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Accountability - Annual Report 2012

Responsible management of resources requires accountability and standards. In 2010, the Judicial Conference approved the Strategic Plan for the Federal Judiciary to identify goals for preserving Judiciary core values—the rule of law, equal justice, judicial independence, accountability, excellence, and service—while addressing challenges and meeting new demands on resources. A number of studies, programs, and management tools reinforce the Judiciary's commitment to this plan and high ethical standards and accountability.

Studies, Reviews, and Management Tools

• Support GAO Studies: In FY 2012, the GAO conducted seven studies involving the Judiciary. The AO responds to studies and requests for information from the GAO. It also reviews and comments on GAO draft reports in coordination with Conference committees and the courts.
  
  In fiscal year 2012, GAO completed a report on the bankruptcy of financial companies, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Six other GAO studies were active during this period, addressing the consolidation of district and bankruptcy clerks’ office operations, courthouse planning process, the Judicial Survivors’ Annuities System, the Sex Offenders Registration and Notification Act, patent litigation, and the National Drug Control Strategy, including drug abuse prevention and treatment programs.
• Review Internal Controls and Requirements: The AO is finalizing a self-assessment tool that court units and federal defenders can use to review their local internal control policies and procedures. The tool will highlight internal controls that address higher-risk areas of operation and help courts and defender organizations review their internal control programs annually, as required. Internal control measures provide reasonable assurance that: Judiciary assets are protected from error, fraud, waste, loss, or abuse; operations are efficient and effective; financial reports are accurate and reliable; and business practices comply with all applicable statutes and policies.
  
  Also, the AO is completing a review of the Judiciary's current internal control requirements, with an eye toward reducing administrative burdens while maintaining adequate protection of Judiciary assets in an environment where court units are operating with decreasing staffing levels. The results of the review will be used to improve the Judiciary’s internal control program and cyclical court audit process.
• Implement National Internal Control Evaluation System: By the end of fiscal year 2012, the Internal Control Evaluation (ICE) system had been implemented in a total of 307 court units in 76 district courts and four appellate courts. A software application for court managers, the ICE system includes a separation-of-duties component that assists in identifying potential conflicts involving certain financial and other administrative actions, such as purchasing goods and approving payment for those goods; and a data-mining report component that can identify potentially problematic financial transactions, such as high-cost purchases or repeat purchases from the same vendor.
• Expand Conflict of Interest Reporting: The Stop Trading on Congressional Knowledge (STOCK) Act of 2012 took effect on April 4, 2012, some provisions of which affect judges and Judiciary employees who are required to file financial disclosure reports. Covered Judiciary personnel who are negotiating agreements with private entities for post-judicial employment or compensation, or who have made such agreements, must file statements within three days; recuse themselves “whenever there is a conflict of interest, or appearance of a conflict of interest, for such individual with respect to the subject matter of the statement,” and file a notice regarding such recusals.
  
  With the exception of the new reporting requirement, the Judiciary’s existing ethics rules already cover, in general terms, the specific items addressed in the STOCK Act. Existing ethics rules also provide guidance concerning potential conflicts of interest related to post-judicial employment. The Committee on Codes of Conduct is developing recommendations on implementation of the STOCK Act.
• Assess the AO’s Review Programs: At the request of the Judicial Conference Committee on Audits and Administrative Office Accountability, a comprehensive assessment of the AO’s management and program reviews of court and federal defender organizations was completed in FY 2012 to determine how well the AO’s review programs are operating and what improvements should be made to strengthen and enhance the programs. AO offices are now in the process of implementing the study’s recommendations and revising office protocols for conducting reviews in compliance with newly issued standards.
  
  The assessment found that the AO’s review programs are generally well received, working well, and provide a valuable, effective resource and service to the courts and federal defender organizations. Recommendations addressed issues of accuracy, clarity, priorities and timeliness. The study also reviewed and revised the AO’s 1996 Standards and Guidelines for Program Review and Management Assistance Services, which are broad, overarching standards and guidelines for conducting review and assessment programs.
• Establish Sound Financial Management and Controls with Audits and Reviews: The AO performs financial audits, oversees cyclical audits, and assists courts through program review and assessment activities that include administrative, management, and operational assessments, as well as technical reviews. In conjunction with these activities, the AO assists courts in establishing sound financial management and internal control processes.
  
  Court audits are conducted on a four-year cycle for most courts, and on a 30-month cycle for larger courts. In fiscal year 2012, the Administrative Office issued final reports for 97 cyclical financial audits of the courts. It completed 42 other financial audits, including audits of Chapter 7 bankruptcy trustees and Criminal Justice Act defender grantees, and audits in response to a change of clerk or other special request. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 also requires audits of randomly selected debtors to determine the accuracy, veracity, and completeness of the information contained in the petitions, schedules, and statements filed by individual Chapter 7 and 13 debtors. During FY 2012, 242 debtor audits were conducted.
  
  Each year, onsite management assistance and program reviews of various kinds are conducted in court units and federal defender organizations. Reviews may cover budget management, jury administration, court reporting, program operations and management, human resources management, property management, procurement, succession planning, and continuity of operations plans and disaster preparedness. Review procedures generally include observations of office operations, interviews with key staff, and the review of records and files. During fiscal year 2012, onsite management reviews were conducted for one appellate court, five district courts, four bankruptcy courts, 21 federal defender organizations, and 15 probation/pretrial services offices.
• Extend Whistleblower Protection: In September 2012, the Judicial Conference adopted a recommendation from its Committee on Judicial Resources to amend the 2010 Model Employment Dispute Resolution Plan, extending whistleblower protection to Judiciary employees. The Judiciary has channels that employees may use to report a violation of law or suspected fraud, waste, abuse, or mismanagement of funds by an employee or an entity doing business with the courts. Amending the Model Plan added an administrative remedy specifically addressing allegations that an employee faced an adverse personnel action as a result of whistleblowing.
• Share Mechanisms for Reporting Fraud, Waste, and Abuse: In April 2012, the Judicial Conference Committee on Audits and Administrative Office Accountability, asked courts and defender organizations for information about their format and processes for notifying Judiciary staff about available channels for reporting allegations of fraud, waste, and abuse. In response, more than 50 courts offered to share their procedures with interested court units.