This study of the District Court Revenues was included in the Auditor’s Office 2002 work program.  The Metropolitan King County Council requested the review to examine the potential for raising additional revenue through the King County District Court to offset operating costs funded by the county’s current expense (CX) fund.

The King County District Court is the county’s court of limited jurisdiction.  It has jurisdiction over criminal, non-criminal traffic, small claims, and civil cases of up to $50,000.

District Court revenues are comprised of fines, forfeits, penalties, court cost recoveries, charges for services, and shared court costs for adjudicating city-filed cases.  These revenues are collected by the District Court as a part of King County’s current expense resources.

The study objectives were to examine possible ways of enhancing current revenues generated by the King County District Court and determine if other types of fees or revenue-generating methods used by other courts can be applied to the District Court.

The study reviewed the District Court’s current practices for collecting and accounting for revenues.  This included monitoring of receivables and unfunded state mandates.  We also looked at efforts by the District Court to identify other potential income sources.  We compared the District Court’s fee levels to those of other jurisdictions or courts in the state.

We found that most of the fees are set by the state, and the fees charged by the District Court compared to other district courts in the state are generally the same type and levels of fees.  Other revenues are as ordered by the court.

We identified and recommend to District Court two potential sources of revenues that should provide additional revenues of about $106,000 to $257,000 a year.  These are:

1. Passport Photo Services – should generate an annual profit of about $82,000 to $145,000. 

2. Handling fee for returned documents - should provide additional revenue of about $24,000 to $112,000 a year.

Also, the Finance and Business Operations Division should establish a performance-based contract for collection services, and enter all receivables in a timely manner.

Finding 2.  A filing fee for returned documents will provide more revenues to District Court.

Management of the District Court estimates that about 30% of the files processed by the District Court clerks were faulty and/or incomplete; thus, the papers were returned to the submitting parties.  They also indicated that most of the documents or files returned to submitting parties are civil cases filed with the court. 

The District Court currently does not charge the submitting party a fee for refiling previously filed faulty and/or incomplete documents.  If fees were charged, our calculations show that fees for handling returned documents when they are refiled with the court could provide additional revenue of about $24,000 to $112,000 a year.

The study recommends that the county seek authorization from the state legislature to impose an extra handling fee for refiling previously filed and returned documents which were erroneous and/or incomplete.

The county referred for collection 35,428 delinquent accounts with a dollar value of $14,745,131.  Of this amount, the collection agency collected $4,980,393 or 33.8%. 

We were not able to evaluate whether or not the performance of the collection agency meets the county’s expectations because the county has not established performance targets or benchmarks for collection services. 

To strengthen the Finance and Business Operations Division’s (FBOD) efforts in promoting achievement of a high collection rate, the study recommends that the contract for collection services include appropriate performance measures in contracts with collection agencies and that the county use them to evaluate contractor performance.

Finding 4.  Time-pay and non-time-pay accounts are not maintained in the county’s accounts receivable and financial systems.

Receivables from non-time-pay and time-pay accounts are not routinely recorded in the accounts receivable and financial systems.  FBOD records these receivables in the financial statements only at the end of the year.  Moreover, the accounts receivables from non-time-pay and time-pay accounts from city-filed cases are not recorded in the county’s accounts receivable and financial systems at all.

To enhance consistency in recording receivables and provide better management control of receivables, as well as to conform to generally accepted accounting principles, the study recommends that the FBOD routinely and in a timely manner record all receivables from time-pay and non-time-pay accounts in the county’s accounts receivable and financial systems.

The court is open to the possibility of providing passport photo services and will be conducting a cost/benefit analysis as part of its preparation for the 2004 budget.

The court would like to seek authority from the state legislature allowing the courts of limited jurisdiction to assess a fee for returned documents.

The court agrees that the contract for collection services should include performance measures or benchmark to evaluate performance of the collection agency.  This will be addressed in the upcoming request for proposal for the collection contract.

The court concurs with auditor’s recommendation that FBOD should record time-pay and non-time-pay accounts with frequency to enhance consistency in accounting for court accounts receivables.

Auditor's Comments

Based on our recommendation, the Council’s Government Relations staff has drafted state legislation to be introduced in the 2003 session.  The legislation will authorize the courts of limited jurisdiction to impose an additional fifteen-dollar fee for filing revised or corrected documents.

Regarding the accounts receivable recommendation, the court wants the FBOD to keep these accounts receivable current.  In November 2002, the King County District Court filed a change request with the Office of the Administrator for the Courts.  The change request, subject to approval of the Judicial Information System (JIS) Advisory Committee, proposes to have the District Court Information System[1] (DISCIS) interface with the county’s financial systems.  This will enable a convenient transfer of accounts receivable data from the DISCIS to the county’s financial system.