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Measure
4.2.3: Evaluation of the Court’s Financial Auditing Practices
Periodic
audits of financial practices are designed to reveal whether revenues and
expenditures of governmental organizations are handled in accordance with
law, regulation, contractual obligations or, in some cases, policy. This
measure focuses on whether the court uses formal financial auditing to
prevent and detect irregularities, misfeasance, or malfeasance in its
financial practices.
To
assess the court’s auditing procedures, the following questions are
examined:
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Are
there internal auditing procedures?
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How
frequently do internal audits occur?
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Is
there an independent external audit conducted periodically to assess the
effectiveness of the court’s internal controls, including its internal
audit procedures?
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What
is the scope of the external audit? (For example, is the audit conducted on
financial statements and internal controls or just on cash controls?)
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What
use is made of the financial audit? Are auditors’ suggestions for
improvements reviewed and implemented?
Planning/Preparation.
This step involves determining who will carry out the data collection and
analysis. Should a trial court staff member be selected because of financial
or other limitations? Or should the court consider an outside researcher to
work in cooperation with court administrative staff? Because an outside
researcher may produce a more thorough and objective assessment and bring
special expertise to the subject, this alternative is recommended. Insiders
are needed, in any case, to help secure the information necessary to conduct
the assessment. Preparation for the measure includes review of Form
4.2.3, Auditing Practices Checklist and Performance Index. It may be
necessary for the researcher, in consultation with court personnel, to
modify the instrument to improve its specificity and appropriateness for
State and local conditions and terminology.
Data
Collection. The
researcher will conduct interviews to become familiar with policies that
govern internal and external audits of the court’s financial controls.
These interviews allow the researcher to partially complete Form
4.2.3. The initial interviews, for example, will clarify whether
periodic audits are performed and who performs them. Copies of audit reports
or memoranda then should be collected for a 3-year period. After reviewing
the audit reports, the researcher should discuss them with court financial
officers and managers to determine who reviewed the audit reports and what
actions were taken in response to any problems or deficiencies noted in
them.
Data
Analysis and Report Preparation.
A performance index assigns scores to the
court’s use of audits. The scoring method uses points as negative
indicators; a perfect score is "0." Once the researcher has
completed the checklist and summed the index scores associated with it, a
brief narrative should be prepared to explain checklist items that are not
scored as "0". The checklist and rating form, with narrative,
should be submitted to the steering committee formed to oversee and
interpret the results of the evaluation, as described in the introduction to
the measures of performance for independence and accountability
Go
to Form 4.2.3
Go
to Standard 4.2
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