Federal Judiciary: Improved Cost Savings Estimates Could Help Better Assess Cost Containment Efforts
Published: 2015-11-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In March 2013, the President ordered spending reductions, known as sequestration, across the federal government. As a result, the federal judiciary's resources were reduced by about $346 million over the remainder of fiscal year 2013. The judiciary has been affected by decreasing federal resources, such as the sequestration, and has been implementing various cost containment initiatives.
GAO was asked to evaluate judiciary cost savings actions and the effects of the 2013 sequestration. This report examines, among other things, (1) judiciary actions to achieve cost savings and efficiencies, and the extent to which the judiciary has estimated cost savings; and (2) judiciary actions to implement the 2013 sequestration and any effects from these actions on judiciary personnel and operations.
GAO analyzed relevant judiciary documents and collected information from and interviewed judiciary officials in all 12 regional circuit courts and the district court, bankruptcy court, and federal defender organization in four judicial districts, selected to obtain a diverse group of districts on the basis of funding level, among other factors.
section_title: What GAO Found
paragraphs: The federal judiciary has implemented cost containment initiatives for over 10 years, but the judiciary does not fully know how much it has saved because it has not developed a reliable method for estimating cost savings achieved. For example, GAO found that the judiciary's estimate of cost savings primarily attributed to cost containment initiatives since fiscal year 2005—nearly $1.5 billion, relative to projected costs—does not include all savings realized from cost containment initiatives, includes amounts that did not result from initiatives, does not always include the costs associated with implementing initiatives, and was not always supported by adequate documentation. Examples of cost-saving initiatives are establishing rent budget caps and providing incentives to courts for work efficiency. Judiciary officials confirmed, for example, that $291 million of the $538 million in space and facilities estimated savings is the result of lower than anticipated rent inflation. Also, an estimated $89 million in savings resulting from information technology (IT) initiatives did not include all savings (such as savings from an IT-based solution to manage and administer the jury function) or provide adequate documentation of costs to implement the initiatives. Judiciary officials stated that they discuss cost containment initiatives in the judiciary's congressional budget justifications, among other documents. GAO analyzed the judiciary's congressional budget justifications and found that these documents did not consistently report information on cost savings achieved for major initiatives. Reliable information on and reporting of estimated cost savings achieved for major initiatives could help the judiciary better assess the progress of its initiatives and help inform congressional oversight and decision making.
The judiciary imposed emergency measures in response to the 2013 sequestration and has identified negative effects of the sequestration on the judiciary. Examples of emergency measures were postponing and reducing payments to private attorneys representing individuals who cannot afford counsel in criminal cases. One of the most significant effects of sequestration cited by judiciary officials was continued court staff loss. According to GAO analysis of judiciary data, in the 12 months following sequestration, total onboard court full-time equivalent staff declined by nearly 1,600—or about 8 percent (see fig.). Also, over 3,600 court and defender organization staff were furloughed in fiscal year 2013. Funding for expenses such as drug abuse treatment for offenders was reduced by 20 percent. Further, according to judiciary officials, some courts and defender organizations reduced services, such as closing 1 day per week.
Total Onboard Court Full-Time Equivalent Staff, as of End of Fiscal Years 2010 to 2014
section_title: What GAO Recommends
paragraphs: GAO recommends that the Director of the Administrative Office of the United States Courts (AOUSC) take the following two actions for major cost containment initiatives: (1) develop a reliable method for estimating cost savings achieved, and (2) regularly report estimated cost savings achieved. AOUSC said it will seriously consider GAO's recommendations.

section_title: Letter
paragraphs: The federal judiciary has the critical and constitutional responsibility of  ensuring the administration of justice in the United States and handles all  federal civil, criminal, and bankruptcy cases and review of administrative  agency cases throughout the country. As we reported in June 2013, the  judiciary has been affected by decreasing resources, and has been  identifying and implementing options for saving money and increasing  efficiency. The judiciary’s budget increased by less than 1 percent in  fiscal years 2011 and 2012, and the judiciary began fiscal year 2013  under a continuing resolution that, among other limitations, held funding  near the same levels as in fiscal year 2012. Then, on March 1, 2013, as  required by law, the President ordered spending reductions—known as  sequestration—across the federal government. Ultimately, the judiciary  was required to reduce its nonexempt discretionary appropriations and  mandatory spending by $346 million, or by about 5 percent, over the  remainder of fiscal year 2013.
In October 2013, because of a lapse in fiscal year 2014 appropriations,  the federal government partially shut down for 16 days, but the federal  judiciary was able to continue operating during this time using filing fee  collections and other no-year funds. At the beginning of fiscal year 2014,  the judiciary remained under a continuing resolution and operated under  sequestration funding levels until January 17, 2014, when Congress  enacted fiscal year 2014 appropriations. The fiscal year 2014 enacted  appropriation for the judiciary was about $7.03 billion, or $57 million (less  than 1 percent increase), over the fiscal year 2012 level of $6.970 billion.  Fiscal year 2015 enacted appropriations increased judiciary funding to  approximately $7.2 billion (or approximately 3 percent above fiscal year  2014 levels).
Current law requires government-wide limits on discretionary  appropriations through fiscal year 2021 and sequestration of direct  spending through fiscal year 2025. The effect of these reductions on the  judiciary’s operations is unclear at this point. As the judiciary balances its  ongoing strategic and operational challenges with constrained resources,  the ability to mitigate risk and to determine how to prioritize spending and  investments will be paramount.
Over the last 2 years, we have evaluated the planning and  implementation of fiscal year 2013 sequestration reductions by federal  executive branch agencies and the effects of the sequestration on  selected agencies. In addition, in June 2013, we found that the judiciary  had considered and implemented various cost containment strategies to  meet the demand for judicial services with limited increases in resources,  while seeking to avoid delays in cases and other negative consequences  that could result when funding for court services is diminished. We found  that judiciary cost containment efforts have included limiting growth in  space rental costs and instituting a new pay policy for employees, among  others. We focused the review on judiciary efforts to consolidate or share  administrative services between district and bankruptcy courts. We found  that few federal judicial districts had consolidated their court clerks’  offices, and courts were sharing services among the clerks’ offices, but  that the costs and benefits were unclear. We also found that the  Administrative Office of the United States Courts (AOUSC), which  provides a wide range of services for the federal judiciary, began a cost- savings study on shared administrative services in August 2011.
We found  that sequestration reduced or delayed some public services and disrupted some  operations, and that agencies faced planning challenges because they lacked sufficient  information and institutional knowledge regarding how to apply sequestration reductions.  We recommended that OMB publish criteria to clarify the application of sequestration  reductions across certain accounts, and direct agencies to record their decisions and  principles used to implement sequestration for potential future use. OMB agreed with our  recommendations and has updated its OMB Circular A-11, The Preparation, Submission,  and Execution of the Budget, to address them. See GAO, 2013 Sequestration: Agencies  Reduced Some Services and Investments, While Taking Certain Actions to Mitigate  Effects, GAO-14-244 (Washington, D.C.: Mar. 6, 2014). For another example, see GAO,  2013 Sequestration: Selected Federal Agencies Reduced Some Services and  Investments, While Taking Short-Term Actions to Mitigate Effects, GAO-14-452  (Washington, D.C.: May 28, 2014), among others.
Additionally, in June 2010, we reported that the federal judiciary and the  General Services Administration were in the midst of a multibillion-dollar  courthouse construction initiative, which had faced rising construction  costs. For the 33 federal courthouses completed since 2000, we  examined whether the courthouses contained extra space and any costs  related to that space and whether the level of courtroom sharing  supported by the judiciary’s data could have changed the amount of  space needed in these courthouses, among other areas. We  recommended that the judiciary establish and use courtroom-sharing  policies based on scheduling and use data to more fully reflect the actual  scheduling and use of district courtrooms, among other things. While the  judiciary has courtroom-sharing policies for federal bankruptcy,  magistrate, and senior district judges, the judiciary has chosen not to fully  implement our recommendation for district judges to share courtrooms.  We continue to believe that the efficiency of courtroom sharing is  applicable to active federal district judges.
Given the 2013 sequestration and continued environment of constrained  budgetary resources, you asked us to review how the judiciary planned  for and implemented the 2013 sequestration, the extent to which the  actions the judiciary took to address sequestration budget cuts or other  options may be considered and available in the future, and the extent to  which the judiciary has monitored the effects of sequestration. This report  addresses the following questions.  1.  What efforts has the judiciary undertaken in the past 10 fiscal years to  achieve cost savings and efficiencies, and to what extent has the  judiciary estimated cost savings achieved?  2.  To what extent does the judiciary have mechanisms to identify  opportunities for cost savings and efficiencies?  3.  What actions did the judiciary take to plan for and implement the fiscal  year 2013 sequestration, and what effects, if any, has the judiciary  identified from these actions and the fiscal year 2014 lapse in  appropriations on judiciary personnel and operations?
To determine the efforts the judiciary has undertaken in the past 10 fiscal  years to achieve cost savings and efficiencies, we analyzed judiciary  reports and documents (such as Annual Reports of the AOUSC Director,  among others) from fiscal year 2004 through July 2015 and compiled a  list of the initiatives undertaken by the judiciary to contain costs, as well  as a description of the initiatives and the dates the initiatives were  implemented since approximately fiscal year 2004 (or the initiation of a  cost containment strategy by the judiciary). To determine the extent to  which the judiciary has estimated the cost savings achieved as a result of  its efforts, we analyzed judiciary documents and information such as rent  savings projections and data tracked by AOUSC staff in data systems  and spreadsheets. We compared the judiciary’s cost savings estimates  against Standards for Internal Control in the Federal Government and  cost-estimating guidance to determine the extent to which the estimates  comported with these criteria. While the judiciary is not required by law  to abide by the Standards for Internal Control in the Federal Government  and cost-estimating guidance, the management controls described in the  standards and the guidance are consistent with the management  practices of leading organizations. To assess the reliability of the cost  savings and related staffing and salary data, we interviewed judiciary  officials who maintain the databases where these financial and staffing  and salary data are tracked and reviewed related documentation. We  determined the data were sufficiently reliable for the purposes of  assessing the extent to which the judiciary has estimated cost savings  and determining the reliability of these estimates.
To determine the extent to which the judiciary has mechanisms to identify  opportunities for cost savings and efficiencies, we analyzed judiciary  documentation on such mechanisms during this same time period (fiscal  year 2004 through July 2015), including cost containment strategic policy  documents, Reports on the Proceedings of the Judicial Conference of the  United States, and guidance to courts, among other documents. To  identify and provide context on the mechanisms the judiciary uses, such  as the judiciary’s budget formulation and execution process, we  interviewed officials from the Judicial Conference Budget Committee and  AOUSC. We compared the information we obtained from the above  documentation and interviews against applicable sections of Standards  for Internal Control in the Federal Government.
To determine the actions the judiciary took to plan for and implement the  2013 sequestration, we reviewed laws and the executive order governing  the sequestration and analyzed judiciary documentation from fiscal years  2012 to 2014 (such as financial plans and memorandums to federal  courts) and budget data (such as data showing the final sequestration  reductions by judiciary account). In addition, we used a structured  questionnaire to collect and analyze information regarding the actions that  officials we interviewed in each of the 12 regional courts of appeals  (circuit courts); 4 district courts, including 4 bankruptcy courts and 4  probation and pretrial services offices; and 4 federal defender  organizations (described below) took in response to the 2013  sequestration. See appendix I for tables showing the results of this  analysis. To determine the effects that the judiciary has identified from its  actions to implement the 2013 sequestration and from the fiscal year  2014 lapse in appropriations on judiciary personnel and operations, we  reviewed judiciary documentation (such as statements for congressional  hearings and annual reports) and analyzed judiciary data, where available  (such as full-time equivalent staff data from the staffing database,  mentioned above, and the defender services management information  system), to corroborate statements made by judiciary officials regarding  the effects they identified. To assess the reliability of the staffing data  from the defender services management information system, we  interviewed judiciary officials who maintain the database where the data  are tracked and reviewed related documentation. We determined the  staffing data were sufficiently reliable for our purposes of reporting  defender organization full-time equivalent levels from fiscal year 2010  through 2014.
For all three objectives, to provide context and confirm our understanding  of the documents and data we analyzed, we interviewed Judicial  Conference Budget Committee and AOUSC officials. Furthermore, to  obtain the perspectives of the federal courts and defender organizations  regarding all three objectives, we conducted semistructured interviews  with judges and court officials in the 12 regional circuit courts and judges  and court and defender organization officials in four selected judicial  districts and completed a content analysis of their responses. Specifically,  in each of the four districts, we conducted semistructured interviews with  officials in the district court, including the bankruptcy court and probation  and pretrial services offices, and federal defender organization. We  visited 2 of the 12 circuit courts and the four selected districts to meet with  officials and observe examples of space-related cost containment  activities. We selected the four judicial districts to obtain a diverse group  of district courts on the basis of funding level, number of case filings, and  judicial circuit/geographic region. While the views and information  obtained from these district courts and defender organizations cannot be  generalized to all districts and defender organizations, they provided key  insights into how districts with different characteristics have dealt with  constrained budgetary resources.
We conducted this performance audit from July 2014 to November 2015  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.
subsections: section_title: Background
paragraphs: The federal judiciary consists of the Supreme Court, 12 regional circuit  courts of appeals, 94 district courts, 91 bankruptcy courts, as well as  courts of special jurisdiction including the Court of Appeals for the Federal  Circuit, the Court of International Trade, and the Court of Federal  Claims. In each district, defender services programs and probation and  pretrial services offices assist the judiciary in the fair administration of  justice and protecting the community.
Governance of the judiciary is substantially decentralized, and individual  courts have discretion to organize operations, develop procedures, and  make budgetary decisions within allotted funds to suit local needs. The  Judicial Conference of the United States, presided over by the Chief  Justice of the United States, is the policy-making body for the federal  judiciary and sets national policies and takes positions on legislation on  all aspects of federal judicial administration. Membership of the Judicial  Conference comprises the chief judge of each judicial circuit, the Chief  Judge of the Court of International Trade, and a district judge from each  regional judicial circuit. The Judicial Conference operates through a  network of committees created to address and advise on a wide variety of  subjects such as information technology, personnel, probation and pretrial  services, space and facilities, security, judicial salaries and benefits,  budget, defender services, court administration, and rules of practice and  procedure. AOUSC provides a range of administrative and other support  services to the Judicial Conference, the courts, and federal defender  organizations. In addition to AOUSC supporting the judiciary, the Federal  Judicial Center (FJC) is responsible for conducting research on federal  judicial operations and procedures and conducting and promoting training  for federal judges, court employees, and others. See figure 1 for an  overview of the judicial entities discussed in this report.
subsections: section_title: Key Agencies and Offices Involved in the Federal Court System
paragraphs: The federal judiciary works with executive branch agencies to administer  justice in federal court cases. For example, within the Department of  Justice (DOJ), United States Attorneys serve as the nation’s principal  litigators in the prosecution of criminal cases brought by the federal  government and the prosecution and defense of civil cases in which the  United States is a party, among other duties. Also, the United States  Marshals Service, a component of DOJ, has primary physical security  responsibility for federal courthouses. Among other things, the Marshals  Service’s responsibilities include managing court security officers and  security systems and equipment, including X-ray machines, surveillance  cameras, duress alarms, and judicial chambers’ entry control devices.
In addition, as the federal government’s landlord, the General Services  Administration (GSA) is responsible for, among other things, designing,  building, and maintaining its portfolio of approximately 9,000 federally  owned or leased buildings and courthouses. According to AOUSC, as of  June 30, 2015, the judiciary rented 437 courthouse buildings through  GSA and rented space (including courthouse buildings and space such  as probation services offices and chambers not located in courthouses) in  a total of 740 GSA buildings. In fiscal year 2014, the judiciary’s rent  payments to GSA totaled over $1 billion.
section_title: Budget of the Federal Judiciary
paragraphs: The operations of the federal judiciary are funded by a combination of  annual appropriations and mandatory spending, including offsetting  collections. For fiscal year 2014, the judiciary’s enacted appropriations  totaled about $7.03 billion, with offsetting collections of about $234  million, resulting in approximately $7.3 billion in new budgetary  resources. The judiciary uses accounts to obligate, account for, and  manage its enacted appropriations each fiscal year and budget object  classifications as a framework for categorizing obligations. The judiciary  obligated about $7.1 billion in fiscal year 2014.
The judiciary’s operations are primarily funded through 12 appropriation  accounts, including the Salaries and Expenses account for the Courts of  Appeals, District Courts, and Other Judicial Services; the Defender  Services account; and the Court Security account, among others. As  shown in figure 2, almost 94 percent of the fiscal year 2014 obligations of  $7.1 billion made by the judiciary were from the Salaries and Expenses,  Defender Services, and Court Security accounts. The Salaries and  Expenses account includes the costs associated with the salaries,  benefits, and other operating expenses of the judges and supporting  personnel for the U.S. courts of appeals, district courts, and probation and  pretrial services offices. The Defender Services account supports the  appointment of counsel and other services necessary to represent  defendants financially unable to retain counsel in federal criminal  proceedings and to provide for the continuing education and training for  those who represent these defendants. The Court Security account  funds the necessary expenses incident to the provision of protective  guard services and the procurement, installation, and maintenance of  security systems and equipment that protect U.S. courthouses and other  facilities housing federal court operations, not otherwise provided for by  other accounts.
In addition, the judiciary uses budget object classifications, which are  categories used in budget preparation to classify obligations by the items  or services purchased by the federal government (e.g., personnel  compensation, contractual services). As shown in figure 3, about 56  percent of the $7.1 billion in obligations made by the judiciary in fiscal  year 2014 were from the personnel and compensation object  classification. In addition, the judiciary made about 35 percent of its fiscal  year 2014 obligations from two contractual services subobject  classifications—rental payments to GSA and others and other services. A  brief description of each budget object classification follows the figure.
section_title: Budget Decentralization
paragraphs: Once appropriations are enacted, the judiciary develops annual financial  (or spending) plans to balance requirements with available funds and  allots funds to the courts and federal defender organizations for salaries,  operations, and information technology, among other things. Under the  judiciary’s budget decentralization policies, the courts and federal  defender organizations can spend their allotted funds as needed— whether for staff, technology, or other needs. According to judiciary  documents, if available funding for a fiscal year does not meet court  needs, court managers have local authority to decide how to staff and  support their offices within the allotted funds. For example, court  managers may decide to take personnel actions (such as not filling  vacancies, freezing promotions, instituting furloughs, and offering early  retirement incentives and buyouts, among other actions); seek to identify  and adopt efficiencies in work processes (such as sharing administrative  staff); or shift funds among allotments for salary, operations, and  information technology, among other actions.
section_title: 2013 Sequestration and the Judiciary
paragraphs: The absence of legislation to reduce the federal budget deficit by at least  $1.2 trillion triggered the sequestration process in section 251A of the  Balanced Budget and Emergency Deficit Control Act of 1985, as  amended, and the President ordered the sequestration of budgetary  resources on March 1, 2013. Following this order, OMB calculated  sequestration based on the annualized funding level set by the continuing  resolution that was currently in effect—or 5 percent for nondefense,  nonexempt discretionary appropriations and 5.1 percent for nondefense,  nonexempt direct, or mandatory, spending. Because these cuts were to  be achieved during the 7 remaining months of the fiscal year, OMB  estimated that the effective percentage reduction to fiscal year 2013  spending over that time period was approximately 9 percent for  nondefense programs.
The judiciary’s discretionary appropriations include Salaries and  Expenses for the Courts of Appeals, District Courts, and Other Judicial  Services (excluding judges’ salaries); Defender Services; Fees for Jurors  and Commissioners; and Court Security, among others. Judiciary  nonexempt mandatory spending includes judiciary filing fees and registry  administration funds. Exempt from sequestration are mandatory  spending for Article III judges’ salaries and benefits and judicial retirement  funds, and certain other expenses. As shown in figure 4, sequestration  reduced fiscal year 2013 funding for the Salaries and Expenses account  by $239 million, Defender Services by almost $52 million, Court Security  by $25 million, and Fees of Jurors and Commissioners by approximately  $3 million, among other reductions.
section_title: Fiscal Year 2014 Lapse in Appropriations and the Judiciary
paragraphs: In October 2013, the federal government partially shut down for 16 days  because of a lapse in appropriations for fiscal year 2014. At the start of  the fiscal year, agencies without available funds were required to cease  all operations (with a few exceptions, such as the protection of human life  and property) and commence an orderly shutdown. The judiciary was  able to continue operating during the fiscal year 2014 lapse in  appropriations using available funds from fee collections and no-year  appropriations.
section_title: The Judiciary Has Implemented Various Cost Containment Initiatives, but Cost Savings Estimates Do Not Include All Savings Realized from or Costs Associated with Those Initiatives
paragraphs: To help preserve its ability to fulfill its responsibility to render justice in a  fair and timely manner and serve the public, the judiciary implemented a  cost containment strategy in fiscal year 2005 and has implemented a  range of cost containment initiatives for over 10 years. However, we  found that the judiciary does not fully know how much it has saved as a  result of these efforts because it has not developed a reliable method for  estimating cost savings achieved by major cost containment initiative. For  example, AOUSC officials stated that the judiciary has realized cost  savings of nearly $1.5 billion relative to projected costs and attributed  these savings primarily to the cost containment policies implemented, as  well as other factors, since the adoption of its cost containment strategy.  However, our analysis of available documentation and discussions with  judiciary officials show that the reliability of the savings estimate is limited  because the estimate does not include all savings realized, includes  savings not attributable to cost containment initiatives, does not always  include the costs associated with implementing initiatives, and was not  always supported by adequate documentation.
subsections: section_title: The Judiciary Developed a Cost Containment Strategy in 2004 and Has Implemented Various Cost Containment Initiatives
paragraphs: The judiciary has implemented numerous cost containment initiatives  since developing a cost containment strategy in September 2004. Also,  some cost containment initiatives were under way before the strategy was  developed. In 2012, the judiciary reported that in fiscal years 2004 and  2005, it faced a budgetary challenge of unprecedented magnitude caused  by lower than anticipated appropriations from Congress (in part because  of across-the-board rescissions at the end of the appropriations process),  a sudden and unexpected decline in filing fee collections, and significant  levels of growth in certain portions of the judiciary’s budget (especially  rent to GSA). According to the report, these factors combined to result in  the loss of 1,350 onboard court staff, or approximately 6 percent of the  workforce, in fiscal year 2004. In anticipation of future constrained  budgets and to help mitigate potential further staff loss, in 2004 the  Judicial Conference approved a Cost Containment Strategy for the  Federal Judiciary: 2005 and Beyond that analyzed the judiciary’s major  cost drivers and identified cost containment initiatives in six categories to  slow the growth of costs. Appendix III contains examples of several cost  containment initiatives the judiciary has implemented by category.
According to AOUSC officials, the judiciary’s recent cost containment  initiatives have focused on curtailing costs in the three major spending  categories of space and facilities, judiciary personnel costs, and  information technology. Table 1 shows examples of initiatives under way  for these three categories and the year the judiciary began implementing  the initiative.
As shown in appendix III, the judiciary also has undertaken cost  containment initiatives in the other five categories of law enforcement– related expenses, law book expenditures, defender services, court  security, and fee adjustments. For example, the judiciary’s fiscal year  2016 congressional budget justification states that the judiciary has  reduced costs by encouraging office consolidation in individual districts in  order to save money and create efficiencies. Specifically, the judiciary  encouraged individual court units within each district (i.e., district court,  bankruptcy court, and probation and pretrial services) to work together to  adopt shared administrative services plans. In fiscal year 2013, all 94  districts prepared plans that showed that many districts had either already  begun to share administrative services or had committed to doing so.
Furthermore, court and defender organization officials we interviewed  identified efforts to achieve cost savings and efficiencies over the past 10  fiscal years. For example, court officials we interviewed in 9 of 12 circuit  courts said that they have generally not hired new staff for positions  vacated as a result of retirements and attrition. For example, one circuit  court judge noted that when an employee resigns or retires from the court  staff, managers will restructure the staff so that duties are reassigned to  other staff. The judge estimated that in this court, staff levels have  declined 11 percent from 2011 through 2014, resulting in a cumulative  reduction in payroll expense of more than $4 million from fiscal years  2011 through 2014. Similarly, officials we interviewed in 3 of 4 district  courts and 1 of 4 defender organizations said that they have generally not  hired new staff when positions were vacated. According to the chair of the  Budget Committee of the Judicial Conference, increases to the judiciary’s  appropriations since the 2013 sequestration have allowed some courts to  hire employees to fill some vacant positions in recent years.
section_title: The Judiciary’s Cost Savings Estimates Have Limited Reliability That Affect Its Ability to Measure the Effectiveness of Efforts
paragraphs: According to AOUSC officials, since the adoption of its cost containment  strategy in September 2004, the judiciary has realized a cost savings of  nearly $1.5 billion relative to projected costs. AOUSC officials attributed  these savings primarily to the cost containment policies implemented, as  well as other factors. Estimating cost savings is consistent with our  conclusions from prior work on duplication, fragmentation, and overlap,  that identifying and achieving cost savings should be a goal of all  agencies. However, according to our analysis of available  documentation and discussions with judiciary officials, the $1.5 billion cost  savings estimate has limited reliability because the estimate does not  include all savings realized, includes savings not attributable to cost  containment initiatives, does not always include the costs associated with  implementing initiatives, and was not always supported by adequate  documentation. Figure 5 shows the nearly $1.5 billion cost savings  estimate by major cost containment category, and details of our analysis  of the estimate by category follow.
Space and facilities cost savings estimate—The savings estimate  for space and facilities initiatives has limited reliability for four reasons.  First, AOUSC officials stated that the $538 million in space and  facilities savings is the difference between a rent cost projection for  fiscal year 2015 alone and the actual rent paid in fiscal year 2015  alone, which we confirmed. We found that the estimate does not  include estimated rent cost savings for fiscal years 2006 through  2014. Second, the judiciary used a 3.1 percent annual rent inflation  factor to help project its rent costs for fiscal years 2006 through 2015.  However, the actual annual rent inflation ranged from 0.6 percent to  3.1 percent over this time frame, resulting in lower actual rent paid.
As a result, according to AOUSC officials, $291 million of the $538  million savings estimate is the result of lower than anticipated rent  inflation rather than savings from the judiciary’s cost containment  efforts. Third, AOUSC officials stated that $247 million of the $538  million in estimated cost savings is the result of multiple initiatives  undertaken by the judiciary to limit the growth in rent costs, but  officials could not provide documentation to support this cost savings  figure. Fourth, the space and facilities savings estimate did not always  include the costs incurred by the judiciary to implement the cost  containment initiatives, such as the upfront costs (e.g., for planning  and design and construction or renovation) incurred for space  reduction and Integrated Workplace Initiative projects.
Salary and staff reduction cost savings estimates—According to  our analysis of information provided by AOUSC, we determined that  the methodology and data used to calculate the $785 million  estimated savings resulting from salary and staff reductions are  reliable. Specifically, AOUSC officials said that the salary reductions  compare the cost of onboard payroll at a particular point in time with  the previous year’s salary base to determine the savings in this  category. With regard to the staffing reductions, AOUSC officials  stated that they used the reduction in full-time equivalent staff and  multiplied this reduction by the national average salary and benefits  rate of judiciary staff to determine the savings resulting from staffing  reductions. We assessed the reliability of the judiciary’s staffing and  salary data and determined the data to be sufficiently reliable for the  purpose of developing estimates of cost savings achieved from salary  and staff reductions.
Information technology cost savings estimate—The $89 million  estimated savings resulting from information technology (IT) initiatives  has limitations because AOUSC officials did not include all potential  cost savings achieved or all costs to implement the initiatives. First,  the judiciary provided documents that show approximately an  additional $126.3 million in savings. Specifically, the judiciary did not  include in its estimate the cost savings resulting from implementing  technology-based solutions to manage and administer the jury  function—i.e., select jurors, send pre-jury-selection paperwork to  jurors, pay jurors for their service—($79 million); notify creditors,  debtors, and other entities of bankruptcy proceedings ($43.9 million);  and provide remote language interpretation for court proceedings  ($3.4 million). Second, the IT savings estimate did not always include  the costs incurred by the judiciary to implement the initiatives, so the  amount of net cost savings resulting from these initiatives is unclear.
For example, AOUSC officials were able to provide the costs incurred  to implement the electronic jury management and bankruptcy  notification systems, but did not provide information on the costs  incurred to implement the other IT initiatives included in these  estimates above, such as the costs incurred to consolidate and  reduce the number of servers for several of its IT systems and the  costs of contract telephone interpreters.
Operating expense cost savings estimates—The $50 million  estimated savings from operating expense reductions has limitations  similar to those noted above for the IT cost savings estimate.  Specifically, AOUSC officials provided documents that show an  additional $42.7 million in savings resulting from law book reductions.  AOUSC officials told us that $50 million in operating expense cost  savings includes $25 million in savings resulting from lower than  expected court operating expenses, $3 million in savings associated  with lower than expected records management expenses, and $22  million in savings associated with lower than expected law book  expenses. However, AOUSC officials provided documents that  indicate that the law book reductions resulted in savings of $64.7  million (not adjusted for inflation), or $42.7 million more than the $22  million estimated by AOUSC officials. In addition, the operating  expense savings estimate did not include the costs incurred by the  judiciary to implement the initiatives, such as the costs of transitioning  to contracts for electronic legal research resources, so the net cost  savings the judiciary has achieved as a result of these efforts is  unclear at this time.
Estimating reliable cost savings is consistent with standards in Standards  for Internal Control in the Federal Government. For example, Standards  for Internal Control in the Federal Government states that program  managers need complete and accurate operational and financial data to  determine whether they are meeting their agencies’ strategic and annual  performance plans and meeting their goals for accountability and for  effective and efficient use of resources. In addition, internal control  standards state that transactions and significant events should be clearly  documented and the documentation should be readily available for  examination. Further, cost-estimating guidance states that agencies  should determine whether an activity’s benefits (savings) also take into  account the costs incurred to implement the activity. In addition, best  practices suggest that federal agencies should routinely identify cost  savings and efficiencies, as we have previously concluded. The  judiciary is not required by law to abide by Standards for Internal Control  in the Federal Government or cost-estimating guidance, but these tenets  are consistent with the management practices of leading organizations.
As described above, on the basis of information provided by AOUSC  officials, we determined that the methodology AOUSC officials used to  estimate savings from staffing and salary reductions—or approximately  $785 million of the nearly $1.5 billion total cost savings estimate—was  reliable. However, as AOUSC officials acknowledged, the methodology  for estimating the remaining approximately $677 million of the savings  estimate has limitations. For example, the officials acknowledged that  $291 million of the $538 million in space- and facilities-related savings  resulted from lower than anticipated rent inflation and was not the result  of judiciary actions. Also, AOUSC officials agreed that the amount of  estimated rent savings for fiscal years 2005 to 2015 should include the  amount saved for each fiscal year over the last 10 years and not only the  savings for fiscal year 2015.
In addition, AOUSC officials said that excluding the additional savings  found in the information technology and operating expense categories  was an oversight, and AOUSC is in the process of reconsidering how to  portray its long-term savings estimates. According to the officials, these  particular additional savings amounts will be included in the future.  Furthermore, AOUSC officials acknowledged that they did not include the  costs incurred to implement several of these initiatives, so the cost  savings estimates do not always reflect net cost savings. According to  AOUSC officials, the costs incurred to implement an initiative were not  included in the nearly $1.5 billion savings estimate because the estimated  savings are the result of national policies and initiatives that frequently  have an element of local spending or operating expense, and AOUSC  officials have not attempted to gather and calculate the implementation  costs and link them to the specific savings estimates.
Regarding the lack of documentation for $247 million in estimated space-  and facilities-related savings, AOUSC officials stated that the numerous  cost containment initiatives and policies implemented in this category  since fiscal year 2005 have resulted in reduced space requirements and  rent costs over time as the initiatives and polices have been implemented.  However, they stated that the cost savings resulting from each initiative  and policy cannot be measured directly. They stated that these initiatives  and policies include the following, among others:
Establishing the circuit rent budget process and rent budget caps  intended to ensure consideration of all alternatives to increases in  space requirements and cap rent growth, among other things.
Closing nonresident court facilities in multiple locations nationally.
Establishing the Rent Validation Initiative, which involved detailed  reviews of GSA rent billings to ensure that they are based on agreed- upon rental rates for the space that the judiciary occupies, among  other things.
Establishing a goal of reducing the amount of total square footage  leased from GSA by 3 percent by fiscal year 2018 (from the baseline  footprint of fiscal year 2013). AOUSC officials stated that as projects  mature and leased space is returned to GSA and others, they expect  the judiciary to meet this goal. According to AOUSC officials, as of  October 2014, approximately 242,403 square feet has been  eliminated from the judiciary’s rent bill, resulting in a savings of almost  $6 million annually. According to AOUSC officials, this reduction in the  rent bill reflects actual space released back to GSA; however, it is not  a net reduction to the rent bill because there have been some space  increases to the judiciary’s inventory from new construction and  alteration projects completed and occupied during the course of each  year.
AOUSC officials stated that it would be challenging, if not impossible, to  precisely measure all cost savings attributable to each individual cost  containment initiative for three reasons. First, AOUSC officials stated that  AOUSC does not maintain a single, historical list of initiatives, although  initiatives and some cost savings estimates are documented in a  collection of documents such as the Cost Containment Strategy for the  Federal Judiciary and congressional budget justifications. Second,  AOUSC officials said that retroactively reporting on cost containment  savings would be resource-intensive and would not add meaningful  business value to its planning process. Third, AOUSC officials stated that  under the judiciary’s decentralized funding structure, court units may  receive reduced funding allotments because of a cost containment  initiative or action, but courts have local flexibility to determine how to  staff and support their offices within the allotted funds. AOUSC officials  stated that under the decentralized model, courts are able to develop  creative, local solutions that meet the demands of the court, but doing so  makes it more challenging to determine the actual savings that are  attributable to any individual initiative.
Furthermore, according to AOUSC officials, the judiciary considers a cost  containment initiative to be successful if the initiative slowed the projected  cost growth or reduced a resource requirement and noted that the  anticipated cost savings from individual cost containment initiatives is  incorporated in its annual budget request estimates. Additionally, AOUSC  officials stated that the collective effect of the cost containment initiatives  undertaken by the judiciary may be seen in the judiciary’s annual budget  request at the appropriation account level (e.g., Salaries and Expenses,  Defender Services, Court Security). Overall, AOUSC officials said that the  judiciary’s budget request increases have historically ranged from 7 to 9  percent, but in recent years its budget request increases have ranged  from 3 to 5 percent.
We reviewed the judiciary’s annual congressional budget justifications for  fiscal years 2010 through 2016 and confirmed that congressional budget  justifications did not consistently report information on cost containment  initiatives or the estimated cost savings realized from the initiatives. For  example, the congressional budget justifications included descriptive  information about several cost containment initiatives implemented by the  judiciary in recent years, but the estimated cost savings realized— cumulatively or from year to year—as a result of the initiatives were not  always included. As a result, we could not use the congressional budget  justifications to determine the cost savings the judiciary has realized from  its cost containment initiatives.
With regard to the decrease in the growth rate of the judiciary’s budget  requests, many factors other than cost containment could influence a  reduction in an agency’s or the judiciary’s budget request from year to  year, which make it difficult to demonstrate that a slower rate of growth in  the judiciary’s budget requests is the result of its cost containment  initiatives. For example, the rate of inflation and other economic  fluctuations, changes in the federal budgetary outlook, changes in  workload, and changes in the political environment could affect the  judiciary’s need or request for less money in a given fiscal year.
We acknowledge that calculating cost savings estimates for every cost  containment initiative could be resource-intensive and that calculating  actual cost savings may be challenging. For example, retroactively  reporting on cost savings for each individual cost containment initiative  could be resource-intensive. Also, cost factors may change and data may  be initially incomplete because savings may take several years to be fully  realized. However, particularly in a time of constrained resources,  developing a reliable method for estimating accurate and complete cost  savings for major cost containment initiatives going forward and regularly  reporting estimated cost savings by major cost containment initiative  could help the judiciary better assess the effectiveness of its cost  containment strategy and help inform decision making related to ongoing  and new cost containment initiatives.
Additionally, developing a reliable method for estimating cost savings by  initiative and regularly reporting estimated cost savings could help  improve the reliability of cost savings information the judiciary provides to  Congress. For example, developing a reliable method for estimating  accurate and complete cost savings for major cost containment initiatives  could help address the limitations, noted earlier, of the cost savings  estimates that constitute the cumulative cost savings estimate that the  judiciary reports to Congress (such as the estimated cumulative cost  savings from cost containment efforts implemented since fiscal year  2005). In addition, in the fiscal year 2015 appropriations act, Congress  appropriated $10 million to remain available until September 30, 2016, to  the judiciary for Integrated Workplace Initiative (IWI) costs (such as space  construction projects and the purchase of furniture). Congress stipulated  that these funds would not be available for obligation until the AOUSC  Director submits a report to the House and Senate Committees on  Appropriations showing that the estimated cost savings resulting from the  IWI will exceed the estimated costs of the initiative. In March 2015,  judiciary officials transmitted reports to the House and Senate  Committees on Appropriations regarding the status of space reduction  and IWI projects but reported it was too early to be able to provide  specific details regarding rent cost savings from these projects until after  the concept design phases for the projects are completed. Developing a  reliable method for estimating cost savings achieved for major cost  containment initiatives—which takes into account the costs to implement  and all cost savings achieved—could help inform judiciary efforts to report  space reduction- and IWI-related cost savings information to Congress.  Furthermore, regularly reporting such cost savings for major cost  containment initiatives could provide Congress with more accurate and  complete information for oversight and decision making.
Several cost-efficient options for developing a method to accurately  estimate and regularly report cost savings for major cost containment  initiatives exist. For example, one approach might be to estimate cost  savings using a risk-based methodology to determine and track cost  savings for those cost containment initiatives related to the judiciary’s  highest-cost areas or those from which the judiciary anticipates the  largest savings (or by major spending or major cost containment  category). Another approach could be developing a method for estimating  cost savings as part of existing processes and data collection and  analysis activities, such as the judiciary’s budget formulation and  execution process. Regularly reporting estimated cost savings achieved  for major cost containment initiatives through an existing mechanism,  such as congressional budget justifications or other document, could be  another option, and reporting could be done on a periodic, but not  necessarily annual, basis. In addition, adding features to the judiciary’s  new financial management system to help facilitate the collection and  analysis of cost and cost savings information from courts and defender  organizations related to space and facilities initiatives and other initiatives  is another option, if cost effective. Additionally, AOUSC is using a process  to estimate the costs and estimated cost savings to meet congressional  reporting requirements. Tailoring such a process to estimate cost savings  for other major cost containment initiatives could be another option.
section_title: The Judiciary Uses Various Mechanisms to Identify Opportunities for Cost Savings and Efficiencies
paragraphs: The judiciary uses various mechanisms to identify opportunities for cost  savings and increasing efficiencies, including: (1) strategic policy  documents, (2) the annual budget formulation and execution process, (3)  Judicial Conference and conference committee meetings, and (4)  information sharing across federal courts.
Strategic policy documents—In the past 10 fiscal years, the  judiciary has developed various strategic policy documents that  assist the judiciary with its efforts to contain costs—including  identifying opportunities for cost savings and efficiencies, among  other things, as described in table 2.
As shown in table 2, the judiciary developed the Cost Containment  Strategy for the Federal Judiciary: 2007 Update Report (2007 update)  to provide a progress update on the Cost Containment Strategy for  the Federal Judiciary: 2005 and Beyond (2005 cost containment  strategy), including analyzing and documenting changes that occurred  in the judiciary’s long-range budget forecasts and the status of  implementing cost containment initiatives in each cost containment  category, among other things. The judiciary has established  timeframes for regularly updating its Strategic Plan for the Federal  Judiciary and the Long Range Information Technology Plan, but has  not updated its cost containment strategy since 2007. In July 2012,  the judiciary issued a six-page Cost Containment Update: A Report  from the Budget Committee, which provided an overview of the  judiciary’s long-range budget forecasts and summarized some new  cost containment initiatives (table 2). AOUSC officials told us that the  judiciary does not plan to issue another update report on the 2005  cost containment strategy in the future primarily because the  judiciary’s culture has changed in the past 10 years, and the judiciary  relies on other mechanisms, described below, to identify opportunities  for cost savings and efficiencies.
Annual budget formulation and execution process—According to  Judicial Conference and AOUSC officials, the judiciary’s annual  process of preparing its budget and allocating funding, or its budget  formulation and execution process, is the primary mechanism it uses  to identify opportunities for judiciary-wide cost savings and  efficiencies. For example, AOUSC officials told us that the judiciary’s  initiative to reduce all judiciary-occupied space by 3 percent by the  end of fiscal year 2018 was identified through the budget formulation  and execution process. The Judicial Conference, operating through  a network of program committees, oversees the development and  execution of the judiciary’s budget, as shown in figure 6.  Accordingly, the Judicial Conference Budget Committee is  responsible for proposing appropriate funding levels, based, in part,  on annual long-range budget forecasts (i.e., how budget requirements  and potential funding levels may change during the next 5 to 10  years), and input from program committees. The Economy  Subcommittee of the Budget Committee also plays a key role in  working with program committee chairs to identify, recommend, and  promote budget-balancing strategies or cost containment initiatives.  During the budget execution process, the Judicial Conference  Executive Committee is to approve annual financial (spending) plans  for 4 of the 12 judiciary appropriations accounts. According to  judiciary officials, the annual financial plans reflect the policies of the  Judicial Conference, including approved cost containment initiatives,  among other things. Our analysis of the judiciary’s financial plans  from fiscal years 2010 through 2015 showed that these plans  contained some information about the cost containment initiatives that  the judiciary approved. For example, under the Defender Services  account, the fiscal year 2015 plan states that funding was provided for  the conversion of two part-time case-budgeting attorney positions into  full-time positions, among other cost containment initiatives. The  budget formulation process begins 18 months before the fiscal year.  Figure 6 depicts general time frames and activities that may overlap  throughout the process.
Judicial Conference and committee meetings—According to  the Judicial Conference Budget Committee and Economy  Subcommittee chairs and AOUSC officials, the Judicial  Conference semiannual sessions in March and September  provide all Judicial Conference program committee chairs with the  opportunity to discuss the status of new and ongoing cost  containment efforts, among other national judiciary policy matters.  Judiciary officials told us that these discussions were documented  in the Reports on the Proceedings of the Judicial Conference of  the United States issued after each semiannual session, and we  verified this statement through our analysis of these documents  for fiscal years 2007 through 2014. Various Judicial Conference  committee chairs also meet during these semiannual Judicial  Conference sessions and throughout the year to support the  judiciary’s annual budget formulation and execution process, as  described earlier. For example, the Chair of the Economy  Subcommittee of the Budget Committee told us he regularly  meets with program committees to educate them on ways to  contain costs, which include in-depth discussions of (1) each  program’s budget, (2) the status of new and ongoing cost  containment initiatives (including the extent to which the cost  containment initiative has reduced costs), and (3) steps the  program committee has taken to address long-range budget  forecasts.
Also, the Judicial Conference usually holds a long-range planning  meeting 1 day prior to one or both semiannual Judicial  Conference sessions. As shown in figure 6, the long-range  planning meeting is not a formal part of the budget formulation  and execution process, but, according to the Budget Committee  Chair, provides an opportunity for program committee chairs to  discuss judiciary-wide trends and long-range planning issues that  are crosscutting within the judiciary (i.e., issues that may affect  more than one program committee, such as increasing space and  facilities costs). The Chair of the Budget Committee told us these  meetings are typically focused on strategic planning and some,  but not all, over the past 3 to 4 fiscal years involved discussions of  budgetary matters and the potential implications of budget  reductions.
In addition, the Judicial Conference Executive Committee and  Budget Committee held a cost containment summit with program  committee chairs in September 2011. The purpose of the  summit was to respond to anticipated budgetary shortfalls in fiscal  year 2013 and beyond by identifying potential cost containment  initiatives that would help mitigate funding cuts to the courts and  avoid further loss of staff. For example, the Judicial Conference  approved lowering the budget cap for Defender Services and  Court Security during the March 2012 Judicial Conference  semiannual session. The Budget Committee documented this and  other cost containment initiatives identified at the summit in the  Cost Containment Update: A Report from the Budget Committee,  described in table 2, and subsequent Reports on the Proceedings  of the Judicial Conference of the United States.
Information sharing across federal courts—As noted earlier,  according to AOUSC officials, the decentralized governance and  budgetary structure of the judiciary allows courts and defender  organizations to identify opportunities for cost savings and  efficiencies to meet local needs. The judiciary has taken steps to  facilitate the identification and sharing of ideas for cost savings  and efficiencies among federal courts and defender organizations  using various information-sharing mechanisms. For example,  officials we interviewed in 8 of 12 circuits, all 4 district courts, and  3 of 4 defender organizations stated that they coordinate with the  Judicial Conference committees and AOUSC (such as through  AOUSC advisory councils, peer advisory groups, or ad hoc  working groups) to identify opportunities for cost savings and  efficiencies. For example, an official in one circuit court told us  that court officials leverage the semiannual Judicial Conference  sessions to meet with their counterparts in other circuit courts to  share cost saving and efficiency ideas. Also, officials representing  10 of 12 circuits, all 4 district courts, 2 of 4 bankruptcy courts, and  3 of 4 defender organizations we met with stated that they have  regular meetings with colleagues to share ideas about cost-saving  and efficiency opportunities. For example, the probation services  office and pretrial services office in one district court developed a  Budget Consortium to formulate cost savings ideas, such as  combining bulk supply purchases to reduce costs.
Furthermore, through our interviews with court officials, we  learned that some of the opportunities for cost savings and  efficiencies identified by local courts have led to national  implementation. For example, one official in a district court clerk’s  office told us that the court codeveloped a software system that  automates criminal debt and restitution processes, which it has  been using since 2008 to streamline the process of collections  and accounting—thereby increasing processing efficiency and  saving costs. In addition, the district court developed guidance  for local courts to implement the software system, and according  to the district official, other courts began to use the system in June  2013. The officials stated that, as of August 2014, 80 district  courts were using one component of the software to import  Bureau of Prisons and U.S. Department of Treasury offset  payments, and beginning in early 2015, approximately 30 courts  received access to all software components (with the actual extent  of use of the components varying from court to court).
section_title: The Judiciary Imposed Emergency Measures and Has Identified Negative Effects of the 2013 Sequestration and 2014 Lapse in Appropriations on Judiciary Personnel and Operations
subsections: section_title: The Judiciary Began Preparing for Sequestration in 2012 and Imposed Emergency Measures
paragraphs: According to AOUSC and court officials we interviewed, the judiciary’s  cost containment initiatives helped to prepare the judiciary for potential  budget reductions, but the judiciary still needed to impose a set of  emergency measures to achieve the $346 million in budget cuts caused  by the 2013 sequestration and faced some planning challenges.  According to the judiciary budget officer, the Judicial Conference  Executive Committee began to plan for sequestration in January 2012,  and the judiciary implemented a final set of emergency measures in  March 2013, when sequestration ultimately took effect. The judiciary  budget officer and some court and defender organization officials we  interviewed stated that planning for the reductions resulting from  sequestration was challenging because the estimated percentage  reductions changed several times. Figure 7 provides a detailed timeline  of judiciary, OMB, and legislative actions taken to prepare for the fiscal  year 2013 sequestration and the lapse in fiscal year 2014 appropriations.
As previously noted, the 2013 sequestration reduced fiscal year 2013  funding for the judiciary’s Salaries and Expenses account by $239 million;  Defender Services account by almost $52 million; Court Security account  by $25 million; and Fees for Jurors and Commissioners account by  approximately $3 million, among other reductions. To achieve these  reductions, the judiciary identified approximately 33 emergency measures  that generally reduced or postponed funding for the remainder of fiscal  year 2013 in each of these accounts and reprogrammed available funds  (such as prior-year unobligated balances) to areas of the fiscal year 2013  financial plan to mitigate shortfalls. According to Judicial Conference  officials, the judiciary designed the emergency measures to address the  four main appropriations accounts and to help ensure consistency and  equity among members of the judiciary. They stated that many of the  measures were temporary, one-time reductions that could not be  repeated if future funding levels continued to decline. Table 3 shows  examples of the emergency measures the judiciary implemented to  achieve the reductions required by the fiscal year 2013 sequestration.
As shown in figure 7, the judiciary kept the emergency measures in place  until the enactment of fiscal year 2014 appropriations, which returned  funding to presequestration levels, or approximately fiscal year 2010  levels, because the judiciary received relatively flat funding in fiscal years  2011 and 2012.
section_title: Implementation and Effects of Sequestration Varied across Courts and Defender Organizations
paragraphs: Under the judiciary’s decentralized governance structure, individual courts  and defender organizations made local decisions about how to manage  staff and operations within the reduced allotments imposed by the  emergency measures and about any additional spending cuts or actions  that may be needed. For example, to absorb reduced salary allotments,  courts and defender organizations determined whether they needed to  downsize, implement furloughs, a combination of both, or neither, or take  other personnel actions, such as freezing promotions, offering buyout and  early retirement offers, or implementing layoffs (i.e., involuntary  separations), among other actions. AOUSC officials stated that some  courts cut hours of operation, closed 1 day per week, or chose not to hear  criminal cases every other Friday. See appendix I for examples of the  personnel and related actions that the 12 circuit courts, 4 district court  clerks’ offices, 4 bankruptcy courts, 4 probation and pretrial offices, and 4  defender organizations we interviewed reported taking in response to the  2013 sequestration.
The emergency measures also reduced nonsalary (i.e., operations and  IT) allotments to most court units by 20 percent and to bankruptcy court  clerks’ offices by 34 percent. To absorb these reductions, circuit court and  district court officials we interviewed told us they reduced staff training  and travel, entered into bulk purchase agreements to acquire supplies,  and postponed building renovations and maintenance, among other  actions. In addition, officials we interviewed in 9 of 12 circuit courts, all 4  district courts, all 4 bankruptcy courts, and all 4 defender organizations  stated that they rescoped or delayed cyclical IT replacements (e.g.,  laptops, printers) and maintenance (e.g., payments for extended  warranties) or reduced IT investments in response to the 2013  sequestration. See appendix I for examples of the nonpersonnel actions  each court and defender organization we interviewed reported taking.
section_title: Judiciary Took Actions to Mitigate the Effects of Sequestration on Personnel but Reported Some Actions Resulted in Delays and Increased Costs
paragraphs: The judiciary implemented actions to help mitigate the impact of  sequestration on court and defender organization staff, but officials  reported that reprogramming or reducing funding in other areas  interrupted cost containment efforts and led to increased costs and  inefficiencies. For example, the Judicial Conference Executive Committee  reduced nonsalary funding—such as funding for training, IT, supplies, and  equipment—and used funding flexibilities (such as prior-year unobligated  balances and fee collections) to help centrally fund the resource  requirements identified in the judiciary’s fiscal year 2013 financial plan.  However, AOUSC officials and court and defender organization officials  we interviewed in 3 of 12 circuit courts, 2 of 4 district courts, 3 of 4  bankruptcy courts, and 1 of 4 defender organizations stated that diverting  funds from IT investments and travel and training as a result of  sequestration interrupted cost containment and efficiency efforts, and led  to increased costs and risks in some cases. For example, according to  AOUSC officials, upgrades to several national IT systems designed to  achieve cost savings or improve internal controls—such as to judiciary  financial management, human resources, and probation and pretrial case  management systems; a national videoconferencing system; and a new  national Internet Protocol telephone system—were suspended in fiscal  year 2013 because of sequestration. According to the officials, restarting  upgrades after they have been suspended for some time is costly, and  many upgrade projects have still not been completed. For example,  AOUSC officials stated that the delayed rollout of an upgraded financial  management system to all courts introduces the risk of technical  obsolescence of the legacy financial accounting system, which has the  potential to introduce new costs to keep the legacy system operational.
In addition, court and defender organization officials stated that they  participate in information-sharing and training conferences and  meetings—such as circuit judicial conferences and annual or biannual  court clerks conferences—to stay proficient in their subject matters and to  discuss court administration, including sharing ideas for saving money  and increasing efficiency. However, because of reduced funds for travel  and training, officials representing 6 of 12 circuit courts stated that they  canceled or postponed circuit judicial conferences in 2013 and 2014.  Also, officials in 6 of 12 circuit courts, 3 of 4 district courts, 2 of 4  bankruptcy courts, and 2 of 4 defender organizations stated that they  canceled, reduced, or did not attend training conferences or meetings  (e.g., for judges, staff attorneys, defenders, court clerks, and IT staff).  Moreover, AOUSC officials estimated that approximately 2,585 federal  defender and Criminal Justice Act panel attorneys and paralegals,  investigators, and staff did not receive subject matter training (such as  substantive legal, forensics, and case management training) as a result of  canceled training events because of sequestration and threat of  continued sequestration in fiscal year 2013 and early 2014.
section_title: Judiciary Reported That the 2013 Sequestration and 2014 Lapse in Appropriations Negatively Affected Personnel, Operations, and Services to the Public
paragraphs: Judiciary officials reported that the 2013 sequestration and fiscal year  2014 lapse in appropriations negatively affected court and defender  organization personnel and services to the public, among other effects.
Reduced court staff and implemented furloughs—AOUSC officials  stated that one of the most significant effects of the 2013  sequestration was the continuing loss of court staff through attrition,  including buyouts and voluntary early retirements, among other  actions. According to GAO analysis of judiciary data, in the 12 months  following sequestration, total onboard full-time equivalent staff in  federal courts nationwide declined by nearly 1,600 full-time equivalent  staff—or by approximately 8 percent. According to GAO analysis of  judiciary data, from fiscal years 2011 to 2014 (including the 2 years of  relatively flat funding preceding sequestration), the total number of  onboard full-time equivalent staff in federal courts nationwide declined  by more than 11 percent—specifically, the total number of onboard  full-time equivalent staff declined by 11 percent in circuit courts, 8  percent in district court clerks’ offices, 24 percent in bankruptcy  courts, and 7 percent in probation and pretrial services offices  nationwide. Furthermore, the judiciary reported that, nationally, by the  end of March 2014, there were 3,300—or 15 percent—fewer onboard  court staff than in July 2011. GAO analysis of judiciary data supports  this statement. See figure 8 for the total number of onboard court  full-time equivalent staff in circuit courts, district court clerks’ offices,  probation and pretrial services offices, and bankruptcy courts from  fiscal years 2010 to 2014.
To help manage within the reduced salary allotments, some courts and  federal defender organizations offered buyouts, early retirement offers, or  a combination of both to employees. AOUSC provided supplemental  funding to courts and defender organizations that requested funding and  met certain criteria to help pay for the these actions. Table 3 shows the  total number of buyouts, early retirement offers, and combined buyout  and early retirement offers approved by AOUSC and federal public  defender organizations to offer locally to staff in fiscal years 2013 and  2014, according to GAO analysis of judiciary data.
Furthermore, 5 of 12 circuit courts, all 4 bankruptcy courts, and 3 of 4  defender organizations reported implementing a reduction in force in  response to the 2013 sequestration—some of which involved the  involuntary separation of employees. Specifically, officials in 3 of 12  circuit courts and 1 federal defender organization stated they  implemented a reduction in force that did not result in any involuntary  separations. Officials in 2 of 12 circuit courts, all 4 bankruptcy courts,  and 2 of 4 defender organizations stated that they implemented a  reduction in force in response to the 2013 sequestration that included at  least one involuntary separation.
In addition, in fiscal year 2013, federal courts and federal defender  organizations furloughed a combined total of more than 3,600 staff (table  5), resulting in reduced wages. Specifically, according to GAO analysis of  judiciary data, circuit courts, district courts (including probation and  pretrial services offices), and bankruptcy courts furloughed approximately  1,400 staff for 1 to 15 days in fiscal year 2013. Also, according to GAO  analysis of judiciary data, over half of the country’s federal public  defender organizations furloughed a total of about 2,000 staff for 1 to 16  days in fiscal year 2013. Additionally, according to GAO analysis of  community defender organization data, community defender  organizations furloughed 219 staff from 3 to 14 days. None of the circuit  courts, district courts, and bankruptcy courts we interviewed implemented  furloughs; however, two of the four defender organizations we interviewed  implemented furloughs, which resulted in lost wages for furloughed  federal defender organization staff.
Defender services—reduced staff, implemented furloughs, and  postponed and reduced payments—According to AOUSC officials,  the Defender Services account primarily pays for defense attorneys  and staff salaries, rent, case-related expenses (such as expert  witnesses and interpreters), and Criminal Justice Act panel attorney  payments. As a result, they stated, there is less flexibility for  absorbing budget reductions other than reducing or furloughing staff,  or reducing or postponing panel attorney pay. According to GAO  analysis of judiciary data and community defender organization data,  federal public defender and community defender organizations  downsized by a net total of approximately 316 total onboard full-time  equivalent staff—250 federal public defender and 66 community  defender full-time equivalent staff—from the end of fiscal year 2012 to  the end of fiscal year 2014. See figure 9 for the total number of  onboard full-time equivalent staff in federal defender organizations as  of the end of fiscal years 2010 to 2014.
Furthermore, according to AOUSC officials, payments to panel  attorneys were postponed for the last 10 business days of fiscal year  2013 into fiscal year 2014. In addition, because of the lapse in  appropriations at the beginning of fiscal year 2014, the officials stated  that payments to panel attorneys were further delayed. Moreover, to  maintain projected onboard defender office staffing nationally as of  the beginning of fiscal year 2014, the Executive Committee imposed a  temporary emergency hourly rate reduction for panel attorneys of $15  an hour from September 1, 2013, to September 30, 2014. According  to an AOUSC official, this was the first time the judiciary had to reduce  the hourly panel attorney rate in 50 years, instead of postponing  payments as had been done in the past to address shortfalls, an  action that significantly reduced panel attorney morale in the short and  long terms.
Probation and pretrial services—reduced staff, mental health and  drug testing and treatment services, and law enforcement  training—According to GAO analysis of judiciary data, total onboard  probation and pretrial services full-time equivalent staff in district  courts nationwide declined by about 400 full-time equivalent staff in  fiscal year 2013. Also, the judiciary reduced funding for law  enforcement–related expenses—including substance abuse testing  and treatment, mental health treatment, and electronic monitoring of  federal defendants and offenders on supervised release, among other  expenses—by 20 percent compared with funding in the interim fiscal  year 2013 plan. According to AOUSC officials, reduced funding for  probation and pretrial officer staff throughout the courts equates to  less deterrence, detection, and response to possible criminal activity  by federal defendants and offenders in the community. In addition,  probation and pretrial officials we interviewed in all 4 district courts  stated that staff reductions and reduced funding for treatment limited  efforts to reduce recidivism, and some noted increased potential risks  to public safety.
Furthermore, according to judiciary training records and AOUSC  officials, the judiciary suspended 4 of 10 planned new officer training  courses in 2012 and 2 of 9 new officer courses at the Federal Law  Enforcement Training Center in Charleston, South Carolina, in 2013  as a result of the sequestration. According to AOUSC officials, the  suspended courses have led to a 13-month backlog of required law  enforcement training for new probation officers, which means that  some new probation and pretrial services officers had been  supervising defendants and offenders on supervised release without  basic law enforcement training, putting their lives and public safety at  risk.
Reduced services to the public—Officials we interviewed  representing 6 of 12 circuit courts, 1 district court, and 2 of 4 defender  organizations reported that they reduced court services to the public,  such as reducing the number of hours open to the public, as a result  of sequestration. Furthermore, AOUSC officials reported that courts  across the country reduced their court hours or services as a result of  sequestration (such as not holding hearings or trials of criminal cases  on Fridays because federal defenders and U.S. Attorney’s Office staff  were furloughed), but AOUSC does not maintain nationwide data on  the total number of court closures or number of reduced hours.
Reduced court security—According to the judiciary’s fiscal year  2013 financial plan, to implement the $25 million reduction to court  security resulting from sequestration, the judiciary reduced funding for  security systems and equipment by approximately 25 percent, or  about $13 million; reduced court security officer hours by 25 hours per  officer per year ($4.3 million); and reduced funding for DHS Federal  Protective Service building security services by $1 million. According  to U.S. Marshals Service officials, security system funding reductions  most affected funding for additional and replacement equipment,  perimeter security, and access control systems.
Reduced employee morale, recruitment, and retention—Court  officials we interviewed in 8 of 12 circuit courts, 2 of 4 district courts, 2  of 4 bankruptcy courts, and all 4 defender organizations reported that  reduced staffing levels because of the 2013 sequestration have led to  other negative effects, including increased workloads, decreased  morale, and retention and recruitment challenges. For example,  officials we interviewed in 6 of 12 circuit courts, 3 of 4 district courts, 2  of 4 bankruptcy courts, and all 4 defender organizations stated that  the 2013 sequestration or the lapse in fiscal year 2014 appropriations  weakened employee morale, on the basis of their observations and  interactions with employees. The Budget Committee Chair told us that  increased funding for the judiciary in fiscal years 2014 and 2015 has  allowed courts to begin filling vacant positions, but that most courts  have been concerned about increasing their staff levels after the  experience of the 2013 sequestration and because of fear of future  budget reductions.
Increased median civil case disposition times, though other  factors could contribute—AOUSC officials reported that the median  civil case disposition time for district courts increased about 16  percent—from 7.3 months to 8.5 months—from October 1, 2011, to  September 30, 2013. GAO analysis of judiciary data supports this  statement. Judicial Conference and AOUSC officials stated that the  2013 sequestration probably contributed to these delays, but the  judiciary has not conducted analyses to isolate the effects of  sequestration on civil case disposition times. According to an AOUSC  official, years of relatively flat budgets in fiscal year 2011 and 2012,  actions taken to implement sequestration, and federal judgeship  vacancies all may have contributed to the civil case disposition time  increases, making it difficult to identify which one or more of these  factors may be causing an increasing backlog of cases and growing  wait times.
Additionally, officials we interviewed in 7 of 12 circuit courts and 3 of 4  district courts stated that case disposition in their courts was delayed  as a result of the 2013 sequestration. For example, officials we met  with in 1 district court stated that the district court prioritized criminal  trials and postponed civil jury trials because, under the Speedy Trial  Act of 1979, courts are required to hold criminal trials within specified  time frames. However, the district court clerk stated that judicial  vacancies also may contribute to the court’s ability to hear civil cases  in a timely manner.
Furthermore, in October 2013, during the 16-day lapse in appropriations,  the judiciary was able to continue operating using filing fee collections  and no-year funds. Nonetheless, officials we interviewed in 8 of 12 circuit  courts, 3 of 4 district courts, and 1 of 4 bankruptcy courts reported that  the lapse in appropriations still contributed to case-processing delays, or  that uncertainty due to the potential lapse led to other negative effects on  operations, such as wasted time in planning for a potential lapse. For  example, officials we interviewed in 7 of 12 circuit courts, 2 of 4 district  courts, and 1 of 4 bankruptcy courts stated they received civil case  motions to stay, or suspend, cases from DOJ because U.S. Attorneys or  U.S. Trustees were not available and had to postpone other cases  because federal defenders were furloughed. For example, one district  court clerk stated that her office had to process and docket the DOJ  orders to suspend about 200 cases, then her office had to file motions to  “unstay,” or remove from suspension, the orders and catch up on the  approximately 200 cases when the appropriations lapse ended, an action  that she said was very cumbersome and inefficient.
section_title: Conclusions
paragraphs: Identifying and implementing actions to save costs and reliably estimating  cost savings achieved is critical to helping the judiciary and Congress  assess the progress of cost containment initiatives and identify available  resources in a constrained budgetary environment. In September 2004,  the Judicial Conference approved a Cost Containment Strategy for the  Federal Judiciary: 2005 and Beyond to help slow the growth of its major  cost drivers—including rent and personnel costs—and the judiciary has  implemented a wide range of initiatives in these and other major cost  containment categories over the past 10 years. According to AOUSC,  court, and defender organization officials we interviewed, several of these  initiatives helped to mitigate the negative effects of the 2013  sequestration. However, the judiciary does not fully know how much  money it has saved as a result of its cost containment initiatives because  it has not developed a reliable method of estimating cost savings  achieved for major initiatives. For example, the judiciary estimated that it  avoided nearly $1.5 billion from fiscal year 2005 through fiscal year 2015  primarily as a result of its cost containment initiatives. However, we found  that this estimate has limited reliability because it did not include all  savings realized, included savings not attributable to cost containment  initiatives, did not always include the costs associated with implementing  initiatives, and was not always well documented to support estimated  savings. Developing a reliable method to estimate cost savings achieved  for major initiatives and regularly reporting such cost savings could  provide the judiciary and Congress with more accurate and complete  financial information for assessing the progress of the judiciary’s cost  containment initiatives, informing judiciary decision making related to its  initiatives, and informing congressional oversight and decision making to  help ensure that the judiciary continues to render justice in a fair, timely,  and efficient manner.
section_title: Recommendations
paragraphs: To provide more reliable information for assessing the progress of its cost  containment efforts and for informing judiciary and congressional  oversight and decision making, we recommend that the Director of  AOUSC take the following two actions for major cost containment  initiatives (as determined by the judiciary):  develop a reliable method for estimating cost savings achieved (i.e., that ensures that cost savings are calculated in an accurate and complete manner); and regularly report estimated cost savings achieved.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided copies of a draft of this report to AOUSC, the Federal  Judicial Center, the U.S. Sentencing Commission, GSA, and the  Marshals Service for review and comment. These agencies provided  technical comments that we incorporated as appropriate. AOUSC  provided written comments on a draft of this report, which are printed in  full in appendix IV.
In its comment letter, AOUSC stated that the judiciary appreciates and  takes seriously the recommendations and findings in the report and will  give them careful consideration. Specifically, AOUSC commented that  improvements can always be made to administrative and accounting  processes to improve further the judiciary’s reporting on cost containment  activities. According to AOUSC, in a time of constrained resources,  however, the expenditure of resources to develop new methodologies for  cost savings estimates must align with the judiciary’s business needs.  AOUSC said that the judiciary will carefully evaluate any additional  methods for estimating cost savings to ensure that a strong business  case justifies the expenditure of scarce resources for that purpose and  that any new reporting is cost effective and of direct use to the judiciary  and Congress.
As we stated in the report, developing a reliable method for estimating  accurate and complete cost savings for major cost containment initiatives  could help the judiciary better assess the effectiveness of its cost  containment strategy and help inform decision making related to ongoing  and new cost containment initiatives. This is especially important in a time  of constrained resources. Additionally, developing a reliable method for  estimating accurate and complete cost savings for major cost  containment initiatives and regularly reporting such cost savings  estimates could help the judiciary provide Congress with more accurate  and complete financial information for oversight and decision making.  Furthermore, we identified several potential cost-effective approaches  that the judiciary might consider for developing a reliable method for  estimating and reporting cost savings from major cost containment  initiatives.
In addition, AOUSC commented that the draft report’s emphasis on  retroactive cost estimating may give the appearance of undervaluing the  judiciary’s long-term budget planning and its 10 years of cost containment  activity, which enabled the judicial branch to continue to serve the public  during sequestration.
We believe that the draft report acknowledges and values the judiciary’s  long-term budget planning and its 10 years of cost containment activity.  Specifically, the draft report identifies and describes the judiciary’s long- range budget planning process and strategic policy documents, such as  the Cost Containment Strategy for the Federal Judiciary: 2005 and  Beyond, among others, as mechanisms the judiciary uses to identify  opportunities for cost savings and efficiencies and describes several  examples of the cost containment initiatives that the judiciary has  undertaken in the past 10 years, including a list of multiple examples of  the judiciary’s cost containment initiatives in all categories in appendix III.  Further, we report that the judiciary’s cost containment initiatives helped  to prepare the judiciary for potential budget reductions, according to  AOUSC and court officials we interviewed. The report also includes  examples of cost-saving actions that courts and defender organizations  we interviewed took in the years prior to sequestration that helped to  mitigate the negative effects of sequestration, according to these entities  (for example, see app. I).
We are sending copies to the appropriate congressional committees and  the Director of AOUSC, Director of the Federal Judicial Center, Chair of  the U.S. Sentencing Commission, the Attorney General, and the  Administrator of GSA. In addition, this report is available at no charge on  GAO’s website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-9627 or MaurerD@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix V.
section_title: Appendix I: Examples of Actions the 12 Circuit Courts and 4 District Courts and 4 Defender Organizations We Interviewed Reported Taking in Response to the 2013 Sequestration
paragraphs: This appendix contains tables showing examples of the personnel and  nonpersonnel actions that the officials we interviewed in 12 circuit courts;  4 district courts, including 4 bankruptcy courts and 4 probation and  pretrial offices; and 4 defender organizations reported taking in response  to the 2013 sequestration.
section_title: Appendix II: Changes in Judiciary Accounts from Fiscal Years 2012 to 2013
subsections: section_title: (Dollars in millions)
paragraphs: 2013 across- the-board  rescission  (0.2%)
Retirement Fund costs increased as a result of an actuarial experience study that shows increased  longevity, the recent litigation regarding judges’ pay, and the lower discount rates developed and  published by the Office of Personnel Management.  This includes nonexempt mandatory spending in the Judiciary Filing Fees and Registry  Administration accounts.
section_title: Appendix III: Examples of Judiciary Cost Containment Initiatives in All Categories
paragraphs: Table 16 shows examples of the cost containment initiatives the judiciary  has under way, in all categories, as of July 2015, and the year the  judiciary began implementing the initiative.
section_title: Appendix IV: Comments from the Administra
section_title: tive Office of the U.S. Courts
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Glenn Davis (Assistant Director),  David Alexander, Chuck Bausell, Jennifer Bryant, Keith Cunningham,  Elizabeth Curda, Katherine Davis, George Depaoli, Gustavo Fernandez,  Eric Hauswirth, Leslie Gordon, Kristen Kociolek, Thomas McCabe, Linda  Miller, Michelle Sager, Janay Sam, Lauren Sherman, Janet Temko- Blinder, and Ellen Wolfe made key contributions to this report.