INTERNAL AUDIT DIVISION CLERK OF THE CIRCUIT COURT

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1 INTERNAL AUDIT DIVISION CLERK OF THE CIRCUIT COURT FOLLOW-UP REVIEW TO AUDIT OF COLLECTIONS AND ENFORCEMENT OF COURT FINES AND COSTS Ken Burke, CPA Clerk of the Circuit Court Ex officio County Auditor Robert W. Melton, CPA*, CIA, CFE Chief Deputy Director Internal Audit Division Ken Green Internal Auditor II Audit Team Scott Stees, CIA, CISA, CFE Internal Audit Manager DECEMBER 8, 2005 REPORT NO *Regulated by the State of Florida

2 December 8, 2005 The Honorable Ken Burke Clerk of the Circuit Court We have conducted a follow-up review to our audit of Collections and Enforcement of Court Fines and Costs. The objectives of our review were to determine the implementation status of our previous recommendations. Of the 17 recommendations contained in the audit report, we determined that 11 have been implemented, 3 have been partially implemented, and 3 have not been implemented. The status of each recommendation is presented in this follow-up review. We appreciate the cooperation shown by the staff of the Court and Operational Services Divisions during the course of this review. Respectfully Submitted, Robert W. Melton, CPA*, CIA, CFE Chief Deputy Director Internal Audit Division *Regulated by the State of Florida

3 Follow-Up Review to Audit of Collections and Enforcement of Court Fines and Costs INTRODUCTION Scope and Methodology We have conducted a follow-up review of our audit of Court Services Division- Collections and Enforcement of Court Fines and Costs. The purpose of our follow-up review is to determine the status of our previous recommendations for improvement. The purpose of our original audit was to: Determine if assessments are adequate and in compliance with state law. Determine if all fines and costs owed are accounted for properly. Determine if there are adequate procedures to ensure follow-up and collection of amount due. To determine the current status of our previous recommendations, we conducted an interview with management to determine the actual actions taken to implement the recommendations for improvement. We performed limited testing to verify the progress of the recommendations for improvement. The audit period of our original review was October 1, 2001 to March 31, Overall Conclusion Of the seventeen recommendations in the report, we determined that eleven have been implemented, three have been partially implemented, and three have not been implemented. Background The Court Services Division includes Circuit and County Civil Court Records, Probate Court Records, Circuit Criminal Court Records and County Criminal Court Records, Criminal Court Customer Service and Court Assistance. Circuit Civil Court Records includes the processing of Circuit Civil, Mortgage Foreclosures, Child Support and appeal cases and Jury Service. County Civil Court Records issues service of process on new cases, assists the public with filing Small Claims cases, receipts all required collections, assists the public with filing Domestic & Repeat Violence actions, dockets and files all pleadings. Circuit Criminal, established in July 1996, is responsible for felony and all juvenile cases that are processed in the Circuit Criminal Court Records. County Criminal Court Records, established in July 1996, is responsible for the intake and filing of all cases and pleadings in those cases, under the jurisdiction of County Court including uniform traffic citations, non-criminal infraction violations, local ordinance violations and misdemeanor offenses. Criminal Court Customer Services provides customer service for the areas of Felony, Juvenile, Misdemeanor and Traffic Court Records. Court Assistance is comprised of court clerks, evidence clerks, supervisory personnel, and administrative employees whose primary objective is to comply with the requirements conferred on the Clerk of the Circuit Court by Florida Statutes. The 2

4 Follow-Up Review to Audit of Collections and Enforcement of Court Fines and Costs INTRODUCTION following table is an analysis of total filings in Circuit/County Court obtained from the 2002 Performance Report. Circuit Court Change Criminal Filings 11,413 12, % Civil Filings 9,155 9, % Family Filings 14,501 14, % Juvenile Filings 5,452 5, % Probate Filings 7,139 7, % Total Circuit Court Filings 47,660 49, % County Court Criminal Filings 30,171 31, % Civil Filings 18,553 20, % Criminal Traffic 23,045 24, % Civil Traffic 157, , % Total County Court Filings 229, , % The 2002 Performance Report lists the Sixth Judicial Circuit, as Florida s fourth largest trial court. There are 59 judges, 37 Pinellas and 18 Pasco. In Pinellas County, there are 14 County Criminal Court Judges and 23 Circuit Court Judges. The collection of court fines and costs are the responsibility of the Clerk of the Court, but other outside agencies are involved. The Department of Juvenile Justice (DJJ) does the initial intake for juveniles. DJJ collects and receives the amount of juvenile detention fees. Those juveniles who committed punishable crimes are assigned a case number to collect information on the charges, disposition and sentencing, including fines and costs. The Clerk is responsible for collecting those fines and costs ordered. On occasion when the Clerk s Office collects juvenile detention fees, the amount is turned over to the DJJ less a 3% collection fee. For the month of June 2003, the Clerk s Office collected only $ Outside agencies are utilized to collect the amount of money owed for fines, fees and costs ordered by the court as a condition of probation. The Department of Corrections (DOC) is utilized for felony collections. The Salvation Army Correctional Services are utilized for criminal traffic, local ordinance violations and misdemeanor collections. All unpaid fines, fees and costs for traffic and criminal traffic are referred to Department of Motor Vehicles (DMV). DMV will suspend or revoke a person s driver s license if amounts remain unpaid after 20 days. There is an interstate agreement with DMV for suspending or revoking driver s licenses for unpaid traffic fines, fees and costs. The following table shows a breakdown by fiscal year of Pinellas County s Assessments, Credits and Payments. 3

5 Follow-Up Review to Audit of Collections and Enforcement of Court Fines and Costs INTRODUCTION Fiscal Year Assessments Credits Payments % Paid ,433,710 3,993,958 17,707,469 55% ,912,824 3,864,805 19,433,974 54% ,041,608 4,393,615 20,124,431 56% ,287,356 4,597,714 21,375,625 57% ,221,199 5,629,303 23,227,509 52% /31/ ,849,766 3,097,863 11,877,824 50% Total 235,746,463 25,577, ,746,832 54% The percentage calculations were made for each year and the total five years to show what percentage of assessments, less any credits, were actually collected (% Paid). The overall collection rate of 54% for October 1, 1997 through March 31, 2003 is a weighted average of Circuit Criminal at 43% and County Criminal at 71%. 4

6 This section reports our follow-up on actions taken by management on the Recommendations for Improvement in our audit of Collections and Enforcement of Court Fines and Costs. The recommendations contained herein are those of the prior audit, followed by the current status. 1. Public Defender And Other Attorney Fees Are Not Being Assessed In All Cases, And Assessments Are Less Than Other Counties Surveyed. We noted an estimated $6.3 million in public defender costs that were not assessed during the audit period. We also found that public defender cost amounts are below other counties, meaning an additional estimated $10.8 million could have been assessed if our amounts were comparable to other counties. Attorney s fees and costs are not being assessed by the court when the assistance of the public defender s office is provided. The application fee requesting legal assistance is being ordered by the court, but attorney fees and costs are not assessed for most cases. We reviewed cases where legal assistance was provided. Our analysis included reviewing a listing of cases where a Public Defender or Court Appointed Attorney was provided to the defendant and the defendant pled guilty, nolo contendere or was found guilty. An analysis of 76 cases is as follows: 88% (67 cases) had no assessment for attorney fees and costs. 12% (9 cases) had assessments for attorney fees and costs. In the 9 cases where the court assessed attorney fees, the assessments were as follows: Public Defender had 5 cases for $150, 1 for $60 and 1 for $50. Court Appointed Attorneys had 2 cases for $800. The Public Defender attorney fees are not prescribed. Court Appointed Attorney s fees are set out by administrative order, ranging from $300 to $1,000. Attorney costs usually require prior approval of the court. We understand from management that the judiciary is considering prescribing Public Defender attorney fees in similar fashion to the Court Appointed Attorney structure. We also compared our usual assessment amount to other counties as illustrated in the following chart. 5

7 Public Defender Highest Costs $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 $150 $250 $250 $350 $800 $1,750 Pinellas Orange Sarasota Brevard Pasco Hillsborough We calculated an average of $378 for the counties surveyed, which we used to project the additional amounts that could have been assessed. We estimate that an additional $10,815,408 in public attorney fees could have been assessed if our rates were comparable to other counties. The total impact of not assessing legal assistance costs on all cases and assessing at a lower rate is estimated at $17,077,008 for the audit period. Recommendation: Management provide information to the judiciary regarding cases where legal assistance is provided by the Public Defender for their consideration in assessing court costs. Status: Partially Implemented. Although management did advise the judiciary of this opportunity for their consideration, management stated that Public Defender and other attorney fees are still not being assessed in most cases. 2. Assessment Amounts Are Not Adequate. Assessments for Pinellas County fees are not adequate in comparison to fees of other counties. The assessments also are not always sufficient to cover mandatory and discretionary court costs, which means no amounts would go toward fines/civil penalties. Fines/civil penalties that are assessed are only a fraction of amount allowed. A. Fines for Ordinance Violations have not kept pace with inflation and are not adequate in comparison to fees of other counties. If fine amounts had 6

8 kept pace with inflation, an additional $1,504,413 would have been assessed during the audit period. Since 1977, Ordinance Violation fees have only been increased one time, in 1998, when each class was raised by $15. The following calculation uses the Inflation Conversion Factor to estimate what the current fee would be if the fee kept pace with inflation. Based on the 1977 fee amount, current amounts would be as follows: VIOLATION CLASS 2003 AMOUNT (Inflation Based) 1977 FINE AMOUNT I $135 $385 $250 II $110 $313 $203 III $60 $171 $111 IV $35 $100 $65 V $10 $28 $18 INFLATIONARY INCREASE The $15 increase does not cover the inflationary increase over the time period for any violation class. The impact of this inflationary increase can be estimated by applying an average increase for the cases in the audit period. The average inflationary increase would be $126.40; applied to the 11,902 cases would result in $1,504,413 increase. We estimate that $722,118 of this increase could be collected on County and Municipal Ordinance fines. A comparison of several counties was also made for 20 selected ordinance violations to compare current fees. The results of the analysis are as follows: NO. OF VIOLATIONS PINELLAS CHARGES LESS NO. OF TOTAL VIOLATIONS COUNTY Pasco Orange Hillsborough 7 20 Brevard Sarasota 8 20 The results show that Pinellas is generally charging less than other counties surveyed. Our current uniform fine schedule highest fine is $150. All the other counties surveyed have the maximum $500 fine amount. The following graph shows how far Pinellas County s fine amounts are below the highest fine amounts for the 20 violations tested. 7

9 Fine Comparison Dollars Pinellas Highest Violations The graph shows a definite disparity in the fine amounts between Pinellas and other counties. The current County Ordinance provides the authority to levy fines not to exceed $500. B. Assessments were not made or were not sufficient to cover all court costs, and reasonable fines/civil penalties. The most notable court costs not sufficiently assessed were: Local County Alcohol and other Drug Abuse Trust Funds $15 BUI/DUI Trust Funds $135 Violation of Assault, Battery, Culpable Negligence, Domestic Violence Trust Fund $201 Legal Assistance for public defender attorney fees and costs (usually $150) After the court costs are satisfied, the amount left for fines is only a fraction of what could be assessed for misdemeanor and felony cases. The usual fine amounts are only a fraction of the amount allowed. If an overall average of one-half of the maximum fine for the lowest degree were assessed on the cases during the audit period, it would generate fine amounts of over $78 million (an estimated $75.9 million more than estimated assessed fines of $2.1 million. We question whether fine amounts of an average of $22 are reasonable when state law establishes the maximum fines at $5,000-$15,000. 8

10 Recommendations: the Clerk s Office: A. Work with the Court to increase fees to cover inflation and to be equitable in comparison to other counties. B. Provide information to the court regarding the number and types of mandatory and discretionary costs and fines that have been assessed. The Clerk s Office should work with the Chief Judge to establish consistent guidelines regarding the amount of fines and costs assessed. Status: A. Partially Implemented. Management has worked with the court regarding this issue, but the level of assessments has not significantly improved. B. Partially Implemented. Management has provided information to the court regarding the number and types of mandatory and discretionary costs and fines that have been assessed. The Clerk s Fee Schedule was also revised to show minimum and maximum fine amounts. However, any available guidelines regarding the amount of fines and costs apparently are not being utilized consistently by the judiciary. 3. Court Costs And Fines Due Are Not Being Recorded Accurately. The fines and costs ordered are not accurately reflected in the Accounts Receivable/Deferred Payment system. We found an overall error rate of 10% in testing the accounts receivable balance of $57,155,655 as of April 7, Our specific concerns are as follows: A. Amounts entered on case dockets are not being posted correctly to the accounts receivable system. It was determined that the outstanding balances in Case Progress Docket (K) did not reconcile to the Deferred Payment system (DP). B. Our analysis determined that in 41 of 60 parking ticket cases (68%), the amounts owed in the parking system did not agree with the accounts receivable balance. C. Pre-Trial Intervention Fees owed are not entered on the Case Progress Docket or established as an accounts receivable when decided. The effect is that Pre-Trial Intervention fees are not included as an account receivable. 9

11 D. Public Defender application fees docketed in the system were not posted correctly to accounts receivable. E. The Accounts Receivable System does not accurately reflect what amounts are due. This is in addition to the previous problems in recording how much is actually owed. The accounts receivable system lacks key information to analyze what receivables are due or past due. Recommendations: A&B. Management correct discrepancies between the Case Progress Docket and the Accounts Receivable System. C. Require Pre-Trial Intervention Fees assessed be docketed in the Case Progress Docket when decided. D. Correctly post fines, fees and costs assessed by court from Case Progress Docket to the Accounts Receivable /Deferred Payment System. E. Revise the Accounts Receivable/Deferred Payment System to meet accounting standards. Management needs to develop reports for monitoring amounts due or past due. Status: A&B. Implemented. Management has corrected discrepancies between the case progress docket and the Accounts Receivable System. C. Not Implemented. Management stated that the court costs and fines recorded are still not being recorded accurately. D. Not Implemented. Management stated that the court costs and fines recorded are still not being recorded accurately. E. Implemented. Management started generating reports in July 2005 of past due accounts receivables. 4. Inaccurate Information Is Being Maintained Within The Parking Ticket System. Parking ticket case information is not always properly reflected in the Parking Ticket System. In testing account receivable balances for the 60 parking tickets selected, we found 17 discrepancies in the Parking Ticket System for a 28% error rate. The differences are discussed below. 10

12 A. The amounts due and paid according to the case file agreed with the Accounts Receivable System; however, the Parking Ticket System shows a credit amount due or an incorrect amount due. B. In 8 cases, the balance due according to the case records did not agree to the Parking Ticket System. The balance on Payment Record (PV) of Parking System was not supported by the case record information. The high error rates in the Parking Ticket System and the Accounts Receivable System in the previous opportunity for improvement, significantly impact the credibility of what amount of fines and costs are actually owed. Recommendation: Management create control and exception reports that will highlight discrepancies in the Parking Ticket System. The exceptions can then be corrected. Status: Not Implemented. Management has initiated a data processing request to create the exception reports. However, the data processing request has not yet been completed. 5. Credits To Fines And Costs For Working Prisoners Were Not Being Recorded. Pinellas County was not recording the per diem credit toward fines and costs for working prisoners. A companion provision, Section , Florida Statutes, providing that prisoners receive a credit for time served, was being followed and reported. Management indicated that they are working with the Sheriff s Office to record the credit for working prisoners. Recommendation: Management record the credit to fines and costs for working prisoners as required in state law. Status: Implemented. Management is recording the credits to fines and costs for working prisoners, as required by state law. 11

13 6. Collection Efforts Were Not Sufficient. Collection efforts for court fines and costs do not include some activities allowed. Pinellas County uses collection letters, but does not use collection calls, private collection agents or reporting to credit services. We noted several areas where improvements in collection efforts could be made. A. Collections could be increased by as much as $1,263,080 for application fees. Management is not adequately collecting Public Defender application fees that are not a Condition of Probation. Management stated that Department of Corrections is only responsible for those fines, fees and costs ordered by the judge as a Condition of Probation.. B. Collections could be increased by as much as $258,314 for late fees. Management is not adequately collecting Delinquent or Additional late fees assessed that are not a Condition of Probation. We determined that in 9 cases, the balances on the Salvation Army payment stub did not reconcile with the balances on the Deferred Payment records. Management stated that Salvation Army is only responsible for fines, fees and costs ordered by the judge as a Condition of Probation. All delinquent and additional fees assessed after the judge s order are not the responsibility of the Salvation Army but the Clerk s Office. Our review indicated that 18,451 cases representing $258,314 contained delinquent or additional fees not collected. C. Management was not taking adequate action on delinquent accounts receivable balances for parking tickets. Our testing included selecting 60 parking tickets with a balance due on the payment record. Our analysis indicated that in 6 cases (10%), there was no subsequent action taken on delinquent accounts receivable balances other than late notices. In 2 of 6 cases, the cases were aged out; the case activity display file (PK) was not available on the Parking Ticket System. No collection efforts are really made on delinquent parking tickets between the time they are due and when they are aged out. Recommendations: A&B. Management notify the court of Public Defender application fees, delinquent fees, and late fees to be satisfied prior to release of the defendant. C. Management evaluate alternatives for collection of parking ticket receivables prior to writing them off from collection. 12

14 Status: A&B. Implemented. Management now notifies the court of Public Defender application fees, delinquent fees, and late fees to be satisfied prior to release of the defendant. C. Implemented. Management has recently signed an agreement with a collection agency that specializes in collecting government receivables. 7. Collection Monitoring Was Needed. Pinellas County was not taking adequate action for collecting amounts owed. In general, the Board of County Commissioners can pursue collection of fines and court costs. The Clerk of the Circuit Court-Court Assessed Fund/Owed Collection Analysis Report was not used by management to monitor collections. We noted the following specific concerns: A. The Accounts Receivable System did not provide key information for monitoring collection efforts. B. Payments received are less than one-half of the amounts assessed. We calculated that on an average, 48% of the payments were collected during the period October 1, 1997 thru March 31, The assessments that are satisfied through community work programs and credit for time served are each about 1%. The amounts suspended by the court are about 2% of the assessments. The three areas with the lowest collection rates are Felony, Juvenile and Ordinance cases. Court assessed fines and costs were not being satisfactorily collected or satisfied. C. Management has not adequately monitored the collection and satisfaction of fines and costs. The court system focus is on the administration of court cases, not on the collection and satisfaction of fines and costs, so active enforcement efforts may stop short of satisfying all amounts due. Pinellas County is not monitoring collections of court-related financial obligations. The consideration of contracting with a collection agent should help identify the requirements for information of court-related financial obligations. D. The amount assessed, including fines, was not adequate to cover the related costs of the County. The assessments made only cover about half the County s costs and only half the assessments made are collected. These assessments include fines which are not normally intended to be used toward court costs. 13

15 Recommendations: A. The Accounts Receivable System needs to provide reports for monitoring amounts owed and collection efforts made. B&C. The information on collection efforts and success need to be compiled for review by the responsible parties to determine that efforts are made to collect or satisfy fines and court costs imposed. D. Management pursue collecting court-related financial obligations to sufficiently cover the related costs. The efficiency and effectiveness of collection efforts need to be reported and reviewed. The pursuit of collecting court-related financial obligations through private collection agencies should be evaluated for Pinellas County. Status: A. Implemented. Management started generating accounts receivable reports in July 2005 to monitor collections. Management is also currently developing specifications for a new Accounts Receivable System. B&C. Implemented. Management now generates reports showing amounts outstanding more than 90 days. D. Implemented. Management has signed a contract with a collection agency to pursue delinquent amounts. 14

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