(Last year, the AOC's name was dropped and the agency was officially blended into the Judicial Council of California, the governing body led by Chief Justice Tani Cantil-Sakauye.)
"The AOC," says the new audit, "engaged in questionable compensation and business practices, and failed to adequately disclose its expenditures to stakeholders and the public."
While the dollars in question are small relative to the overall budget of the judicial branch of government, the audit's findings certainly can't help court supporters in their public relations effort to increase the flow of tax dollars. And the audit may embolden critics, most notably a splinter group of California judges that has long accused court administrators of spending money on "trivial bureaucratic activities."
By late Wednesday afternoon, Chief Justice Cantil-Sakauye announced the creation of a special panel of judges and officials to examine the audit's findings.
Salaries, Perks, Office Space and More
From salaries to office space and beyond, the new state audit argues that court officials could have taken a closer look at how they spent a portion of some $386 million in taxpayer dollars over the past four years. The report criticizes the judges that oversee the court bureaucracy -- the Judicial Council -- as too often seeing its management of administrators' spending decisions as "more ministerial than substantive."
The audit finds that managers of eight court subdivisions are all paid salaries between $179,000 and up to almost $182,000 -- more than Gov. Jerry Brown or other top state officials:
"We question whether the AOC's salary levels are justified. For example, AOC office directors manage a range of 12 to 111 employees. In contrast, the director of the California Department of General Services receives a lesser salary of $167,000 yet manages a state department with more than 3,600 employees."
The audit also reports on perks that extend beyond those top officials -- like paying an employee's portion of retirement contributions for some workers, free meals and cash payments to some workers for their unused vacation hours at a cost of about $900,000 in each of two recent fiscal years.
Auditors also raised a larger question: Does the administrative agency that runs the court system really need to be spread out over offices in Sacramento, San Francisco and Burbank? Why, wonder auditors, shouldn't the agency centralize its staff in the state capital and stop adding an extra stipend (a "differential") to the paychecks of those who live in the Bay Area or Los Angeles?
"We estimate the AOC could save over $5 million in rent alone each year by moving its offices to Sacramento. Further, the AOC could eliminate travel expenses between its offices as well as the regional pay differentials."
The audit goes on to criticize the court system for not analyzing the cost-benefit of its fleet of state-owned vehicles, or the money spent on outsourcing work to contractors or consultants -- at a total cost in the 2013-14 fiscal year of $55 million.
Change Is Underway, Say Court Officials
The reaction to the audit from inside California's court system seems to be criticism about the context mixed with assurances that change is well underway.
"We still have work to do," wrote Cantil-Sakauye in a memo Wednesday morning to the entire judicial branch. "This audit, while confined in scope, gives us another useful tool to help us make progress."
The chief administrator of the state court system, Martin Hoshino, has also promised that systemic change is underway. "I agree with many of the recommendations in the report," Hoshino wrote in a recent letter to auditors.
Others suggest that the public not miss the context of the total dollars at issue vis-a-vis the overall finances of the courts.
"It's about 4 percent of the judicial branch budget," said Yolo County Superior Court Judge David Rosenberg, a member of the governing Judicial Council. "It's a bucket of water into the ocean."
Still, auditors say the Legislature should be stepping in -- not with rules about how the money is spent (after all, these are separate and somewhat autonomous branches of government) but rather with more transparency via independent audits every year.
And auditors insist that judicial administrators need to, in laymen's terms, walk the walk.
"We are concerned that without significant changes," says the audit, "the Judicial Council and AOC will continue to publicly embrace addressing the weaknesses that we and others have identified but fail to take the steps necessary to actually repair those weaknesses in a meaningful and transparent way."
