Judicial Branch Procurement

CALIFORNIA STATE AUDITOR | Report 2025-302 1 January 2026 Audit Objectives and the Methods Used to Address Them AUDIT OBJECTIVE METHOD 1 Determine whether the Judicial Branch Compiled revisions to the PCC, SAM, and SCM from July 2023 through June 2025, and Contracting Manual (judicial contracting determined whether the judicial contracting manual reflects those revisions and whether it is manual) is consistent with the requirements consistent with requirements set forth in the judicial contract law. set forth in the judicial contract law. 2 Determine whether the Judicial Council’s Determined whether any revisions made to the judicial contracting manual are reflected in the local manual conforms to the judicial local manual. contracting manual. 3 Assess the Judicial Council’s internal • Reviewed the judicial contracting manual, the local manual, and the Judicial Council’s controls over procurement practices and procedures, and interviewed staff members, to assess the Judicial Council’s internal controls then determine whether the council for contracting and procurement. complied with those controls and other • Used FI$Cal data from the Judicial Council to identify all procurements for the period key requirements, including requirements from July 2023 through June 2025. From these data, randomly selected 45 procurements related to competitive bidding and for review and judgmentally selected an additional five procurements based on the factors sole‑source contracting. described in Objective 5. • Tested a selection of 50 procurements, including contract agreements, purchase orders, and contract amendments, for compliance with the requirements of the judicial contracting manual and the local manual, including requirements for procurement approval, segregation of duties, competitive bidding, and other key controls. 4 Assess the Judicial Council’s internal • Reviewed the judicial contracting manual, the local manual, and the Judicial Council’s controls over payment practices and procedures, and also interviewed staff members, to assess the Judicial Council’s internal determine whether it complied with controls for payments. those controls. • Judgmentally selected a sample of 24 invoice payments, based on payment amounts, from the procurements reviewed in Objective 3. Tested the selected payments for compliance with requirements of the judicial contracting manual and other procedure documents, including requirements for invoice approval, proper authorization, and segregation of duties. 5 Evaluate the Judicial Council’s contracts • Confirmed that the judicial contracting manual still prohibits Judicial Branch entities from to determine whether the Judicial Council splitting transactions of $10,000 or more into multiple transactions of less than $10,000. inappropriately split any contracts to • Used data from FI$Cal to identify vendors from which the Judicial Council made multiple avoid necessary approvals or competitive procurements of less than $10,000 for the period from July 2023 through June 2025. bidding requirements. • For a random selection of five vendors with multiple payments of less than $10,000, assessed corresponding procurement documentation to determine whether any of those multiple procurements should have been a single competitively bid procurement. 6 Assess the reliability of the Judicial Council’s • Reviewed the Judicial Council’s annual procurement reports submitted to the Legislature contract and payment data recorded and the State Auditor for July 2023 through June 2025. in FI$Cal to ensure the accuracy and • Obtained data from FI$Cal that the Judicial Council used to generate the annual reports for completeness of the data and to establish July 2023 through June 2025. testing selections. • For a selection of hard copy procurement files, determined whether the selected procurements were accurately recorded in the annual report and in FI$Cal. • Compared information from the 24 payment invoices selected as part of Objective 4 to the FI$Cal data to determine whether the invoices existed in the system and were accurate. 7 Determine whether each court has Obtained each court’s local contracting manual that was applicable from July 2023 through developed its own local contracting manual June 2025. Assessed whether the local contracting manuals conformed to the judicial and assess its conformance to the judicial contracting manual’s requirements and recommendations. contracting manual. continued on next page . . . CALIFORNIA STATE AUDITOR | Report 2025-302 2 January 2026 AUDIT OBJECTIVE METHOD 8 Assess each court’s compliance with key • Based on factors including contract value and type of goods or services procured, internal controls over contracting and judgmentally selected contracts from each court that were active from July 2023 through procurement in the judicial contracting June 2025. Based on factors including payment value, judgmentally selected payments that manual and its local contracting manual, each court made from July 2023 through June 2025. including those related to competitive • To gain assurance that data used to select payments and contracts were complete, traced bidding, sole‑source contracting, source documents to the information used for selection. and payment and deliverable review • For each court, reviewed a selection of contracts and an initial selection of payments and oversight. compared to key requirements and safeguards identified in the judicial contracting manual, local manual, and other relevant policies and procedures. • For each court, used the Phoenix Financial System to identify any new or amended contracts valued at more than $1 million from July 2023 through June 2025. For any such contracts, reviewed the contracts and the courts’ documentation of notifications sent to the State Auditor. 9 Evaluate selected courts’ contracts to Used the Phoenix Financial System to identify any instances of courts having possibly split determine whether they may have contracts. For the identified instances, evaluated additional information, such as payment inappropriately split contracts to reports and contract documents, to identify whether a court entered into contracts with the avoid obtaining necessary approvals same vendor for similar goods or services during the same time frame for the purposes of or compliance with competitive avoiding competitive bidding. bidding requirements. 10 Review the appropriateness of each court’s Determined whether each court used purchase cards and reviewed monthly purchase card CAL‑Card or other court‑issued purchase statements for transactions that appeared questionable based on the amount or vendor. Based card transactions when those transactions on factors including transaction amount and purchase justification, reviewed a judgmental exceed a total of $100,000 or 10 percent of selection of purchase card transactions for each court. all reported procurement payments for a one‑year period. Source: Audit workpapers.