Rule 3-415. Auditing.

Intent:

To establish an internal fiscal audit program for the judiciary within the administrative office.

To examine and evaluate court operations by measuring and evaluating the effectiveness and proper application of programs.

Applicability:

This rule shall apply to all courts and the administrative office.

Statement of the Rule:

(1) Schedule of audits.

(A) Periodic. Not less than annually, the audit manager shall prepare a plan of scheduled fiscal and program audits for submission to and approval by the Council Management Committee. The Board of Justice Court Judges shall provide the audit manager a recommendation of the courts not of record to be included in the annual audit schedule submitted to the Council Management Committee.

(B) Amendment to schedule. Any modification or change to the approved plan of scheduled audits shall require prior approval by the Council Management Committee.

(C) Special audits. Requests for special audits not included in the plan shall be submitted in writing to the Council Management Committee and identify the circumstances and need for a special unscheduled audit.

(D) Limited audits. In the event of a reported theft, burglary or other alleged criminal act or suspected loss of monies or property at a court location, or if a change occurs in the personnel responsible for fiduciary duties, the state court administrator may authorize a limited audit.

(2) Authority. The audit manager shall be independent of the activities audited. The audit manager shall have access to all records, documents, personnel and physical properties determined relevant to the performance of an audit. The audit manager shall have the full cooperation and assistance of court personnel in the performance of an audit. The audit manager shall follow generally accepted accounting and performance audit principles for conducting internal audits.

(3) Fiscal audits. Fiscal audits may consist of one or more of the following objectives:

(A) to verify the accuracy and reliability of financial records;

(B) to assess compliance with management policies, plans, procedures, and regulations;

(C) to assess compliance with applicable laws and rules;

(D) to evaluate the efficient and effective use of judicial resources;

(E) to verify the appropriate protection of judicial assets.

(4) Short audits. When a short audit is required or approved, the audit will be conducted without prior notice. The audit shall consist of a one time reconciliation of current cash and receipts and an observation of fiscal management procedures unless otherwise directed by the State Court Administrator or Management Committee. A written report shall be prepared and exit conference conducted.

(5) Full audits. When a full audit is required or approved, the audit shall be conducted with prior notice. An entrance conference shall be conducted between:

Courts of record: the auditors, court executive, presiding judge, clerk of court and state level administrator.

Courts not of record: the auditors, justice court judge, a local government representative, and state level administrator.

The audit shall be conducted at the convenience of the court.

(6) Performance audits. During the course of conducting a short or full fiscal audit, the audit manager shall observe and review compliance with programs and procedures established by state law and this Code and make written findings and recommendations to be incorporated in the final report. The performance audit shall include an evaluation of the adequacy, effectiveness and efficiency of court operations and management. Objectivity shall be employed by the auditors at all times. Proper recognition shall be given to commendable court operations when appropriate.

(7) Audit reports.

(A) The audit manager shall prepare a written report containing findings and recommendations as a result of the audit. A draft copy of the report shall be provided in advance and presented to:

Court of record: the court executive, presiding judge and state level administrator at the exit conference. An opportunity for written response or comment will be afforded the court executive and presiding judge which will be incorporated into and become part of the final report.

Court not of record: the justice court judge and state level administrator at the exit conference. An opportunity for written response or comment will be afforded the justice court judge which will be incorporated into and become part of the final report.

(B) Copies of the final report shall be provided to:

Courts of record: the Council Management Committee, appropriate Board of Judges, state court administrator, presiding judge, court executive and state level administrator.

Courts not of record: the Council Management Committee, state court administrator, justice court judge, a local government representative, state level administrator and the Board of Justice Court Judges.

(8) Follow-up review.

Courts of record: Within 12 months of a short or full audit, the audit manager shall provide a Follow-up Review form, including only non-compliance audit findings, to the court executive and copy the court level administrator. The court executive will complete the Follow-up Review form reporting on progress made toward compliance and return the form within 30 days to the audit manager and copy the court level administrator.

Courts not of record: Within 12 months of a short or full audit, the audit manager shall provide a Follow-up Review form, including only non-compliance audit findings, to the justice court judge and a copy to the state level administrator. The justice court judge will complete the Follow-up Review form reporting on progress made toward compliance and return a copy of the completed form within 30 days to the audit manager, the state level administrator, and the Board of Justice Court Judges.