301 West Jefferson St
Suite 660
Phx, AZ 85003-2143
Phone: 602-506-1585
Fax: 602-506-8957
www.maricopa.gov
Independent Accountant’s Report
On Applying Agreed-Upon Procedures
Members of the Supreme Court of the State of Arizona
Chief Juvenile Probation Officer – Juvenile Probation
We have performed the agreed-upon procedures enumerated in Part III of the
Minimum Accounting Standards (MAS) Compliance Checklist for Arizona Courts,
November 1997 Revision.
We performed these procedures to assist the Supreme Court of Arizona,
Administrative Office of the Court in evaluating management’s assertion that as of
August 28, 2007, Juvenile Probation Department (JPD) has maintained an effective
internal control system over its financial accounting and reporting. These agreed-upon
procedures were performed in accordance with standards established by the
American Institute of Certified Public Accountants. The sufficiency of these
procedures is the responsibility of the specified users of the report. Consequently, we
make no representation regarding the sufficiency of the procedures referred to above,
either for the purpose for which this report has been requested, or for any other
purpose.
No exceptions were found as a result of applying the agreed-upon procedures, except
those presented in the accompanying Summary of Findings.
We were not engaged to, and did not; perform an examination, the objective of which
would be the expression of an opinion on management’s assertion. Accordingly, we do
not express such an opinion. Had we performed additional procedures, other matters
might have come to our attention that would have been reported to you.
This report is intended for the information of the party listed in the first paragraph, and
should not be used by those who have not agreed to the procedures and taken
responsibility for the sufficiency of the procedures for their purposes. However, this
report is a public record and its distribution is not limited.
Should you have any questions concerning this report, please let us know.
Ross L. Tate, CIA
Maricopa County Auditor
November 30, 2007
Maricopa County
Internal Audit Department
2
Juvenile Probation
Summary of Findings
As of November 30, 2007
Juvenile Probation Budget and Finance Division is located at 3125 W. Durango, Arizona 85009,
and performs all case-related cash collections and disbursements of the Diversion Restitution and
Emergency Service Fund checking accounts. Work performed was limited to these accounts.
Transactions selected for review were from fiscal years 2005, 2006, and 2007. The Diversion
Restitution Account average daily balance is less than $5,000 dollars per month. We tested a
sample of 30 transactions on this account. For the Emergency Service Fund account, we tested all
transactions, as this account had less than 30 transactions during the review period. The review was
conducted September 5–7, 2007.
On July 30, 2007, JPD converted the Juvenile Online Tracking System (JOLTS), the system used
to account for transactions related to diversion and restitution, to the Integrated Court
Information System (iCIS). Our review only covers transactions processed using JOLTS,
although some exceptions listed within this report may have continued with the implementation
of iCIS.
Accounting System
Activity: MAS 2.02 requires that the accounting system include the following components:
a) Preprinted, consecutively numbered receipts or receipts consecutively numbered by
automated system. All receipts shall display the name of the court.
b) Prenumbered checks or checks consecutively numbered by an automated system.
c) Case financial record of all payments received and disbursed on a particular case. A case
financial record shall include the following information (if amount received or disbursed
is non-case related, see standard 2.02.e.):
- Case number
- Defendant’s name (if applicable)
- Plaintiff’s name (if applicable)
- Date payment was received or date court check issued
- Amounts received or disbursed
- Name and address of person making the payment or to whom the disbursement
made. (Name and address of person making the payment is only required when the
person is (1) posting a bond, or (2) making payment by check or money order, and
the name and address is not on that check or money order.)
- Receipt/transaction number or check number
- Method of payment
- Identification of person accepting payment
Juvenile Probation
Summary of Findings
3
- The total costs assessed by assessment type and/or distribution type
- Total amount paid and/or converted from bond by distribution type (fine, Criminal
Justice Enhancement Fund, Medical Services, Enhancement Fund, bond, etc.)
- Balance owed by distribution type
- Balance held on deposit, including bonds (indicate cash or surety)
- The name of the party against the fine and fees are assessed
- The date notice of amount due and other collection notices were sent until amount is
paid in full
d) Cash receipts journal and cash disbursements journal which show all payments received
and disbursed by day. The cash receipts journal and cash disbursements journal shall
include the following:
- Date payment was received or date court check issued
- Amount received or disbursed
- Name of payee if check issued
- Receipt/transaction number or court check number for disbursement
- Payment distribution (fine, Criminal Justice Enhancement Fund, Medical Services
Enhancement Fund, bond, etc.)
e) Record of non-case related receipts. Each record should include applicable information
listed in 2.02.c. If this information is recorded on a receipt, a separate non-case financial
transaction record is not required.
f) Open items record (unidentifiable items or bonds).
Exceptions:
Of thirty Diversion Restitution account transactions reviewed, we noted the following:
• One instance where the consequences contract was not included in the financial case file.
• Receipts issued from JOLTS were not numbered by the system.
• Receipts issued from JOLTS did not include name and address of individual making
payments.
• Receipts issued from JOLTS did not include the method of payment.
Of eight receipts and seven disbursements tested for the Emergency Service Fund account, we
noted the following:
• Four instances where supporting documentation for receipts and disbursements were not
on file.
Juvenile Probation
Summary of Findings
4
• One instance where the supporting invoice did not identify the case file or juvenile
receiving counseling.
• Funds deposited into this account were not receipted into the financial system.
General Policies and Procedures
Activity: MAS 3.01 requires that JPD post the following financial policies at a conspicuous
location:
a) The methods of payment that will be accepted
b) A receipt will be issued for every payment made in person
c) The non sufficient funds (NSF) check policy
d) A statement that the receipt is proof of payment
Exception: JPD did not have the above listed policies posted where payments for diversion
restitution were accepted.
Activity: MAS 3.03 requires that JPD does not commingle personal monies with court monies or
make change for court payments with personal monies.
Exception: JPD did not have a change fund and although their policy was to accept only
cashier’s checks or money orders, if a juvenile came in to pay his/her restitution and only had
cash, they accepted the cash. Staff said that they tried to make change for the juvenile out of
their own money.
Activity: MAS 3.04 requires that JPD maintain a uniform fine/bond schedule and fee schedule.
For the Diversion Restitution and Emergency Services Fund, the court order determines the
correct amount in place of the fee schedule.
Exception: No supporting documentation could be located for three of the eight Emergency
Service Fund deposits reviewed, so we were unable to verify the amount of the receipt to the
order of the court.
Cash Receipts
Activity: MAS 5.05 requires that they issue a receipt for each payment made in person. For all
other payments, either issue a receipt for each payment or prepare a sequential numbered
transaction record for each payment. A receipt or transaction record shall include:
a) Case number, if applicable
b) Defendant’s name, if applicable
c) Plaintiff’s name, if applicable
d) Date payment was received
e) Amount received
Juvenile Probation
Summary of Findings
5
f) Name and address of the person making the payment (only required if not included on
financial record and person is (1) posting a bond, or (2) making a payment by check or
money order and the name and address are not on that check or money order.)
g) Identification of person receiving the payment
h) Method of payment (cash, check, credit card, etc.)
i) Sequential receipt/transaction number
j) Name of court
Exceptions:
During our testing, we found the following:
• JPD did not save copies of unnumbered receipts created in Microsoft Word and issued
when payments were made in person.
• When money was entered into JOLTS a receipt was created; this receipt did not include a
receipt number, the name and address of the person making the payment, or the method of
payment received.
Activity: MAS 5.06 requires that all payments received are recorded immediately on the case
financial record unless an automated system immediately journals payments and posts them daily
to the case financial record. The following information must be recorded on the case financial
record:
a) Case number
b) Defendant’s name (if applicable)
c) Plaintiff’s name (if applicable)
d) Date payment was received
e) Amount received
f) Method of payment
g) Name and address of the person making the payment (Name and address is only required
when a person is (1) posting a bond, or (2) making a payment by check or money order
and the name and address is not on the check or money order.)
h) Receipt/transaction number
i) Total amount paid and/or converted from bond, by distribution type (fine, surcharges,
bond, etc.)
j) Balance owed by distribution type (fine, surcharges, bond, etc.)
k) Identification of person accepting payment
Juvenile Probation
Summary of Findings
6
Exceptions:
From our sample of thirty receipts from the Diversion Restitution account, we noted the
following:
• Ten instances where funds deposited into the bank were not entered into the financial
reporting system within 24 hours of deposit.
• JOLTS did not include the receipt number, method of payment, name, and address of
individuals making payments when money orders were the method of payment.
Activity: MAS 5.07 requires that all payments received be recorded on the cash receipts journal
and include:
a) Date payment was received
b) Amount received
c) Receipt/transaction number
d) Payment distribution by type (fine, Criminal Justice Enhancement Fund, Medical Service
Enhancement Fund, bond, etc.)
Exceptions:
During our testing, we noted the following:
• Receipts were entered into JOLTS for the Diversion Restitution Account. These receipts
did not have receipt numbers.
• Monies deposited into the Emergency Service Fund account were not receipted into the
financial system.
Disbursement Policies
Activity: MAS 6.01 requires that JPD establish policies to require that disbursements (such as
refunding exonerated bonds, paying restitution to victims and refunding overpayments) be made
within a prescribed period of time as dictated by administrative order, court policy or local
ordinance.
Exception: We found two occurrences where juveniles overpaid their Restitution and funds were
not returned. Each overpayment was for less than $0.50.
Payments Disbursed
Activity: MAS 7.02 requires that responsibility for issuing and signing checks or check
requisition forms should be limited to as few individuals as practical. Bank records should be
monitored so that only authorized individuals are on the bank’s list of those authorized to sign
checks. The bank should be notified immediately of any changes to the list of those authorized.
Juvenile Probation
Summary of Findings
7
Exception: During our review, we received copies of the bank signature cards which listed one
individual that had retired in April 2006. After we inquired about this individual, the Budget and
Finance Director provided a Deposit Account Balance Summary from the bank dated October 5,
2007, which did not show this individual as a signer on the account, indicating that this situation
had been corrected; however, we were unable to determine when this individual was removed
from the account and the Department was unable to provide documentation of the deletion date.
Activity: MAS 7.05 requires that all disbursements be posted immediately to the case financial
record.
Exception: For the Diversion Restitution account, we found two instances where money was
disbursed but not recorded immediately to the case financial record; one instance where the
disbursement was recorded six days after the disbursement check was written, and one instance
where the disbursement was recorded four days after the disbursement check was written.
Activity: MAS 7.08 requires that JPD establish a method of stop payment and that they account
for checks reported as lost.
Exception: JPD had no formal written policy and decided on a case by case basis if a stop
payment would be issued.
Deposits and Bank Accounts
Activity: MAS 8.05 requires all monies be deposited in the same form (such as check, cash or
money order) as received and deposit at least weekly or daily if cash receipts exceed $300.
Exception: We were unable to verify if money was deposited in the same form received because
the accounting system did not provide a method of payment.
Reconciliation
Activity: MAS 9.01 requires that JPD reconcile and balance all accounting records at least
monthly to verify that all receipts and disbursements are accounted for properly.
Exception:
During our testing, we noted the following:
• JPD was not able to locate the monthly reconciliations for the period of July 2004 through
December 2004 for both the Diversion Restitution and the Emergency Service Fund
accounts. Bank statements were obtained from the bank following our initial review;
however, reconciliations had not been completed. JPD staff indicated that they plan to
complete the reconciliations.
• In FY 2005 three monthly reconciliations for both accounts were not reconciled the
following month.
Juvenile Probation
Summary of Findings
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• The November 2006 to May 2007, reconciliations for both accounts were not completed
until July 2007.
Outstanding Checks
Activity: MAS 10.01 requires on at least a monthly basis, investigate all court checks
outstanding for more then six months.
Exception: JPD did not have a formal written policy regarding outstanding checks. During our
review of the June 30, 2007, Diversion Restitution bank reconciliation, we noted 22 checks that
were over six months old; of these, five were over three years old.
