DENVER – After initial resistance by Denver County Court of the authority of Denver Auditor Timothy M. O’Brien, CPA, a completed audit of County Court operations reveals weaknesses in the court’s management of case files, as well as other administrative problems.
Auditor O’Brien said, “The court management should listen to our recommendations to help improve their operations and to ensure they can complete their goals to administer justice for the people of Denver.”
Our audit found incomplete documentation in case files and more than 4,000 case files closed in error. Management may also be using inaccurate information from performance metrics to make decisions. As a result, Denver County Court is at risk of not fulfilling its mission to administer justice in a fair, efficient and effective manner.
Case files are at the core of court operations as they are the repository where all records and documents supporting actions related to a case should reside. We found Denver County Court case files contained inconsistent and incomplete information, hindering our ability to perform planned audit procedures.
“It’s disturbing to me that the County Court is not keeping the consistent records they need to support case files and track actions taken in court,” Auditor O’Brien said.
We found several case files with missing documentation of key courtroom actions including the suspension of fines and penalties, the cancellation and reinstatement of a protection order, and defendants’ acknowledgments of the terms of probation.
County Court has agreed to create specific rules to determine what records must be kept in case files. Court management plans to regularly review those case files, as well.
Our audit work also found problems with how the court reviews closed case files. During the audit, we identified more than 4,000 improperly closed case files with outstanding fines. Seventy-seven percent of these errors happened when cases were either dismissed or transferred. The fees assigned to these cases should have been manually removed but were not, resulting in an approximate $24,000 overstatement of accounts receivable as of the end of 2017. In addition, more than 300 cases were prematurely closed and needed to be reopened. In other cases, the court had to issue refund checks for duplicative and overpaid fines.
Court officials say they reviewed and addressed each of these errors; however, they did not share individual case-level information with the audit team for verification until after audit testing work concluded.
“The court could be perceived as unfair if it closes cases inconsistently,” Auditor O’Brien said. “Closing a case incorrectly could allow individuals to escape punishment, such as probation, community service, or payment of fines or compensation for victims.”
Court management is also relying on erroneous performance measures to make decisions. Out of more than 200 metrics Denver County Court is reporting, more than 100 do not have an established standard or goal. The court is wasting resources and time compiling data for metrics with no meaning for the organization. Due to the misaligned and inaccurate performance metrics, Denver County Court management risks not making appropriate oversight decisions or having an accurate picture of its operations.
The audit also found a potential for misuse and errors in payment records. In the current system, personnel can alter case file and payment records without detection because the people who authorize transactions are also the custodians of the cash. The County Court’s cashiering staff is small, making segregation of duties difficult. However, we recommend a management review of audit logs and transactions to avoid possible abuse of the system.
County Court also needs to update ordinances related to its operations. New national best practices say primary court operations, including salaries and benefits, should not be funded by fines and fees. Although fees are currently being used in accordance with the current ordinance through two special revenue funds, the court should adopt the new principles. The County Court also needs to update outdated language in city ordinances governing the courts.
The County Court management disagreed with several of our recommendations regarding best practices for internal controls. Court management stated current policies, procedures and practices are sufficient; however, if that were the case, our audit team would not have found the problems reported in the audit. Further, court management chose not to prioritize certain IT-related controls. While there are many projects for the court’s information technology team, the audit identified significant areas of concern that should receive more immediate attention.
“We make these recommendations as a way to mitigate risks,” Auditor O’Brien said. “If they aren’t addressed, these risks could potentially threaten the achievement of the court’s organizational goals.”