Analysis by IME: Management and Budget of the Judiciary

15.06.2016
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Between the years 2000 and 2016 the budget of the judiciary has increased 5.5 times compared with a threefold increase of the state budget for the same period. At the same time Bulgaria ranks second in terms of the number of magistrates per capita among all EU member states.  

These statistics have provoked the Institute for Market Economics to produce an analysis of the budget and overall resource management of the judiciary. The aim of this analysis is to determine the effectiveness of resource management in the judiciary and also the transparency and rationality of the budgeting process.

The analysis unveils a number of serious problems both in the management of resources in the judiciary and in the process of budget drafting, implementation, and reporting.

Resource management in the judiciary

Ninety percent of the budget of the judicial power consists of payroll expenses. Therefore, the question whether human resources are efficiently managed remains central to the issue of spending.

Data clearly show that Bulgaria ranks fourth in the European Union in terms of the number of judges per capita, and heads the ranking according to the number of prosecutors. Furthermore, the number of judges exhibits a clear upward trend, in contrast to the stable decline of the population. For a period of eight years, between 2007 and 2014, the number of judges increased by 19 percent, whereas the population of the country decreased by 5 percent.

In addition, the workload of different courts throughout the country remains rather unbalanced. On the one hand, some of the regional courts in district centers are characterized by excessive workload, but these constitute only 3 percent of all regional courts in the country. On the other, around 76 percent of all regional courts qualify as courts with relatively low workload. Such courts are also the courts of appeal and 23 district courts. Among the district courts, only the Sofia City Court features high workload. The situation with administrative courts is pretty similar – in 11 of them, the workload is less than 10 cases per judge per month, which is almost twice lower than the country average.

In other words, some magistrates and administrative staff work between 3 and 5 times more compared to others. This shows unbalanced distribution of human resources, as well as ineffective and inexpedient management of financial resources in the system.

The long-expected index of judges’ workload, the application of which is expected to start in April 2016, must be used for a serious reform and optimization of the court system. A reasonable reform would include the transfer of staff from courts with low workload to courts with excessive workload, as well as the merger or closure of courts with low workload. This would also cut administrative spending for courts with low workload.

An administrative reform in the judiciary would not be complete without addressing the prosecution. Bulgaria ranks first in the European Union in terms of prosecutors per capita. This high payroll of the prosecution is hardly justified, considering data of the Council of Europe which show that the Bulgarian prosecution has a relatively low workload in comparison to other European prosecutions. For example, in Finland there were 425 000 registered crimes and 402 prosecutors in 2012, whereas Bulgaria reported 120 000 registered crimes and 1 977 prosecutors (including 512 investigators) for the same year. It remains a mystery what is the reason for Bulgaria to have 3.5 times more prosecutors than Finland with 4 times less registered crimes.

The administration of the Bulgarian prosecution is also the largest in the European Union. Part of this administration must be cut and this measure should be combined with a moratorium on all new appointments in the prosecution and closure of all vacant positions in the administration. Regional prosecutions with up to 5 prosecutors do not need to maintain full administrative staff. Instead, several of these could share one and the same general administration. 

There is also room for improvement in the system of remunerations. Unlike the government administration, the judicial system continues to enjoy annual salary increases for every year of service. This additional payment thanks solely to one’s stay in the system should be put an end to by its one-off inclusion in the basic salary. At the same time, additional payments should be connected to the workload and the risk pertaining to the position or the magistrate’s workplace.

Budgeting process

The budgeting process suffers from a number of deficiencies, too. Firstly, the budget of the judicial branch continues to be prepared following a historical approach instead of program budgeting in accordance with clear goals and plan which should be financially provided for. In other words, what was spent last year is mechanically copied for the following year. A small increase of the budget is typically foreseen, too.

This practice should be discontinued and replaced by genuine program budgeting in the judicial power. For this purpose, however, indexes of the workload of both magistrates and administrative staff should be first introduced. Currently, the Supreme Judicial Council does not avail of an in-depth analysis which would show the time needed for each activity of the judiciary, the number of staff necessary to secure the performance of these activities, the degree of efficiency in the execution of these activities, etc.

An up-to-date and comprehensive analysis on the technical needs of the judiciary has not been carried out either. Such an analysis would show the judiciary’s expenditure on software, hardware and technical maintenance, as well as the extent to which current software and hardware systems meet the needs of the judicial power. At present, the judiciary is serviced by four different file-keeping systems. Neither the SJC, nor the society in general is aware of the number of man-hours lost due to the usage of different systems or the exact contribution of this specific factor to the slow judicial process.

No thorough analysis of the state of the buildings used by the judiciary, or the cost of their maintenance has been made either. The lack of such an analysis shows that neither the Ministry of Justice, nor the SJC can set adequate budgetary goals for the maintenance of the buildings used by the judicial institutions.

Another substantial aspect of the budgeting process in the judicial branch is its transparency, including the participation of the civil society in the budget debate. At present, this process is characterized by a complete lack of transparency, while the budget of the judiciary is not subject to any discussion or coordination with the civil society. The budget draft is not publicly available at any stage of its preparation; it becomes known only with the publication of the state budget bill.

The lack of transparency applies not only to the process of drafting the budget, but also to its implementation. Currently, the data on budget implementation that are publicly available unveil only the main items on the expenditure and revenue side. For example, anyone interested can find information on the payroll for the entire system, but not on how much money for salaries is allocated to a certain court or prosecution. This places significant barriers to any sort of analysis and hinders the adequate participation of civil society in the budgetary debates.

The management of the budget throughout the year also suffers from a number of bottlenecks. Dozens of budget corrections (i.e. revisions), which redirect financial resources from one judicial body to another, are made in the course of the year. One of the reasons for those changes is the glaring imbalance in the workload of the different parts of the system, as well as the lack of any analysis of the staff needed in each court and prosecution, which requires frequent business trips for magistrates from one institution to another.

These budget corrections are made weekly and are also a substantial part of the duties of SJC and its administration. Furthermore, it is inefficient for magistrates with more than 15 years of practice to handle revisions of the budgets of judicial bodies, including issues such as the purchase of new hardware or other operational decisions. A possible solution to this problem would be the appointment of a “Financial Officer” or an “Administrator of the Judiciary” with the needed qualifications, who is elected by and held accountable to the SJC.

Budget reporting in the judiciary also exhibits certain malpractices. Perhaps the most damaging one is the practice of budgetary reporting against a so-called “specified yearly plan”. This plan is a correction of the budget of the judiciary for the previous year which is made in the beginning of the next year. For example, the specified yearly plan for 2015 is adopted in the beginning of 2016. By doing this, the judiciary creates the false impression in society for a very good implementation of its budget, but in reality its expenditures typically surpass substantially the original budget.

In general, IME’s study tries to pinpoint some of the main problems in the financial management of the judicial power, while also putting forward possible solutions that can be borrowed from the practice of other European countries and the United States. The study in no way makes any pretense of completeness, but we believe that it gives a good starting point for debate on the most pressing administrative and financial reforms in the judiciary.