Myth vs. Fact – Making the Case for an AOC Audit

Posted on February 19, 2014


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Last week, the Chief Justice told an audience in Riverside, “There is a presumption, somehow, in the capitol in Sacramento that the judicial branch is where it is now, with courtrooms closed and less services . . . because somehow, somehow, we mismanaged ourselves into the situation. . . . I have to remind them, ‘You took $1.5 billion from us,’ that’s how we’re here. . . .”

We agree.  Yes, the executive branch and the Legislature think that the judiciary has mismanaged its money.  The Governor himself has said so.  And yes, we’re not getting the funding we need to perform our basic functions.  We need only count the number of shuttered courtrooms for proof of that sad fact.

But there is a link between these two points.  We’re not getting adequate funding precisely because we’re perceived to have mismanaged our money.  That’s why, whether you like the AOC or not, it’s vital that we all support Assembly Member Reggie Jones-Sawyer’s call for a complete audit of the AOC.   Regardless of its outcome, it would go a long way to restore our credibility with the other branches of government and bolster our appeal for better funding.

We note with concern the lack of enthusiasm with which the Chief Justice greeted the news of the audit proposal.  The Chief Justice issued a statement in which she complained of “a fourth AOC audit in three years.”

We take it that she is counting among those audits the 2011 review of the CCMS project by the State Auditor [available at this link].  That audit found that the AOC planned the project poorly, entered into unfavorable contracts, failed to conduct a meaningful cost-benefit analysis, and provided misleading information to the Legislature.  This audit led to the termination of the program, saving the taxpayers well over $1 billion.

Perhaps the Chief Justice is including among these four audits the August 2012 Pegasus Global Holdings audit of the Court Capital Construction Program [available at this link].  That report concluded (at p. 5) that “there is no universal agreement or understanding within the Program (at any level) as to the ultimate Owner of the Program.  Thus, the actual Owner [the Judicial Council] may not be exercising its responsibility to examine and make crucial funding decisions from a program perspective.”

The Chief Justice may also be counting the March 2013 review of judicial branch procurement [available here], in which the State Auditor found deficiencies in the Judicial Branch Contracting Manual and inaccuracies in the AOC’s semiannual reports.  Or the December 2013 review [available here], in which the State Auditor found “pervasive deficiencies” in two information systems that “could compromise the security and availability of the AOC’s and superior courts’ information systems.”  The State Auditor further faulted the AOC for providing information in a format that was difficult to use.

The Chief Justice might also be referring to the Legislative Analyst Office’s review of the Long Beach Courthouse public-private partnership [available here], which states that the courthouse could have been built for $160 million less in net present value terms had the AOC used a traditional procurement approach.

The Chief Justice specifically numbers the 2012 SEC report [available here] among the four audits.  That isn’t quite correct.  The SEC report was not an audit—it says so in the report itself, at p. 181: “The SEC was not charged with conducting a financial audit of the AOC and was not provided the resources to review financial data at that level.”  One of its lead authors, Judge Charles Wachob, specifically told the Judicial Council that the SEC report is not a “formal audit.”  [See here, at 13:50].  Nevertheless, the SEC report was thorough, and it was blistering in its criticisms of the AOC’s financial management: “A consistent issue that emerged in this review is that the AOC budget process is not transparent.”

All of these reviews and audits have two things in common.  First, each was limited in its scope and nature.  The Pegasus Global Holdings report, for example, reviewed only six construction projects.  The State Auditor’s reports on procurement focused only on procurement practices involving six counties.  None of these reviews was designed to do what Assembly Member Jones-Sawyer’s review seeks to do: find money that can be better spent on the trial courts.

Second—and most important—each report found fault with the way in which the AOC conducts its business.  The message we’re getting over and over from review after review is that there’s something fundamentally wrong at 455 Golden Gate Avenue.

If the AOC and the Judicial Council are tired of getting audited, they can start doing things differently.  They can open their books and open their meetings.  In the meantime, at a time when local court staffs have been gutted, brand-new courthouses are threatened with closure, and citizens have to drive for hours to seek justice, the very least that the AOC and the Council can do is justify the way they spend our branch’s money.

The Chief Justice notes that the AOC is about to undergo another audit by the Department of Finance.  By implying that other audits will somehow render a legislative audit superfluous, the current chief justice seems to be borrowing a page out of the playbook of former Chief Justice George.  He sought to head off the CCMS audit by claiming that the massive project was already being reviewed by the State Chief Information Officer.  That gambit failed, and we were spared a billion-dollar financial hit.

We close with the words of the SEC report:

“The AOC has not been credible or transparent concerning such important matters as budgeting, staffing levels, hiring freezes and furloughs, large-scale projects, and other areas of importance. . . . This lack of full disclosure—or shading information to make it appear more favorable to the AOC—has created mistrust. Unless credibility and trustworthiness are instilled as core organizational values, modeled from the top down, the AOC cannot expect to be successful in its dealings with its employees, the courts, the Legislature, its stakeholders, and the public.”

If the Judicial Council and the AOC really want to make credibility and trustworthiness their core values, if they want to dispel the notion that they are mismanaging our money, they can join us in seeking a legislative audit, rather than complaining about one.

If you have not already joined the Alliance of California Judges, we ask that you consider doing so at this critical time. In order to join, you need only hit “reply” to this email and indicate your desire to be part of an organization whose main objective is keeping our courts properly staffed and open to the public.

Directors, Alliance of California Judges



A member communique from the Alliance of California Judges last week-

On behalf of our 500 member judges, we applaud Assembly Member Reggie Jones-Sawyer for having the courage to request a thorough and independent audit of the AOC and the Judicial Council.  We attach this link to Maria Dinzeo’s article in yesterday’s Courthouse News that details the scope of his request.  The audit request specifically asks, among other things, the key question: Are there available funds that can be redirected to trial court operations for the immediate future?

As many of you know, the Alliance has been seeking a legislative audit of the AOC’s financial operations for a long time.  We are deeply grateful that Assembly Member Jones-Sawyer responded when we reached out and he has taken up the cause of judicial branch transparency.

If the Joint Legislative Audit Committee approves the request, then the State Auditor will take a close look the AOC and Judicial Council budgets to determine, in the words of the audit request, whether “public funds are being utilized in the most effective manner.”

This audit proposal presents a no-lose situation for the judicial branch.  If—as we suspect—the audit uncovers waste and inefficiency, then the misallocated money can be redirected to the trial courts.  If the audit finds that everything is in order, then the Chief Justice and branch leaders can make a much stronger case to a skeptical Governor and Legislature for the $1.2 billion increase they now seek for branch funding over the next three years.  We repeat the request that we made in a recent letter to the Chief Justice—a letter that has gone unanswered—that she join the Alliance in seeking this audit.

Back in 2011, the Chief Justice said, “I believe in absolute transparency.”  Just last year, the AOC’s administrative officer, Curt Soderland, wrote: “As always, we welcome audits of the judicial branch.”  This audit request is a chance for our branch leaders to stand by what they said.

Join us in backing Assembly Member Jones-Sawyer’s brave efforts to bring some accountability back to an agency that stubbornly and arrogantly resists it.  Please contact the members of the Joint Legislative Audit Committee and voice your support for a comprehensive audit of the AOC.

If you have not already joined the Alliance of California Judges, we ask that you consider doing so at this critical time. In order to join, you need only hit “reply” to this email and indicate your desire to be part of an organization whose main objective is keeping our courts properly staffed and open to the public.

Directors, Alliance of California Judges


From JCW:

We’re going to refer to this as part one of making the case. We’ve been having some technical difficulties with newly composed posts vanishing when they are saved to draft or published. The reason we mention this is because we will be supplying additional reasons for a broad and thorough audit of both the judicial council and the AOC. We did it in a post last week that was among a few that vaporized when published.