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Audit Report

Denver County Courts: Operations

The audit had two objectives: (1) to evaluate the extent to which Denver County Court’s management and oversight functions support its core operations; and (2) to assess the extent to which Denver County Court’s collection of fines, administration of penalties, and its use of funds align with internal control standards and applicable laws and regulations.

 

Watch the Audit Committee presentation here.

This audit was delayed because the court in 2017 objected to the Auditor’s authority to assess the court’s operations. The Auditor’s Office was ultimately able to conduct the audit in 2018, and that work highlighted deficiencies and areas of risk that the court needs to improve to ensure the continued administration of justice is done in a fair, efficient, and effective way. In response to one recommendation, the court sought City Council approval—even before the report was published—to update the city ordinances identified in the audit that conflict with modern-day court practices.

Our audit of Denver County Court operations identified three areas needing improvement.

Weak Internal Controls Expose Denver County Court Operations to Unnecessary Risks

Audit work revealed that, because of a weak internal control environment consisting of a lack of management review and insufficient policies and procedures:

Case file documentation is not consistently available;
•Management failed to detect more than 4,000 incorrectly closed case files; and
•Management is relying on erroneous information when developing and evaluating performance metrics to make organizational decisions.

Consequently, Denver County Court is at risk of not fulfilling its mission to administer justice in a fair, efficient, and effective manner.

Unsegregated Job Responsibilities and a Lack of Management Review Create a Potential for Misuse and Errors

Because court management has not separated incompatible job responsibilities, there is a risk of fraud, waste, and abuse.

•Cashiers, responsible for the custody of cash and record keeping of fines and penalties, also have access to create and alter official court records.

Some Court Practices Do Not Align with National Standards and City Ordinance

Denver County Court currently uses certain fees to fund core operations, such as the salary and benefits of IT personnel and collection investigators.

•This is out of alignment with nationally recognized judicial principles, which state that, in the interests of promoting an atmosphere of fairness and objectivity, core operations should not be funded by fees and fines.

We also identified inconsistencies between some of the court’s current practices and those required by City ordinance.

1.1 Policies and Procedures for Case File Contents – Denver County Court should determine the necessary components for a complete and accurate case file record and create policies and procedures to formalize the requirements. In addition, Denver County Court should formalize the requirements and develop a schedule for management to regularly perform and document case file reviews.

Agency Response: Agree, Implementation Date – April 30, 2019

1.2 Management Review of Case File Contents – In accordance with the newly developed policies and procedures established in Recommendation 1.1, Denver County Court management should regularly perform and document a detailed review of case file records to ensure the completeness and accuracy of case file contents.

Agency Response: Agree, Implementation Date – April 30, 2019

1.3 Supervisory Review of Closed Case Files – Denver County Court supervisors should regularly perform and document reviews of closed case files.

Agency Response: Agree, Implementation Date – January 1, 2019

1.4 Management Audit of Closed Case Files – Denver County Court management should regularly audit a sample of closed case files for completeness and accuracy. Documentation of the sample case files and audit results should be retained.

Agency Response: Disagree

1.5 Configure System Edit Checks – Denver County Court should configure system edit checks to prevent the incorrect closure of case files in accordance with the seven criteria outlined in the court’s policy and procedures.

Agency Response: Disagree

1.6 Performance Metrics Policies and Procedures – Denver County Court should determine critical performance metrics and formalize, in written policies and procedures, how to compile, calculate, and report them in accordance with best practices. This should include reasons for deviating from the best practice when Denver County Court’s unique operations justify the deviation. In addition, Denver County Court should formalize requirements for management to regularly perform and document reviews of performance metrics.

Agency Response: Disagree, Implementation Date – June 30, 2019

1.7 Management Review of Performance Metrics – Court management should regularly perform and document reviews of performance metrics for completeness and accuracy.

Agency Response: Agree, Implementation Date – September 30, 2019

1.8 Configure Meaningful Information System Reports – With input from division managers, Denver County Court should configure information systems to record, track, and report performance metrics needed by individual divisions.

Agency Response: Disagree

2.1 Create and Review Audit Logs – Denver County Court should create audit logs for all key systems to report exceptions and unauthorized changes due to a lack of segregation of duties. Management should then establish a process to regularly review those audit logs and exception reports to detect and correct unauthorized actions.

Agency Response: Agree, Implementation Date – December 31, 2019

2.2 Establish and Document Management Review – Denver County Court should perform and document review of individual transactions and end-of-shift deposit drops. This should include a manager or supervisor signature evidencing review and approval of end-of-shift deposits.

Agency Response: Agree, Implementation Date – Current Practice

2.3 Policies and Procedures of Management Review – Denver County Court should design and implement policies and procedures requiring management to regularly perform and document detailed review of individual transactions and daily deposits.

Agency Response: Disagree

3.1 Alternative Funding Strategies – Denver County Court should develop alternative funding strategies for its two special revenue funds to incorporate a range of different funding scenarios based on:

a. Potential legislative changes put forth by the state;
b. Whether the assessment of fines and fees remains appropriate considering recent guidance published by the National Task Force on Fines, Penalties, and Bail Practices; and
c. Alternative uses for the special revenue fund proceeds.

Agency Response: Agree, Implementation Date – 2019-2020 budget cycle

3.2 Update City Ordinance – Denver County Court should ask City Council to update relevant City ordinances to reflect current-day court practices.

Agency Response: Agree, Implementation Date – January 1, 2019

Follow-up report

A follow-up report is forthcoming. 

Other related reports
None at this time.
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Audit Team: Dawn Wiseman, Anna Hansen, Ivy Anderson, Alexandra Dickerson

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