The Department of Justice (DOJ) describes human trafficking as a form of “modern-day slavery.” According to the DOJ, trafficking victims are predominantly women and children who are lured into prostitution, domestic servitude or other forms of exploitative labor in the United States by traffickers who promise those victims the prospects of a better life.

In 2000, Congress enacted the Trafficking Victims Protection Act, which authorized the provision of a number of benefits and services now available to trafficking victims. Under this legislation, in fiscal year (FY) 2003, the Office for Victims of Crime (OVC) made its first award under the Services for Human Trafficking Victims Discretionary Grant Program (the Program). The Program supports the development or enhancement of victim service programs for alien victims trafficked into or within the United States who require emergency services. Victim services may include shelter, case management, interpretation, medical care, dental care, crisis counseling, legal/immigration assistance, criminal justice system advocacy, job training, and transportation.

Program awardees provide victims of sex and labor trafficking with comprehensive or specialized services in locations throughout the nation. The Program’s goal is to develop, expand, and strengthen victim services during the precertification period for persons who have been identified by law enforcement as victims of severe forms of human trafficking. The precertification period is the period after trafficking victims are initially identified by law enforcement and before they are officially certified by the federal government as such.

The Office of the Inspector General, Audit Division has completed an audit of Cooperative Agreement number 2004-VT-BX-K010, awarded by OVC to Refugee Women’s Network, Inc. (RWN), in Decatur, Georgia. A national nonprofit organization created in 1995, RWN seeks to address the special needs of refugee women by empowering refugee and immigrant women through leadership training, education, and advocacy. In addition to its programs, RWN created Tapestri, a unique program dedicated to ending domestic violence, sexual assault, and trafficking. In 2002, Tapestri became an independent organization providing its own services. The cooperative agreement award established RWN as the lead agency responsible for the project’s financial management, with Tapestri, the subgrantee, responsible for program implementation. Under the agreement, RWN draws down funds and passes the funds to Tapestri.

For this project, RWN received an initial award of $311,708 in July 2004 and a supplemental award of $221,250 in January 2006, for a total of $532,958. The initial award covered activities from July 1, 2004, through December 31, 2005. The supplemental award extended the performance period to June 30, 2007. As of March 15, 2007, RWN had requested and received reimbursement for $357,712 in expenditures.

We tested compliance with essential award conditions pertaining to accomplishments, reporting, fund drawdowns, budget management and control, program income, local matching requirements, expenditures, and monitoring of subrecipients. In addition, we tested the accounting records to determine if reimbursements claimed for costs under the awards were allowable, supported, and in accordance with applicable laws, regulations, guidelines, and the terms and conditions of the cooperative agreement. As noted below, we found material weaknesses in the areas of project goals, expenditures, and local match and identified $113,474 in dollar-related findings.

RWN and Tapestri are meeting three program goals to: (1) facilitate monthly meetings with federal and local authorities, service providers, and community agencies to develop a local collaborative network and facilitate a coordinated community response to trafficking; (2) perform outreach, such as interviews on ethnic radio and articles in ethnic newspapers, to refugee and immigrant communities through a minimum of 20 outreach activities each year; and (3) organize and facilitate training each year for 500 law enforcement and other criminal justice personnel, service providers, refugee and immigrant agencies, health care providers, and community members to educate them about rights and needs of victims of trafficking. However, RWN and Tapestri apparently will not accomplish two goals related to the number of victims planned to be served. Also, we identified weaknesses in local match requirements, expenditures, and accounting practices. Each weakness we identified is summarized as follows.

• Two of the goals pertained to RWN and Tapestri providing direct services and advocacy to 99 victims of human trafficking during the precertification phase, during the 3-year award period. Between July 2004 and March 15, 2007, RWN and Tapestri served 21 potential human trafficking victims.

• Local match transactions totaling $10,229 were unsupported. RWN and Tapestri provided insufficient documentation, duplicated match supporting documentation, and pro-bono attorney fees donated for clients of other programs administered by Tapestri.

• RWN claimed $6,450 paid for Tapestri’s annual financial audit. The Office of Justice Programs Financial Guide states that audit costs for audits not required or performed in accordance with Office of Management and Budget Circular A-133 are unallowable.

• RWN claimed $875 for insurance expenditures not approved in the budget.

• RWN overcharged $8,463 in salaries. RWN claimed reimbursement for salary cost reported also as local match contribution.

• We identified some weaknesses in the system of accounting and internal controls regarding the segregation of duties for financial transactions. The same person was responsible for approval of payment requests, preparation of checks, signature of the checks, and was involved in the preparation of Financial Status Reports.

We made six recommendations to address these concerns.