by Timothy McQuiston Vermont Business Magazine Vermont State Auditor Doug Hoffer released an audit today on fees owed the state by criminal defendants using public defenders. Not only have state courts collected less than a third of what is owed, the courts are not trying hard enough to collect the fees either at the time of the initial assessment, nor later through common means like garnishing income tax refunds. “We found that the State’s processes to collect court-ordered payments are not effective,” Hoffer wrote in his report to the Legislature. “The State has collected less than a third of the $3.1 million in court-ordered assessments for public defender services due between January 1, 2012 and December 31, 2014.”
The money owed just disappears. About $7 million in public defender fees that remained uncollected and referred to DOT were excluded from the State’s accounts receivable balance at the end of the fiscal year.
Doug Hoffer
Hoffer said the courts have been remiss by not applying all available remedies for pursuing payment of outstanding fees for public defender services. In particular, the surest method available for increasing collection of fees — obtaining payments at the time fees are assessed from defendants that can afford it — has not been frequently utilized. Additionally, the courts did not utilize all collection methods available to them in statute or as recommended by the State’s internal control guidance, or ensure that all eligible debt is referred for tax refund offset.
Moreover, the Judiciary removed outstanding public defender fee debt from their records once this debt was referred to the Department of Taxes for offset against personal income tax refunds and homestead property tax income sensitivity adjustments. As a result, the Judiciary ceased all efforts to collect these debts and they were not recorded as accounts receivable in the State’s financial records.
“More aggressive action on the part of the Judiciary,” Hoffer said, “could result in more effective collection of public defender fee debt. We make several recommendations to the Judiciary to enhance its efforts to collect court-ordered payments for public defender fees.”
In a terse rebuttal to the audit, the Judiciary said the defendants typically do not have the means to pay, that there is not a practical system to collect money upfront in the courts themselves, and that the courts, that the Department of Taxes do not have relationship to ensure that either party follows up on the collections, and that denial of a public defender would be unconstitutional.
“While the State Auditor’s report acknowledges the Judiciary’s concern regarding enforcement of the statutory provision… we believe the significance of the concern has been marginalized. The ramifications of denying counsel for nonpayment of a public defender fee are significant. To characterize this as a simple “constraint” is a serious understatement,” wrote Patricia Gabel, State Court Administrator and the Honorable Brian Grearson, Chief Superior Judge.
“To insist on payment before of counsel will have a deleterious effect on the existing assigned counsel process in Vermont. In considering the options under the current states, unless the individual report that they have the $50.00 co-payment in their possession at the time of the assignment, the court has no choice but to assign counsel with an order of reimbursement.”
“Given the correlation between the collecting rate and the financial circumstances of the individuals subject to the fees, it is disingenuous to suggest that the lack of collections is due entirely to a lack of effort on the part of the Judiciary.”
The court officers also said that the Auditor’s recommendations would require staff time and cost, which are already in short supply.
They also noted that hunting down social security numbers and even garnishing tax refunds can be futile, given that indigent defendants sometimes don’t have a Social Security card on them and often don’t even file taxes.
In response to the court officers, Hoffer wrote that it was the Judiciary that was setting the fees on what the defendant could afford in the first place.
He also said: “We took the Judiciary’s concerns about constitutionality into account in the wording of our first recommendation, which emphasizes the need for the Judiciary to make greater efforts to collect at time of arraignment but does not link payment to assignment of counsel. If the Judiciary believes that the language of the Vermont statute is unconstitutional, they should address their concerns to the Legislature.”
In conclusion, Hoffer said the law requires the Judiciary to take responsibility for not only the assessment of the fees but the collecting of them and that it is Judiciary’s responsibility to make arrangements to ensure the accounting for receivables.
The sixth amendment to the US Constitution guarantees that criminal defendants have the assistance of counsel regardless of the defendant’s ability to pay. Since 1872, Vermont has recognized its responsibility to indigent defendants to provide counsel at the expense of the state. 13 V.S.A. §5231 states that a needy person who is detained without charge or who is charged with having committed a serious crime is entitled to be represented by an attorney, to be provided at public expense to the extent that the person is unable to provide for payment without undue hardship.
Parameters specified in statute help Vermont’s 14 Superior Courts determine the amount, if any, that indigent defendants are capable of paying for public defender services. The Judiciary’s Office of the Court Administrator provides administrative staff support to the courts to assist in the overall management of the court system, including calculating, assessing, and collecting public defender fees, which are intended to offset some of the cost of those services. At the courts’ discretion, fees may be waived. For the most part, those that can pay have been assessed a minimum of $50 for the services of a public defender, as required by statute.
If the courts find that a defendant has the means, the statute states that the courts are to seek an immediate payment of a portion of the public defender fee—called a co-payment—with any remaining amount to be paid within 60 days. This authority was infrequently utilized by the three Superior Courts we visited, thereby overlooking the most effective way to ensure collection. Court operations managers could not explain why up-front co-payments were not collected before public defender services were provided, as described in statute. One constraint is the Judiciary’s concern over the constitutionality of the statute. According to the Court Administrator, a review by the Judiciary’s general counsel concluded that the enforcement of the statute that makes the assignment of counsel contingent on a prior payment of a co-payment raises serious constitutional concerns.
Once the debt is established the courts do not actively pursue collection from debtors. The Judiciary only (1) provides the defendant with the amount and due date of the fee and (2) submits overdue debt to the Department of Taxes (DOT) for offset against personal income tax refunds and homestead property tax income sensitivity adjustments.
The Judiciary does not employ other collection methods for overdue public defender fees that it uses for other types of debt, such as referral to collection agencies. Moreover, 6 percent (about $195,000) of the overdue debt was not included in the annual referral process to DOT because the records either lacked social security numbers — key to the ability of DOT to conduct a tax refund offset — or were debts from prior periods that the Judiciary’s process did not ensure were included.
Lastly, once the debt is referred to DOT, the Judiciary adjusts the defendant’s record to show $0 due, thereby removing the debt from the Judiciary’s records. As a result, the Judiciary 1) makes no further effort to collect this debt, and 2) no longer records this debt as a receivable. Among the reasons cited by the Chief of Finance and Administration for removing outstanding debt from the Judiciary’s records is that DOT does not return the revenue to the Judiciary nor does it provide data on the results of its offset efforts. While this reflects the Judiciary’s current practices regarding public defender fee debts, the Judiciary does not treat other types of debt owed to another part of its organization in this manner, instead continuing to seek collection of debt that is also referred to DOT.
Public Defense
For purposes of assigning a public defender, 13 V.S.A. §5201 defines a needy person as someone who is financially unable, without undue hardship, to provide for the full payment of an attorney and other necessary expenses of representation. Determination of need is based on written certification by the person when an application is completed for public defender services, subject to the penalties for perjury.
Clerks at the Superior Courts, or other judicial officers of the courts, make the determination of need by relying on self-attested data from defendants and may consider such factors as income, property owned, outstanding obligations, and the number and ages of dependents. The clerks initially determine the amount to be paid using public defender payment tables. The tables provide guidance on the amount to be charged based on the type of case, income as a percentage of the federal poverty level, and the number of dependents. If the income of the person is at or above 125 percent of the federal poverty level, the defendant must pay a percentage of the average direct cost per case. At 200 percent of the federal poverty level, the defendant must pay all of the average direct cost per case. 13 V.S.A. §5238 states that any needy person assigned counsel is to pay a minimum payment of $50, unless financially unable to pay.
Applications for public defender services are reviewed by judges, who make the final determination of whether such services are granted or denied. The judge signs a public defender order that includes the amount the defendant is to pay. Defendants can submit revised applications to request changes to this order to reduce the amount to be reimbursed.
Amounts collected for public defender fees are recorded in the Public Defender Special Fund in accordance with 13 V.S.A. §5239(a). The Office of the Defender General has the responsibility to assure that persons entitled to appointed counsel receive effective legal advocacy. The Public Defender Special Fund is used to offset the cost of the Office of the Defender General.
The ability of an agency to collect its debts will generally decrease as the debts become older. The relationship between increased collections and requiring up-front payment was stressed in a 2001 report of a Vermont Indigent Defense Task Force.
According to Vermont law, the amount ordered to pay for public defender services by defendants upon whom a fee is assessed is to be divided between an up-front payment, called a co-payment, and an amount to be paid within 60 days, called a reimbursement. If the court finds that a person has income or assets to enable immediate payment of a co-payment, the statute states that the assignment of counsel is to be contingent upon the prior payment of the co-payment. Alternatively, the court has the authority to waive the fee altogether if it determines that the defendant does not have the financial means to pay. In a November 24, 2015 e-mail, the Judiciary’s legal counsel was quoted as saying that the statute appears to assume that there should be immediate payment of the up-front co-payment so that subsequent collection efforts would be unnecessary.
The Judiciary’s application for public defender services includes a section in which the clerk, or designee, records the amount due and whether it is an immediate co-payment or reimbursement. This results in a public defender order in which the applicant is told whether he has been assigned a public defender and how much is due immediately versus to be reimbursed within 60 days.
“At the three courts we visited (Chittenden, Orleans, and Windsor),” Hoffer said in the report, “the Court Operations Managers (COMs) and clerks indicated that up-front co-payments are collected infrequently. Instead, these courts were generally recording the amount in the courts’ case management system as being due 60 days from the date of the public defender order. This practice likely contributes to only 13 percent of assessed public defender fees having been collected by the courts for fees due in calendar years 2012 through 2014.
“The COMs could not explain why up-front co-payments were not collected before public defender services were provided, as described in statute. One constraint is the Judiciary’s concern over the constitutionality of the statute. According to the Court Administrator, a review by the Judiciary’s general counsel concluded that the enforcement of the statute that makes the assignment of counsel contingent on a prior payment of a co-payment raises serious constitutional concerns.
“Nevertheless, additional focus on collecting public defender fees up-front could improve the rate of collection of these fees. In particular, while the Judiciary’s internal procedures pertaining to the assignment of public defenders address the application process, determining whether a defendant is needy, and assessing the amount to be reimbursed, these procedures do not address collecting an up-front co-payment, when applicable under Vermont statute. Instead, the procedures only include instructions on how to record payments made at the time a public defender counsel is assigned.”
Once the unpaid debts are referred to DOT, the Judiciary’s RIS analyst adjusts the individual’s case management record to show that the payment due for public defender services is $0. In this manner, the outstanding debt is removed from the Judiciary’s records.
According to the Judiciary’s Chief of Finance and Administration, removing defendants’ debt from its records is appropriate, because:
- revenues collected by DOT via the income tax refund offset process are not returned to the Judiciary (i.e., DOT records the applicable entry into the State’s financial system),
- DOT does not provide the Judiciary with data on the accounts in which the tax refund was offset so it does not have the information to continue to try to collect outstanding debt, and
- the annual transfer of records to DOT is akin to “selling” these debts to this department.
While the first two points reflect the Judiciary’s current practices regarding public defender fee debts, it is inconsistent with the Judiciary’s practices pertaining to other debt referred to DOT. Specifically, when the Judiciary refers debts from the Judicial Bureau to DOT for tax refund offset, it does not reduce those debts to $0. Instead, Judiciary personnel input amounts that have been collected through the tax refund offset process after receiving notification by DOT of the offset amount. Additionally, the Judicial Bureau continues to attempt to collect these debts. These same practices could be applied to public defender fee debts. Regarding the chief’s statement that the Judiciary’s current practice is akin to “selling” the debts to DOT, there is no written agreement between the two organizations that transfers responsibility for overall debt collection from the Judiciary to DOT.
Moreover, the Judiciary chief’s reasoning does not address why public defender debt has to be treated differently than that of other debt sent to DOT for tax refund offset. Treating public defender debt referred to DOT in the current manner has two negative consequences.
First, no further collection efforts are made by the courts on the referred debt. Indeed, any subsequent payments from defendants on amounts that have been referred to the tax department are either forwarded to DOT from the court or refused by the court with instructions given to the defendant to pay DOT.
Second, about $7 million in public defender fees that remained uncollected and referred to DOT were excluded from the State’s accounts receivable balance at the end of the fiscal year.
Collections & Recommendations
Hoffer makes several recommendations to both the courts and the Department of Taxes in order to collect what he believes would be a much greater percentage of fees owed.
1) Modify the Judiciary’s internal procedures on the assignment of public defenders to emphasize the need to collect up-front payments at the time of arraignment whenever possible.
2) Actively engage in efforts to collect accounts that are past due, such as:
- Sending out a bill to overdue accounts,
- Using a collection agency,
- Assessing an additional fee in accordance with the procedures outlined in 13 V.S.A. §7180, and
- Reporting overdue debt to a credit bureau
3) Modify the public defender order to include language that there will be additional fees assessed for additional collection actions, such as referring to DOT for tax refund offset.
4) Consider implementing additional procedures to ensure that social security numbers are obtained from defendants and validated.
5) Update the instructions provided to Superior Court staff to ensure that the annual transmittal of records to DOT includes previous periods.
6) Cease the process of removing public defender debt from the court’s records once it has been referred to DOT for tax refund offset and continue to attempt to collect these debts.
7) Ensure that all outstanding public defender fees are included as accounts receivable in the State’s financial system.
Source: Vermont Auditor of Accounts. 1.25.2016