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Rule 3-415. Auditing.

Intent:

To establish an internal audit program forthe judiciary within the administrative office.

To examine and evaluate court operations bymeasuring and evaluating the effectiveness and proper application of programs.

Applicability:

This rule shall apply toall courts and the administrative office.

Statement of the Rule:

(1)    Auditplanning.

(1)(A) Audit planning schedule. The audit director shall annually preparea plan of scheduled fiscal and performance audits for submission to andapproval by the Council Management Committee.

(1)(B) Audit recommendations. The Board of Appellate Court Judges, theBoard of District Court Judges, the Board of Juvenile Court Judges, and theBoard of Justice Court Judges may provide the audit director recommendations tobe included in the audit plan submitted to the Council Management Committee.

(1)(C) State court administrator authorization. The state courtadministrator may authorize a limited scope audit in the event of a reportedtheft, burglary, or other alleged criminal act or suspected loss of monies orproperty at a court location, or if a change occurs in the personnelresponsible for fiduciary duties.

(1)(D) Amendment to the audit plan schedule. Any modification or changeto the approved plan of scheduled audits shall require prior approval by theCouncil Management Committee. Requests for audits not included in the planshall be submitted in writing to the Council Management Committee and identifythe need for an unscheduled audit to be included in the plan.

(2)      Authority.The auditors shall have the authority to conduct audits, consultations, andother engagements in accordance to generally accepted audit principles. Theauditors shall be independent of the activities audited, and shall followgenerally accepted accounting and performance auditprinciples for conducting internal audits. The auditors shall have full andunrestricted access to all records, documents, personnel and physicalproperties determined relevant to the performance of an audit. The auditor shallhave the full cooperation and assistance of court personnel in the performanceof an audit.

(3)    Fiscalaudits. Fiscal audits may consist of one or more of the followingobjectives:

(3)(A) to verifythe accuracy and reliability of financial records;

(3)(B) to assesscompliance with fiscal policies, procedures, and best practices;

(3)(C) to assesscompliance with applicable laws and rules; and

(3)(D) to verifythe appropriate protection of judicial assets.

(4)     Performanceaudits. Performance auditing is an assessment that provides an objectiveevaluation about the performance of court operations. Courtoperations includes any program, activity, project, function, or policythat has an identifiable purpose or set of objectives. Performance audits maycontain one or more the following objectives:

(4)(A) to assess the performanceand management of court operations against objective criteria;

(4)(B) to determine how efficientlycourt operations manage resources;

(4)(C) to determine how effectivelycourt operations accomplish goals and objectives;

(4)(D) to assess internal controlsand compliance with laws, rules, policies, and best practices;

(4)(E) to provide information andrecommendations to improve court operations.

(5)      Auditprocess. An audit within the judicial branch may consist of a fiscal audit,a performance audit, or elements of both types of audits. When an audit isrequired or approved, the audit shall be conducted with prior notice.

?????? (5)(A)An entrance conference shall be conducted between:

(5)(A)(1) Courts of record: the auditors, courtexecutive, presiding judge, clerk of court, and state level administrator.

(5)(A)(2) Courts not of record: the auditors,justice court judge, and state level administrator. The presiding judge mayalso be invited to attend.

(5)(A)(3) Administrative offices: the auditors,state court administrator, deputy court administrator, and department director.

(5)(B)An exit conference shall be conducted at the conclusion of the audit. Thisconference shall include the same individuals attending the entrance conferencefor both courts of record, courts not of record, and administrativeoffices.? At the exit conference, theauditors shall review the audit findings and recommendations and providerecognition for commendable court operations, when appropriate.

(5)(C)Audit results will be communicated to and approved by the Council ManagementCommittee.

(6) Auditreports.

(6)(A) The audit director shall prepare a writtenreport containing findings and recommendations as a result of the audit. Adraft copy of the report shall be provided prior to the exit conference andpresented to:

(6)(A)(1) Court of record: court executive,presiding judge, clerk of court, and state level administrator. An opportunityfor written response or comment will be afforded the court executive andpresiding judge, which will be incorporated into and become part of the finalreport.

(6)(A)(2) Courts not of record: the presidingjudge, justice court judge, and state level administrator. If the court andlocal government are following Accounting Model 2, then a local governmentrepresentative will receive a draft copy of the sections of the report thatpertain to the local government, who receipt and deposit court collected funds.An opportunity for written response or comment will be afforded the justicecourt judge, and a local government representative ifAccounting Model 2 is being followed, which will be incorporated into andbecome part of the final report.

(6)(A)(3) Administrative offices: state courtadministrator, deputy court administrator, and department director.

Written responses orcomments to reports presented under paragraph (6)(A) shallbe provided to the audit director within 30 days.

(6)(B)Copies of the final report shall be provided to:

(6)(B)(1) Courts of record: the CouncilManagement Committee, appropriate Board of Judges, state court administrator,presiding judge, court executive, and state level administrator.

(6)(B)(2) Courts not of record: the CouncilManagement Committee, state court administrator, presiding judge, justice courtjudge, state level administrator, and the Board of Justice Court Judges. Alocal government representative will receive the sections of the final reportthat pertain to the local government, if Accounting Model 2 is being followed.

(6)(B)(3) Administrative offices: the CouncilManagement Committee, state court administrator, deputy court administrator,and department director.

(7) Follow-up review.

(7)(A) Courts of record: Within 12 months of anaudit, the audit director shall provide a Follow-up Review form, including onlynon-compliance audit findings, to the court executive and copy the court leveladministrator. The court executive will complete the Follow-up Review formreporting on progress made toward compliance and return a copy of the completedform within 30 days to the audit director and court level administrator, thepresiding judge, and the appropriate board of judges.

(7)(B) Courts not of record: Within 12 monthsof an audit, the audit director shall provide a Follow-up Review form,including only non-compliance audit findings, to the justice court judge and acopy to the state level administrator. The justice court judge will completethe Follow-up Review form reporting on progress made toward compliance andreturn a copy of the completed form within 30 days to the audit director, thestate level administrator, the presiding judge, and the Board of Justice CourtJudges.

(7)(C) Administrative offices: Within 12 months of an audit, the auditdirector shall provide a Follow-up Review form, including only non-complianceaudit findings, to the department director and a copy to the state courtadministrator. The department director will complete the Follow-up Review formreporting on the progress made toward compliance and return a copy of thecompleted form within 30 days to the audit director and the state courtadministrator.

 

Effective November 1, 2021