Report 2014-107 Recommendation 1 Responses

Report 2014-107: Judicial Branch of California: Because of Questionable Fiscal and Operational Decisions, the Judicial Council and the Administrative Office of the Courts Have Not Maximized the Funds Available for the Courts (Release Date: January 2015)

Recommendation #1 To: Judicial Council of California

To ensure that the compensation the AOC provides is reasonable, the Judicial Council should adopt procedures that require a regular and thorough review of the AOC's compensation practices including an analysis of the job duties of each position to ensure that the compensation aligns with the requirements of the position. This review should include comparable executive branch salaries, along with a justification when an AOC position is compensated at a higher level than a comparable executive branch position.

Annual Follow-Up Agency Response From November 2016

The Judicial Council of California (Judicial Council) has implemented the State Auditor's recommendation to the extent it deems advisable and will not be taking further action. The State Auditor's Office, based on its previous comments, seeks a commitment from the Judicial Council to regularly review compensation practices on a pre-established schedule as opposed to business need. The Judicial Council believes its executive management team are best placed to determine when further changes to compensation are necessary. The Judicial Council took the State Auditor's recommendation very seriously and, following the audit, hired an independent consultant to review our classification and compensation structure. The consultant's recommendations prompted the Judicial Council to change its compensation practices, effective January 2016, which resulted in salary reductions for many of our employees. To increase transparency, the Judicial Council has now posted on its website the salary ranges and job descriptions for each job classification, allowing the public to monitor the compensation levels for different job types. Finally, as noted in our previous response, the Judicial Council discussed its compensation review practices with CalHR and found that executive-branch agencies similarly evaluate changes to compensation based on business need. The Judicial Council will continue to follow the process used by executive-branch agencies.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

1-Year Agency Response

The status reported for the six-month report has not changed.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

As we noted in our assessment to the AOC's 60-day and 6-month responses, this recommendation is partially implemented because the AOC adopted procedures as we suggested. However, although the AOC's response indicates that it will perform a regular and thorough review of compensation practices, its adopted policy states that it will conduct reviews based on organizational needs as a result of recruitment/retention and modified organizational function. We will not consider this recommendation fully implemented until the AOC adopts a policy to regularly review its compensation practices.

6-Month Agency Response

An independent organization-wide classification and compensation study was initiated in 2014 based on recommendations of the Strategic Evaluation Committee appointed by the Chief Justice and a subsequent Judicial Council directive. Staff was provided their new classifications during the second quarter of 2015; the compensation portion of the study will be finalized by third quarter 2015.

In response to the Judicial Council 60-day response, the auditor indicated that they would not consider the recommendation to be fully implemented until a policy is adopted to regularly review its compensation practices rather than based on organizational needs. Council staff contacted CalHR to obtain their policy regarding classification and compensation review. CalHR does not have a periodic review system in place. We believe, therefore, that the Judicial Council's policy is consistent with the approach taken by CalHR for executive branch classification and compensation and consider this recommendation to be fully implemented.

(Judicial Council Personnel Policy 3.4, Classification and Compensation Management Program, is submitted as supporting documentation.)

California State Auditor's Assessment of 6-Month Status: Partially Implemented

As we noted in our assessment to the AOC's 60-day response, this recommendation is partially implemented because the AOC adopted procedures as we suggested. However, although the AOC's response indicates that it will perform a regular and thorough review of compensation practices, its adopted policy states that it will conduct reviews based on organizational needs as a result of recruitment/retention and modified organizational function. We will not consider this recommendation fully implemented until the AOC adopts a policy to regularly review its compensation practices.

60-Day Agency Response

An independent organization-wide classification and compensation study was initiated in 2014 based on recommendations of the Strategic Evaluation Committee appointed by the Chief Justice and a subsequent Judicial Council directive. The study will be completed in the second quarter of 2015.

Procedures requiring regular and thorough review of compensation practices were adopted and modified, effective February 19, 2015. The policy now outlines a process to establish a new classification and includes an annual reporting requirement to the Judicial Council governing body of changes to the classification and compensation structure.

The policy also requires that compensation levels remain appropriate and competitive with the executive branch as well as other comparable labor markets such as trial courts, cities, and counties.

(Judicial Council Personnel Policy 3.4, Classification and Compensation Management Program, is submitted as supporting documentation.)

California State Auditor's Assessment of 60-Day Status: Partially Implemented

This recommendation is partially implemented because the AOC adopted procedures as we suggested. However, although the AOC's response indicates that it will perform a regular and thorough review of compensation practices, its adopted policy states that it will conduct reviews based on organizational needs as a result of recruitment/retention and modified organizational function. We will not consider this recommendation fully implemented until the AOC adopts a policy to regularly review its compensation practices.

All Recommendations in 2014-107

Agency responses received are posted verbatim.