Judicial Branch announces results of external audit for FY 2022 financial statements

FRANKFORT, Ky., Nov. 30, 2022 – The Kentucky Judicial Branch has received a clean audit opinion on its financial statements for Fiscal Year 2022 (July 1, 2021-June 30, 2022) from an external auditor.

MCM CPAs & Advisors audited financial statements from the Administrative Office of the Courts and found that the Judicial Branch’s FY 2022 financial statements were free of material misstatements and contained no material findings. See the report here.

The firm found that the financial statements “present fairly, in all material respects, the fund balance of the Judicial Branch, as of June 30, 2022, and the receipts, disbursements and changes in fund balance for the year then ended,” in accordance with accounting practices under state law.

“I am pleased that the audit firm’s opinion was clean, with no findings once again this year,” Chief Justice of Kentucky John D. Minton Jr. said. “This audit and its release to the public are important steps in Judicial Branch accountability and transparency for taxpayers.”

The AOC prepared and released its first financial statements under Supreme Court Administrative Order 2019-11 in FY 2021. The 2019 order required the AOC to issue a request for proposals to conduct an annual external audit of its financial information beginning with FY 2021 and make resulting reports public. Some portions of Order 2019-11 were amended in 2021 with Order 2021-34 and in 2022 with Order 2022-41, but the external audit requirement remained the same.  

The external audit is among the many steps the Judicial Branch has taken to enhance its accountability and tighten internal controls after the Kentucky Auditor of Public Accounts released an examination of the AOC in 2018. The AOC requested the examination.

In 2019, the AOC updated its organizational structure to bring its administrative and financial operations up to industry standards. As part of that change, the AOC created the independent Office of Audits, which has two divisions. The Division of Internal Audit oversees risk management and management controls, safeguarding assets, reliability of financial information and reporting, and compliance with laws and regulations. Internal Audit has conducted 12 internal audits since its formation. The Division of Audit Services is responsible for conducting annual audits of Offices of Circuit Court Clerk, master commissioners, domestic relations commissioners and Kentucky Court of Justice facilities.

Chief Justice Minton established an Audit Oversight Committee with internal and external members to review matters related to the Office of Audits.

The reorganization also included a new Office of Finance & Administration to oversee budgeting and forecasting, court facilities, and accounting and procurement. Finance & Administration has focused on developing policies, processes and standard operating procedures for a wide range of functions, including cash handling, procurement, payment of invoices, inventory control, surplus property, travel regulations, leasing and nonrecurring project reimbursement to counties.

Administrative Office of the Courts
The Administrative Office of the Courts in Frankfort is the operations arm for the state court system. The AOC supports the activities of nearly 3,300 court system employees and 406 elected justices, judges and circuit court clerks. As the fiscal agent for the state court system, the AOC executes the Judicial Branch budget.