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

Letter

Background

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.

Key Agencies and Offices Involved in the Federal Court System

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.

Budget of the Federal Judiciary

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.

Budget Decentralization

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.

2013 Sequestration and the Judiciary

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.

Fiscal Year 2014 Lapse in Appropriations and the Judiciary

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.

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

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.

The Judiciary Developed a Cost Containment Strategy in 2004 and Has Implemented Various Cost Containment Initiatives

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.

The Judiciary’s Cost Savings Estimates Have Limited Reliability That Affect Its Ability to Measure the Effectiveness of Efforts

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.

The Judiciary Uses Various Mechanisms to Identify Opportunities for Cost Savings and Efficiencies

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).

The Judiciary Imposed Emergency Measures and Has Identified Negative Effects of the 2013 Sequestration and 2014 Lapse in Appropriations on Judiciary Personnel and Operations

The Judiciary Began Preparing for Sequestration in 2012 and Imposed Emergency Measures

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.

Implementation and Effects of Sequestration Varied across Courts and Defender Organizations

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.

Judiciary Took Actions to Mitigate the Effects of Sequestration on Personnel but Reported Some Actions Resulted in Delays and Increased Costs

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.

Judiciary Reported That the 2013 Sequestration and 2014 Lapse in Appropriations Negatively Affected Personnel, Operations, and Services to the Public

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.

Conclusions

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.

Recommendations

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.

Agency Comments and Our Evaluation

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.

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

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.

Appendix II: Changes in Judiciary Accounts from Fiscal Years 2012 to 2013

(Dollars in millions)

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.

Appendix III: Examples of Judiciary Cost Containment Initiatives in All Categories

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.

Appendix IV: Comments from the Administra

tive Office of the U.S. Courts

GAO Contact

Staff Acknowledgments

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.