Municipal Court for the City of Leeds

Transcription

1 Special Report on the Municipal Court for the City of Leeds Jefferson County, Alabama January 1, 2006 through December 31, 2008 Filed: September 11, 2009 Department of Examiners of Public Accounts 50 North Ripley Street, Room 3201 P.O. Box Montgomery, Alabama Website: Ronald L. Jones, Chief Examiner

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5 Table of Contents Page Summary A Contains items pertaining to state and local legal compliance, court operations, and other matters. Schedule of State and Local Compliance and Other Findings D Contains detailed information about findings pertaining to state and local legal compliance, and other findings. Exhibit #1 Schedule of Charges a schedule that provides details on amounts that an employee of the court has been asked to repay. 1 Order of the Chief Examiner 3 Exhibit #2 City Council Members and Mayors a listing of the council members and mayors. 4 Municipal Court for the City of Leeds Jefferson County

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7 Department of Examiners of Public Accounts SUMMARY Municipal Court for the City of Leeds Jefferson County, Alabama January 1, 2006 through December 31, 2008 The Municipal Court for the City of Leeds, Jefferson County, Alabama, (hereinafter referred to as the Court ) receipts, disburses and otherwise accounts for court costs, fines, forfeitures, fiduciary funds and other miscellaneous receipts for cases under the Court s jurisdiction. The amounts collected are then distributed to various state and local entities as ordered by the Court and in accordance with state and local laws and regulations. The Municipal Court Clerk, an employee of the City, is responsible for the daily operations of the municipal court. This report presents the results of an examination of the Court and a review of compliance by the Court with applicable laws and regulations in accordance with the requirements of the Department of Examiners of Public Accounts under the authority of the Code of Alabama 1975, Section Findings are numbered and reported by the examination period in which the finding originally occurred. Instances of noncompliance with state and local laws and regulations and other matters were found during the examination as shown on the Schedule of State and Local Compliance and Other Findings and they are summarized below: CURRENT FINDINGS relates to the lack of a proper segregation of duties relates to the lack of procedures related to the collecting, receipting and safeguarding of funds relates to the lack of procedures to ensure that bank accounts were properly reconciled and that supporting documentation was maintained relates to the Court s failure to follow the minimum accounting requirements for issuing manual receipts A

8 relates to cash bonds not being receipted and posted to the cash bond transaction register relates to cash bonds not being properly applied to defendants case files relates to the Court s failure to follow minimum accounting requirements relating to funds on hand relates to case numbers being deleted from the records with no supporting documentation relates to the Court s failure to follow minimum accounting requirements for the issuance of Uniform Traffic Ticket and Complaint Forms relates to the disposition of a defendant s case and the lack of supporting documentation relates to case files being closed with amounts owed by the defendants relates to dismissed cases not being properly authorized or maintained relates to the improper assessment of fines and restitution relates to probation payments not being properly recorded relates to worthless check procedures not being properly followed relates to misdemeanor case files not being properly maintained relates to the improper use/transfer of restricted court funds. As reflected on Exhibit 1, the charges against the employee resulted from amounts receipted but not deposited into the bank account, fines and court costs assessed but not recorded, probation payments that could not be traced into the court records, cases improperly closed, amounts collected and amounts improperly applied to case files resulting in shortages. Official demand was made on the employee to pay the charges. She declined to pay the charges. A letter was sent to the employee requesting repayment in the amount of $94, At a meeting with the Chief Examiner, the former employee failed to appear and show just cause as to why the amount should not be repaid; therefore, relief was accordingly denied as evidenced by the Order of the Chief Examiner contained in this report. The charges remain due and unpaid and, as a result, this report will be certified to the Attorney General for collection B

9 The following officials/employees were invited to an exit conference to discuss the findings and recommendations appearing in this report: City Council Members: Kenneth Washington; Ross Bartee; Jim Saxon; Owen Drake; Susan Webb Carswell; Patricia Phillips; Charlotte Earnest; Bryce Thornton; Johnny Kile; Cary Kennedy; and Mayors: Eric Patterson and Mr. James O. Whitfield. The following individuals attended the exit conference, held at the offices of City of Leeds Chamber of Commerce: City Council Members: Kenneth Washington, Jim Saxon, Susan Webb Carswell, Charlotte Earnest and Johnny Kile; Mayor Eric Patterson; and representatives of the Department of Examiners of Public Accounts: James Hall, Audit Manager; and Kathy Brown, Examiner of Public Accounts C

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11 Schedule of State and Local Compliance and Other Findings D

12 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding: An adequate system of internal controls requires a proper segregation of duties. The Municipal Court Clerk performed the following duties: the maintenance of municipal court case files, the collection and receipting of funds, the preparation of bank deposits, the disbursement of court funds, and the recording of court transactions into the accounting system. Procedures should be implemented to ensure the proper segregation of duties Finding: An adequate system of internal controls would include procedures related to the collecting, receipting and safeguarding of funds related to traffic and municipal court cases. The following control deficiencies were noted: All court funds collected were not deposited into the bank account. This resulted in a shortage of $31, as reflected in the Schedule of Charges on (Exhibit 1). Funds receipted into the accounting system were not properly classified as to cash, check, money order or credit card. The accounting records reflect that $48, was classified as credit card transactions; however, the amounts deposited by the credit card company into the Court s bank account totaled $1, Deposits were not made timely or intact. Instances were noted where bank deposits were only made between one and five times a month. A daily summary of receipts ( daily receipt report ) was not maintained to support all bank deposits. Instances were noted where bank deposits could not be traced to any supporting documentation. Voided receipts were not properly maintained. Records were not maintained to account for the numerical sequence of receipts. Court funds were not properly safeguarded after collection. In April 2008, $13,450 in cash was found in a plastic grocery bag in a cabinet above the Court Clerk s desk. These funds were defendant s cash bonds which had been collected from the police department but not deposited into the bank account. In July 2008, funds in the amount of $3, were discovered in various locations throughout the Court Clerk s office. The court cases to which these funds were attributable could not be determined. Procedures should be implemented to ensure the proper collecting, receipting and safeguarding of funds related to traffic and municipal court cases. Municipal Court for the City of Leeds Jefferson County E

13 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding: Minimum accounting requirements for municipal courts, as codified in the Code of Alabama 1975, Volume 23A (Rules of the Alabama Supreme Court), Rule 43, require that all bank accounts be reconciled to the cashbook at the end of each month. Procedures were not in place to ensure bank accounts were properly reconciled and that all supporting documentation was maintained. The following instances were noted: Bank accounts were not reconciled to the amounts due to be on hand at the end of each month. Manual disbursements were entered into the accounting system after they cleared the bank as reflected on the bank statement instead of when written. As a result, the listing of outstanding checks was not accurate. Some items shown as deposits in transit on the bank reconciliation could not be substantiated. The bank reconciliation included several outstanding checks which never cleared the bank. These checks were made payable to the City of Leeds. Some bank reconciliations, bank statements and deposit slips were not available for review. Necessary documents were obtained from the financial institutions. Procedures should be implemented to ensure that all bank accounts are properly reconciled each month and all supporting documentation is maintained Finding: Minimum accounting requirements for municipal courts establish controls over manual receipts. Manual receipts should be pre-numbered and accounted for on a periodic basis. In addition, manual receipts should be entered into the computer system and a computer-generated receipt number should be written on the manual receipt. The following items were noted: Twenty-six instances were noted in which defendants were issued manual receipts; however, these funds were never entered into the computer system or deposited into the bank account. These amounts totaling $6, are reflected as charges on Exhibit 1. Manual receipt books were not sequentially numbered and accounted for making it difficult to determine the exact number of receipt books used. Municipal Court for the City of Leeds Jefferson County F

14 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding Continued: Computer-generated receipt numbers were not always written on the manual receipts. Two pages of receipts were removed from one receipt book. One instance was noted where a receipt was written on a form that was different from the receipt books normally used. Procedures should be implemented to ensure compliance with minimum accounting requirements relating to manual receipts Finding: Minimum accounting requirements for municipal courts require that all cash bonds be receipted and posted to a cash bond transaction register. In addition, the cash bonds should be deposited into a separate bank account which is reconciled monthly with an analysis of all funds on hand. The following instances were noted: All monies collected for cash bonds were not deposited into the bank account. The Court Clerk was responsible for obtaining the funds from the police department, recording the transactions in the computer system, and preparing the bank deposits. A comparison between the police department bond log and amounts recorded on the cash bond transaction register indicated that 23 bonds were not recorded or deposited. These bonds, totaling $9,450.00, are reflected as a charge on Exhibit 1. Reconciliations were not performed between the cash bond bank account and the cash bond transaction register. Instances were noted in which property bonds were posted as cash bonds. Procedures should be implemented to ensure compliance with minimum accounting requirements relating to cash bonds. Municipal Court for the City of Leeds Jefferson County G

15 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding: Cash bonds received should be deposited into the cash bond bank account until the fine/court costs are ordered by the judge and the bond is applied to a defendant s case to pay for fines, costs, or restitution or the cash bond is refunded to the defendant. The applied amount is then sent to the Court s collection account for distribution to various agencies. The following items were noted: Seventeen instances were noted in which applied bonds were properly credited to a defendant s case file; but the date when the bond was applied was entered incorrectly. Therefore, the daily reports which substantiated the deposit into the collection account were incorrect. This resulted in a shortage of collection account deposits totaling $7, and is reflected as a charge on Exhibit 1. The amounts transferred from the cash bond bank account were not reconciled with the receipts in the collection account. One instance was noted in which a defendant overpaid fines and court costs by $1, due to an unrecorded cash bond. Procedures should be implemented to ensure the proper posting of cash bonds Finding: The minimum accounting requirements for municipal courts requires that all monies collected for fines, court costs, restitutions and other various items should be disbursed on a monthly basis. In addition, any funds that are not due to be disbursed should be identified on a non-disbursement report noting the case number, court ruling and the reason for non-disbursement. As of December 31, 2008, the non-disbursement report did not agree to the reconciled collection account balance. Procedures should be implemented to ensure compliance with minimum accounting requirements on any funds remaining that are not due to be disbursed Finding: Minimum accounting requirements for municipal courts require case numbers to be assigned numerically and maintained in chronological order in accordance with guidelines from the Administrative Office of Courts. In addition, case numbers should never be deleted from records or totally removed from the files. Instances were noted where case numbers were deleted from the records with no supporting documentation of their removal. Procedures should be implemented to comply with the minimum accounting requirements concerning case numbers. Municipal Court for the City of Leeds Jefferson County H

16 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding: Minimum accounting requirements for municipal courts set certain procedures for the issuance of blank Uniform Traffic Ticket and Complaint Forms (UTC) to officers and their subsequent transmittal to the court clerk. The following items were noted: A permanent record of the blank UTC-1 Forms (Traffic Tickets) received by the Police Department was not maintained. A permanent record of the tickets issued by each officer was not maintained. UTC transmittal forms were not submitted to the Court Clerk by officers. Therefore, it could not be documented that the Court Clerk was assigning case numbers for each citation issued. Numerous tickets and ticket books were missing and not available for review. Procedures should be implemented to ensure compliance with minimum accounting requirements for UTC s Finding: Once a case has been adjudicated, the disposition of a defendant s case should be documented. The traffic citation or municipal case action summary sheet should include the date, fine/court costs assessed, and the signature of the judge or magistrate. Review of a sample of 434 municipal and traffic cases revealed the following: Fines and court costs charged to defendants for traffic tickets and municipal cases were not entered into the computer system in ten percent of cases tested. The fines and court costs not recorded totaled $11, and are reflected as a charge on Exhibit 1. Five percent of traffic tickets and six percent of municipal cases were missing. Thirty-one percent of traffic tickets and twenty-two percent of municipal cases were not documented as being adjudicated or were adjudicated with a verdict of no more trouble. Fines were recorded and payments were taken on cases that were not documented as being adjudicated. Cases were recorded as being adjudicated with no signature of the Judge or Magistrate. Review of a sample of 63 closed cases revealed the following: Three cases were noted in which fines were set up in the computer system; however, it was not documented that the fines were ordered by the Judge. In two cases, fines were recorded in the computer system for amounts less than ordered by the Judge. Municipal Court for the City of Leeds Jefferson County I

17 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding Continued: A review of the December 2006 court docket revealed the following: Of the 110 cases on the court docket, only 6 cases were recorded as being adjudicated. Fines assessed by the Judge totaling $7, were not recorded in the Court s records and are reflected as a charge on Exhibit 1. Procedures should be implemented to ensure that disposition is properly documented for all cases Finding: Court case files should only be shown as closed after all fines/court costs have been paid. A report of cases closed with balances due was reviewed for the period January 1, 2006 through December 31, The amount of cases closed with amounts due totaled $5, as reflected on Exhibit 1. Procedures should be implemented to ensure that cases are not closed with balances remaining Finding: A sample of thirty dismissed cases was selected for review to determine if the dismissal was properly authorized by the judge. The following instances were noted: Twenty-three percent of the files were missing and therefore could not be reviewed. Nine percent of the tickets available for review were not dismissed by the Judge. Dismissed case files should be properly maintained and documented to show the Judge s authorization. Municipal Court for the City of Leeds Jefferson County J

18 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding: Fines are penalties charged to defendants upon conviction. Restitution is the payment to the victim for damages and other losses. If a case is dismissed, fines and restitution should not be charged due to the lack of conviction. However, court costs are still assessed, but the Judge has the discretion to waive these costs. The following instances were noted: The Judge dismissed various cases; however, fines were assessed and collected. The Judge ordered restitution to be paid to the City of Leeds; however, there was no indication that the City was the victim and was due restitution for damages. Procedures should be implemented to ensure that fines and restitution are properly assessed Finding: The Court contracts with a private collection company to collect probation payments from defendants. The collection company remits these amounts monthly to the Court. For the months of January 2006 through November 2008, the amounts submitted by the collection company were compared to the Court s computer records. The following instances were noted: Probation payments totaling $15, could not be traced to court records and are reflected as a charge on Exhibit 1. Reconciliations were not performed between payments posted to the Court records and amounts received from the collection company. Numerous posting errors were noted which could have been identified and corrected if reconciliations had been performed. Procedures should be implemented to ensure that remittances from the collection company are properly recorded. Municipal Court for the City of Leeds Jefferson County K

19 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding: Any party holding a worthless check may file a complaint with the Court for the prosecution and collection of the instrument. Upon the submission of the worthless check to the Court, a case file should be created. The original instrument is to be maintained in the case file along with the signed complaint. Upon payment by the defendant, the Court is to disburse to the victim all restitution collected. All court disbursements are to be made by check. The following items were noted: All disbursements to victims were not paid by check. Worthless check case files were not properly maintained. Procedures should be implemented to ensure that worthless check files are properly maintained and amounts owed to victims are disbursed by check Finding: Misdemeanor cases are to be reported on Incident Offense Reports which are submitted to the Court Clerk. The Court Clerk should then complete a complaint describing the offense. It was noted that numerous files for the complaints were missing and existing files were often incomplete. Procedures should be implemented to ensure that misdemeanor case files are properly maintained. Municipal Court for the City of Leeds Jefferson County L

20 Schedule of State and Local Compliance and Other Findings January 1, 2006 through December 31, 2008 Ref. No. Finding/Noncompliance Finding: Funds collected in the Municipal Court for the City of Leeds are to remain in their original account (cash bond account or collection account) until the case s final disposition. The funds are then to be disbursed based on applicable laws and regulations. During calendar year 2007, the City of Leeds improperly transferred funds from restricted municipal court accounts to other city accounts as shown below: Transferred from Date Amount Transferred to Cash Bond Account March 8, 2007 $70, (*) Gasoline Tax Fund Cash Bond Account March 8, 2007 $10, (*) General Fund Collections Account March 23, 2007 $ 6, (*) Gasoline Tax Fund Corrections Account April 2, 2007 $ 2, (*) General Fund (*) - these amounts were repaid prior to the completion of the examination. Probation payments which should have been deposited into the collection account were improperly deposited as shown below: Date Amount Fund Deposited July 2006 Probation Check $6, Bond Fund September 2006 Probation Check $9, General Fund Procedures should be implemented to ensure that all municipal court funds are maintained in accordance with applicable laws and regulations. Municipal Court for the City of Leeds Jefferson County M

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22 Schedule of Charges January 1, 2006 through June 30, 2008 Amount Person/Official Charged Date Charged Directly Charged To: Fernessa McConico, Court Clerk 01/01/ /30/2008 $ 31, /24/ /12/2007 6, /25/ /06/ , /01/ /31/ , /25/ /14/2008 5, /05/ /19/2006 7, /22/ /22/2008 9, /01/ /13/2008 7, Total Direct Charges $ 94, Municipal Court for the City of Leeds Jefferson County 1 Exhibit #1

23 Amount Relieved Amount by Chief Amount Paid Examiner Unpaid Description of Charge Court funds collected and receipted but not $ $ $ 31, deposited into the bank account. $ $ $ 94, Manual receipts issued to defendants but not 6, deposited into the bank account. 11, Fines and court costs assessed but not recorded. Probation payments that could not be traced to 15, court records. Cases improperly closed with amounts due 5, from defendants. 7, Fines assessed by the Judge but not recorded. Monies collected for cash bonds but not deposited 9, into the bank account. Bonds applied incorrectly to case files resulting 7, in shortages in the collection account. Municipal Court for the City of Leeds Jefferson County 2 Exhibit #1

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25 Order of the Chief Examiner 3

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27 City Council Members and Mayors January 1, 2006 through December 31, 2008 City Council Members Term Expires Hon. Kenneth Washington Member District 1 P. O. Box 591 Leeds, AL Hon. Ross Bartee Member District Julianne Drive Leeds, AL Hon. Jim Saxon Member District Marie Circle Leeds, AL Resigned November 2007 Hon. Owen Drake Member District 2 P. O. Box 865 Leeds, AL Resigned November 2006 Hon. Susan Webb Carswell Member District Montevallo Road Leeds, AL Hon. Patricia Phillips Member District Forest Drive Leeds, AL Hon. Charlotte Earnest Member District Carlise Circle Leeds, AL Hon. Bryce Thornton Member District Lanewood Circle Leeds, AL Hon. Johnny Kile Member District Maitland Road Leeds, AL Hon. Cary Kennedy Member District 5 P. O. Box 542 Leeds, AL Mayors Hon. Eric Patterson Mayor 6820 Mountain View Terrace Leeds, AL Hon. James O. Whitfield Mayor 6462 Zeigler Road Leeds, AL Municipal Court for the City of Leeds 4 Exhibit #2 Jefferson County