The Alabama Department of Examiners of Public Accounts released findings from an audit of the Administrative Office of Courts (AOC), noting discrepancies between Oct. 1, 2022, and Jan. 20, 2025.
The period coincides with a change in leadership after Chief Justice Tom Parker retired, and current Chief Justice Sarah Stewart took over on Jan. 24, 2025. Parker's appointee, Rich Hobson, served as the Administrative Director of Courts during the examination period.
Examiners regularly audit public entities to ensure public funds are responsibly managed.
Findings include instances of noncompliance with state laws and regulations, many of which have already been addressed by law changes.
Among nine findings in the AOC report, examiners noted "[t]he AOC did not ensure that non-consumable personal property was accounted for properly" during the examination period. Examiners reported the AOC did not update property records and did not report 21 property items totaling $174,626.40. A similar issue was noted in the 2023 report, with Over $600,000 in items not reported.
"As a result of not having adequate controls in place, the AOC does not have an accurate listing of its non-consumable personal property and is subject to potential loss due to fraud or theft," the report states.
Examiners recommended that the AOC ensure that sensitive items and property items with a value of $500 or more are reported to the State Auditor's Office within 30 days.
A 2023 audit report stated the AOC did not have adequate policies and procedures in place to ensure an employee's employment eligibility was verified through E-Verify. During the latest audit, examiners noted that the issue had not been addressed. In fact, at least one employee's eligibility was never verified, according to the report. Two others were verified after the required time period. Examiners once again recommended that the AOC verify the employment eligibility of all employees through the E-Verify system within three business days after the employees start work for pay, as the law requires.
Incorrect amounts of longevity pay and annual leave pay were noted in the report. Eligible employees are given longevity pay every December. One employee was overpaid $300 in 2022, 2023 and 2024. The Attorney General's Office is in the process of recovering those public funds. Three former employees were also given longevity pay after they were no longer in active pay status. Two of them have already reimbursed the AOC. However, another owes nearly $1,150 in overpaid longevity pay and annual leave pay.
Annual leave pay is payable for up to 480 hours of accrued time when an employee separates from state service. The audit found that one employee was paid $8,064.61 in annual leave. That employee self-reported the overpayment, and the Attorney General's Office was in the process of recovering the funds at the time of the report.
Examiners recommended that the AOC ensure employees are paid for accumulated leave hours in accordance with State Personnel Department Administrative Rules.
Many of the findings pertained to the Alabama Judicial College Fund, a 501(c)(3) created to pay for judicial education expenses. Funds are held outside the state treasury and are used for continuing education for justices, judges and court personnel.
The AOC paid the salary for the Fund's five employees. The issue was noted in a 2023 audit report, so the state passed an amendment allowing the AOC to house the fund and its staff.
The 2026 audit also noted issues with the Alabama Judicial College's internal controls, bank accounts, payment processes and IRS tax forms.
"The Alabama Judicial College (the "Judicial College") did not have effective internal controls to properly handle, secure, and deposit cash payments received for on-site conference registrations," the report stated.
Examiners found 15 cash payments totaling $2,597 were kept in a lock box instead of a checking account and were not reported in financial records, according to the report. Other cash payments were not adequately identified in records, posing a risk of loss or misuse.
Some payments made to conference speakers were also listed in the findings. There was either no memorandum of understanding to support payments or no documentation to support travel reimbursement. In 10 instances, the Alabama Judicial College did not issue an IRS Form 1099-NEC as required. Four instances were noted in which the compensation of three conference speakers during a calendar year was erroneously reported on their IRS Form 1099-NEC.
Since the 2026 audit period, the Alabama Judicial College has also come into compliance by ensuring bank accounts are held in qualified financial institutions covered by the SAFE Program, addressing an issue listed in the 2023 audit report.
The full report can be viewed below.
To connect with the author of this story or to comment, email [email protected].
Don't miss out! Subscribe to our newsletter and get our top stories every day or become a member to gain access to exclusive content and 1819 News merch.
