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California State Auditor Report Number : 2016-301

Judicial Branch Procurement
The Five Superior Courts We Reviewed Mostly Adhered to Required and Recommended Practices,
but Some Improvements Are Needed



Summary

The State’s 58 superior courts are required to follow state law and the policies of the Judicial Council of California (Judicial Council) when making purchases of goods and services and processing payments.1 This is the third audit we have performed of the procurement processes of California superior courts. For the five courts we reviewed for this audit—the superior courts of Riverside, San Diego, San Joaquin, San Mateo, and Tehama counties—we found fewer instances of the courts not adhering to procurement processes compared to the superior courts reviewed in our past two procurement audits. Our review found that while these courts largely complied with contract and payment requirements and guidelines, three of them could make improvements. The Riverside and San Diego courts consistently adhered to these requirements and recommended practices.

The following are the key conclusions discussed in this report:


Three of the five superior courts could improve their contracting practices.

The San Joaquin, San Mateo, and Tehama courts did not consistently follow the guidelines in the Judicial Branch Contracting Manual (judicial contracting manual), particularly in regard to noncompetitive contracts. Notably, the three courts did not always determine whether the price they paid for goods and services was fair and reasonable as the judicial contracting manual recommends for certain noncompetitive contracts. In addition, these three courts sometimes failed to explain why they had entered into contracts without using a competitive process. In contrast, the Riverside and San Diego courts followed state laws and the Judicial Council’s contract guidelines more strictly.


Two of the five superior courts had some weaknesses in their processing of vendor or purchase card payments.

The San Joaquin and San Mateo courts did not always appropriately approve or verify that goods or services were received before paying for them. Further, San Joaquin court routinely exceeded the judicial contracting manual’s $1,500 limit for purchase card transactions without explaining the necessity for exceeding the limit. Also, in fiscal year 2015–16 the San Mateo court spent $4,000 on bottled water for its employees, which is unallowable under state procurement rules. In contrast, payments we tested for the Riverside, San Diego, and Tehama courts were processed according to the judicial contracting manual and their internal control processes.



Table 1 provides a summary of the results of our review of procurement practices related to contracts—both competitive and noncompetitive—and payments at the five superior courts we audited.

Table 1
Overall Level of Compliance With Required and Recommended Practices
  County
Superior Court
Procurements
 
Payments
Competitive NonCompetitive To Vendor With  Purchase Card
Riverside Complied with all Complied with all   Complied with all Complied with all
San Diego Complied with all Complied with all Complied with all Complied with all
San Joaquin Complied with all Complied with most Complied with most Complied with most
San Mateo Complied with all Complied with most Complied with most *
Tehama Complied with all Complied with most Complied with all *

 

Source: California State Auditor’s analysis of procurements and payments at five superior courts.

Level of Compliance With Required and Recommended Practices

= Complied with all

= Complied with most

* Court had less than our threshold for testing purchase card payments.



The Judicial Council has implemented contract and payment requirements and recommended practices to ensure that state judicial branch entities—in this instance, superior courts—make the best use of public funds when purchasing and paying for goods and services. When superior courts do not follow these requirements and recommended practices, they increase the risk that they will overpay for goods or services, or that they will make unauthorized or unallowed payments. Moreover, the courts undermine the integrity of the competitive procurement process when they bypass the competitive process without adequate justification.


Summary of Recommendations

The San Joaquin, San Mateo, and Tehama courts should determine whether pricing for noncompetitive contracts is fair and reasonable, when applicable.

The San Joaquin, San Mateo, and Tehama courts should consistently retain in contract files their justification for entering into contracts that they have not competitively bid.

The San Joaquin and San Mateo courts should ensure that their staff follow the courts’ payment approval policies.

The San Joaquin court should implement a process to ensure that its staff adheres to its policy for exceeding the $1,500 per‑transaction limit for purchase cards, and the San Mateo court should cease purchasing bottled water for employees.


Agency Comments

Three superior courts agreed with our findings and recommendations. However, the San Joaquin court did not agree with the basis of two of our recommendations. Finally, the Riverside court chose not to respond.





Footnotes

1 In July 2014, the Judicial Council voted to retire the name Administrative Office of the Courts for its staff agency; however, state law continues to use this name.  Go back to text

 



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