IMPLEMENTATION AND OVERSIGHT
Change the effective dates of all court-cost legislation from September 1 to January 1.
Legislation implementing or changing court costs often becomes effective on September 1, the beginning of the state’s fiscal year. Such changes often are not determined until late in the session, and generally are signed into law during June.
The Comptroller’s office needs time after bills are signed into law to analyze the changes and inform affected groups. Typically, the Comptroller sends information on session changes to cities and counties in July or early August. This does not give cities, counties or the Comptroller’s office much time to implement the changes that are needed (to forms, computer systems, staff training and so forth). The lack of time often produces clerical errors; either some court personnel are not informed of the new rates, or the city or county does not change its computer software in time. Often, old rates are imposed on new cases, resulting in lower collections than would be called for by the new rates.
September 1 implementations also cause problems in the change-over process. For example, most court costs are reported on a calendar quarter basis. A September 1 effective date falls within a calendar quarter, causing significant problems in reporting. To accommodate a change, the Comptroller’s office typically has changed the 3rd quarter report to include only July and August, moving September into the 4th quarter report. It is a common occurrence, however, for a city or county to forget to include September in the 4th quarter report, causing these collections to go unreported unless it is discovered by an audit or internal review.
An effective date of January 1 would allow cities and counties more time to implement the required changes in their systems and forms. January 1 falls at the beginning of a quarter and a calendar year.
In future court cost legislation, the effective date should be January 1 of the following year.
Moving the implementation date from September 1 to January 1 would give cities, counties, and the Comptroller’s office four additional months to implement changes, revise forms, change computer software, and train personnel. It also would eliminate the reporting problems caused by effective dates that fall in the middle of a calendar quarter.
If the other recommendations in this report are enacted, moreover, additional time would be needed to implement the extensive allocation changes involved in the proposed new consolidated court cost system.
For new court costs, this proposal would delay the arrival of the new funding. For existing funds, the changes in the effective date would result in a delay in increased revenue. These delays might be offset by the reduction in clerical errors that occur when cities or counties are forced to implement changes in haste.
The Comptroller’s office would realize productivity increases through savings in the audit time required to determine if rate changes have been implemented correctly.
The State Auditor should conduct periodic reviews and main-tain continuing oversight of each fund in which court costs are deposited to determine if the funds are being used as intended.
Many cities and counties have expressed concern about some of the funds for which court costs are collected. Apparently, in some cases appropriate rules and procedures were not in place when revenue began flowing into the new fund, and cities and counties find themselves collecting court costs before the implementation of the programs for which they are intended.
Some cities and counties also have expressed a desire for review and oversight of court-cost funds after they are created, to ensure that their funding is being used in accordance with legislative intent, and that the rate of the court cost remains appropriate. Such oversight would give cities and counties a greater level of confidence in the purpose of the collection, and provide the state with a greater level of financial oversight.
The Legislature should consider instituting a program of review and continuing oversight by the State Auditor for each fund that receives state court costs and fees, to determine whether the money is being used as intended, and whether the court costs and fees are necessary and appropriate.
Since the State Auditor’s Office is charged with ensuring financial accountability by any entity receiving funds from the state, the agency would be the appropriate entity to monitor these funds for compliance with state law.
Some changes to state funding might occur if the State Auditor’s review finds that adjustments to court costs are necessary. There would be no fiscal impact on local governments.