Report 2020-301 All Recommendation Responses

Report 2020-301: Judicial Branch Procurement: Courts Generally Met Procurement Requirements, but Some Need to Improve Their Payment Practices (Release Date: January 2021)

Recommendation #1 To: Superior Court of California, County of Alameda

To ensure that it expends public funds appropriately, the court should immediately require staff to match invoices to appropriate supporting documentation and to adhere to the established authorization limits when approving invoices.

6-Month Agency Response

Updates to the AP Desk Manual were completed.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

The court provided documentation of updated procedures for reviewing and approving invoices which, if followed, should help ensure that it expends public funds appropriately.

60-Day Agency Response

The Court has revised its invoice approval authorization limit matrix, updated the invoice approval signature cards, and a revised the invoice code strips to include accounts payable staff verification and acknowledgement of invoice and supporting documentation matching prior to payment processing.

Revisions to the accounts payable staff desk manual have been started and are expected to be completed by April 1, 2021.

California State Auditor's Assessment of 60-Day Status: Pending

Recommendation #2 To: Superior Court of California, County of Lake

To reduce the risk of improper payments, by July 1, 2021, the court should revise its payment process to incorporate an alternative safeguard in any instance when it is not practical to fully separate payment duties.

60-Day Agency Response

All invoices now have documented secondary approval by other court staff before the CEO approves and posts the payments.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

As part of its 60-day response to us, the court provided documentation demonstrating that it has implemented the alternative safeguard described in its response. To the extent that the court follows this process, it will help mitigate the risk of making improper payments.

Recommendation #3 To: Superior Court of California, County of Orange

To ensure appropriate approval of all payments, by July 1, 2021, the court should revise its payment process to consistently require two levels of approval for all invoices above a certain dollar limit.

60-Day Agency Response

Effective on January 28, 2021, we modified our process for approving Alternate Defense invoices. Invoices greater than $10,000 are routed to the Administrative Analyst in Accounting Services for a primary approval. If the invoice is greater than $50,000 it is routed to the Accounting and Fiscal Services Director for a secondary approval.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

As part of its 60-day response, the court provided us with documentation of the revised invoice approval process described in its response. The revised process requires secondary approval for high-value invoices for certain legal services, similar to the approval the court requires for high-value invoices for other goods and services. To the extent that it follows the revised process, the court will address the concern we raised in our report about its payment safeguards.

Recommendation #4 To: Superior Court of California, County of Alameda

To comply with the requirements of state law, each court should immediately implement policies and procedures for notifying the State Auditor within 10 business days of entering into all contracts with estimated values over $1 million, except those contracts exempted from the notification requirement in state law.

6-Month Agency Response

The court has implemented processes to trigger notification of high value contracts and has subsequently submitted notification to the State Auditor for applicable contracts.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

The court has a documented policy to notify our office of high-value contracts, and we have received certain notifications of such contracts from the court. The court's adherence to its policy should help ensure that it complies with the notification requirement in state law.

60-Day Agency Response

The Court has amended its contract review form to identify contracts valued over $1 million and has begun to notify the State Auditor of contracts meeting the threshold in compliance with state law. Additionally, the Court's local contract manual has been updated to include the policy and procedures regarding State Auditor notification on executed contracts with estimated values over $1 million.

California State Auditor's Assessment of 60-Day Status: Pending

The court has taken action to begin implementing this recommendation but, subsequent to submitting its 60-day response, it informed us that staff had not yet begun notifying our office of contracts in accordance with its revised policies and procedures. Therefore, we look forward to evaluating the court's progress at the time of its 6-month response.

Recommendation #5 To: Superior Court of California, County of Contra Costa

To comply with the requirements of state law, each court should immediately implement policies and procedures for notifying the State Auditor within 10 business days of entering into all contracts with estimated values over $1 million, except those contracts exempted from the notification requirement in state law.

60-Day Agency Response

We reviewed our existing contracts, including MOUs with the County, to identify contracts that have or are estimated to exceed $1 million that we have not sent notification to the State Auditor. We immediately notified the State Auditor of these contracts. We will monitor the values of new contracts in our Contracts Database for the State Auditor notification requirement going forward.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

As part of its 60-day response, the court provided documentation showing that it has notified our office of additional high-value contracts as required by state law. To the extent that the court follows the monitoring actions it describes in its response, it will help ensure that it fully complies with the notification requirement in state law.

Recommendation #6 To: Superior Court of California, County of Orange

To comply with the requirements of state law, each court should immediately implement policies and procedures for notifying the State Auditor within 10 business days of entering into all contracts with estimated values over $1 million, except those contracts exempted from the notification requirement in state law.

60-Day Agency Response

The Court revised its policy applicable to all Procurement Staff entering contracts into the Court's Contract Management Database System (CMDS K2 System) to include, in addition to all signed contracts, all approved POs in SAP with an Overall Contract Value of more than $1M created without a Court signed contract (e.g., a PO based on a California State LPA that did not require the Court to sign an agreement) so that the Court's CMDS K2 System can be used to send BSA Notices for such POs in the same way that the Court already uses its CMDS K2 System to send BSA Notices for signed contracts. This policy became effective December 1, 2020. Additionally, the Court implemented a new CMDS-BSA Notice Review Process effective March 8, 2021. This new process requires the Procurement Manager, or the Procurement Manager's designee, to confirm weekly that new and revised POs with Overall Contract Values of more than $1M approved in the prior week have been entered into CMDS, along with any signed contracts related to the POs, and the Court's CMDS K2 System has been activated to send the required BSA Notice. A copy of the Court's CMDS-BSA Notice Review Process will be submitted separately.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

As part of its 60-day response, the court provided documentation of the revised policies and procedures described above. These policies and procedures address our recommendation, and following them should help the court to ensure it fully complies with the notification requirement in state law.

Recommendation #7 To: Superior Court of California, County of San Bernardino

To comply with the requirements of state law, each court should immediately implement policies and procedures for notifying the State Auditor within 10 business days of entering into all contracts with estimated values over $1 million, except those contracts exempted from the notification requirement in state law.

60-Day Agency Response

The Superior Court of San Bernardino County (Court) submitted required notification for both benefit contracts (for Kaiser and Blue Shield) totaling over $1 million individually on January 14, 2021. Supporting documentation of these email notifications will be provided to [the State Auditor]. The Court already had an existing process and documented procedure in place for notification on all other contracts exceeding $1 million. The two benefit contracts not originally submitted were due to prior direction received from Judicial Council staff.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

As part of its 60-day response, the court provided documentation that it is now notifying our office of certain types of contracts it previously believed were exempt from the notification requirement in state law.

Recommendation #8 To: Superior Court of California, County of Alameda

To ensure appropriate administration and review of its contracts, by July 1, 2021, the court should revise its local contracting manual to include a contract administration plan and legal review policy, as recommended by the judicial contracting manual.

60-Day Agency Response

The local contract manual has been updated to include a contract administration plan and legal review policy.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

As part of its 60-day response, the court provided documentation of its updated local contracting manual, including information about its contract administration plan and legal review policy.

Recommendation #9 To: Superior Court of California, County of Lake

To ensure appropriate administration of its contracts, by July 1, 2021, the court should revise its local contracting manual to include a contract administration plan, as recommended by the judicial contracting manual.

60-Day Agency Response

The court has revised the Local Contracting Manual to include a contract administration plan.

California State Auditor's Assessment of 60-Day Status: Fully Implemented

As part of its 60-day response, the court provided documentation that in March 2021 it adopted an updated local contracting manual that includes a contract administration plan.

All Recommendations in 2020-301

Agency responses received are posted verbatim.