1. Audit of Municipal Court Payments ABSTRACT
In general, the City has established effective
controls over the collection of Municipal Court
fines and fees, however, additional supervision
over dropped payments, refunds, and case updates
would further reduce the risk of fraud and abuse.
LF 31u0`>9 � Internal Audit Department
F6
City Auditor
Madison Rorschach, CIA, CGAP
Audit Lead
Neeraj Sama, MBA
AUDIT OF MUNICIPAL COURT
PAYMENTS
crr v
IT
DENTON
Audit Project#: 019
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Table of Contents
Auditat a Glance .................................................................................................................................3
Introduction.........................................................................................................................................4
ManagementResponsibility.....................................................................................................................4
Audit Objectives, Scope, and Methodology..............................................................................................4
Findings&Analysis..............................................................................................................................6
Citations Generally Recorded Effectively; Could Improve Manual Citation Processes ............................7
Effective Collection Procedures Established; Drop Payment Supervision Needed ................................10
Defendants Payment Plans Are Appropriately Documented and Administered....................................13
Some Reviewed Refunds Were Not Properly Approved ........................................................................14
Collection Agency Payments Are Effectively Processed; Clarify Referral Process..................................14
Case Management System Access Properly Granted; Increased Monitoring Needed...........................16
Appendix A: Management Response Summary.................................................................................. 19
Appendix B: Citation Demographic Information.................................................................................22
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Audit at a Glance
Why we did this Audit: What we Found:
Annually, the City collects about $3 The City's Municipal Court Administration Division
million in fines and fees through its supports the adjudication and disposal of citation
Municipal Court function. These cases by assessing, communicating, and collecting
payments must be collected in fines and fees. Our findings are summarized below:
accordance with applicable
regulations and documented Citation Processing. The City's public safety agencies
appropriately to minimize the risk of issue the majority of citations electronically, but some
fraud. This audit was included on the are issued manually. All citations are accurately
City's fiscal year 2020-21 Audit Plan recorded in the Municipal Court's case management
as approved by the City Council. system; however, some manual citations may not be
recorded in a timely manner. In addition, manual
What we Recommend: citations received are not reconciled with those issued
despite being vulnerable to misplacement.
Recommendations 1 & 2
Reconcile manual citations and Fines & Fees Collection. In general, the Division has
improve delivery timeliness. adequately established controls over fine and fee
payments made online and in-person. Payments left
Recommendation 4, 5, 6, &7 in the drop box or received in the mail should be
Require further supervision of retrieved and processed by two Court Representatives
dropped payments and refunds. to reduce the risk that cash may be misplaced or
stolen. Similarly, refunds should be processed and
Recommendations 3, 8, &9 approved by different individuals.
Clarify procedures around cash
access and collection agency Payments received from the City's collection agency
referrals. are appropriately processed; however, information
about when and why court fines and fees are referred
Recommendations 10, 11, & 12 to the collection agency does not seem to be available
Establish additional controls over on the City's website.
case management system access.
Case Management System Access. In general, only
authorized users have access to the Municipal Court's
case management system; however, there is no
process to regularly verify users' access. Additionally,
while fine and fee payment transactions are well
reviewed, there is no process to review case status
and court fines and fees changes for appropriateness.
CITY
OF
DENTON
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Introduction
The Internal Audit Department is responsible for providing: (a) an independent appraisal' of City
operations to ensure policies and procedures are in place and complied with, inclusive of
purchasing and contracting; (b) information that is accurate and reliable; (c) assurance that assets
are properly recorded and safeguarded; (d) assurance that risks are identified and minimized; and
(e) assurance that resources are used economically and efficiently and that the City's objectives
are being achieved.
The Internal Audit Department has completed a performance audit of the Municipal Court
Administration Division's fines and fees collection processes.We conducted this performance audit
in accordance with generally accepted government auditing standards. Those standards require
that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objectives. We believe that
the evidence obtained provides a reasonable basis for our findings and conclusions based on our
audit objectives.
Management Responsibility
City management is responsible for ensuring that resources are managed properly and used in
compliance with applicable regulations; programs are achieving their objectives; and services are
being provided efficiently, effectively, and economically.
Audit Objectives, Scope, and Methodology
The Internal Audit Department has completed an audit of Denton's Municipal Court Administration
Division's fines and fees collection processes. This report is intended to provide assurance that
municipal court fines and fees are effectively collected and safeguarded.
Audit fieldwork was conducted during December of 2020 and January and February of 2021. The
scope of review varied depending on the procedure being performed. The following list
summarizes major procedures performed during this time:
• Reviewed documentation to develop criteria including industry standards, best practices,z
policies, and procedures;
• Developed process narratives to identify current control activities in municipal court fines and
fees adjudication,collection, posting, and reporting processes that were certified by Municipal
Court Administration staff;
• Interviewed Municipal Court Administration staff and reviewed policies and procedures
pertaining to the court fines and fees collection activities;
• Reviewed a statistical sample'of 96 court cases filed during the FY2019-20 to ensure that cases qzt
are appropriately documented, and adjudicated fines and fees are appropriately collected; Q
a
'The Internal Audit Department is considered structurally independent as defined by generally accepted government auditing standard 3.56.
z An Informal Staff Report has been issued separately from this report that discusses two state of Texas programs that are intended to compel
fine and fee collection and warrant clearance for traffic-related citations.
3 This sample size provides 95%confidence that the true population mean is within±10 percent of the sample estimate.
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
• Reviewed a randomly selected judgement sample of 30 Municipal Court Daily Deposits Reports
to verify that collected payments are appropriately processed and accurately reported to
Accounting;
• Reviewed a randomly selected sample of 90 citations to verify that citations are appropriately
and accurately recorded into the City's Court Case Management System;
• Reviewed a randomly selected sample of defendants' active payment plans and collection
agency referral and collection reports to verify the effectiveness of reporting and
administrative controls;
• Reviewed the Municipal Court case management system's user access list and procedures to
verify that access controls are properly managed and secured; and
• Summarized fiscal year 2019-20 citation, dismissal, and potential warrant information for the
Denton Municipal Court's defendants.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Findings & Analysis
The City of Denton's Municipal Court is generally responsible for processing and disposing of citations
issued by the City's public safety agencies for violations of City ordinances, traffic laws and other Class C
Misdemeanors. The Court consists of two functions including the Office of the Municipal Court Judge and
the Municipal Court Administration Division of the Finance Department. The Municipal Court
Administration Division supports the adjudication and disposal of citation cases by assessing,
communicating, and collecting fines and fees.This process is illustrated in Figure 1 below:
Figure 1: Municipal Court Payments Process
•Public Safety •Municipal •Municipal
Agencies issue Court Admin. Court Admin.
Citations Informs Collects and
•Citation Fines defendants of Records
& Fees Adjudication Assessed or
Assessed Process Adjudicated
Automatically •Municipal Fines & Fees
Court Judge
Adjudicates
Citation Cases
This audit generally focused on the processing of payments made to the Municipal Court
Administration Division for fines and fees due for citation cases, including assessment,
adjudication, collection, and record-keeping.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Citations Generally Recorded Effectively; Could Improve Manual Citation Processes
Citations are issued to defendants by the City's public safety agencies for violations of City
ordinances and other chargeable offenses. During fiscal year 2019-20,almost 15,200 citations were
issued by public safety agencies as shown in Figure 2:
Figure 2: Citations by Public Safety Agency (FY2019-20)4
r— —,qql
Denton University of North
DepartmentTexas
9%
Texas Women's
/ University
\ 3%
Other Agencies
1%
These citations must then be communicated to the Municipal Court and assessed before they can
be adjudicated by the Municipal Court Judge. Defendants are generally required to appear in court
about a month after the citation was issued to begin the adjudication process.Therefore, citations
should be promptly recorded and made available in the Municipal Court's records to ensure timely
and effective case disposal. The citation assessment process is outlined in Figure 3.
Figure 3: Citation Assessment Process
•Issue Citation • ' •Municipal *Assess Fines&
Electronically or *Record Citation in Fees Automatically
Manually Case Mgmt. based on Violation
System.
Public Safety Case Mgmt.
Officer
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4 Other public safety functions include Animal Services(0.6%),Code Enforcement(0.5%),Municipal Court(0.2%),Denton Fire Department
(0.1%),Building Inspections(0.1%),and Wastewater Treatment(0.1%).
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
What We Found
• The City's public safety agencies issue citations electronically and manually. The Municipal
Court Administration Division has developed a 'Data Entry Manual'that contains the steps and
responsibilities for staff recording and importing citations into the case management system.
o Electronic citations are issued using handheld ticket writers that are integrated with
the case management system through an electronic citation software.These citations
are uploaded from the citation software into the case management system each day.
o Manual citations are physically delivered to the Municipal Court Administration
Division. These citations must be entered into the case management system by
Division staff. The majority of manual citations are issued by the Denton Police
Department, which are delivered to the Municipal Court by Police Department staff
each business day.
• Citations have a pre-printed note directing defendants to wait five days after receiving a
citation before contacting the Municipal Court. In order to facilitate this timeline, Division
practices require issued citations to be uploaded into the case management system within two
to five days of issuance.
o Based on review of a judgement sample of 30 electronic citations issued in 2020,about
97 percent were recorded in the case management system within five days of issuance,
indicating that timeliness was not an issue.
o Based on review of a sample of 60 manual citations issued in 2019 and 2020, it was
observed that 34 were recorded in the case management system within five days of
issuance.This timeliness appears to have been significantly impacted by the COVID-19
Pandemic, as seen in Table 1.
Table 1: Manual Citation Filing Timeliness by Year
Avg. Days to Avg. Days to Avg. Days to Percent
Deliver Enters Record Recorded Timely
2019 3 1 4 70%
2020 4 3 7 43%
Both: 4 2 5 57%
• Fines and fees due for each citation are automatically determined by the case management
system and assessed to each defendant's case based on the violation committed. This
determination uses fine and fee information stored in the case management software that is
based on federal, state, and local statutory requirements.
• Based on review of a randomly selected sample of 60 manual citations issued in 2019 and 2020
and 30 electronic citations issued in 2020, citations are accurately recorded in the case
management system.
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5 Occasionally,Municipal Court Administration staff must request clarification or additional information from the issuing officer,which may cause
delays in entry.
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
o Manual citations are verified by another court clerk to ensure that details are correctly
details entered into the case management system. A copy of the issued citation was
uploaded into the defendants' cases in the case management system.
• About 400 manual citations were issued during fiscal year 2019-20. The Municipal Court
Administration Division provides blank citation books to the City's public safety agencies for
their use.
o Issued manual citations are not reconciled to the case management system by the
Municipal Court Administration Division or public safety agencies to ensure they are
not lost or misplaced. Gaps in issued citations' sequential numbering were observed.
Why It Matters
Citations should be recorded in the case management system within stated timelines to ensure
information is readily available to defendants when they contact the Court and prevent confusion.
In addition, delays in citation recording, may impact defendants who are generally required to
appear in Court 30 days after the citation is issued if no other action on their case is taken. While
manual citations were generally recorded in a timely manner previous to the COVID-19 Pandemic,
the Municipal Court Administration Division and public agencies should work to ensure that
citations are recorded as quickly as possible to prevent delays in the case adjudication process and
judicial proceedings.
Similarly, there is currently no process to detect if any manual citations were voided, lost, or
misplaced before submission to Municipal Court. Unaccounted citations may result in delays in the
judicial process or could potentially be abused. Implementing a reconciliation process could
provide assurance that all issued and voided manual citations are appropriately tracked and
recorded in the City's records.
Recommendations:
1. Develop a process in consultation with the City's public safety agencies for timely submission
of manual citations with Municipal Court Administration Division. Also, ensure that manual
citations, once received, are recorded in the case management system without delay to
improve the overall timeliness of citations' entry.
Police Department Comments: The Records Management Division will electronically scan
manual citations to Municipal Court during business hours to expedite the internal process. A
Standard Operating Procedure pertaining to this procedure will be added to the Records
Management SOP manual.
Municipal Court Administration Comments: While the Court does not have the authority to
assign or enforce procedures to public safety agencies, the Court will work with them to develop
processes that will expedite the submission of manual citations. Court Administration will also
update internal processes to further ensure timely entry of these citations in the case
management system.
2. Maintain a database of manual citations received and create a process for reconciliation of 0)
manual citations in consultation with the public safety agencies. Q
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Police Department Comments:The Police Quartermaster will maintain a database to record the
number of manual citation books issued, unused and destroyed inventory. The Records
Management Division will maintain an electronic database of manual citations issued,
corrected, voided and/or returned. The division will disseminate this information to Municipal
Court for reconciliation.
Municipal Court Administration Comments: Since manual citations originate with the public
safety agencies, it is most appropriate that a database is maintained by these agencies. Court
Administration can provide reporting of manual citations entered, or other information deemed
necessary, to assist the agencies with their tracking and reconciliation processes.
Effective Collection Procedures Established; Drop Payment Supervision Needed
In order to ensure accurate collection of fines and fees, each case's status and adjudication
judgement must be promptly updated in the case management system and supporting
documentation should be appropriately maintained. In order to ensure that fine and fee payments
are effectively recorded and accurately reported:
o Appropriate policies and procedures should be developed for posting and reconciling
collections;
o Duties should be properly segregated among staff for accounting transactions; and
o Municipal Court Administration staff should be aware of payment collection posting
and reporting requirements.
During the FY2019-20, Municipal Court Administration Division collected about 2.9 million in fines
and fees from defendants.
What We Found
• Municipal Court Administration staff maintain and update case records in the case
management system based on the judicial adjudication process and the Municipal Court
Judge's directions. Case documentation is maintained in the City's document repository.
o Based on review of a statistical sample of 96 cases filed during the FY2019-20, case
documentation regarding the judicial adjudication process was properly executed and
appropriately retained in the document repository. In addition, fines and fees
appeared to be appropriately collected and posted to the case management system
based on the assessment or adjudication. Documentation for Community Services and
Driver Safety Course was appropriately verified and recorded when applicable.
o Based on review of a randomly selected sample of ten cases, documentation for all
defendants who were granted credit for jail time by the Municipal Court Judge was
properly recorded in the case management system and documented in the document
repository.
• The Municipal Court Administration Division has developed adequate standard operating
procedures for cash handling and payment processing. Defendants may pay outstanding fines 0
and fees online or in person at the Municipal Court with cash, check, money order, or credit
to
card. Payments received at the Court are manually entered and updated to each defendant's
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
case in the case management system in real-time.Adequate controls appear to be in place for
handling and reconciling payments collected daily, including:
o Court Representatives are each assigned one cash bag, which is obtained from the
Municipal Court safe at the beginning of each shift. Only the Municipal Court
supervisors are able to open the safe and they do not have the ability to open individual
cash bags.
o Payments made by defendants online are reviewed and posted in the case
management system each business day by a Court Supervisor.
o Daily, Court Representatives reconcile collections to payments recorded in the case
management system. A different Court Representative or a Court Supervisor then
verifies that this reconciliation is accurate.
o These reconciliations are consolidated on a Daily Deposit Report,which is prepared by
a Court Supervisor and forwarded to the Accounting Division to report daily
collections.
■ Based on review of a sample of 30 randomly selected Daily Deposit Reports,
all collected fines and fees were properly recorded into the case management
system and accurately reported to Accounting.
o Fines and fees collected in cash are deposited with the Customer Service Division the
next day along with a signed deposit receipt.Customer Service staff verify the cash and
sign the deposit receipt.
o Checks and money orders are scanned and deposited with the bank electronically.
• Checks, cash, and money orders may also be mailed or placed in an overnight drop box.
o These payments are retrieved by a single Court Representative who processes each
payment in the case management system daily.
o The cashier windows are monitored during business hours by security cameras, which
are generally watched by a Court Supervisor throughout the day. This footage is
maintained for about 60 days.
o Payments are also recorded in an EXCEL-based Mail Log.
■ Based on a review of fifteen payments recorded in the Mail Log, all but one
were properly posted in the case management system and accurately
reported in the Daily Deposit Reports.This exception was a check that was not
cashed but instead returned to the defendant by their request. This fine was
instead paid online and recorded per that payment process.The check return
was not recorded in the Mail Log.
• As required by Texas Government Code, Chapter 71, Section 71.035(b), Denton's Municipal
Court activities reports were properly filed with the Texas Office of Court Administration during
fiscal year 2019-20.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Why It Matters
Appropriate court case records and documentation maintenance ensure that the cases are being
efficiently monitored and assessed, and adjudicated court fines and fees are being appropriately
collected. Similarly,the Municipal Court Administration Division has adopted formalized processes
for cash handling;clarifying which staff have access to the safe and cash bags would provide further
assurance about cash safety and help bring awareness among the City's staff. In addition, the City
has adopted adequate procedures for proper posting of payments into the case management
system and accurate reporting to the Accounting Division.
That being said, about nine percent of payments collected by the Municipal Court are received in
the mail or through the drop box. Allowing a single employee to retrieve payments received in the
mail and drop box increases the risk of fraud and abuse as the customer does not witness the
payment being processed. Furthermore, while these payments should be recorded on a mail log,
the current EXCEL-based system is vulnerable to alteration, which could potentially be misused,
especially when cash is received. Finally, updating the Mail Log to include checks and money orders
that are returned or not cashed will facilitate reconciliation.
Recommendations:
3. Update procedures to clarify which staff have access to the safe and cash bags.
Municipal Court Administration Comments: Court Administration will update process
documentation to include safe and cash bag access information.
4. Keep a record of returned checks and money orders in the Mail Log maintained for recording
payments received through the mail and drop box to reconcile the checks and money orders
received and cashed.
Municipal Court Administration Comments:In addition to adding comments on the case, Court
Administration will update processes to include noting the mail log if a payment is returned to
a defendant.
5. Requiring two staff members to retrieve and process payments received through the mail and
drop box. These payments and the Mail Log should be verified again as part of the daily
reconciliation process.
Municipal Court Administration Comments:Court Administration will explore options to further
reduce risk identified with mail and drop box payments. Processes and assignments will be
updated accordingly.
6. Maintain a non-alterable record of payments received through the mail and drop box.
Municipal Court Administration Comments:Court Administration will explore options to comply
with this recommendation. Processes and documentation will be updated accordingly.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Defendants Payment Plans Are Appropriately Documented and Administered
Allowing defendants to pay court fines and fees in installments through a payment plan is
considered a best practice. Denton's Municipal Court provides an option to defendants to pay
adjudicated fines and fees in parts and dispose of their case without arrest. Payment plans should
be properly approved, adequately documented, and regularly monitored for delays and non-
payments in order to be effective.
What We Found
• The Municipal Court Judge has authorized Municipal Court Administrative Division staff to
create payment plans for fines and fees owed on adjudicated cases if requested by a defendant
within certain parameters. These parameters are documented in the Collection Office Manual
and include the following:
o Defendants may request a payment plan before or after a warrant has been issued;
however, if the case has not been adjudicated,the Municipal Court Judge must review
and approve the request.
o Monthly payment amounts can be set as low as $50, and defendants can be granted
up to 30 days for the first payment to be paid. If the defendant requests a lower
monthly amount or a longer time before the first payment, the Municipal Court Judge
must review and approve the request.
o A Court Representative may grant three 30-day extensions to make a monthly
payment. Defendants are required to make a new payment plan on the fourth
extension request.
• At the end of December 2020, 226 defendants had an active payment plan with Denton's
Municipal Court. Based on a review of a judgement sample of 30 active payment plans, it was
observed that all payment plans had been appropriately approved and administered following
the Court's procedures.
o All payment plans'transactions were appropriately recorded in each defendant's case
in the case management system.
o The documentation for each reviewed payment plan's application and approval was
appropriately executed and maintained in the document repository.
o The monthly payment delays and plan extensions were appropriately tracked and
administered by Municipal Court staff.
Why It Matters
The Municipal Court Administration Division administers defendant's payment plans appropriately
per the Municipal Court's established procedures. Payment plans appear to assist defendants who
owe fines and fees by spreading payments out over time. This process also helps the City dispose
of cases while minimizing the issuance of arrest warrants.
Recommendation: None Cn
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Some Reviewed Refunds Were Not Properly Approved
Municipal Courts are required to refund defendants if fines and fees are overpaid or if the posted
bond exceeds the adjudicated fines and fees, whenever necessary. Refunds should be properly
approved and documented to ensure they are issued appropriately.
What We Found
• Per the Collection Office Manual, refund documentation is prepared by a Court Representative
based on a defendant's request or the based on the Municipal Court Judge's order. A refund
form with supporting documentation is submitted to their Supervisor for approval. Refunds
forms are verified and signed by a Supervisor and sent to the Accounts Payable Division for
payment to defendants.
• The Municipal Court Administration Division processed 23 refunds amounting to $5,608
between March 2020 and February 2021. Of 23, eight refunds were prepared by a Court
Supervisor instead of a Court Representative.
o Of these, four refunds, amounting to $906, were not verified or approved by another
employee. The remaining four, while verified, were not approved by the preparer's
supervisor. Based on discussion with Municipal Court Administration Division staff,
these refunds were not properly authorized due to staffing shortages caused by the
COVID-19 Pandemic.
Why It Matters
The Collection Office Manual requires refunds to be approved by the Supervisor of the Court
Representative, who prepares the documentation and processes the refund in the case
management system.These procedures are designed appropriately to ensure adequate separation
of duties between those requesting and authorizing a cash disbursement; however, almost a third
of refunds processed since March 2020 did not adequately follow this procedure. Allowing staff to
process and approve refunds increases the risk of error and fraud.
Recommendation:
7. Ensure that Municipal Court refunds are adequately approved. Specifically, one employee
should prepare and process the refund request, which should be reviewed and approved by
their Supervisor.
Municipal Court Administration Comments: Court staff will follow documented procedures to
ensure separation of duties and adequate controls. Court Administration will regularly check
for compliance and plan ahead if staffing creates dual control challenges.
Collection Agency Payments Are Effectively Processed; Clarify Referral Process
Collection efforts are generally required if defendants do not pay their fines and fees timely. In
general, municipalities contract with a collection agency to facilitate these efforts after a certain
length of time. In order to ensure effective reporting and administration of collection through a
collection agency:
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➢ Delinquent cases should be timely referred to the Collection Agency,
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
➢ Payments received from Collection Agency should be appropriately monitored and
accurately reported in City's records; and
➢ Defendants should be aware of the City's practice of sending the delinquent cases to the
Collection Agency.
What We Found
• The City has contracted with a collection agency to collect delinquent payments from
defendants. According to Municipal Court Administration Division staff, delinquent fines and
fees are generally sent to the collection agency at least 60 days after a warrant has been issued.
• As authorized under Chapter 103 of the Texas Code of Criminal Procedure, the collection
agency directly charges defendants a collection fee equivalent of 30 percent of the fines and
fees due.
o The Municipal Court stopped issuing warrants to defendants after March 2020 due to
the COVID-19 Pandemic. Forthis reason, no delinquent payment cases have been sent
to the collection agency since March 2020.
o The Municipal Court's City webpage does not appear to include information on the
referral of court fines and fees to the collection agency.
• The Municipal Court Administration Division has set up an effective process for tracking and
recording of fine and fee payments collected by the City's collection agency daily as illustrated
in Figure 5.
Figure 5: Collection Agency Payments' Daily Tracking and Recording Process
Collection Agency Municipal Court Admin. Division
Daily Verification
ImportDaily E-Mail to &
Municipal Court Municipal Court payments into and Cases Closed
Case Mgmt.
System
• Based on review of 12 randomly selected collection agency daily reports, all reviewed daily
collected payments were properly verified and recorded in the case management system per
the established process. These payments were also accurately reported in Municipal Court's
Daily Deposit Reports sent to Accounting.
• Based on a review of cases referred to the collection agency between October 2019 to March
2020, referrals made for delinquent cases are generally referred to the collection agency four
months after a warrant is issued and are generally made at least 30 days after the 60 day
minimum timeline.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Why It Matters
The Municipal Court Administrative Division has developed an effective process for receiving and
processing delinquent payments collected by the City's collection agency; however, information
about the delinquent payment referral and collection process is not publicly posted on the City's
website. Ensuring that this information is available may further prompt some defendants to pay
their fines and fees on time and helps minimize the risk that defendants are overcharged by the
collection agency as they charge defendants the collection fee directly.
In addition, from October 2019 to March 2020, all delinquent payment cases were referred to the
collection agency after at least 90 days from the warrant issue. Delaying referral of cases to the
collection agency may hinder the timely disposal of cases.Therefore, reducing the referral timeline
could help reduce the overall time taken to dispose of cases as collection efforts can be initiated
earlier.
Recommendations:
8. Update the Municipal Court's City webpage to include the collection agency referral
procedure.This information should include the referral timeline and the additional collection
fee.
Municipal Court Administration Comments: The Court Administrator will have collection
agency information added to the Frequently Asked Questions portion of the court's website.
9. Develop a procedure for referring the delinquent payment cases to the collection agency
promptly on the passing of 60 days after issuance of a warrant. This recommendation is
suggested to be implemented when the Municipal Court resumes sending cases to the
collection agency.
Municipal Court Administration Comments: Court Administration will develop and document
collection agency referral processes to comply with this recommendation.
Case Management System Access Properly Granted; Increased Monitoring Needed
Per the Government Accountability Office's Federal Information System Controls Audit Manual's
methodology,governmental entities should have policies and procedures in place to provide logical
access to the users.
➢ Access should be limited to users with a valid business purpose and should be related to
the users' duties and responsibilities.
➢ Unnecessary and inactive accounts and access rights should be removed or otherwise
secured.
➢ System owners should periodically review authorization lists and levels to assess their
appropriateness.
➢ Entries executed by employees in an information system should be controlled through
formal and active supervision.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
What We Found
• The City uses a court case management system to record the collection of assessed or
adjudicated fines and fees and to track the progress of cases through the judicial process.
• Group-based case management system access rights are granted based on the duties and
responsibilities performed by City staff; however,there is no formal process or criteria in place
for granting and removing this access.
o The Municipal Court Administrator is able to grant and revoke access rights to the case
management system and access rights are granted and removed with her approval.
o The modification and removal of access rights are made on request if there is a new
appointment, role change,or employee termination information received from the HR
Department.
o Only two Municipal Court Supervisors have been granted administrative rights.
• No formal process has been developed to regularly review users and their access levels to verify
that assess and authorization are appropriate.
o Four active system users, including two Technology Services staff with administrative-
level rights,were former employees.Their access rights were promptly removed once
the Municipal Court Administration Division staff were informed. It should be noted
that the risk associated with this is relatively minimal as the case management system
is a desktop-based, licensed application,which must be installed on a user's system to
access.
• No formal process has been developed to regularly review and monitor the case updates or
fee adjustments made in the case management system by the users.
Why It Matters
Group-based case management system access ensures staff are granted access based on their
duties and responsibilities provides assurance that users are not granted unnecessary access.That
being said,without a formal process for requesting and approving system access there is a risk that
inappropriate access may be granted.
Additionally, in order to ensure proper controls,terminated employees' access should be promptly
disabled or deleted. The Municipal Court Administration Division has a procedure in place to
disable the users who are no longer employees or no longer needed access when they are notified.
Conducting periodic user access reviews access will provide further assurance that only authorized
users may use the system.
Finally, not all case management system transactions and entries executed by users are monitored
and reviewed regularly,which may leave room for error or abuse.A formal process for periodically
reviewing case status updates or fee adjustments made in the case management system would
help ensure the accuracy and appropriateness these transactions.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Recommendations:
10. Create a formal process for granting and removing case management system user access,
including the criteria and conditions for group-based access control.
Municipal Court Administration Comments: The Court Administrator recently developed a
SmartSheet request form to add, update, or remove Incode access. The form includes the
group-based access needed. This has already been used to add new Dispatch employees. The
Court Administrator will document this process.
11. Develop a procedure for periodical review and monitoring of the case management system
User Listing and authorization.
Municipal Court Administration Comments: The Court Administrator will audit user access at
least twice annually. This process will be documented by the Court Administrator.
12. Develop a process to regularly review fees and fine adjustments and case status updates in
the case management system to ensure accuracy and appropriateness.
Municipal Court Administration Comments: The Assistant Court Administrator currently audits
cases and payments on a daily basis. Court Administration will document these processes. If
additional ways to audit are found that will further comply with this recommendation, they
will be added.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Appendix A: Management Response Summary
The following summarizes the recommendations issued throughout this report. The auditors found that
staff and the Divisions were receptive and willing to make improvements to controls where needed.
Management has provided their response to each recommendation.
Develop a process in consultation with the City's public safety Expected
agencies for timely submission of manual citations with the Completion
Municipal Court Administration. Also ensure that manual (Mentioned
1 citations, once received, are recorded in the case management Concur below)
system without delay to improve the overall timeliness of
citations'entry.
Municipal Court Administration Comments: While the Court does not have the Responsibility:
authority to assign or enforce procedures to public safety agencies, the Court will work Court
with them to develop processes that will expedite the submission of manual citations. Administration
Court Administration will also update internal processes to further ensure timely entry & Public
of these citations in the case management system. Safety
Agencies
(June 30,
2021)
Police Department Comments:The Records Management Division will electronically Responsibility:
scan manual citations to Municipal Court during business hours to expedite the internal Records
process. A Standard Operating Procedure pertaining to this procedure will be added to Management
the Records Management SOP manual. Division
(April 1, 2021)
Maintain a database of manual citations received and create Expected
2 a process for reconciliation of manual citations in consultation Concur Completion
with the public safety agencies. (Mentioned
below)
Police Department Comments: The Police Quartermaster will maintain a database to Responsibility:
record the number of manual citation books issued, unused and destroyed inventory. Records
The Records Management Division will maintain an electronic database of manual Management
citations issued, corrected,voided and/or returned.The division will disseminate this Division
information to Municipal Court for reconciliation. Section (April
1, 2021)
Quartermaster
Section (End
of 2021)
Municipal Court Administration Comments: Since manual citations originate with the Responsibility:
public safety agencies, it is most appropriate that a database is maintained by these Court
agencies. Court Administration can provide reporting of manual citations entered, or Administration
other information deemed necessary,to assist the agencies with their tracking and & Public
reconciliation processes. Safety
Agencies (June
30, 2021)
0)
Update procedures to clarify which staff have access to the Expected v
3 safe and cash bags. Concur Completion: tao
04/30/2021 0-
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Municipal Court Administration Comments: Court Administration will update process Responsibility:
documentation to include safe and cash bag access information. Court
Administration
Keep a record of returned checks and money orders in the Mail Expected
4 Log maintained for recording payments received through the Concur Completion:
mail and drop box to reconcile the checks and money orders 04/30/2021
received and cashed.
Municipal Court Administration Comments: In addition to adding comments on the Responsibility:
case, Court Administration will update processes to include noting the mail log if a Court
payment is returned to a defendant. Administration
Requiring two staff members to retrieve and process payments Expected
received through the mail and drop box. These payments and Completion:
5 the Mail Log should be verified again as part of the daily Concur 05/30/2021
reconciliation process.
Municipal Court Administration Comments: Court Administration will explore options Responsibility:
to further reduce risk identified with mail and drop box payments. Processes and Court
assignments will be updated accordingly. Administration
Maintain a non-alterable record of payments received through Expected
6 Concur Completion:
the mail and drop box.
05/30/2021
Municipal Court Administration Comments: Court Administration will explore options Responsibility:
to comply with this recommendation. Processes and documentation will be updated Court
accordingly. Administration
Ensure that municipal court refunds are adequately approved. Expected
7 Specifically, one employee should prepare and process the Concur Completion:
refund request, which should be reviewed and approved by Immediately
their Supervisor.
Municipal Court Administration Comments: Court staff will follow documented Responsibility:
procedures to ensure separation of duties and adequate controls. Court Administration Court
will regularly check for compliance and plan if staffing creates dual control challenges. Administration
Update the Municipal Court's City webpage to include the Expected
S collection agency referral procedure. This information should Concur Completion:
include the referral timeline and the additional collection fee. 04/30/2021
Municipal Court Administration Comments:The Court Administrator will have Responsibility:
collection agency information added to the Frequently Asked Questions portion of the Court
court's website. Administration
Develop a procedure for referring the delinquent payment Expected
cases to the collection agency promptly on the passing of 60 Completion:
9 days after issuance of a warrant. This recommendation is Concur 07/30/2021
suggested to be implemented when the Municipal Court
resumes sending cases to the collection agency.
Municipal Court Administration Comments: Court Administration will develop and Responsibility:
document collection agency referral processes to comply with this recommendation. Court
Administration
Create a formal process for granting and removing case Expected 0
10 management system user access, including the criteria and Concur Completion:
conditions for group-based access control.
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
In Progress;
Complete by
04/30/2021
Municipal Court Administration Comments:The Court Administrator recently Responsibility:
developed a SmartSheet request form to add, update, or remove Incode access.The Court
form includes the group-based access needed.This has already been used to add new Administration
Dispatch employees.The Court Administrator will document this process.
Develop a procedure for periodical review and monitoring of
Expected
11 Incode User Listing and authorization. Concur Completion:
07/30/2021
Municipal Court Administration Comments:The Court Administrator will audit user Responsibility:
access at least twice annually.This process will be documented by the Court Court
Administrator. Administrator
Expected
Develop a process to regularly review fees and fine Completion:
12 adjustments and case status updates in the case management Concur In progress;
system to ensure the accuracy and appropriateness. Complete by
06/30/2021
Municipal Court Administration Comments:The Assistant Court Administrator Responsibility:
currently audits cases and payments on a daily basis. Court Administration will Court
document these processes. If additional ways to audit are found that will further Administration
comply with this recommendation,they will be added.
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The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Appendix B: Citation Demographic Information
The following demographic information has been presented to provide information and context about the
City of Denton's Municipal Court system's defendants. This information is solely based on citations issued
during fiscal year 2019-20 by Denton's public safety agencies. It is important to note that this demographic
information is reported by public safety officers and so may not accurately represent a person's self-
reported identify. This report does not draw conclusions about disparate citation outcomes experienced
by different racial, ethnic, gender, and age groups.'
The following figures present the percentage of all citations issued, cases dismissed, and potential
warrants'for each demographic group in comparison to each group's percentage of the City of Denton's
population.$Citations are split between those issued in relation to the Transportation Code (almost 10,900
total)and the Penal Code(About 900 total) .Almost 3400 citations not related to either of these two Codes
are not include in Figure 6, Figure 7, or Figure 8.
Figure 6: Gender Comparisons of Citation Outcomes to Denton Population
80% 80%
70% 70%
60% 60% —
50% 50% — ■City Population
40% 40% —
30% 30%
■Citations
20% 20% ■Dismissed Cases
10% 10% ■Potential Warrants
0% 0%
Women Men Women Men
Traffic Code Related Penal Code Related
Figure 7: Age Comparisons of Citation Outcomes to Denton Population
70% 90%
60% 80% — —
50% 70%
60%
40% 50% ■City Population
30% 40%
20%
30% ■Citations
10 20% ■Dismissed Cases
0% '-- A 10% .
0% '�� A III' ■Potential Warrants
Juvenile Minor Young Adult Juvenile Minor Young Adult N
Adult Adult N
Traffic Code Related Penal Code Related v
an
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6 It should be noted that reporting on race,ethnicity,and gender are limited by data as it is collected by public safety agencies.Internal Audit
recognizes that some demographic categories as they are presented here may inaccurately represent an individual's race,ethnicity,or gender.
'Due to the COVID-19 Pandemic,the Municipal Court has not issued new warrants since March 2020.For this reason,the potential warrant
metric is used and includes all outstanding warrants and cases where the defendant has failed to appear but a warrant has not yet been issued.
8 While this comparison is used,it is important to note that not all defendants are City of Denton residents.
The City of Denton Internal Audit Report April 2021
Audit of Municipal Court Payments
Figure 8: Race & Ethnic Comparisons of Citation Outcomes to Population
70% 70%
60% 60%
50% 50%
40% 40%30% 30% —
0 0 ■City Population
20% 20% ■Citations
10% Ill.
10% ■Dismissed Cases
0% - 0% L 1 0-1
■Potential Warrants
��•� ��yQa� ��a P5� O'`r Jar ��SQa� Q'�a Py�a O`r
Traffic Code Related Penal Code Related
The table below summarizes the percentage of all citations issued to each group that are dismissed or will
potentially have a warrant issued.This information is intended to allow comparison of citation conversion
rates.
Table: Citation Conversion Rates by Demographic Group
Group Total Citations9 Percent Dismissed Percent Potential Warrant
Gender Groups
Male 8,099 7.2% 18.0%
Female 5,103 7.7% 11.9%
Age Groups
Juvenile 150 10.0% 0.0%
Minor 2,398 8.5% 11.6%
Young Adult 2,836 7.2% 17.3%
Adult 7,867 7.0% 16.5%
Race&Ethnic Groups
White 7,674 7.2% 13.0%
Hispanic 2,556 6.9% 13.8%
Black 2,528 8.2% 27.3%
Asian 286 5.6% 6.3%
Other 84 9.5% 4.8%
All Groups: 15,167 6.5% 13.6%
If you would like to learn more about the demographic information of traffic stops performed and
citations issued by the City of Denton's Police Department you can visit its Data Initiative webpage on the
City of Denton's website.
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9 Citations by group may not add up to the total citations issued as those with unknown or blank gender,age,race,or ethnicity information have
been excluded.