Tx State Auditor Court of Criminal Appeals Admin for Grant Funds From Judicial and Court Personnel Training Fund 2009

• Topics: Misconduct/Corruption, Corrections Audits

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John Keel, CPA
State Auditor

An Audit Report on

The Court of Criminal Appeals’
Administration of Grant Funds
from the Judicial and Court
Personnel Training Fund
April 2009
Report No. 09-028

An Audit Report on

The Court of Criminal Appeals’
Administration of Grant Funds from the
Judicial and Court Personnel Training
Fund
SAO Report No. 09-028
April 2009

Overall Conclusion
The Court of Criminal Appeals (Court) should
improve its administrative processes to ensure
that grants from the state Judicial and Court
Personnel Training Fund (judicial education
program) are used efficiently and effectively
and that grantees are held accountable for
providing agreed-upon services.
The Court awarded 8 judicial education program
grants totaling $8.44 million in fiscal year 2007
and 7 grants totaling $8.47 million in fiscal year
2008. According to the Court’s records, a total
of 204,443 training hours were provided to
16,437 participants1 in fiscal year 2008. The
Court has processes to ensure that grantees’
requests for funds are reviewed and do not
exceed the grantees’ total award amounts.

Background Information
The Court of Criminal Appeals (Court)
administers the Judicial and Court Personnel
Training Fund, which is a State Treasury
fund. Grants from this training fund provide
for continuing legal education, technical
assistance, and other support programs to (1)
judges; (2) prosecuting attorneys and their
personnel; (3) criminal defense attorneys
who regularly represent indigent defendants
in criminal matters; (4) justices of the peace
and their court personnel; (5) district and
county clerks; (6) law enforcement officers;
(7) law students; and (8) other judicial
personnel.
As part of the Court’s oversight of the
training program, it is required by Texas
Government Code, Section 56.006 (b), to
monitor both the financial performance and
the program performance of entities
receiving grant funds.
The Court was appropriated $8.9 million in
fiscal year 2007 and $9.7 million in fiscal year
2008 from the Judicial and Court Personnel
Training Fund.

The Court should develop written policies and
procedures for its financial monitoring of
judicial education program grants and expand the scope of its financial monitoring
of grantees. Although the Court’s staff reports that it reviews 100 percent of grant
expenditures, it does not limit the amount of grant funds that can be expended on
grantee administrative costs. Grantees’ administrative expenditures in fiscal year
2008 ranged from 36.5 percent to 75.1 percent, with an average administrative
expenditure rate of 49.5 percent across the seven grantees. The Court also should
improve its financial monitoring by requiring grantees to report budget-to-actual
expenditures and ensuring that audits of state and non-state funds are conducted
as required by the grant provisions.
The Court also should develop written policies, procedures, and performance
measures to monitor grantees’ program performance. The number of training

This sum may not represent total individuals because participants may have attended more than one training event.
This audit was conducted in accordance with Texas Government Code, Section 321.0132.
For more information regarding this report, please contact John Young, Audit Manager, or John Keel, State Auditor, at (512) 936-9500.

An Audit Report on
The Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028

events proposed by grantees varied from the actual number of training events they
conducted. These variances ranged from the grantees providing 8 fewer events
than they proposed to providing 17 more events than they proposed. The Court
also should improve its program monitoring by analyzing training participant
evaluations to assess the quality of the training provided by the grantees. Without
implementing performance standards and monitoring grantee performance, the
Court cannot effectively ensure that grantees comply with grant agreements or use
state funds efficiently.
The Court lacks formal, written policies and procedures for awarding and
administering grants. While the Court ensures that grant applications considered
for evaluation are substantially complete, it does not document the rationale it
uses to make award decisions. In addition to $16.9 million in judicial education
program grants, the Court reported that it awarded approximately $171,626 in
supplemental grants during fiscal years 2007 and 2008; however, the Court did not
have a written agreement to document the purposes and amounts of supplement
grants awarded. As a result, the Court could not ensure that these supplemental
grant funds were used as intended. Also, these supplemental grants were awarded
through a noncompetitive process.
The Court’s Education Committee is required by Texas Government Code, Section
56.005, to provide curriculum recommendations to the Court. However, the Court
could not provide any documentation showing that the Education Committee had
formally met or issued an annual report of recommendations since the committee
was created in fiscal year 2004. As a result, the Court primarily relies on the
grantees’ curriculum committees to identify training needs of state judicial and
court personnel.

Key Points
The Court should monitor grantees’ administrative expenditures.
The Court lacks a standard against which it can assess the reasonableness of
grantees’ administrative expenditures, which averaged 49.5 percent of total
grantees’ expenditures in fiscal year 2008.
The Court should improve its monitoring of grantee expenditures.
The Court lacks a standardized process and written procedures for monitoring
grantees’ financial performance. Additionally, the Court did not conduct its
reviews of grantee expenditures in a timely manner and it did not monitor
grantees’ budgets.

An Audit Report on
The Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028

The Court should utilize additional controls to monitor grantees’ financial
performance.
The Court did not ensure that grantees obtain annual independent audits of state
and non-state funds as required by grant provisions. Additionally, the Court did
not actively monitor grantees’ compliance with grant provisions requiring grantee
bank accounts to maintain balances of less than $100,000 so that funds are
protected by insurance offered by the Federal Deposit Insurance Corporation.
The Court should develop and implement performance targets to ensure the
effective operations of grantee programs.
The Court’s agreements with grantees lacked specific performance requirements,
and the Court had not identified any specific performance measures to monitor
grantees’ program activities.
The Court should develop written policies and procedures for program monitoring.
The Court did not require any performance information or reports on program
performance from grantees during fiscal years 2007 and 2008.
The Court should develop written policies and procedures for the awarding and
administering of grant funds.
The Court lacks written criteria for awarding judicial education program grants,
and it did not document its rationale for award decisions in fiscal years 2007 and
2008, including award amounts.
The Court should develop procedures that address the award of supplemental
grants from its administrative funds.
The Court did not require a written agreement to document the purpose and
amounts of $171,626 in supplemental grant funds it awarded in fiscal years 2007
and 2008.
The Court’s Education Committee should make annual recommendations for
judicial training needs.
The Court was unable to provide any documentation showing that its Education
Committee had formally met or issued an annual report as required by Texas
Government Code, Section 56.005.

iii

An Audit Report on
The Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028

The Court should ensure that grant acceptance forms are complete and accurate.
The Court’s staff did not review grantee acceptance forms, which govern the use
of funds awarded, in fiscal years 2007 or 2008. As a result, multiple forms were
not signed by grantees for fiscal years 2007 and 2008. Auditors identified other
miscellaneous errors, such as a grantee that modified the terms of its grantee
acceptance form, grantee acceptance forms that were missing award amounts, and
incorrect identification of a grantee’s name. Without ensuring that the grantee
acceptance forms are accurate, complete, and signed, the Court risks awarding
state funds without a legally binding agreement to govern the use of those funds.
The Court should monitor grantees’ third-party agreements.
Grantees did not provide the Court with copies of all applicable third-party
agreements in fiscal year 2008 as required by the Court’s grant provisions.
Auditors identified one instance in which Court staff were unaware that they were
making multiple payments to a third party, rather than directly to the grantee.2

Summary of Management’s Response
The Court generally agrees with the recommendations in this report, and it
provided the following summary of its responses:
The Court generally agrees with the Auditor’s recommendations. The
Court is always open to constructive criticism as it strives to
continually improve judicial and legal education in Texas. The Court’s
establishment of a grant for actual innocence training and the
establishment of the Texas Criminal Justice Integrity Unit are two
examples of this type of leadership. While many of the Auditor’s
recommendations will be satisfied by documenting existing policies
and procedures, others will need additional research, development,
and collaboration with the grantees, who were not interviewed
during the audit process. The court will continue with its
commitment to ensuring that the Judicial and Legal Education Fund is
operated in the most efficient and accountable manner possible.
Detailed management responses are included in the Detailed Results section of this
report.

The Court’s auditor verified that these funds were used for judicial education training in fiscal year 2007.

An Audit Report on
The Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028

Summary of Objectives, Scope, and Methodology
The objectives of this audit were to:
¾

Determine whether the Court has processes that provide reasonable assurance
that grant funds from the Judiciary and Court Personnel Training Fund are being
awarded and used in accordance with Texas Government Code requirements, the
terms of grant agreements, administrative and Court rules, and Court policy.

Determine the status of implementation of the recommendations contained in
the September 5, 2006, performance review report prepared by MTG
Management Consultants, L.L.C.

The scope of this audit included the Court’s awarding and monitoring procedures,
grant documentation, and financial records for fiscal years 2007 and 2008, and the
Court’s response to recommendations made in the 2006 report by MTG
Management Consultants, L.L.C.
The audit methodology included collecting and reviewing documentation on the
Court’s grant processes; interviewing Court staff and judges; reviewing
documentation on individual grants; analyzing grant expenditure data, budgets,
award decisions, and grant findings; and determining the status of
recommendations made in the 2006 report by MTG Management Consultants, L.L.C.
The Court did not have information systems that were significant to the objectives
of this audit.

Contents
Detailed Results
Chapter 1

The Court of Criminal Appeals Should Obtain Timely and
Complete Information on Grantees’ Financial
Performance............................................................ 1
Chapter 2

The Court’s Staff Should Actively Monitor Grantee and
Program Performance................................................ 11
Chapter 3

The Court Should Establish and Implement Processes
That Will Enable It to Effectively Administer Its Grants
Program ................................................................ 16

Appendices
Appendix 1

Objectives, Scope, and Methodology.............................. 24
Appendix 2

Texas Government Code, Chapter 56 ............................. 27
Appendix 3

Summary of Grant Expenditures for Fiscal Year 2008 .......... 31
Appendix 4

Excerpts from General Appropriations Act (80th
Legislature)............................................................ 33
Appendix 5

Summary of the Court’s Implementation of
Recommendations in MTG Management Consultants’
Report .................................................................. 36

Detailed Results
Chapter 1

The Court of Criminal Appeals Should Obtain Timely and Complete
Information on Grantees’ Financial Performance
The Court of Criminal Appeals (Court) should improve its administration of
grants from the Judicial and Court Personnel Training Fund (judicial
education program) by monitoring grantees’ administrative expenditures,
developing a standardized process and written policies and procedures for
expanded monitoring of grantees’ financial performance, and implementing
additional controls to monitor grantees’ compliance with grant provisions.
The Court did not limit the amount of judicial education program funds that
grantees can expend on administrative costs. In fiscal year 2008, grantees’
administrative expenditures ranged from 36.5 percent to 75.1 percent. While
the Court’s staff reported that they review 100 percent of grant expenditures,
they could more effectively monitor the program by analyzing budget-toactual expenditures and ensuring that audits of state and non-state funds are
conducted and reviewed on a regular basis.
Chapter 1-A

The Court Should Monitor Grantees’ Administrative Expenditures
The Court lacks a standard against which it can assess the reasonableness of
grantees’ administrative expenditures. In fiscal year 2008, seven grantees
reported they expended a combined $4.7 million on administrative
expenditures, including salaries. These administrative expenditures
represented 49.5 percent of the $9.6 million grant funds expended by all
grantees in fiscal year 2008 (see Table 1).
Table 1

Grantee Administrative Expenditures for Fiscal Year 2008

Grantee
Center for American and
a
International Law

Total Expenditures

Administrative
Expenditures

Percent of
Administrative
Expenditures

$ 299,696

$ 109,249

36.5%

489,220

247,474

50.6%

Texas Criminal Defense
b
Lawyers Association

1,098,670

824,834

75.1%

Texas Center for the
Judiciary

1,738,265

724,576

41.7%

Texas Association of
Counties

An Audit Report on the Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028
April 2009
Page 1

Grantee Administrative Expenditures for Fiscal Year 2008

Grantee

Total Expenditures

Administrative
Expenditures

Percent of
Administrative
Expenditures

Texas District and County
Attorneys Association

1,798,289

859,017

47.8%

Texas Justice Court
Training Center

1,931,037

977,961

50.6%

Texas Municipal Courts
Education Center

2,127,274

950,209

44.7%

$9,482,451

$4,693,320

49.5%

Totals
a

Excludes an innocence training grant with total expenditures of $97,584, including total
administrative expenditures of $32,692.
b
Excludes an innocence training grant with total expenditures of $77,115, including total
administrative expenditures of $5,636.
Source: Unaudited expenditure information provided by the grantees.

As Table 1 shows, grantees’ administrative expenditures ranged from 36.5
percent to 75.1 percent of total expenditures. This degree of variation
indicates that some grantees may not have used the grant funds in an efficient
manner. A 2001 study of general expenditures at nonprofits conducted as part
of the Nonprofit Overhead Cost Project3 reviewed tax returns for fiscal year
1999 from 160,000 nonprofit organizations. Organizations specializing in
education with $500,000 to $5 million in revenues—similar to the size of the
Court’s grantees—spent an average of approximately 16 percent of total
expenditures on administrative costs. It should be noted, however, that there
was a wide variation in the accounting practices used by individual nonprofits
included in the study.
The Court is ultimately responsible for determining whether grantees’
administrative expenditures are reasonable. Increased monitoring of
grantees’ administrative expenditures could help the Court determine whether
grantees are using state grant funds for excessive spending on items such as
rent, equipment, or overstaffing.
Recommendations

The Court should:

Assess the appropriateness of grantees’ administrative expenditures and
establish a maximum acceptable administrative rate. Once this rate is
established, the Court should periodically calculate grantees’

“Understanding Management and General Expenses in Nonprofits,” presented by Thomas H. Pollak, Patrick Rooney, and Mark
A. Hager at the 2001 annual meeting of the Association for Research on Nonprofit Organizations and Voluntary Action. A
copy of the report can be found at http://nccsdataweb.urban.org/kbfiles/525/M&G.pdf.
An Audit Report on the Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028
April 2009
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administrative expenditures. The Court may also consider developing
financial penalties to enforce compliance with the maximum rate.

Conduct additional reviews of administrative expenditures of grantees that
spent the highest percentage of funds on administrative costs in fiscal year
2008 to determine whether these expenditures were reasonable.

Management’s Response

Management generally agrees that there should be a review of the Auditor’s
research regarding benchmark data on administrative expenses in order to
determine if it is reasonable to establish an appropriate and realistic
allowable rate for administrative overhead. Additionally, the Court will
review FY08 administrative expenses in order to determine if the expenditures
were necessary and reasonable.
While management generally agrees with the Auditor’s recommendations, it
should be noted that the Auditor did not mention that all expenses, both
administrative and programmatic, are carefully reviewed by the Court’s
auditor in order to determine if they comply with grant conditions. If any
expenditure is found to be out of compliance, the grantee is required to
reimburse the grant from private funds. This could have been verified had the
auditor team interviewed any grantee.
Again, the Court will research the establishment of an allowable
administrative rate, including the feasibility of implementing an enforcement
mechanism to ensure compliance with any administrative targets.
The Court’s grant staff will complete this review and implement any changes
within 180 days.

An Audit Report on the Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028
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Chapter 1-B

The Court Should Improve Its Monitoring of Grantee Expenditures
Grant Findings
Court staff periodically review
grantees’ expenditures from the prior
fiscal year. When a questionable
expenditure is identified, the Court’s
staff issues a “grant finding.” These
findings may be issued for:

Unallowable expenditures.
Unsupported transactions.
Travel expenses that are more
than state-approved limits.

Transactions that require
additional explanation.

Court staff consider grant findings
resolved once they determine
whether the grantee should pay back
the grant funds.

As of February 2009, the Court lacked a standardized process or
written policies and procedures for the monitoring of grantees’
financial performance. Court staff did not review expenditures or
resolve grant findings in a timely manner. Court staff also did not
monitor grantees’ budgets. For the effective operation of the
judicial education program, the Court should ensure it conducts
timely reviews of grantees’ expenditures and expands its oversight
activities to include the monitoring of grantees’ budgets.
The Court’s oversight consisted primarily of annual reviews of
grantee expenditures conducted after the end of each grant period.
If a questionable expenditure is identified, the Court issues a grant
finding (see textbox). Auditors reviewed the Court’s grant
findings for fiscal year 2007 and verified that the Court
consistently identified unallowable and unsupported expenditures.

The Court should improve the efficiency and timeliness of its monitoring of grantee
expenditures. Court staff reported they reviewed 100 percent of state-funded

grant expenditures to ensure they were allowable and supported. These
reviews identified and resolved $9,169 in fiscal year 2007 grantee
expenditures that had not been spent in accordance with grant provisions.
However, the Court had not yet resolved some additional grant findings or
recouped all grant funds from fiscal year 2007.
These reviews do not provide the Court with timely information because they
occur after all grant funds have been expended for each fiscal year. For
example, as of February 2009, the Court had not finished reviewing grantee
expenditures for any grantee that received funds in fiscal year 2008. In
addition, the Court’s current practice of reviewing grantee expenditures
includes Court staff reviewing all expenditures regardless of dollar amount or
grantees’ compliance history.
The Court also lacks clear standards and a standardized process for resolving
grant findings in a timely manner. As of February 2009, the Court had not
resolved 60 (25.9 percent) of 231 grant findings from fiscal year 2007.
Currently, a single staff member reviews all grant findings and has full
discretion to decide whether a finding should be referred to a judge for review.
All referrals are sent to the judge who manages the judicial education section
for review or referral to the full court. Because the Court lacks written,
detailed policies and procedures for the review and resolution of grant
findings, there is no assurance that grant findings are processed in a consistent
manner. For example, auditors identified one instance in which a staff
member recommended that a grant finding be referred for judicial review;
later, the staff member decided to resolve that finding even though the issue
was never forwarded to a judge for consideration. The lack of clear
An Audit Report on the Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028
April 2009
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procedures and responsibilities increases the risk that grant findings may not
be resolved appropriately.
The Court should monitor grantees’ budgets.

The Court requires grantees to report
financial information into an accounting system used by the Court. However,
the template designed by the Court—known as the “chart of accounts”—does
not have the capability to fully track the programs and fund years related to
the reported expenditures. As a result, the Court cannot fully track grantees’
use of grant funds from funding sources restricted by the General
Appropriations Act for specific constituent groups (see Appendix 4 for
excerpts from the General Appropriations Act).
For example, Rider 7, page IV-6, the General Appropriations Act (80th
Legislature), requires the Court to designate at least $1 million in each fiscal
year for the training of court clerks and personnel at each of the judicial court
systems in the State (see Appendix 4 for full text of Rider 7). However,
because of the weaknesses in the accounting system template that the Court
requires grantees to use to report grant expenditures, the Court cannot track all
of the funds restricted for training specific constituent groups or designated
for specific fiscal years. In some cases, the Court’s accounting system
template allows grantees to track expenditures for specific constituent groups,
such as those for travel, meals, and lodging. However, grantees did not code
other expenditures such as those for faculty, course materials, and conference
rooms, so that the Court could link them to a specific constituent group. As a
result, the Court cannot ensure full compliance with Rider 7.
Additionally, Court staff did not complete monthly budget monitoring reports
for any grantees from March 2008 to January 2009. Without timely
information about grantees’ budgeted amounts, actual expenditures, and
unexpended fund balances, the Court cannot (1) ensure that grantees are
expending funds for the purposes and events agreed upon in the grant
agreement or (2) accurately assess grantees’ needs for supplemental funding
(see Chapter 3 for more information about supplemental grants). This is
significant because many grantees do not spend all grant funds awarded to
them in each fiscal year. At the end of fiscal year 2007, six grantees had
unexpended balances totaling $472,691. Two grantees accounted for 80
percent of the total unexpended balances. At the end of fiscal year 2008, three
grantees reported unexpended balances totaling $419,069, and the same two
grantees accounted for 88 percent of the total unexpended balances (see
Figures 1 on the next page).

An Audit Report on the Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
SAO Report No. 09-028
April 2009
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Figure 1

Grantees’ Unexpended Balances in Fiscal Years 2007 and 2008
Unexpended Balances in Fiscal Year 2007

Other Grantees
Texas Justice

Combined,

Court Training

$95,267

Center,

20%

$157,651
33%

Texas Center for
the Judiciary,
$219,773
47%

Unexpended Balances in Fiscal Year 2008
Other Grantees
Combined,
Texas Justice Court
Training Center,

$50,994
12%

$194,038
46%

Texas Center for
the Judiciary,
$174,037
42%

Source: Grantee budget documents provided by the Court.
An Audit Report on the Court of Criminal Appeals’ Administration of Grant Funds from the Judicial and Court Personnel Training Fund
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The grantees refunded to the Court the unexpended balances at the end of
each fiscal year, in compliance with Rider 6, page IV-6, the General
Appropriations Act (80th Legislature), which required that the Court recoup
unexpended balances at the end of each fiscal year (see Appendix 4 for the
full text of Rider 6). However, these unexpended balances may indicate that
grantees had not accurately planned for the use of grant funds or inaccurately
identified the amount of training needed by specific constituent groups.
Grantees’ unexpended balances may provide an additional funding source for
supplemental grants in the event that the Court identifies additional training
needs. (See Chapter 3-B for more information regarding supplemental
grants.)
Recommendations

The Court should:

Improve the efficiency and timeliness of its review process by:

Reviewing a sample of monthly expenditures.

Establishing a minimum dollar threshold of grant expenditures to
review.

Selecting expenditures to review based in part on grantees’ compliance
history.

Develop written policies and procedures that provide grant review
timelines and clearly assign responsibilities for the review and resolution
of grant findings.

Develop and implement written policies and procedures for monitoring
grantee’s financial performance. These policies and procedures should
consider incorporating the best practices identified in the State of Texas
Contract Management Guide and should include:

Timely reviews and resolutions of grant monitoring issues.

Regular reviews of grantees’ budgeted costs to actual expenditures.

Ensure that its auditor reviews monthly budgets for each grantee.

Modify the accounting system’s template (chart of accounts) to allow
Court staff and grantees to track and report all grant funds awarded for use
in different years, for different programs, and for different constituent
groups, as required by the General Appropriations Act.

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SAO Report No. 09-028
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Management’s Response

Management generally agrees that there should be written policies and
procedures regarding the monitoring of grant expenses and will research the
best practices referenced by the Auditor to see if there is a fit with this
program. The Court will also research the Auditor’s recommendation to
review monthly expenditures based on minimum dollar thresholds and the
compliance history of each grantee. The Court does maintain, however, that
there is value in its current policy of performing annual audits based on 100%
of expenditures. This practice ensures compliance. Still, the Court will
consider the integration of this with the monthly sampling of current year
expenditures subject to the availability of sufficient staff time.
While management also generally agrees that internal timelines would be
beneficial to both the Court and the grantees, it must be noted that current
policy requires that all grant decisions be made by a majority vote of all
judges on the Court. Management will research the feasibility of these kinds
of targets, but due to the rigorous workload of the judges, it may not be
practical to impose these types of restrictions.
Management generally disagrees that the chart of accounts lacks the ability to
track and report funds for different purposes and constituent groups. In
addition, grantees track funds in greater detail than is required in different
ways according to their unique needs. Additionally, each year is tracked
independently in a distinctive set of books. Therefore, the need to track funds
by year within the chart of accounts would not be useful.
The Court’s grant staff will draft appropriate policies and procedures within
180 days.

Chapter 1-C

The Court Should Utilize Additional Controls to Monitor Grantees’
Financial Performance

Grantee Funding Sources
The Court’s grant provisions
differentiate between state grant
funds and other sources of funding.
These other sources include nonstate grants that the grantee
obtains from other organizations
and private funds. The Court’s
grant provisions also require that
grantees obtain annual
independent financial audits of all
funding sources.

The Court did not ensure that grantees obtain annual independent audits
of state and non-state funds as required by their grant provisions.
Grantees are required to obtain annual audits of all funding sources and
send the results to the Court within 180 days of the fiscal year’s end (see
text box). As of January 2009 (487 days after the end of fiscal year
2007), the Court had not received audit reports from 5 (62.5 percent) of
the 8 grantees receiving grant awards in fiscal year 2007. As a result, the
Court lacked complete information on grantee funding sources for these
five grantees. The remaining three grantees submitted audit reports that
covered the state and non-state funds they received in fiscal year 2007.
Audits of state and non-state funds for fiscal year 2008 were not available

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for State Auditor’s Office review because grantees were within the six-month
timeframe to provide these reports during audit fieldwork.
Although the Court’s grant provisions require grantees to obtain and submit
audit reports for state and non-state funds within six months of the end of the
fiscal year, the Court does not have procedures to require Court staff to review
these audit reports. These reports could provide the Court additional
assurance that the financial information grantees submit to the Court is
accurate and complete, and they could help the Court focus its monitoring
efforts on grantees that present the most risk.
In addition, the Court did not actively monitor grantees’ compliance with
grant provisions requiring accounts receiving deposits of grant funds to
maintain balances less than $100,000 so that funds are protected by insurance
offered by the Federal Deposit Insurance Corporation (FDIC). Five of seven
grant organizations receiving grant funds in fiscal year 2008 did not comply
with this grant provision. Those five grantees exceeded the $100,000 limit by
transferring more than $100,000 into their bank accounts on 65 different
occasions, or 56 percent of the 116 transfers that occurred between the Court
and grantees from fiscal year 2007 to fiscal year 2008. Account balances that
are more than the FDIC insurance limit could potentially put state funds at
risk in the event of bank insolvency. It is important to note that this risk is
significantly reduced from October 2008 until December 2009, when the
FDIC increased its insurance on bank deposits from $100,000 to $250,000 for
accounts at participating bank institutions. However, this change was not
reflected in the Court’s grant provisions as of February 2009.
Recommendations

The Court should:

Ensure that grantees obtain and submit audits of state and non-state funds
within the timelines required by grant provisions. The Court may also
consider issuing penalties included in the grant agreements to enforce
grantee compliance.

Ensure that staff review audit reports that cover state and non-state funds
to determine the accuracy and completeness of financial information that
grantees self-report to the Court and focus monitoring efforts on areas of
higher risk.

Develop and implement policies and procedures to prohibit Court staff
from approving transfers of grant funds to grantee accounts that have
balances higher than FDIC-insured limits.

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Ensure that grantees comply with all grant provisions. To do this, the
Court should consider incorporating penalties in its grant provisions to
encourage compliance by grantees.

Management’s Response

Management generally agrees that a mechanism to ensure compliance with
the requirement to provide the Court with copies of annual audits of both state
and non-state funds should be implemented. However, since these audits use
different standards and criteria than those required by the grant, this
information is not seen to be of significant value. Rather, it will be used as a
piece of the overall risk profile of each grantee.
Management generally agrees that controls should be implemented to
guarantee that all grantees have measures in place to ensure compliance with
FDIC-insured limits. Since February 2009, the Court has implemented a
process to verify that each grantee has such a mechanism in place.
Additionally, the Court will implement a policy to prevent grantees from
receiving draws that would exceed current FDIC-insured limits.
The Court’s grant staff has implemented controls to ensure compliance with
FDIC-insured limits.
The Court’s grant staff will implement controls to ensure that all audits are
submitted in a timely fashion within 90 days. (We will insert management’s
responses here.)

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Chapter 2

The Court’s Staff Should Actively Monitor Grantee and Program
Performance
The Court should incorporate performance targets in its grant provisions and
employ performance measurement to help ensure the effective administration
of judicial training grants. The Court does not have a formal system of
performance measures to ensure that grantees (1) comply with grant
provisions, (2) measure efficiency, (3) determine quality of training, and (4)
report results to Court management. Without these fundamental controls, the
Court cannot ensure that state funds are used efficiently and that the services
provided are consistent with grant agreements.
The Court should develop and implement performance targets to measure the
effectiveness of grantee program operations.

The Court’s agreements with grantees lack specific performance
requirements. When grantees accept a grant, the acceptance notice states they
acknowledge and agree to comply with grant rules, provisions, and orders of
the Court. Although the grant provisions stipulate that the Court may monitor
grantees’ program activities, the Court has not identified any specific
performance measures that would be used. The State of Texas Contract
Management Guide4 states that monitoring performance is a key
administrative function to ensure that a grantee is performing all duties in
accordance with the terms of the agreement and is essential to diagnose and
mitigate problems in a timely manner.
The Court should monitor grantee deliverables.

Court staff did not verify that
grantees provided the level of service stated in their grant agreements; as a
result, grantees provided different amounts of training than they proposed to
conduct in their grant agreements. Each grant proposal includes a list of
proposed training events and an estimated number of participants. When the
grantee signs the grantee acceptance form accepting the judicial education
program funds, the proposal should form the basis for expected deliverables;
therefore, the number of training events in the proposal can serve as a
performance standard to determine grantee compliance with grant provisions.
No grantee provided the same number of training events as stated in its
original proposal in fiscal year 2008. The differences ranged from grantees
providing 8 fewer events than they proposed to grantees providing 17 more
events than they proposed. Six of seven grantees provided more events than
they proposed. This indicated that grantees significantly underestimated the
number of events they can provide. In addition, conducting site visits could
be a useful tool to help the Court evaluate grantee performance; however,
4

State of Texas Contract Management Guide, pages 62-67. A copy of the guide can be found at
http://www.window.state.tx.us/procurement/pub/contractguide/CMG_Version_1_6.pdf.
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Court staff do not conduct regular site visits of grantee programs. Table 2
lists grantees’ proposed events and actual events in fiscal year 2008.
Table 2

Fiscal Year 2008 Proposed and Actual Training Events
Events
Proposed
Events

Actual
Events

Center for
American and
International
Law

Justice Court
Training
Center

Texas
Association of
Counties

Texas Center
for the
Judiciary

Grantee

Participants
Difference

Projected
Participants

Actual
Participants

425

684

Difference

(55.6%)

259
(60.9%)

2,942

3,113

171

(54.8%)
23

(5.8%)
528

642

(64.3%)
8

1,062

1,002

(14.3%)

Texas
Criminal
Defense
Lawyers
Association

Texas District
and County
Attorneys
Association

Texas
Municipal
Courts
Association

-60
(-5.6%)

1,755

2,657

(65.0%)

114
(21.6%)

902
(51.4%)

3,280

3,466

186

(92.3%)

-8

(5.7%)

3,828

3,595

(-12.3%)

-233
(-6.1%)

Source: Unaudited data provided by the Court.

The Court should assess the appropriateness of grantees’ costs.

Court staff attempted
to measure a grantee’s efficiency by calculating an estimated cost per course
hour of training the grantee offered. Auditors also calculated this measure for
fiscal year 2008 using the expenditures and course attendance that grantees
reported to the Court as of February 2009. Auditors’ calculation identified a
wide range of costs per course hour among the grantees from $32 to $1315 per
hour for fiscal year 2008.
The significant difference between the highest cost per hour and the lowest
cost per hour could indicate that some grantees’ costs are excessive (see
Appendix 3 for more information on grantee costs). The Court had not
5

The calculation for this grantee’s costs excluded $295,907 in training provided by third-party organizations (see discussion of
third-party agreements in Chapter 3-E).
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established criteria to determine an appropriate cost per hour or cost range.
These criteria could include a program-wide benchmark that would be
applicable to all grantees, or they could be based on a grantee’s own historical
data. The range in cost per hour or the number of training events alone do not
indicate whether a grantee is a good or bad performer, but viewed in relation
to a performance benchmark or other performance metrics, these measures
could provide insight into the efficiency of a grantee’s operations.
The Court should use course evaluations to analyze quality of grantees’ training and
standardize the design of these evaluations. The Court collected completed

training evaluations from each grantee, but it did not use this information to
evaluate programs or grantee performance. In addition, the Court did not
require grantees to submit information needed to calculate the evaluation
response rates of course participants for each course. Grantees’ course
evaluations also lacked consistency. For example, each grantee’s course
evaluation included different numbers and types of open- and close-ended
questions. Because of these weaknesses, the evaluations provide limited
information on (1) future training needs, (2) improvements needed to existing
courses, or (3) any positive or negative outcomes of training events.
The Court should develop written policies and procedures for program
monitoring.

Texas Government Code,
Section 56.006 (b)
“The Court of Criminal Appeals
… shall monitor both the
financial performance and the
program performance of entities
receiving a grant of funds under
this chapter.”

The Court is required by statute to monitor programmatic performance of
entities receiving grant funds (see text box); however, the Court did not
require grantees to submit any performance information or reports on
program performance during fiscal years 2007 and 2008. As a result, the
Court could not effectively ensure that grantees complied with the terms of
grant agreements. The Governmental Accounting Standards Board’s
(GASB) special report on reporting performance information6 suggests that
performance reports include information that is timely, complete, accurate,
and relevant.
Recommendations

The Court should:

Ensure that its grant administrators develop and implement programmatic
and financial performance measures to evaluate whether grantees are
meeting program objectives and complying with the terms of grant
agreements. Examples of the types of measures the Court should consider
include:

Reporting Performance Information: Suggested Criteria for Effective Communication, August 2003, Governmental Accounting
Standards Board, Norwalk, CT, http://www.seagov.org/sea_gasb_project/suggested_criteria_report.pdf.
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Comparison of proposed to actual deliverables (output). For example,
the number of classes, participants, and course hours.

Cost per hour of training and/or cost per attendee (efficiency).

Information from attendee evaluations (effectiveness).

Ensure that its grant agreements incorporate performance targets. The
Court may also consider developing penalties to enforce compliance with
performance targets.

Consider implementing random site visits by its staff of grantees’
programs to monitor grantees’ performance. These visits may include:

Reconciling registrants with attendees.

Obtaining first-hand feedback on grantee performance and the quality
of speakers.

Inspecting facilities.

Incorporate specific questions on grantees’ course evaluations to allow the
Court to:

Obtain information on participants’ training needs.

Compare the quality of each grantee’s courses in addressing training
needs and use this information in awarding future grants.

Require grantees to submit data on response rates of course evaluations.
Once acquired, the Court should review each course’s evaluation response
rate to determine whether it is adequate to rely on the evaluation results.

Ensure that its grant administrators develop and implement policies and
procedures for program performance monitoring. These policies and
procedures should consider the best practices identified in the State of
Texas Contract Management Guide and should focus on the efficiency and
effectiveness of program operations. These may include:

The number of proposed training events compared with the number of
actual events and with the percentage of the grant award that was
expended.

Determination of customer satisfaction based on evaluation results.

Cost of each training conducted.

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Management’s Response

Management generally agrees that additional output, efficiency and
effectiveness measures for grant funded programs should be researched,
developed and implemented. The Court will review the resources provided by
the Auditor in order to determine how to best implement this recommendation.
It should be noted that the Auditor did not mention that the Court’s grant
conditions require grantees to submit a grant adjustment request when
changing the number of planned programs. These adjustment requests are
required to detail the change, the reason for the change and the financial
impact to the grant. The numbers in Table 2 are supported by the amended
grant applications on file with the Court. While the proposed number of
events differs with the actual number of events, program changes are done
with the Court’s knowledge and approval.
The Court has conducted site and program visits in order to monitor various
aspects of grantee performance. The Court will increase this schedule.
Curriculum committees for each grantee conduct regular surveys of
constituents regarding training. The Court will utilize the grantee’s course
surveys in order to obtain information regarding the quality and relevance of
programming. The Court will also research other mechanisms in order to
collect feedback from participants.
Grant staff will conduct this review now and implement any changes during
the FY11 grant cycle.

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Chapter 3

The Court Should Establish and Implement Processes That Will Enable
It to Effectively Administer Its Grants Program
The Court lacked written policies and procedures for awarding and
administering grants. While the Court ensured that grant applications
considered for evaluation were substantially complete, it did not document the
rationale it used to make award decisions in fiscal years 2007 and 2008. In
addition to the $16.9 million in judicial education program grants that the
Court awarded in fiscal years 2007 and 2008, the Court reports that it awarded
approximately $171,626 in supplemental grants through a noncompetitive
process. However, the Court did not adequately document or track the
purpose and the individual amounts of the supplemental grants awarded and
lacked a formal agreement governing the use of these supplemental funds.
The Court’s Education Committee is required by Texas Government Code,
Section 56.005, to provide curriculum recommendations to the Court.
However, the Court was unable to provide any documentation showing that
the committee had met or issued an annual report since the committee was
formed in fiscal year 2004. The Court primarily relied on the grantees’
curriculum committees to identify the training needs of state judicial and court
personnel.
Chapter 3-A

The Court Should Develop Written Policies and Procedures for the
Awarding and Administering of Grant Funds
The Court lacks written criteria for awarding judicial education program
grants. Additionally, the Court made its award decisions for fiscal years 2007
and 2008 during conference committee meetings and did not document the
rationale for the award decisions, including award amounts. Because
competition for the grants has been limited, the Court awarded funding to
primarily the same seven grantees in fiscal years 2006 through 2009 based in
part on funding limitations outlined in the Texas Government Code and the
General Appropriations Act (see Appendix 4 for more information on the
statutory limitations). Developing written policies and procedures could help
the Court ensure that its award decisions are objective and that grant amounts
are based on a grantee’s ability to meet financial and program performance
standards.
In addition, the Court’s solicitation method for grant proposals has been
limited to posting of grant opportunities in the Texas Register. As of February
2009, the Court’s grant application was not available on the Court’s Web site,
and interested parties must request grant applications from Court staff.
Expanding the marketing of the grant opportunities may increase the
competition for the judicial education program grants.

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Since fiscal year 2006, judicial education program grants have been awarded
to primarily the same seven grantees (see Table 3). Although the Court
indicated that competition for the grants is limited, developing procedures for
its awards process could still help the Court ensure it is making the
appropriate award decisions. Additionally, increased competition could help
the Court ensure that training costs are reasonable (see Chapter 1-A for more
information on grantee administrative costs).
Table 3

Judicial Grant Awards
Fiscal Years 2006 to 2009

Grantee

Location

Constituency Served

Fiscal Year
2006 Awards

Fiscal Year
2007 Awards

Fiscal Year
2008 Awards
$

Fiscal Year
2009 Awards

Center for American
and International Law

Plano, TX

Criminal defense
attorneys, prosecuting
attorneys, and staff

$ 210,000

$ 185,000

185,000

Justices of the Peace
and Constables
Association of Texas

Offices
throughout
Texas

Justices of the peace
and court personnel

$1,613,497

$1,813,497

Texas Association of
Counties

Austin, TX

Constitutional county
court judges

$ 460,750

Texas Center for the
Judiciary

Austin, TX

Appellate, district, and
statutory county court
judges, and court
personnel

$1,788,497

$1,783,497

$1,813,497

$1,741,497

Texas Criminal Defense
Lawyers Association

Austin, TX

Criminal defense
attorneys

$1,052,500

$1,056,415

Texas District and
County Attorneys
Association

Austin, TX

Prosecuting attorneys
and staff

$1,333,000

$1,324,250

Texas Justice Court
Judges Association

Austin, TX

Justices of the peace
and court personnel

$ 200,000

Texas Municipal Courts
Education Center

Austin, TX

Municipal court judges
and court personnel

$1,813,497

Source: Unaudited data from the Court.

In addition to a lack of written policies and procedures for awarding and
administering the grants, the Court lacks a policy to address potential conflicts
of interest between the grantees seeking funding and the Court staff and
judges involved in making award decisions. It is possible that some of the
Court’s judges hold positions or may have otherwise been involved with
organizations requesting grants. For example, one Court judge was identified
as a liaison on a grantee’s federal disclosure form listing officers, directors,
trustees, and key employees. Written policies and procedures addressing
conflicts of interest could help the Court ensure that its award decisions are

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231,835

$1,813,497

objective and fair. The State of Texas Contract Management Guide7 offers
guidance on solicitation of grant proposals and the types of evaluation
methods that may help the Court to improve the weaknesses in its grant
administration process.
Recommendations

The Court should:

Develop and implement written policies and procedures for the awarding
and administering of its judicial education program grants. The Court
should consider the best practices identified in the State of Texas Contract
Management Guide in developing these policies and procedures, which
include procedures for:

Objectively evaluating proposals. This could include a review of the
applicants’ ability to perform.

Documenting the rationale for making awards, including award
amounts.

Consider alternative marketing strategies to enhance the competition for
grant awards.

Develop and implement written policies and procedures for addressing
potential conflicts of interest.

Management’s Response

Management generally agrees that there should be written policies and
procedures for the objective evaluation, awarding and administration of the
grant funded proposals and programs. The Court will place into writing the
already existing policies and procedures. The Court will research, develop
and implement this recommendation to include policies regarding the issue of
potential conflicts of interest.
Management generally disagrees with the findings regarding the
documentation of the awards process during committee conference meetings.
However, the Court will document the rationale for any recommendations
made by the grant staff in preparation for consideration by the Court.
Management generally agrees that there is a lack of competition for grant
funds.

State of Texas Contract Management Guide. A copy of the guide can be found at
http://www.window.state.tx.us/procurement/pub/contractguide/CMG_Version_1_6.pdf.
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In 2003, the Court worked with the Legislature to amend the statutory
language which opened the grant to allow for greater competition among
grantees. Additionally, the Court has openly solicited several organizations
in an effort to expand the pool of grantee applicants. Cross-training among
grantees has occurred as have many joint training projects. At the Court’s
request, separate training for public defenders has been and continues to be
accomplished all of which is paid for through administrative funds.
It is also worth noting that the type of training provided by the Fund 540
grants is specialized and specific to the constituent groups served. For this
reason, it is understandable that the constituents would rely on their
associations to provide this training. However, the Court will enhance its
efforts to expand the pool of applicants applying for grant funds. For
example, grant applications will be added to the Court’s website.
Grant staff will research, develop and implement written policies and
procedures detailing the awards process within 90 days. These policies will
include addressing any potential conflicts of interest.
The Court will place the application and instructions on its website in the
“Rules and Procedures” section.

Chapter 3-B

The Court Should Develop Procedures That Address the Award of
Supplemental Grants from Its Administrative Funds
The Court did not require a written agreement to document the purpose and
amount of supplemental funds it awarded in fiscal years 2007 and 2008.
Because recipients of supplemental grant funds did not have a formal
agreement, the Court did not have a legally binding agreement to govern
General Appropriations Act
the use of those funds.

(80th Legislature), Rider 2B,
Page IV-5

The Court may not use more than 3
percent of judicial education training
funds for the administration of the
judicial education function. The term
administration shall include, but not
be limited to, administrative
oversight functions, accounting and
auditing functions, management
studies, performance audits, and
other studies initiated by the Court or
the Office of Court Administration.

The Court was authorized to expend no more than $266,512 in fiscal
year 2007 and $292,037 in fiscal year 2008 for the administration of the
judicial education training program (see text box). The Court provides
supplemental grant awards from these administrative funds. According
to information provided by the Court, it awarded a total of $171,626 in
supplemental grants to grantees in fiscal years 2007 and 2008.

The Court awards supplemental grants to grantees who request
additional funding. The Court does not advertise the availability of
these supplemental funds and does not award these grants using a
competitive process. Grantees can request a supplemental grant by
contacting the Court via telephone or e-mail. In addition, as discussed in
Chapter 1-B, the Court does not consistently monitor grantees’ budgets. As a
result, the Court lacks a means to verify a grantee’s need for additional funds.

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Recommendations

For the effective administration of the judicial education training program, the
Court should develop and implement a standardized process and written
policies and procedures for awarding and monitoring supplemental grants.
This process should require:

A signed agreement for all supplemental grants that documents the
services to be provided.

Adequate documentation supporting the decision of each award amount.

Advertising available funds for supplemental grants.

Awarding the supplemental grants based on competition among qualified
grantees.

Management’s Response

Management will place into writing the already existing policies and
procedures.
It should be noted, however, that these supplemental grants identified by the
Auditor are not from the general pool of grant funds. These are funds
specifically identified as those for the Court to use for the administration of
the grant as stated in Ch. 56.003(a) of the Government Code. This statute is
further defined by the GAA, Rider 2(b) to state that “the term administration
shall include, but not be limited to, administrative oversight functions,
accounting and auditing functions…”
Based on this language, the Court’s policy has been to use any additional
administrative funds to help current grantees provide additional programming
to their constituents or to fill an unmet need as identified by the Court such as
training the state’s public defenders. The Court believes these additional
administrative funds were awarded in a fair manner. In each instance, every
grantee was contacted and given the opportunity to obtain the additional
funds.
However, as noted above, the Court will place its already existing procedures
into writing and will work to better define its policy on the awarding of these
funds.
Grant staff will implement this recommendation within 180 days.

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Chapter 3-C

The Court’s Education Committee Should Make Annual
Recommendations for Judicial Training Needs
Education Committee
Texas Government Code, Section 56.005,
requires the Court to appoint an education
committee that must meet at least twice a
year to review and recommend course
content. Additionally, the education
committee shall:

Recommend to the Court the minimum
education requirements for judges and
court personnel.

Issue an annual report to the Court that
lists the courses, credits, and standards
for the judges and court personnel.

The Court’s Education Committee is required by Texas Government
Code, Section 56.005, to provide curriculum recommendations to the
Court. However, the Court was unable to provide any
documentation showing that this committee had formally met or
issued an annual report since the committee was formed in fiscal
year 2004. As a result, the Court primarily relied on the grantees’
curriculum committees to identify the training needs of state judicial
and court personnel.
An active Education Committee is an important tool for ensuring
that state judicial training needs are identified and incorporated into
programs funded by judicial education program grants.

Recommendations

The Court should ensure that its Education Committee:

Meets at least twice a year, as required by Texas Government Code,
Section 56.005.

Establishes guidelines and timelines for the creation and submission of its
annual report identifying the training needs of state court personnel.

Management’s Response

Management generally disagrees. The Court has appointed the required
Education Committee and has ensured that grantees have appointed similar
committees. The grantees’ committees report participant numbers, planned
courses, course hours, future planned events, and other pertinent program
data. However, the Court will take steps to ensure that the Education
Committee and other similar committees meet at least twice a year and that
all reports required by Ch. 56 are submitted to the Court.
This recommendation has been implemented.

Chapter 3-D

The Court Should Ensure That Grant Acceptance Forms Are
Complete and Accurate
The Court’s staff did not review grantee acceptance forms for fiscal years
2007 and 2008 to ensure they were complete and accurate. Grantee
acceptance forms can provide assurance that the grantee has agreed to comply
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with the terms and provisions of grant agreements. However, auditors
reviewed all 15 grantee acceptance forms for fiscal year 2007 and 2008 and
identified several weaknesses. Specifically:

Seven of the eight grantee acceptance forms for fiscal year 2007 were not
signed by the grantees. In fiscal year 2008, one of the seven grantee
acceptance forms was not signed by the grantee.

One grantee modified the terms of its fiscal year 2008 grantee acceptance
form, and the Court was unaware of the potential risk that the modification
could have voided the grant’s provisions.

One fiscal year 2007 grantee acceptance form was completely blank.

Auditors also identified other miscellaneous errors, such as missing grant
award amounts and incorrect identification of the grantee’s name. Without
ensuring that the grantee acceptance forms are accurate, complete, and signed,
the Court risks awarding state funds without a legally binding agreement to
govern the use of those funds.
Recommendation

The Court should ensure that grantee acceptance forms are free from errors,
omissions, and alterations. To do this, the Court could consider establishing a
checklist for staff to use in reviewing the grantee acceptance forms.
Management’s Response

The Court has implemented new policies that will ensure that all grantees are
bound by the terms and provisions of the grant agreements. These policies
include language stating that by applying for and accepting funds from the
Court the grantee agrees to comply with all terms and provisions regardless
of signatures.
This recommendation has been implemented.

Chapter 3-E

The Court Should Monitor Grantees’ Third-party Agreements
In fiscal year 2008, grantees did not provide the Court copies of all applicable
third-party agreements, as required by the Court’s grant provisions. Auditors
identified one instance in which Court staff were unaware that they were
making multiple payments to a third party, rather than making the payments
directly to the grantee.8 Auditors also noted more than five instances in which
8

The Court’s auditor verified that these funds were used for judicial education training in fiscal year 2007.
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grantees had agreements with third parties to provide services, such as
outsourced training, but the grantees had not provided information to the
Court about these agreements. Obtaining information on third-party
agreements could help the Court ensure that grant funds are used for their
intended purposes.
Recommendations

The Court should:

Ensure that grantees report all third-party agreements as required by the
Court’s grant provisions.

Review grant payments to ensure that payments are made to the correct
recipient.

Management’s Response

Management generally agrees. The Court will develop and implement
procedures to ensure that all grantees report any third-party agreements and
provide the grant office with copies of any agreements.
It should be noted, however, that payments documented by the Auditor’s office
as being made to third-parties were not for the purpose of providing judicial
education. The cited contracts were either: 1) based on a long standing
relationship between the grantee and another state entity (the Court has a
copy of the original agreement document) for the purpose of providing
administrative support; 2) between a grantee and a lessor; or 3) between two
grantees for the purpose of providing a joint program.
Additionally, all transactions made to and by grantees are reviewed by the
Court’s auditor. In each of the cases cited by the Auditor, any risk to the
grant was minimal.
Grant staff will implement this recommendation within 180 days.

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Appendices
Appendix 1

Objectives, Scope, and Methodology
Objectives
The objectives of this audit were to:

Determine whether the Court of Criminal Appeals (Court) has processes
that provide reasonable assurance that grant funds from the Judiciary and
Court Personnel Training Fund (judicial education program) are being
awarded and used in accordance with Texas Government Code
requirements, the terms of grant agreements, administrative and Court
rules, and Court policy.

Determine the status of implementation of the recommendations contained
in the September 5, 2006, performance review report prepared by MTG
Management Consultants, L.L.C.

Scope
The scope of this audit included the Court’s awarding and monitoring
procedures, grant documentation, and financial records for fiscal years 2007
and 2008 and the Court’s response to recommendations made in the 2006
report by MTG Management Consultants, L.L.C.
Methodology
The audit methodology included collecting and reviewing documentation on
the Court’s grant processes; interviewing Court staff and judges; reviewing
documentation on individual judicial education program grants; analyzing
grant expenditure data, budgets, award decisions, and grant findings; and
determining the status of recommendations made in the 2006 report by MTG
Management Consultants, L.L.C. The Court did not have information systems
that were significant to the objectives of this audit.
Information collected and reviewed included the following:

Grantees’ automated files containing information on funds received from
the judicial education program.

Requests for funds, warrants, and corresponding Uniform Statewide
Accounting System statements.

Court’s grantee expenditure reviews and findings.

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Independent audits of state and non-state funds.

Grant solicitations.

Grant applications and acceptance forms.

Grantee prepared attendance reports and evaluations.

Prior performance audits.

Procedures and tests conducted included the following:

Interviewing Court personnel involved in awarding and administering
grants.

Reviewing grant provisions, applications, agreements, and evidence of
deliverables.

Analyzing grantee expenditure data to evaluate grant monitoring
procedures.

Analyzing Court audits and resolution of findings to evaluate the
effectiveness of the Court’s monitoring and oversight functions.

Criteria used included the following:

State of Texas Contract Management Guide, Version 1.6, Office of the
Comptroller of Public Accounts, last updated February 9, 2009.

Texas Government Code, Chapter 56 (Judicial and Court Personnel
Training Fund).

Court of Criminal Appeals, Judicial and Court Personnel Training
Program Grant Conditions, effective September 1, 2007.

Comptroller Manual of Accounts, Office of the Comptroller of Public
Accounts, effective November 1, 2008.

Project Information
Audit fieldwork was conducted from December 2008 through February 2009.
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.

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The following members of the State Auditor’s staff performed the audit:

Courtney Ambres-Wade, CGAP (Project Manager)

Kels Farmer, MBA, CISA (Assistant Project Manager)

Cain Kohutek

Jeremy Schoech

Dana Musgrave, MBA (Quality Control Reviewer)

John Young, MPAff (Audit Manager)

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Appendix 2

Texas Government Code, Chapter 56
TEXAS GOVERNMENT CODE
CHAPTER 56. JUDICIAL AND COURT PERSONNEL TRAINING FUND

§ 56.001. JUDICIAL AND COURT PERSONNEL TRAINING FUND.
(a) The judicial and court personnel training fund is created
in the state treasury and shall be administered by the court
of criminal appeals.
(i) On requisition of the court of criminal appeals,
the comptroller shall draw a warrant on the fund for the
amount specified in the requisition for a use authorized in
Section 56.003. A warrant may not exceed the amount
appropriated for any one fiscal year. At the end of each
state fiscal year, any unexpended balance in the fund in
excess of $500,000 shall be transferred to the general revenue
fund.
Added by Acts 1987, 70th Leg., ch. 148, § 2.78(a), eff. Sept.
1, 1987. Amended by Acts 1989, 71st Leg., ch. 347, § 5, eff.
Oct. 1, 1989; Acts 1993, 73rd Leg., ch. 896, § 1, 2, eff.
Sept. 1, 1993; Acts 1997, 75th Leg., ch. 165, § 30.187, eff.
Sept. 1, 1997; Acts 1999, 76th Leg., ch. 390, § 2, eff. Aug.
31, 1999; Acts 2003, 78th Leg., ch. 209, § 85(a)(10), eff.
Jan. 1, 2004.
§ 56.002. FEES COLLECTED BY CLERKS OF COURTS OF
APPEALS. Fifty percent of the fees collected by the clerks of
the courts of appeals under Section 51.207 shall be deposited
in the state treasury in the judicial and court personnel
training fund for the continuing legal education of judges and
of court personnel.
Added by Acts 1987, 70th Leg., ch. 148, § 2.78(a), eff. Sept.
1, 1987.
§ 56.003. USE OF FUNDS. (a) Unless the legislature
specifically appropriates or provides additional money for
purposes of this subsection, the court of criminal appeals may
not use more than three percent of the money appropriated in
any one fiscal year to hire staff and provide for the proper
administration of this chapter.
(b) No more than one-third of the funds appropriated
for any fiscal year shall be used for the continuing legal
education of judges of appellate courts, district courts,
county courts at law, county courts performing judicial
functions, full-time associate judges and masters appointed
pursuant to Chapter 201, Family Code, and full-time masters,
magistrates, referees, and associate judges appointed pursuant
to Chapter 54 as required by the court of criminal appeals
under Section 74.025 and of their court personnel.
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(c) No more than one-third of the funds appropriated
for any fiscal year shall be used for the continuing legal
education of judges of justice courts as required by the court
of criminal appeals under Section 74.025 and of their court
personnel.
(d) No more than one-third of the funds appropriated
for any fiscal year shall be used for the continuing legal
education of judges of municipal courts as required by the
court of criminal appeals under Section 74.025 and of their
court personnel.
(e) The court of criminal appeals shall grant legal
funds to statewide professional associations of judges and
other entities whose purposes include providing continuing
legal education courses, programs, and projects for judges and
court personnel. The grantees of those funds must ensure that
sufficient funds are available for each judge to meet the
minimum educational requirements set by the court of criminal
appeals under Section 74.025 before any funds are awarded to a
judge for education that exceeds those requirements.
(f) The court of criminal appeals shall grant legal
funds to statewide professional associations of prosecuting
attorneys, criminal defense attorneys who regularly represent
indigent defendants in criminal matters, and justices of the
peace, and other entities. The association's or entity's
purposes must include providing continuing legal education,
technical assistance, and other support programs.
(g) The court of criminal appeals shall grant legal
funds to statewide professional associations and other
entities that provide innocence training programs related to
defendants' claims of factual innocence following conviction
to law enforcement officers, law students, and other
participants.
Added by Acts 1987, 70th Leg., ch. 148, § 2.78(a), eff. Sept.
1, 1987. Amended by Acts 1993, 73rd Leg., ch. 896, § 3, eff.
Sept. 1, 1993; Acts 1999, 76th Leg., ch. 390, § 3, eff. Aug.
31, 1999; Acts 2003, 78th Leg., ch. 654, § 1, eff. Sept. 1,
2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 149, § 1, eff.
September 1, 2007.
§ 56.004. ALLOCATION OF FUNDS. (a) The legislature
shall appropriate funds from the judicial and court personnel
training fund to the court of criminal appeals to provide for
the continuing legal education of judges and court personnel
in this state.
(b) The legislature shall appropriate funds from the
judicial and court personnel training fund to the court of
criminal appeals to provide for:
(1) continuing legal education, technical
assistance, and other support programs for prosecuting
attorneys and their personnel, criminal defense attorneys who
regularly represent indigent defendants in criminal matters,
and justices of the peace and their court personnel; and
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(2) innocence training programs for law
enforcement officers, law students, and other participants.
Added by Acts 1989, 71st Leg., ch. 2, § 8.34(a), eff. Aug. 28,
1989. Amended by Acts 1993, 73rd Leg., ch. 896, § 4, eff.
Sept. 1, 1993.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 149, § 2, eff.
September 1, 2007.
§ 56.005. JUDICIAL EDUCATION COMMITTEES. (a) The
court of criminal appeals shall appoint the court of criminal
appeals education committee to recommend educational
requirements and course content, credit, and standards for
judges and court personnel of appellate courts, district
courts, statutory county courts, and county courts performing
judicial functions. The court of criminal appeals shall
appoint at least two appellate judges, four district court
judges, two statutory county court judges, and one judge of a
county court performing judicial functions. The court of
criminal appeals may appoint not more than six additional
members. Members serve at the will of the court of criminal
appeals.
(b) An entity receiving a grant of funds from the
court of criminal appeals for the education of justices of the
peace and their court personnel shall designate a committee to
recommend educational requirements and course content, credit,
and standards for the purposes of the grant awarded.
(c) An entity receiving a grant of funds from the
court of criminal appeals under this chapter for the education
of municipal court judges and their personnel shall designate
a committee to recommend educational requirements and course
content, credit, and standards for the purposes of the grant
awarded.
(d) The court of criminal appeals education committee
and any committee established as provided by Subsection (b) or
(c) shall meet at least twice a year to:
(1) review and recommend course content,
credit, and standards for initial and continuing judicial
education for judges and court personnel; and
(2) make recommendations and take other action
necessary to carry out the purposes of this chapter.
(e) The court of criminal appeals education committee
and any committee established as provided by Subsection (b) or
(c) shall:
(1) recommend to the court of criminal appeals
the minimum educational requirements for judges and court
personnel;
and
(2) issue an annual report to the court of
criminal appeals that lists the courses, credits, and
standards for the judges and court personnel.
Added by Acts 1989, 71st Leg., ch. 2, § 8.34(a), eff. Aug. 28,

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1989. Amended by Acts 1993, 73rd Leg., ch. 896, § 5, eff.
Sept. 1, 1993.
§ 56.006. RULES; OVERSIGHT. (a) The court of
criminal appeals may adopt rules for programs relating to
education and training for attorneys, judges, justices of the
peace, district clerks, county clerks, law enforcement
officers, law students, other participants, and court
personnel, including court coordinators, as provided by
Section 56.003 and for the administration of those programs,
including rules that:
(1) require entities receiving a grant of
funds to provide legislatively required training; and
(2) base the awarding of grant funds to an
entity on qualitative information about the entity's programs
or services and the entity's ability to meet financial
performance standards.
(b) The court of criminal appeals, for the proper
administration of this chapter and as part of its oversight of
training programs for attorneys, judges, justices of the
peace, district clerks, county clerks, law enforcement
officers, law students, other participants, and court
personnel, including court coordinators, as provided by
Section 56.003, shall monitor both the financial performance
and the program performance of entities receiving a grant of
funds under this chapter.
Added by Acts 1993, 73rd Leg., ch. 896, § 6, eff. Sept. 1,
1993.
Amended by Acts 1995, 74th Leg., ch. 718, § 1, eff. Sept. 1,
1995; Acts 1997, 75th Leg., ch. 45, § 1, eff. Sept. 1, 1997.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 149, § 3, eff.
September 1, 2007.
§ 56.007. ADMINISTRATIVE EXPENSES. An entity
receiving a grant of funds from the court of criminal appeals
under this chapter for continuing legal education, technical
assistance, and other support programs may not use grant funds
to pay any costs of the entity not related to approved grant
activities.
Added by Acts 1993, 73rd Leg., ch. 896, § 6, eff. Sept. 1,
1993.

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Appendix 3

Summary of Grant Expenditures for Fiscal Year 2008
For fiscal year 2008, grantee expenditures totaled $9.5 million. As Table 5
shows, administrative expenditures totaled $4,693,320 (49.5 percent) and
direct training expenditures totaled $4,789,130 (50.5 percent). Approximately
$2.5 million of these direct training expenditures were related to participant
meals, travel, and lodging; approximately $1.4 million were related to the
training facilities and course materials.
Table 5

Summary of Grant Expenditures for Fiscal Year 2008

Center for
American
and
International
Law

Category of
Expenditures

Texas
Association
of Counties

Texas
Criminal
Defense
Lawyers
Association

Texas Center
for the
Judiciary

Texas
District and
County
Attorneys
Association

Texas
Justice Court
Training
Center

Texas
Municipal
Court
Education
Center

Totals

Administrative Expenditures
Personnel
Salaries

$86,084

$172,969

$396,926

$331,793

$490,314

$450,735

$498,292

$2,427,114

20,033

34,669

103,668

95,699

130,300

141,433

124,113

649,916

$106,117

$207,638

$500,594

$427,493

$620,614

$592,167

$622,405

$3,077,029

$9,003

$46,269

$51,195

$36,474

$70,123

$39,551

$252,615

Out-of-state Travel

1,541

284

1,388

433

$11,209

14,854

Administrative
Subtotal

$10,544

$46,553

$52,583

$36,907

$81,331

$39,551

$267,469

$2,330

$12,755

$2,849

$1,117

$6,582

$8,702

$34,335

$802

$16,537

$274,837

$243,384

$201,496

$297,881

$279,551

$1,314,487

$109,249

$247,474

$824,834

$724,576

$859,017

$977,961

$950,209

$4,693,320

Fringe Benefits
Personnel
Subtotal
Administrative Travel
In-state Travel

Capital Outlay
Capital Outlay
(Equipment,
Furniture, and
Computers)
Operating Expenditures
Operating
Expenditures
(Rent, Office
Supplies,
Equipment, and
Professional
Services)
Total
Administrative
Expenditures

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Summary of Grant Expenditures for Fiscal Year 2008

Center for
American
and
International
Law

Category of
Expenditures

Texas
Association
of Counties

Texas
Criminal
Defense
Lawyers
Association

Texas Center
for the
Judiciary

Texas
District and
County
Attorneys
Association

Texas
Justice Court
Training
Center

Texas
Municipal
Court
Education
Center

Totals

Direct Participant Training Expenditures
Staff Expenditures
Staff Expenditures

$808

$6,863

$11,312

$32,743

$46,202

$43,553

$141,480

$29,363

$25,093

$21,264

$102,468

$209,123

$211,794

$188,416

$787,521

Lodging

3,106

65,018

10,822

196,371

256,768

312,160

542,725

1,386,971

Travel

3,139

65,166

102

197,187

14,012

16,290

4,566

300,462

Other

9,098

12,805

21,903

$44,706

$155,277

$44,994

$496,026

$479,903

$540,243

$735,707

$2,496,856

$59,024

$9,181

$63,744

$65,386

$132,190

$100,187

$114,481

$544,193

$1,189

$14,772

$26,104

$45,385

$73,039

$40,921

$43,665

$245,075

$84,720

$55,653

$138,993

$395,580

$221,397

$225,522

$239,660

$1,361,526

Total Direct
Participant
Training
Expenditures

$190,447

$241,746

$273,836

$1,013,689

$939,272

$953,075

$1,177,066

$4,789,130

Total Training
Expenditures

$299,696

$489,220

$1,098,670

$1,738,265

$1,798,289

$1,931,037

$2,127,274

$9,482,450

Total Grant
Awards

$185,000

$460,750

$1,052,500

$1,813,497

$1,333,000

$1,813,497

$8,471,741

$329,130

$501,429

$1,100,057

$1,987,534

$1,788,573

$2,169,298

$2,113,996

$9,990,017

684

642

2,657

1,002

3,466

3,113

3,595

15,159

Conference Participant Expenditures
Meals

Conference
Participant
Expenditures
Subtotal
Faculty Expenditures
Faculty
Expenditures
Seminar Breaks
Seminar Breaks

Facilities and Course Materials
Facilities and
Course Materials

Total Budget

Total Number of
Participants
a
b

Totals may not sum due to rounding.
Includes grant awards, unexpended balances, and program income.

Source: Unaudited expenditure information provided by grantees.

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Appendix 4

Excerpts from General Appropriations Act (80th Legislature)
Below are excerpts from the General Appropriations Act (80th Legislature)
that include riders that specify requirements for the Court of Criminal
Appeals’ administration of grants from the Judicial and Court Personnel
Training Fund, including the maximum funding limitations for administrative
funds; unexpended balances; innocence training; and continuing education
contracts for training for prosecuting attorneys, criminal defense attorneys,
and clerks and other court personnel.
COURT OF CRIMINAL APPEALS
Rider 2. Judicial Education (page IV-5)

a. The Court of Criminal Appeals may assign to the Office of Court
Administration or to any other agency of the Judicial Branch the necessary
administrative and accounting functions for the Judicial and Court Personnel
Training Fund appropriation included in this Act to be performed under the
direction of the Court of Criminal Appeals in compliance with Government
Code, Chapter 56. To implement this provision, the Comptroller is authorized
to transfer the appropriation from the Court of Criminal Appeals to the Office
of Court Administration, or to any other agency of the Judicial Branch, as
directed by order of the Court of Criminal Appeals. Of the amount
appropriated for Strategy B.1.1, Judicial Education, $475,000 in fiscal year
2008 and $475,000 in fiscal year 2009 shall be expended for the continuing
legal education of judges of county courts performing judicial functions.
b. Contingent on the passage of Senate Bill 496 or similar legislation relating
to Government Code, Chapter 56 by the Eightieth Legislature, Regular
Session, none of the funds appropriated above in Strategy B.1.1, Judicial
Education, in excess of 3 percent of the appropriated amount and any
additional amounts appropriated for the purposes of this provision ($90,000 in
each fiscal year of the 2008-09 biennium) in any fiscal year shall be expended
for the administration of the judicial education function. The 3 percent
administrative allocation is estimated to be $287,838 in fiscal year 2008 and
$266,748 in fiscal year 2009, subject to amounts of refunds of unexpended
balances from training entities or other funds that may be provided for judicial
and court personnel training.
For the purposes of this provision, the term administration shall include, but
not be limited to, administrative oversight functions, accounting and auditing
functions, management studies, performance audits, and other studies initiated
by the Court of Criminal Appeals or the Office of Court Administration.
c. Funds expended by either the Court of Criminal Appeals or the Office of
Court Administration, out of the appropriation made above out of the Judicial
and Court Personnel Training Fund, for the purpose of conducting
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management studies, performance audits, or other studies, shall be expended
only in accordance with a competitive bidding process.
Rider 3. Continuing Education and Technical Assistance for Prosecutors and
Criminal Defense Attorneys (page IV-5)

a. The Court of Criminal Appeals is authorized to contract with a statewide
professional association of prosecuting attorneys and other entities whose
purposes include providing continuing legal education courses, programs and
technical assistance projects for prosecutors and prosecutor office personnel,
provided, however, that such contract shall not exceed $1,400,000 in fiscal
year 2008 and $1,400,000 in fiscal year 2009.
b. The Court of Criminal Appeals is authorized to contract with a statewide
professional association of criminal defense attorneys and other entities whose
purposes include providing continuing legal education courses, programs and
technical assistance projects for criminal defense attorneys who regularly
represent indigent defendants in criminal matters, provided, however, that
such contract shall not exceed $1,250,000 in fiscal year 2008 and $1,250,000
in fiscal year 2009.
c. Funds may be expended pursuant to this provision only out of the
appropriation made above out of the Judicial and Court Personnel Training
Fund No. 540.
Rider 4. Judicial Education: Reimbursement for Travel Expenses (page IV-5)

Funds appropriated above in Strategy B.1.1, Judicial Education, for the
purposes established in § 56.003(b) of the Government Code, may be granted
only pursuant to a grant contract which provides for the reimbursement of
expenses of judges pursuant to the provisions of § 74.062 of the Government
Code. This provision shall not apply to funds granted for the purpose of
providing continuing legal education for judges of county courts performing
judicial functions.
Rider 5. Judicial and Court Personnel Training Report (page IV-5)

The Court of Criminal Appeals shall file a report with the Legislative Budget
Board and the Governor within 90 days following February 28 and August 31
of each fiscal year showing the allocation of grants and expenditures from
Judicial and Court Personnel Training Fund No. 540, and the results of grant
audits.
Rider 6. Appropriation: Refunds of Unexpended Balances from Training Entities
(page IV-6)

The Court of Criminal Appeals shall maintain procedures to ensure that the
state is refunded all unexpended and unencumbered state funds held at the
close of fiscal year 2007 and fiscal year 2008 by training entities receiving
grants to conduct judicial and court personnel training. Refunds received by
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the Court of Criminal Appeals in fiscal year 2008 from training entities are
appropriated above in Strategy B.1.1, Judicial Education (not to exceed
$653,000 in fiscal year 2008 out of Judicial and Court Personnel Training
Account No. 540.) In addition, under Article IX, § 8.03 of this Act, the Court
of Criminal Appeals is authorized to spend an amount not to exceed $653,000
from refunds received from training entities in fiscal year 2009 for grants
awarded in fiscal year 2008.
Rider 7. Judicial and Court Personnel Training (page IV-6)

Out of funds appropriated above in Strategy B.1.1, Judicial Education, a
minimum of $1,000,000 per fiscal year is designated for the Court of Criminal
Appeals to contract with training entities providing for the training and
continuing legal education of the clerks and other court personnel of the
appellate courts, district courts, county courts at law, county courts, justice
courts, and municipal courts of this State in accordance with Government
Code § 74.025.
Rider 8. Actual Innocence Training (page IV-6)

Out of funds appropriated above in Strategy B.1.1, Judicial Education, an
amount not to exceed $150,000 in fiscal year 2008 and an amount not to
exceed $150,000 in fiscal year 2009 shall be used by the Court of Criminal
Appeals to contract with statewide professional associations and other entities
whose purposes include providing continuing legal education courses,
programs, and technical assistance projects on actual innocence for criminal
defense attorneys, prosecuting attorneys, judges, bailiffs, constables, warrant
officers, or other persons as provided by statute. Any unexpended balances of
these funds remaining as of August 31, 2008 are hereby appropriated to the
Court of Criminal Appeals for the fiscal year beginning September 1, 2008,
for the same purpose.
Rider 9. Appropriation: Unexpended Balance Authority Between Biennia and
Within the Biennium for Judicial Education, Administrative Allocation
(page IV-6)

Contingent on the passage of Senate Bill 496 or similar legislation relating to
Government Code, Chapter 56 by the Eightieth Legislature, Regular Session,
all unexpended balances of funds appropriated to Strategy B.1.1, Judicial
Education, at the end of fiscal year 2007 are appropriated to Strategy B.1.1,
Judicial Education in fiscal year 2008 (not to exceed $100,000 in Judicial and
Court Personnel Training Fund No. 540, and included in amounts
appropriated above). Further, all unexpended balances of funds appropriated
to Strategy B.1.1, Judicial Education, at the end of fiscal year 2008 are
appropriated to Strategy B.1.1, Judicial Education in fiscal year 2009 (not to
exceed $100,000 in Judicial and Court Personnel Training Fund No. 540) and
included in amounts appropriated above.

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Appendix 5

Summary of the Court’s Implementation of Recommendations in MTG
Management Consultants’ Report
The Court of Criminal Appeals (Court) contracted with MTG Management
Consultants L.L.C. in February 2006 for a performance report to identify
opportunities for improved efficiency and effectiveness within the judicial
education program. The Court was dissatisfied with the consultants’ analysis
and recommendations, and it chose to implement only one of the
recommendations in MTG’s September 2006 report. The recommendation
implemented was to create a central program administration capacity for its
judicial education program by hiring a grant program administrator.

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Copies of this report have been distributed to the following:

Legislative Audit Committee
The Honorable David Dewhurst, Lieutenant Governor, Joint Chair
The Honorable Joe Straus III, Speaker of the House, Joint Chair
The Honorable Steve Ogden, Senate Finance Committee
The Honorable Thomas “Tommy” Williams, Member, Texas Senate
The Honorable Jim Pitts, House Appropriations Committee
The Honorable Rene Oliveira, House Ways and Means Committee

Office of the Governor
The Honorable Rick Perry, Governor

Court of Criminal Appeals
The Honorable Sharon Keller, Presiding Judge
The Honorable Cathy Cochran
The Honorable Barbara Parker Hervey
The Honorable Charles Holcomb
The Honorable Cheryl Johnson
The Honorable Michael E. Keasler
The Honorable Lawrence E. Meyers
The Honorable Tom Price
The Honorable Paul Womack

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