U.S. Courts - Annual Report

2004 Annual Report of the Director
Administrative Office of the U.S. Courts

Audits, Reviews, and Internal Controls

Each year, on-site reviews of various kinds are conducted in the courts for virtually all major areas of business operations.

Audits and Program Reviews

The Administrative Office conducts financial audits, program audits, reviews, assessments, and evaluations to promote effectiveness, efficiency, and economy in both AO and court operations. A comprehensive program of financial audits covering all court units is conducted on a four-year cycle for most courts, and on a two-and-one-half year cycle for larger courts. In 2004, the Administrative Office performed or contracted for 56 cyclical financial audits of the courts and 58 other financial audits, including Chapter 7 trustees, Criminal Justice Act grantees, and special audits such as follow-ups to prior reviews, when there is a change of clerk, or when an audit of particular financial activities is requested by a court.

The Administrative Office continues to implement an analytical software program for its audit program for procurement, accountable property, travel, and payroll certification. Using the software streamlines the audit process, as it helps auditors perform significant work before visiting the courts.

Each year, on-site reviews of various kinds are conducted in the courts. Some offices have a comprehensive cyclical program of reviews. In other cases, reviews are done primarily at the request of individual court managers or chief judges for areas including jury administration; court reporting; clerk's office operations and management; human resources management; property management; procurement; and information technology operations, management and security. During fiscal year 2004, reviews were conducted in five district courts, two bankruptcy courts, 13 federal public defender organizations, and two probation offices.

Internal Controls Handbook

Following an extensive collaborative effort by Administrative Office staff and court managers, a final Internal Controls Handbook for the Federal Courts was published and posted on the J-Net in March 2004. This handbook assists managers in developing internal control procedures consistent with applicable policies and regulations. It also is a tool for managers to conduct required annual reviews of those procedures. Each section of the handbook contains simple checklists of basic internal-control requirements for segregating duties, controlling and protecting assets, maintaining necessary records, performing verification and review activities, and restricting access to sensitive information or assets. Business areas addressed include financial management, procurement, property management, human resources, information systems and security, budget management, postage meters, and jury management. The handbook references policies pertinent to each business area, and practical suggestions are scattered throughout.

Government Accountability Office Studies

The Administrative Office serves as a liaison to the Government Accountability Office (GAO)—formerly the General Accounting Office—on studies pertaining to the Judiciary. The AO coordinates the provision of information and responses to GAO's written reports and testimony before Congressional committees. In fiscal year 2004, GAO commenced or completed 11 studies involving the federal Judiciary to some extent. The most significant reviews addressed financial disclosure redaction authority, the history and cost of the courthouse construction program, the proposed Los Angeles courthouse-construction project, criminal-debt collection, and the implementation status of the E-Government Act of 2002.

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