Appendix
Scope and Methodology
We conducted this audit pursuant to the audit requirements contained in the Judicial Contract Law. Our audit focused on the superior courts in Imperial, Los Angeles, Monterey, Santa Barbara, and Santa Clara counties. The table lists the audit’s objectives and the methods we used to address them.
| AUDIT OBJECTIVE | METHOD | |
| 1 | Review and evaluate the laws, rules, and regulations significant to the audit objectives. | Reviewed relevant state laws and rules, as well as each court’s relevant policies and procedures. |
| 2 | Based on risk factors specified in the California Judicial Branch Contract Law (Judicial Contract Law), Public Contract Code section 19210(a)(1), identify five judicial branch entities excluding the Judicial Council of California for audit to assess their implementation of the Judicial Contract Law. | Evaluated all 58 California superior courts and ranked them based on significant changes that have occurred since 2016 that may impact compliance with the Judicial Contract Law; the amount of time since it was last audited and previous audit results or known deficiencies; significant changes in management or employee turnover; the complexity and size of the courts and its existing contracting practices and procedures; the volume and type of procurements made by the court relative to total judicial branch procurements and to county population; and substantial changes to the number and amount of total procurements in the previous year. |
| 3 |
For the five superior courts selected for audit: a. Determine whether each court has developed its own local contracting manual, and assess its conformance to the judicial contracting manual. |
Reviewed each court’s local contracting manual applicable for fiscal year 2017–18, compared provisions to the judicial contracting manual applicable for the same year, and queried court staff regarding any questionable discrepancies. Each of the five courts we reviewed had a local manual that generally conformed to the judicial contracting manual, as required. At the time of our fieldwork, the Santa Clara Court had updated its local manual to align to the most recent judicial contracting manual, published in August 2018; similarly, the Los Angeles and Santa Barbara courts’ staff told us they had begun updating their local manuals to align to the August 2018 judicial contracting manual, and the Monterey court’s staff said it planned to update its local manual in early 2019. Staff at the Imperial court told us it had not yet established a process for updating its local contracting manual to align to the August 2018 judicial contracting manual. |
| b. Assess each superior court’s internal controls over contracting and procurement and determine whether the court followed those controls. | Reviewed each court’s local contracting manual and interviewed key staff regarding the court’s procurement processes. We judgmentally selected 12 contracts at each court from the contracts that were active during fiscal year 2017–18, as reported in the Judicial Council’s Semiannual Report on Contracts for the Judicial Branch (semiannual reports) posted on the Judicial Council’s website. We also judgmentally selected 18 payments at each court from the payments each court reported to us for fiscal year 2017–18. We tested each of these contracts and payments and queried court procurement staff regarding any exceptions. | |
| c. Assess each superior court’s compliance with key elements of the judicial contracting manual and its local contracting manual and procedures, including those related to competitive bidding, sole‑source contracting, and payment and deliverable review and oversight. | ||
| d. Evaluate each superior court’s contracts to determine whether it may have inappropriately split contracts to avoid obtaining necessary approvals or complying with competitive bidding requirements. | Reviewed the list of contracts that were active at each court during fiscal year 2017–18, as reported in the semiannual reports posted on the Judicial Council’s website, to identify instances in which courts might have split a contract into multiple contracts to avoid competitive bidding or necessary approval requirements. We followed up with court staff as needed regarding additional clarification on the items we tested. We did not find evidence of contract splitting at any of the five courts we reviewed. | |
| e. Review the appropriateness of each superior court’s state purchase card (CAL‑Card) or other court‑issued purchase card transactions when those transactions exceed a total of $100,000 or 10 percent of all reported procurement payments for a one‑year period. | Determined whether each court used purchase cards to make purchases and reviewed the monthly statements for these cards. We tested a judgmental selection of six transactions at each of the two courts whose purchase card transactions exceeded our threshold of $100,000. | |
Source: Analysis of the Judicial Contract Law and of information and documentation identified in the table column titled Method.
Assessment of Data Reliability
In performing this audit, we relied upon electronic data extracted from the information systems of the Judicial Council and three of the superior courts we audited. Specifically, to select contracts for testing the superior courts’ compliance with procurement procedures, we used the Judicial Council’s semiannual report for the periods from July 2017 through December 2017 and from January 2018 through June 2018.
The U.S. Government Accountability Office, whose standards we are statutorily required to follow, requires us to assess the sufficiency and appropriateness of computer‑processed information that we use to support our findings, conclusions, or recommendations. To gain assurance that the population from which we selected contracts for our compliance testing was complete, we selected six contracts from each of the five superior courts—for a total of 30 contracts—and traced them to the semiannual reports. We noted no exceptions to completeness for the contracts we selected from the Monterey court’s iShare/Procurement System or those we selected from the Santa Barbara court. However, we found that the reports did not include one contract each that we selected from the Imperial Court, the Los Angeles court’s Novatus system, or the Santa Clara court. We therefore deemed the information in the semiannual reports for the Imperial, Los Angeles, and Santa Clara courts incomplete. Although we recognize that these limitations may affect the precision of the numbers we present, there is sufficient evidence in total to support our audit findings, conclusions, and recommendations.