Accountability and Resource Management – Annual Report 2017
The Judiciary uses numerous tools and protocols that foster sound stewardship of public funds, effective and efficient use of resources, and adherence to the highest ethical standards.
The Strategic Plan for the Federal Judiciary fosters greater consideration of Judiciary-wide strategic issues in national policy deliberations, while providing needed flexibility and discretion to Judicial Conference committees. Conference committees consider priority strategies and goals from the plan when developing meeting agendas, choosing initiatives to pursue, and assessing the impact of policy recommendations, resource allocation decisions, and cost-containment measures.
The Conference’s Executive Committee has designated as a priority the refining and updating of cybersecurity practices to ensure the confidentiality, integrity, and availability of Judiciary records and information. Other priorities include improving the delivery of justice, securing adequate resources and allocating them efficiently and effectively, harnessing technology’s full potential, and communicating and collaborating with organizations outside the Judiciary to promote greater public understanding of the Third Branch.
Improving Financial Management
In November 2017, the Judiciary completed a major technological undertaking designed to improve financial management systems and to bring the Judiciary under a single system. The Judiciary Integrated Financial Management System (JIFMS), a web-based financial and procurement management system, is now operating in all 94 judicial districts and in all the federal appellate courts, capping a three-year, phased deployment process. JIFMS enables staff for the AO, the courts, and federal defenders to use a single application to record and maintain the Judiciary’s financial and procurement information and to report on that data. JIFMS interfaces with other Judiciary and U.S. Treasury systems, eliminating duplicative data entry and strengthening internal controls. It fosters information-sharing and collaboration across the Judiciary.
JIFMS also reduces financial risk to the Judiciary by strengthening internal controls, enhancing security, and standardizing Judiciary-wide business processes and procedures. AO staff members visited courts in 2017 to assess the system’s impact and developed an action plan to improve JIFMS based on that feedback.
Internal Control and Self-Assessment Tools
All court units and federal public defender organizations (FPDOs) can now assess their compliance with specific Judiciary internal control requirements using the Internal Control Evaluation (ICE) system integrated into JIFMS. The ICE system was upgraded in 2015. Deployment in the courts began the following year and was completed in 2017.
The application’s separation-of-duties component helps courts and defender organizations identify and address situations that may be inconsistent with Judiciary policies requiring separate individuals to perform certain financial and administrative actions. The upgrades also make possible data-mining reports that can highlight financial transactions for further scrutiny and trend analysis. A new module called Access Manager was being deployed to the courts in 2017. It allows them to better manage JIFMS user access and security rights, and automates security changes.
Courts and FPDOs also continued to receive on-site training on how to conduct annual internal controls self-assessments using a self-assessment tool, which provides court units and FPDOs with step-by-step instructions for meeting the annual requirement to assess the adequacy of, and compliance with, internal controls.
Audit Program Yields Benefits
A comprehensive audit program helps the Judiciary maintain sound financial management and internal control processes. During fiscal year 2017, the AO completed 234 audits of the Judiciary’s national programs and funds, court units, federal defender organizations, and – for the six districts served by the bankruptcy administrator program – trustees and debtors.
Most Judiciary audits are financial statement audits, which include the opinion of an independent audit firm on whether statements under review are presented fairly and without material misstatements. Financial statement audits also report on internal controls over administrative areas and compliance with related laws, policies, and procedures. The audit program structure reflects the Judiciary’s decentralized system for financial reporting, which requires separate financial statements for courts, national programs, Judiciary appropriations, and other funds.
Regular audits ensure the validity and accuracy of the Judiciary’s financial statements. They also examine and report on the effectiveness of internal controls designed to mitigate the risk of financial misstatement, fraud, waste, or abuse.
The Court Registry Investment System
As of November 2017, the Court Registry Investment System (CRIS) managed $2.1 billion in registry funds for 166 district and bankruptcy courts and provided innovative solutions in a complex area of financial management. Registry funds refer to funds that are submitted by parties to litigation, which a court holds pending resolution of the litigation or determination of ownership. The CRIS funds are invested in Treasury securities until the court orders disbursement, at which time the funds are paid to the appropriate parties with interest. In 2017, 29 court units joined the program, a 21 percent increase in the number of courts participating.
The AO also completed the process of establishing a disputed ownership fund in CRIS to manage the special federal income tax treatment required for certain funds. This approach will provide an efficient, cost-effective, centralized way for the Judiciary to comply with federal tax regulations. A new fee structure, approved by the Judicial Conference, was implemented for all CRIS cases beginning December 1, 2016.
Government Accountability Office Studies
The U.S. Government Accountability Office (GAO) regularly conducts studies related to Judiciary operations. At the close of 2017, there were six GAO studies involving the Judiciary in progress: Spending Authority and Permanent Appropriations, Indian Youth and the Juvenile Justice System, Central States Pension Fund Consent Decree, Judicial Compliance with Ethics Issues, Federal Operations and Maintenance Costs, and the Justice for All Reauthorization Act. The Justice for All Reauthorization Act mandated two separate studies. One study explored expansion of court authority to award restitution and was completed in October 2017. The remaining study looks at best practices for requesting, ordering, and collecting restitution, and is scheduled to be completed in early 2018. The Judicial Compliance with Ethics Issues study follows up on GAO’s 2004 report on financial disclosure procedures and examines Judiciary gift regulations and their enforcement.
Also in 2017, the AO was implementing recommendations that the GAO issued in three recent studies. As urged in GAO’s Federal Judiciary Sequester study, the AO was in the process of improving how it estimates cost savings achieved. To address suggestions in Lower Cost Alternatives to Courthouse Security, the AO was working with the General Services Administration, the U.S. Marshals Service, and the Federal Protective Service to foster greater information-sharing in Capital Security Program projects. As recommended in the third study, U.S. Court of Appeals Space Utilization, the AO was identifying additional ways for courts to share information about recent space reduction projects.