Summary

This audit of the Office of the Capital Collateral Representative focused primarily on budgetary controls; revenues and cash receipts; payroll, personnel, and leave records; and procurement of goods and services for the period February 1, 1996, through January 31, 1997, and selected actions taken through May 31, 1997. During our audit field work, we became aware of various Office memoranda, dated beginning in January 1997, which acknowledged potential budgetary problems for the 1996-97 fiscal year. Further, the former Capital Collateral Representative had communicated to the Courts and the Governor that the Office did not have adequate resources. To assist oversight entities such as the Legislature and the Executive Office of the Governor in evaluating the financial status of the Office, we performed expanded audit procedures relating to Office management's monitoring of available budgetary authority and current commitments to expend appropriated resources. However, as described in the REPORT ON INTERNAL CONTROL AND LEGAL COMPLIANCE section of this report, our review of the processes used by the Office to seek Federal court compensation and reimbursement was limited by restrictions relating to public access to active capital case files. The Office of the Capital Collateral Representative's approved operating budget (as of June 13, 1997) was, from an overall perspective, sufficient to fund total 1996-97 fiscal year expenditures, including commitments estimated on audit as payable subsequent to May 31, 1997, from the Office's 1996-97 fiscal year appropriations. The approved operating budget shown reflects a June 13, 1997, reallocation of approved budgetary authority proposed by the Executive Office of the Governor, Office of Planning and Budgeting, to facilitate the Office's payment of the estimated expenditures. The Office of Planning and Budgeting recorded this reallocation on June 26, 1997, after consideration by the legislative appropriations committees pursuant to Section 216.177(2)(a), Florida Statutes.

Notwithstanding that the Office's approved operating budget was, from an overall perspective, sufficient to fund total 1996-97 fiscal year expenditures, our audit disclosed that Office processes and records for authorizing and recording the costs of collateral proceedings and for monitoring available budgetary authority need significant improvement in order to provide the Legislature and the Executive Office of the Governor assurances as to the validity of annual and interim funding requests and to promote the effective management of the day-to-day costs of pursuing the completion of active capital cases. Improvements in Office budgetary processes and records would also assist the Courts in evaluating management's representations regarding the Office's financial condition and the potential impact of such financial condition on the Office's capabilities to proceed with collateral proceedings within the time periods prescribed by applicable laws and Court rules. Specifically, as further described in this report under applicable subheadings, we noted the following:

Caseload/Workload Methodology

It is clear that the Office needs to develop a current caseload/workload methodology that will provide a basis for both legislative appropriations and the management of the day-to-day costs of pursuing the completion of active capital cases. Analysis of the nature and timing of the planned activities shown in the Office's litigation calendar in relation to a properly established caseload/workload methodology would assist tremendously in providing the Legislature and Executive Office of the Governor assurances as to the validity of annual and interim funding requests. (See paragraphs 69 through 73.)

Summary Information on Operating Costs

While the SAMAS provides an excellent source of expenditure information, such as by appropriation category and by object code, we noted that the Office did not use the SAMAS or other records systems to accumulate summary information on operating costs, other than those subject to Federal reimbursement, directly related to the conduct of collateral proceedings for individual cases. We believe that summary information, by individual case, for operating costs that are directly related to the conduct of collateral proceedings would, if linked to a properly established caseload/workload methodology, assist tremendously in providing the Legislature and Executive Office of the Governor assurances as to the validity of annual and interim funding requests.

Consideration of Budgeting Authority

While the former Capital Collateral Representative's various authorizations of overtime, travel, expert witnesses, and requests for records production may have included some consideration of available budget authority, the Office did not have a formal overall process in place to encumber planned costs of such activities against available budgetary authority and to provide current information regarding the potential impact of such encumbrances. Specifically, the Office did not utilize the encumbrance capabilities of the State Automated Management Accounting Subsystem (SAMAS). Absent an effective encumbrance system which provides summary information on planned expenditures for all significant types of case-related activities and operating costs, the Office's consideration of available budgetary authority was, at best, an educated guess. For several significant operating costs, we noted the following:

• The extensive use of overtime which was paid or accrued on a one and a half-time basis had a negative effect on Office operations in that overall salary costs increased significantly without a corresponding increase in the number of hours actually spent on operations. Obviously, the negative effect of extensive overtime must be balanced against the needs of the Office to timely pursue capital collateral proceedings. (See paragraphs 74 through 84.)
   
• The document used to authorize case-related travel did not, in form or format, provide evidence of management's consideration of available budgetary authority and the Office did not appear to have a formal process in place to encumber the costs of planned travel against available budgetary authority. (See paragraphs 91 through 95.)
   
• The document used to authorize the use of professional services (i.e., expert witnesses) did not, in form or format, provide evidence of management's consideration of available budgetary authority. Although the Office did record some summary information on planned expenditures for professional services, it is not clear that this summary information was routinely available to Office management when approving such planned expenditures. (See paragraphs 96 through 100.)
   
• The Office incurs internal operating costs for the filing and service of requests for records production. The records custodian typically provided the Office an estimate of the production costs prior to producing copies. However, the Office did not encumber budgetary authority for requests for records production based either on filings made or custodial estimates provided. (See paragraphs 101 through 108.)
   

The written responses of the Interim Capital Collateral Regional Counsel, Northern Region, and the Executive Office of the Governor, Office of Planning and Budgeting Director, to the audit findings and recommendations included in audit report No. 13038 are presented as Exhibit E.