FOLLOW-UP REVIEW Georgia Indigent Defense Council Funding to Local Programs October 2002 Russell W. Hinton, State Auditor Performance Audit Operations Division 254 Washington St. S.W. Department of Audits and Accounts Atlanta, GA 30334-8400 This is a Follow-up Review of the Performance Audit of the Georgia Indigent Defense Council (GIDC) Funding to Local Programs conducted by the Performance Audit Operations Division in November 2000. Background In 1979, GIDC was established as a separate agency within the judicial branch. GIDC's mission is to ensure the provision of representation and to improve the quality of representation for indigent persons who are charged in the criminal courts or who are parties to actions in the juvenile courts. In 1989, GIDC began distributing funds to help support local indigent defense programs. To receive funding, counties must submit a grant application to GIDC with detailed information on the county's indigent defense system and how the county will meet indigent defense guidelines. The guidelines, which are approved by the Georgia Supreme Court, include standards for attorney compensation and recommendations on caseload limits for attorneys handling indigent cases. Counties that cannot meet all of the guidelines can still receive funds but must request a waiver from GIDC for the guidelines that they cannot meet. GIDC distributes both state funds and the interest remitted by court clerks and sheriffs (court clerks' and sheriffs' funds1) to local indigent defense programs through its Grants to Counties Program. This Program distributed $6.0 million in state funds and $1.1 million in court clerks' and sheriffs' funds to counties in fiscal year 2002. GIDC records indicate that these grants represented approximately 14% of the local indigent defense programs' calendar year 2000 costs. GIDC did not have more recent data for local defense programs costs. Seven counties elected not to participate in GIDC's Grants to Counties Program and as a result did not receive any funds from GIDC. 1 When sheriffs hold cash bonds, and when clerks of superior court, state court, probate court, and magistrate court hold certain funds, the funds must be placed in interest-bearing trust accounts, and the interest must be remitted to GIDC unless otherwise provided by law. Georgia Indigent Defense Council: Funding to Local Programs Page 1 Synopsis of the Performance Audit The audit was requested by the Chairman of the Budgetary Responsibility Oversight Committee. The scope of the audit focused on the following five questions: Are at least 90 percent of all state appropriated funds distributed on an equitable basis? How does the Council determine what is "an equitable basis?" Does their working definition meet the requirements of O.C.G.A. 17-12-36 (b)? What other fund sources are being used or are available for use by GIDC? How does GIDC allocate funds among its major activities (i.e., for direct legal defense, professional development seminars, other activities of the Council)? Are the judicial administrative districts satisfied with the services and performance of the GIDC? The audit found that GIDC distributed 99.9% to 100% of the state funds appropriated for county indigent defense programs and that GIDC consistently utilized a formula based on O.C.G.A. 1712-36(b) to distribute funds to counties. Additionally, the audit concluded that the administrative operations of GIDC were almost entirely funded through Interest on Lawyers' Trust Accounts (IOLTA) funds except for the Multi-County Public Defender Office, which was funded by a state appropriation. Lastly, the judges interviewed by the audit team had a favorable opinion of the services provided by GIDC; however a majority of the judges held unfavorable opinions on how GIDC distributes state appropriated funds, GIDC's guidelines, and how the funding formula was written. The audit did identify areas where action was needed to improve GIDC's effectiveness and efficiency. These areas are discussed below. Status of Audit Recommendations Finding/Recommendation (as reported in 2000): Although the current formula used by GIDC follows the criteria identified in state law, the audit team found weaknesses in the data that was used in the formula that might have an impact on the accuracy of the distribution of state appropriated funds to counties. Current Status: GIDC's allocation formula continues to consider population, indigent caseload, and indigent representation expenditures when distributing state funds to local indigent defense programs. The audit recommended that GIDC verify the counties self-reported data on cases and expenses. GIDC indicated it recognizes that accurate information is essential for proper distribution of state funds; however, it still does not verify caseload or expenditure information reported by the counties because it lacks the personnel and resources to do so. GIDC noted it does contact counties that report indigent caseloads equal to or greater than their total caseloads (GIDC contacted 10 counties regarding their fiscal year 2003 grant application) to attempt to determine if the numbers are valid. The audit also recommended that GIDC use the most recent population figures on the county indigent population; however GIDC currently uses total county population figures from the 2000 Census and not more recent indigent population estimates. Georgia Indigent Defense Council: Funding to Local Programs Page 2 GIDC reported that in its 2003 legislative package it is going to recommend that the funding formula be modified to eliminate indigent caseloads and population from the formula and allocate funds based solely on indigent defense expenditures. Finding/Recommendation (as reported in 2000): GIDC should ensure that local courts and sheriffs remit the interest generated from their trust accounts on a timely basis. GIDC should determine how often each court and sheriff is remitting interest and investigate why some have stopped remitting or remit infrequently or on an irregular basis. Consideration should be given to changing the law to allow GIDC to not allocate funds to counties that do not remit interest. Current Status: In August 2002, the Council decided to delay distribution of court clerks' and sheriffs' funds to counties that had not remitted the interest generated from these accounts. Due to these efforts, GIDC has reduced the number of non-remitting court clerks and sheriffs from 13 in November 2000 to two in September 2002. GIDC did a mass mailing in September 2002 to identify all the accounts maintained by the court clerks and sheriffs, which should be remitting interest to GIDC. As part of this effort, GIDC also created a database, which will notify GIDC staff when court clerks and sheriffs miss a scheduled remittance to help them identify nonremitting court clerks and sheriffs more easily. GIDC has not sought a change in the law to allow them to withhold funds from non-remitting counties. It has withheld from making recommendations for legislative changes until the Supreme Court of Georgia's Blue Ribbon Commission on Indigent Defense releases its report in November 2002. Finding/Recommendation (as reported in 2000): GIDC should consider hiring a cash management consultant to review current cash transfer procedures (and the various accounts used) in order to make recommendations to maximize interest income. The amount of interest earned on court clerks' and sheriffs' funds could be significantly increased if the court clerks and sheriffs, GIDC, and Administrative Office of the Courts (AOC) followed prudent cash management strategies. Current Status: GIDC has not hired a cash management consultant, but has not ruled out the possibility of hiring one in the future. GIDC has begun to routinely transfer court clerks' and sheriffs' funds from its bank account to the Georgia Fund 1, which is a higher interest bearing account. In fiscal year 2002, GIDC made seven wire transfers of court clerks' and sheriffs' funds to the AOC for deposit into a Georgia Fund 1 account. In fiscal year 2003, GIDC plans to make the transfers on a monthly basis to further maximize the interest earnings. In August 2002, at GIDC's request, AOC submitted a resolution to the Office of Treasury and Fiscal Services, which would allow GIDC to make deposits into the Georgia Fund 1. It should be noted that subsequent to the original audit, AOC began to study court fee remittance as a result of another performance audit on court fees. AOC indicated that they are going to incorporate cash management issues in their study based on the issues raised in this follow-up review. GIDC's problems with collections should be examined in conjunction with the overall problems of accountability for collection and remittance of court fees. Finding/Recommendation (as reported in 2000): The Administrative Office of the Courts (AOC) is planning to deposit the surplus of IOLTA (Interest on Lawyers' Trust Accounts) funds into GIDC's reserve more quickly to allow the surplus to earn interest longer. Georgia Indigent Defense Council: Funding to Local Programs Page 3 Current Status: AOC is making IOLTA deposits on a quarterly basis as the funds are received rather than annually. A review of deposits made between April 2001 and April 2002 found that AOC made five deposits totaling $2.7 million. The evaluation team also identified that $659,167 in IOLTA funds were deposited into AOC's operating account as required but not transferred to the proper account for over 11 months. These funds were ultimately transferred to the proper account after the problem was identified by the evaluation team; however, GIDC and AOC need to better monitor the funds to ensure that IOLTA funds are transferred in a timely manner. As of September 2002, the Georgia Bar Foundation was working with GIDC to transfer IOLTA funds directly to GIDC. Finding/Recommendation (as reported in 2000): GIDC will begin publishing reports identifying all grants applied for and received, and the amount of IOLTA funds received as required by O.C.G.A. 17-12-35 (b). Current Status: GIDC now publishes their revenues and expenditures in their annual reports. The information published by GIDC in their 2001 annual report, issued in January 2002, included a summary of all of GIDC's fund sources, including information on all grants and IOLTA funds received, and a detail of GIDC's expenditures. Finding/Recommendation (as reported in 2000): In order for GIDC to work more cooperatively with local programs, GIDC should seek legislative approval before attempting to place new restrictions on how local indigent defense programs can use state funds. The audit also recommended that GIDC should identify information requested on grant applications that must be provided in order to receive funding and explain why additional information is requested. Additionally, the Legislature should consider clarifying GIDC's authority to verify data and to ensure compliance with the indigent defense guidelines. Current Status: Since the audit, GIDC has not attempted to put any new restrictions on how local indigent defense programs can use state funds. In May 2002, GIDC asked the Attorney General to issue an advisory opinion on GIDC's authority to request: (1) an executed contract for legal services to be performed by one or more attorneys under agreement with either the county or the Judicial Circuit; (2) total criminal caseload information; (3) copies of the county's most recent audit; and, (4) contact information for attorneys providing indigent representation under an appointed program. The Attorney General indicated that GIDC has clear authority to administer the indigent defense program and the authority to request information that it feels is necessary for this purpose. No changes have been made to the law clarifying GIDC's authority to verify data. GIDC indicated that it has withheld from making recommendations for legislative changes until the Supreme Court of Georgia's Blue Ribbon Commission on Indigent Defense releases its report in November 2002. For additional information or to request a copy of the Performance Audit, contact Paul Bernard at 404-651-8855. Or see our website: www2.state.ga.us/Departments/AUDIT/pao/pao_main.htm Georgia Indigent Defense Council: Funding to Local Programs Page 4