I have several child homicide and serious injury cases where detectives interview a suspect for hours on videotape, in Spanish. The cost of
paying an interpreter to translate and transcribe the interviews is unbelievable. One 13 hour interview cost over $17,000. After that one, I'm having to get estimates from interpreters and got an idea from one that I think might work. So I wondered if you'd heard of doing it this way, or if someone from your office had even done it.

Here it is: The interpreter listens to a videotaped Spanish interview and dictates the English translation onto a tape. Then our office's court reporter takes the English tape and types up an English transcript. Then the interpreter reviews the English transcript, compares it to the Spanish interview, and certifies that the transcript is a true and correct translation from Spanish to English.

Have you done this before? Or is there some other way your office does it?

Do you know of any reason why this would not work? Any help or advice would be appreciated.

Whether it would "work" or not depends, I think, on what you want to do with it. If it is just for your purposes in-house, then you can, of course, handle it however you want. The real test is whether you can use your translation in court, and I would guess at that point you would either have to have the court-approved translator od it real-time int he courtroom or have them listen to the tape and affirm that your translation is accurate before you could present it to a jury.
See Garza v. State, 996//276(Dallas 1999)
"When a tape recording of a conversation in a foreign language is admitted into evidence, the situation is analogous to when a non-English speaking witness testifies, and the safeguards of code of criminal procedure article 38.30 apply. See tex.Code Crim. Proc. Ann. art. 38.30(a) (Vernon Pamph.1999); Leal v. State, 782 S.W.2d 844, 849 (Tex.Crim.App.1989)."