South Carolina Court Administration
South Carolina Supreme Court
Columbia, South Carolina

MEMORANDUM

This past legislative term there was new legislation passed that will impact the collection, distribution and reporting of court generated revenues (only number two below). There were several temporary provisos in the 2012-2013 General Appropriations Act that have been repeated in previous General Appropriations Acts and are repeated again in the 2012 - 2013 General Appropriations Act. There was also a new proviso added regarding the State Treasurer following up on audits conducted by the State Auditor’s Office or independent auditors.

Number 2 below discusses a provision in H.3918, R.293, addressing the Division of Aeronautics, and adds a statute which will affect the collection and distribution of court generated revenues as a result of violations of Title 55, Aeronautics. A separate document will be issued by this Office with direction on the distribution of those funds.

The entire fees and assessments memorandum for fiscal year 2012 - 2013 will not be distributed in hard copy, but is available on the Judicial Department website at www.sccourts.org under “Court News.” You may wish to download and print the memoranda for your reference.

1. Effective July 1, 2012, Section 90.5 of the Temporary Provisions of the 2012 - 2013 General Appropriations Act requires that, in addition to all other assessments and surcharges, a $5.00 surcharge to fund training at the South Carolina Criminal Justice Academy is also levied on all fines, forfeitures, escheatments, or other monetary penalties imposed in the General Sessions Court or in magistrate or municipal court for misdemeanor traffic offenses or for non-traffic violations. No portion of the surcharge may be waived, reduced, or suspended. This proviso has been included in the last several General Appropriations Acts and is repeated verbatim in this year’s Appropriations Act.

2. Effective June 18, 2012, H.3918, R.293, amended several Chapters of Title 55 of the S.C. Code, regarding the Division of Aeronautics and its transfer from the Department of Commerce to the S.C. Budget and Control Board. The Bill added S.C. Code §55-1-7, to provide that all fees and fines assessed by the Division under Title 55 must be deposited into the State Aviation Fund. Due to the complexity and comprehensive nature of the Bill, a separate directive will be issued advising the proper collection and distribution of these revenues.

3. Effective July 1, 2012, Section 76.9 of the Temporary Provisions of the 2012 - 2013 General Appropriations Act provides that if a municipality fails to submit the audited financial requirements required under § 14-1-208 to the State Treasurer within 13 months of the end of their fiscal year, the State Treasurer must withhold all State payments to that municipality until the required audited financial statement is received.

If the State Treasurer receives an audit report from either a county or a municipality that contains a “significant finding” related to court fine reports or remittances to the State Treasurer’s Office, the requirements of proviso 89.65 shall be followed if an amount due is specified, otherwise the State Treasurer shall withhold 25% of all state payments to the county or municipality until the estimated deficiency has been satisfied.

If a county or municipality is more than 90 days delinquent remitting court fines, the State Treasurer shall withhold 25% of state funding for that county or municipality until all monthly reports are current.

After 90 days, any funds held by the State Treasurer’s Office will be made available to the State Auditor to conduct an audit of the entity for the purpose of determining an amount due to the State Treasurer’s Office, if any.

4. Effective July 1, 2012, Section 89.59 authorizes the State Office of Victim Assistance to conduct an audit on any county treasurer, municipal treasurer, county clerk of court, magistrate, or municipal court that the State Auditor has determined has not properly allocated revenue generated from court fines, fines, and assessments to the crime victim funds or has not properly expended crime victim funds pursuant to State law. This proviso was amended from the version in last year’s Appropriations Act. I provide below the entire proviso which indicates by cross through the item deleted from the previous proviso and indicates by italics and underline the item added from the previous proviso.

89.59. (GP: Assessment Audit / Crime Victim Funds)  If the State Auditor finds that any county treasurer, municipal treasurer, county clerk of court, magistrate, or municipal court has not properly allocated revenue generated from court fines, fines, and assessments to the crime victim funds or has not properly expended crime victim funds, pursuant to Sections 14-1-206(B)(D), 14-1-207(B)(D), 14-1-208(B)(D), and 14-1-211(B) of the 1976 Code, the State Auditor shall notify the State Office of Victim Assistance. The State Office of Victim Assistance is authorized to conduct an audit which shall include both a programmatic review and financial audit of any entity or non-profit organization receiving victim assistance funding based on the referrals from the State Auditor or complaints of a specific nature received by the State Office of Victim Assistance to ensure that crime victim funds are expended in accordance with the law. Guidelines for the expenditure of these funds shall be developed by the Victim Services Coordinating Council. The Victim Services Coordinating Council shall develop these guidelines to ensure any expenditure which meets the parameters of Title 16, Chapter 3, Article 15 is an allowable expenditure. Any local entity or non-profit organization that receives funding from revenue generated from crime victim funds is required to submit their budget for the expenditure of these funds to the State Office of Victim Assistance within thirty days of the budget's approval by the governing body of the entity or non-profit organization. Failure to comply with this provision shall cause the State Office of Victim Assistance to initiate a programmatic review and a financial audit of the entity's or non-profit organization's expenditures of victim assistance funds. Additionally, the State Office of Victim Assistance will place the name of the non-compliant entity or non-profit organization on their website where it shall remain until such time as they are in compliance with the terms of this proviso. Any entity or non-profit organization receiving victim assistance funding must cooperate and provide expenditure/program data requested by the State Office of Victim Assistance. If the State Office of Victim Assistance finds an error, the entity or non-profit organization has ninety days to rectify the error. An error constitutes an entity or non-profit organization spending victim assistance funding on unauthorized items as determined by the State Office of Victims Assistance. If the entity or non-profit organization fails to cooperate with the programmatic review and financial audit or to rectify the error within ninety days, the State Office of Victim Assistance shall assess and collect a penalty in the amount of the unauthorized expenditure plus $1,500 against the entity or non-profit organization for improper expenditures. This penalty plus $1,500 must be paid within thirty days of the notification by the State Office of Victim Assistance to the entity or non-profit organization that they are in non-compliance with the provisions of this proviso. All penalties received by the State Office of Victim Assistance shall be credited to the General Fund of the State. If the penalty is not received by the State Office of Victim Assistance within thirty days of the notification, the political subdivision will deduct the amount of the penalty from the entity or non-profit organization's subsequent fiscal year appropriation.
5. Effective July 1, 2012, Section 76.12 of the Temporary Provisions of the 2012-2013 General Appropriations Act provides that the State Treasurer is directed and empowered to follow up on audit findings issued by the Office of State Auditor or any other independent audit involving the receipt or disbursement of State funds, or conduct additional audits or take other actions to ensure proper receipt and disbursement of State funds. This proviso is a new provision added to the General Appropriations Act. I provide the entire proviso below.

76.12. (TREAS: Audit Finding Follow-Up) The State Treasurer is directed and empowered to:  (a) follow up on audit findings issued by the Office of State Auditor, or any other independent audit involving the receipt or disbursement of state funds or achieving cost savings for the State or its agencies and institutions; (b) conduct additional audits or take other actions to ensure proper receipt and disbursement of state funds in accordance with legislative intent; and (c) contract for or conduct recovery audits designed to identify overpayments or erroneous payments to vendors. The Legislative Audit Council shall notify the State Treasurer's Office of any recommendations involving cost savings. The State Treasurer may recover any amounts due the State agencies or institutions by seeking refunds, withholding future payments or distributions, or by whatever other actions the State Treasurer deems appropriate. Such may include appropriate legal action on behalf of the State as the Attorney General may approve, and including the participation of the Attorney General in the litigation or the hiring of any attorneys being subject to the prior approval of the Attorney General. All entities disbursing or receiving state funds shall cooperate with the State Treasurer in these activities. The State Treasurer shall deposit any funds collected by this provision in a separate account to be appropriated by the General Assembly, unless otherwise provided for by law. The State Treasurer may retain and expend a portion of any funds received to pay for costs associated with the management and enforcement of this provision. The State Treasurer shall report annually to the General Assembly on its management activities and cost recoveries regarding this directive.

Copies of any of the legislation referenced above may be obtained by visiting the Legislative website at http://www.scstatehouse.gov.

The enclosed memorandum has been updated to reflect these amendments and discusses these changes in more detail. This memorandum supersedes prior memoranda from Court Administration on the collection and distribution of court generated revenue. It attempts to outline and explain the statutory procedures for collecting and distributing revenues in the circuit, family, magistrate, and municipal courts as well as the register of deeds. Examples of several of the distributions covered in the text of the memorandum appear in the attachments.

The actual distribution of revenue generated by the circuit, family, and magistrate courts is handled by the county treasurer in most cases. City treasurers disburse monies generated by the municipal courts. The treasurers are required to remit the funds to the State Treasurer monthly on such forms and in such manner as is required by him. The county treasurer can determine which funds should be transmitted to the State Treasurer by referring to the magistrates' remittance form which is included as "Attachment E." Since all counties are now on the SC Judicial Department’s Case Management System (CMS), you may find that Attachment E is no longer necessary as CMS has a comparable document. The city treasurer can determine which funds should be transmitted to the State Treasurer by referring to the municipal courts' remittance form which is included as "Attachment F." Again, for those cities that are on CMS, Attachment F may be unnecessary. Also, see “Attachment K” for a schedule of civil filing fees collected in magistrate’s court. Attachment L” includes a list of approved expenditures for victims’ funds. Also, examples of specific fines and applicable assessments/surcharges are included as “Attachment M.” A list of State parking laws exempt from assessments can be found at “Attachment N” of the enclosed memorandum. The recommended roadside bond list, which contains numerous crimes and offenses and applicable assessments, is found at “Attachment P.” Finally, “Attachment O” contains the judge’s total calculator. In this discussion of the distribution of funds, the general rule for each court is stated and followed by an explanation of the statutory exceptions for distribution. The outline which precedes the memorandum summarizes its contents. Please note in the memorandum specific time guidelines pertaining to the transmittal of these revenues. Strict, prompt adherence to the reporting guidelines is required.

Please provide copies of this memorandum to all members of your staff whose duties relate to the collection or distribution of court revenues. If you or your staff has any questions concerning the collection or distribution of revenue, do not hesitate to contact this office.