A Performance Audit
An Audit Report on Financial Processes at the Office of Court Administration
August 2017
Summary Analysis
The Office of Court Administration’s (Office) processes and controls over its revenue collection and contractor payments for the statewide electronic filing system contract were not adequate to ensure compliance with applicable statutes, rules, and Office policies and procedures. Because of those inadequate processes, the Office has not determined whether the revenue collected by the contractor responsible for managing the system was transferred as required by the contract, has not paid the contractor in a timely manner, and owes interest to the contractor for late payments.
The Texas Indigent Defense Commission (Commission), which is administratively attached to the Office and manages indigent defense grants, had adequate processes and related controls over its indigent defense grant program to ensure that it administered associated financial transactions in accordance with applicable statutes, rules, and Office policies and procedures.
The Office should strengthen its processes to ensure that assets are accurately and completely recorded in its asset management system.
The Office of Court Administration (Office) did not have adequate monitoring processes over (1) the collection of filing fees through the statewide electronic filing system (eFile Texas) and (2) the transfer of those fees to the courts.
The Office did not comply with requirements in Texas Government Code, Chapter 2251 (the Prompt Payment Act), on payments it made to the contractor for the statewide electronic filing system contract. Office management asserted to auditors that it made payments late because funds were not always available in the Statewide Electronic Filing Fund to make the payments within the time lines required by the Prompt Payment Act. As of March 31, 2017, the contractor had invoiced the Office a total of $60.7 million, in accordance with the contract’s schedule of payments. That amount was $3.7 million more than the total revenues deposited in the Statewide Electronic Filing Fund since that fund was established on September 1, 2013. As of March 31, 2017, the Office had accrued $531,492 in interest owed to the contractor on invoiced amounts that had not been paid within the required time lines.
The Texas Indigent Defense Commission (Commission), which is administratively attached to the Office, manages indigent defense grants that are funded through the Office’s appropriations. The Commission had adequate processes and controls over the awarding and monitoring of indigent defense grant funds to ensure that funds were spent in accordance with applicable rules, requirements, and grant provisions.
The Office should strengthen its accounting processes and controls over capitalized and controlled assets to ensure that all assets purchased are accurately recorded in the Statewide Property Accounting (SPA) system in accordance with the Comptroller’s Office’s SPA Process User’s Guide.
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