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Judicial Council of California

Letter Report: 2019-302

APPENDIX

Scope and Methodology

We conducted this audit according to the audit requirements contained in the contract code section 19210, which is part of the judicial contract law. We also conducted this audit in accordance with standards of the U.S. Government Accountability Office (GAO), which we are statutorily required to follow. The judicial contract law requires the State Auditor, upon legislative appropriation, to perform biennial audits of the Judicial Council. The table lists the audit objectives we developed and the methods we used to fulfill those objectives.

Audit Objectives and the Methods Used to Address Them
AUDIT OBJECTIVE METHOD
1 Determine whether the judicial contracting manual is consistent with the requirements set forth in the judicial contract law.
  • Compiled revisions to the contract code, SAM, and SCM that occurred from July 1, 2017, through June 30, 2019, and identified significant changes that impact the Judicial Council.
  • Compared the significant changes we identified in the contract code, SAM, and SCM to the judicial contracting manual and determined whether the judicial contracting manual is consistent with requirements set forth in the judicial contract law. We did not identify any reportable findings related to this objective.
2 Determine whether the Judicial Council’s local manual conforms to the judicial contracting manual. Determined that the Judicial Council did not make any changes to its local manual and verified that changes to the judicial contracting manual did not impact the local manual’s compliance. We did not identify any reportable findings related to this objective.
3 Assess the Judicial Council’s internal controls over procurement practices and then determine whether it complied with those controls and other key requirements—including requirements related to competitive bidding and sole-source contracting—when completing its procurements.
  • Reviewed the judicial contracting manual, the Judicial Council’s local manual, and the Judicial Council’s procedures and interviewed staff to assess the Judicial Council’s internal controls over contracting and procurement.
  • Using data from the Judicial Council’s FI$Cal system and its previous Oracle system, identified procurements from the period July 1, 2017, through June 30, 2019.
  • Judgmentally selected 40 of those procurements—15 agreements, 20 purchase orders, and five contract amendments—and tested them for compliance with requirements of the judicial contracting manual and the Judicial Council’s local manual, including requirements concerning procurement approval, segregation of duties, competitive bidding, and other key controls.
4 Assess the Judicial Council’s internal controls over payment practices and determine whether the entity complied with those controls.
  • Reviewed the judicial contracting manual, the Judicial Council’s local manual, and the Judicial Council’s procedures and interviewed staff to assess the Judicial Council’s internal controls over payments.
  • Selected one invoice payment from each of the 40 procurements we selected to address Objective 3 and tested for compliance with requirements of the judicial contracting manual and other procedure documents, including requirements concerning invoice approval, proper authorizations, and segregation of duties.
5 Evaluate the Judicial Council’s contracts to determine whether the Judicial Council inappropriately split any contracts to avoid necessary approval or competitive bidding requirements.
  • Identified a provision of the judicial contracting manual that prohibits Judicial Branch entities from splitting transactions costing more than $10,000 into multiple transactions costing less than $10,000 to avoid competitive bidding requirements.
  • Using data from the Judicial Council’s FI$Cal system, identified vendors from which the Judicial Branch made multiple procurements of less than $10,000 during the period July 1, 2017, through June 30, 2019.
  • Assessed procurement documentation to determine whether any of those multiple procurements should have been a single competitively bid procurement. We did not identify any reportable findings related to this objective.
6 Assess the reliability of data used in the Judicial Council’s semiannual reports on Judicial Branch contracts and payments, as necessary, for the purpose of establishing testing selections.
  • Obtained data generated from the Judicial Council’s FI$Cal and previous Oracle systems used in its semiannual reports for the period July 1, 2017, through June 30, 2019.
  • Haphazardly selected hard copy procurement files and searched for those procurements in either the semiannual report listings or FI$Cal and Oracle systems to determine whether the procurements appeared in the systems and were accurate.
  • Haphazardly selected payment invoices using the Judicial Council’s semiannual reports, reviewed the hard copy invoice records related to each payment, and verified that the amounts in the reports match the amounts on the invoices.
  • Performed this objective in accordance with generally accepted government auditing standards, which we are statutorily required to follow.
  • Determined that these data are sufficiently reliable for the audit purpose of selecting our testing items, and for relying on the information the Judicial Council provided in its semiannual reports.
  • We did not identify any reportable findings related to this objective.

Source: Analysis of the judicial contract law, the State Auditor’s planning documents, and information and documentation identified in the table column titled Method.






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