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Judicial Branch for the Two Fiscal Years Ended June 30, 2016

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Judicial Branch for the Two Fiscal Years Ended June 30, 2016 A REPORT TO THE MONTANA LEGISlaTURE FINANCIal-COMPLIANCE AUDIT Judicial Branch For the Two Fiscal Years Ended June 30, 2016 FEBRUarY 2017 LEGISlaTIVE AUDIT DIVISION 16-27 Financial-Compliance Audits Legislative Audit Committee Financial-compliance audits are conducted by the Legislative Audit Division to determine whether an agency’s financial Representatives operations are properly conducted, the financial reports are Randy Brodehl, Chair presented fairly, and the agency has complied with applicable laws [email protected] and regulations. In performing the audit work, the audit staff uses Kim Abbott standards set forth by the American Institute of Certified Public [email protected] Accountants and the United States Government Accountability Dan Bartel Office. Financial-compliance audit staff members hold degrees [email protected] with an emphasis in accounting. Most staff members hold Tom Burnett Certified Public Accountant (CPA) licenses. [email protected] Virginia Court The Single Audit Act Amendments of 1996 and the Uniform [email protected] Administrative Requirements, Cost Principles, and Audit Denise Hayman Requirements for Federal Awards require the auditor to issue [email protected] certain financial, internal control, and compliance reports in addition to those reports required by Government Auditing Senators Standards. This individual agency audit report is not intended Dee Brown to comply with these reporting requirements and is therefore [email protected] not intended for distribution to federal grantor agencies. The Terry Gauthier Legislative Audit Division issues a statewide biennial Single Audit [email protected] Report which complies with the above reporting requirements. Bob Keenan The Single Audit Report for the two fiscal years ended June 30, [email protected] 2015, was issued March 29, 2016. The Single Audit Report for the Mary McNally, Vice Chair two fiscal years ended June 30, 2017, will be issued by March 31, [email protected] 2018. Copies of the Single Audit Report can be obtained by J.P. Pomnichowski contacting: [email protected] Gene Vuckovich Single Audit Coordinator Legislative Audit Division [email protected] Office of Budget and Program Planning Room 160, State Capitol Room 277, State Capitol P.O. Box 201705 P.O. Box 200802 Helena, MT 59620-1705 Members serve until a Helena, MT 59620-0802 member’s legislative term of office ends or until a successor is appointed, whichever occurs first. Audit Staff §5-13-202(2), MCA, Mary Currin Jessica Curtis Jennifer Erdahl Fraud Hotline (Statewide) 1-800-222-4446 (in Helena) Reports can be found in electronic format at: 444-4446 [email protected] http://leg.mt.gov/audit LEGISLATIVE AUDIT DIVISION Angus Maciver, Legislative Auditor Deputy Legislative Auditors: Deborah F. Butler, Legal Counsel Cindy Jorgenson Joe Murray February 2017 The Legislative Audit Committee of the Montana State Legislature: This is our financial-compliance audit report on the Judicial Branch (branch) for the two fiscal years ended June 30, 2016. Included in this report are recommendations related to compliance with state laws and policies. During the audit, we focused on expenditures for personal services, benefits to individuals, other services, communications, and intangible assets. We also performed work over federal revenues, as well as testing compliance with state laws and policies. The branch’s written response to the recommendations is included in the audit report at page C-1. We thank the Chief Justice, and the Court Administrator and her staff, for their cooperation and assistance throughout the audit. Respectfully submitted, /s/ Angus Maciver Angus Maciver Legislative Auditor Room 160 • State Capitol Building • PO Box 201705 • Helena, MT • 59620-1705 Phone (406) 444-3122 • FAX (406) 444-9784 • E-Mail [email protected] i Table of Contents Elected and Appointed Officials ...............................................................................................ii Report Summary ...................................................................................................................S-1 CHAPTER I – INTRODUCTION ��������������������������������������������������������������������������������������������������������������1 Audit Objectives ........................................................................................................................1 Background �������������������������������������������������������������������������������������������������������������������������������1 CHAPTER II – FINDINGS AND RECOMMENDATIONS ��������������������������������������������������������������������5 Annual Attorney License Tax ....................................................................................................5 INDEPENDENT AUDITOR’S REPORT AND BRANCH FINANCIAL SCHEDULES Independent Auditor’s Report ............................................................................................... A-1 Schedule of Changes in Fund Equity & Property Held in Trust for the Fiscal Year Ended June 30, 2016 ................................................................................A-3 Schedule of Changes in Fund Equity & Property Held in Trust for the Fiscal Year Ended June 30, 2015 ................................................................................A-4 Schedule of Total Revenues & Transfers-In for the Fiscal Year Ended June 30, 2016 ................................................................................ A-5 Schedule of Total Revenues & Transfers-In for the Fiscal Year Ended June 30, 2015 ................................................................................A-6 Schedule of Total Expenditures & Transfers-Out for the Fiscal Year Ended June 30, 2016 ................................................................................ A-7 Schedule of Total Expenditures & Transfers-Out for the Fiscal Year Ended June 30, 2015 ................................................................................A-8 Notes to the Financial Schedules ..........................................................................................A-9 REPORT ON INTERNAL CONTROL AND COMPLIANCE Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Schedules Performed in Accordance with Government Auditing Standards ...............................................................................................................B-1 BRANCH RESPONSE Judicial Branch .....................................................................................................................C-1 16-27 ii Montana Legislative Audit Division Elected and Appointed Officials Term Expires Supreme Court Mike McGrath Chief Justice 2024 Beth Baker Justice 2018 Dirk Sandefur Justice 2024 Laurie McKinnon Justice 2020 James Jeremiah Shea Justice 2020 Jim Rice Justice 2022 Michael Wheat Justice 2022 Clerk of Supreme Court Ed Smith 2018 Appointed Officials Beth McLaughlin, Court Administrator Sarah McClain, State Law Librarian For additional information concerning the Judicial Branch, contact: Beth McLaughlin, Court Administrator Montana Supreme Court P.O. Box 203002 Helena, MT 59620-3002 (406) 841-2957 e-mail: [email protected] S-1 MONTANA LEGISLATIVE AUDIT DIVISION FINANCIAL-COMPLIANCE AUDIT Judicial Branch For the Two Fiscal Years Ended June 30, 2016 FEBRUARY 2017 16-27 REPORT SUMMARY The Judicial Branch’s main operations consist of the Supreme Court and district courts. The branch expended total General Fund resources of approximately $47 million and $39 million in fiscal years 2016 and 2015, respectively. We found the Judicial Branch can improve the timeliness of attorney license tax deposits as well as compliance with related contracting law and procurement rules. Context The judicial power of the state is vested in the items such as incentives, medical services, and Supreme Court; district courts in the 22 judicial transportation. Benefits and Claims related districts; the Workers’ Compensation Court; to Drug Treatment Courts are found in both the Water Court; courts of limited jurisdiction; the Supreme Court program and District and any other courts established by law. Court program depending on the type of Judicial Branch (branch) operations include the funding for the court. Expenditures related Supreme Court, Clerk of the Supreme Court, to the placement of juveniles are also recorded the Water Court, district courts, the State Law as Benefits and Claims to Individuals. The Library, and the computer technology of all branch implemented statutory changes related courts, including those of limited jurisdiction. to Juvenile Placement funds as described in Note 4. Branch activities include district court expenses for district court judges, staff, and The branch spent approximately $200,000 youth probation officers; the Supreme Court’s and $600,000 in fiscal years 2016 and 2015, Justices, Court Administrator’s Office, and respectively, from the Capital Project Fund for Clerk of the Supreme Court; the Law Library; long range information technology projects. and Water Courts. The branch is overseen by At June 30, 2016, approximately $1.2 million the Supreme Court and administered by the in fund equity remained from resources Court Administrator’s Office. District courts’ appropriated for these projects in prior fiscal jurisdiction includes criminal, tort, contract, years. and property rights as well as domestic relations, mental health, estate, civil appeals, Results
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