The U.S. Department of Justice (DOJ), Office of the Inspector General, Audit Division has completed an audit of the use of DOJ equitable sharing revenues by the Detroit Police Department (Detroit PD). Equitable sharing revenues represent a share of the proceeds from the forfeiture of assets seized in the course of certain criminal investigations.1 During the period of July 1, 2004, through October 30, 2007, the Detroit PD was awarded DOJ equitable sharing revenues totaling $1,308,817 to support law enforcement operations>.
The Detroit PD generally complied with equitable sharing guidelines with respect to accounting for equitable sharing receipts, interest earned on equitable sharing funds, and supplanting. We also confirmed that the Detroit PD did not receive any equitably shared property. However, we found weaknesses related to the Detroit PD’s Federal Annual Certification Reports, its tracking and reconciliation of sharing requests, and its use of equitable sharing revenues. Our findings include:
The Detroit PD has not complied with equitable sharing guidelines recommending the use of federal equitable sharing funds within a 2‑year period. As a result, the Detroit PD has accumulated and not spent $5,168,636 over the past 10 years. We believe these funds could have been utilized to enhance law enforcement capabilities.
Pursuant to a July 2003 consent decree, the Detroit PD purchased 4,000 batons for its police officers in July 2005 at a cost of $289,200.2 While initially required to equip all officers within a 2‑year period ending July 2006, as of November 2007 only 904 batons had been issued and the remaining 3,096 batons have been stored in a warehouse for the past 2.5 years. Although the due date for compliance with the consent decree has been extended to July 2009, at the current rate of issuance, it will take at least 5 years before all officers are properly trained and issued a baton. In our opinion, the Detroit PD will not be able to meet its current revised due date for full departmental compliance with the consent decree.
The Federal Annual Certification Reports for fiscal year (FY) 2005 through FY 2007 contained reporting errors. Specifically, the Detroit PD did not account for DOJ revenue separate from other sources. Additionally, we were unable to reconcile the interest income reported on the Federal Annual Certification Reports for FYs 2005 and 2006 to the Detroit PD annual accounting records because the interest income was incorrectly posted to the subsequent year. Further, because the forfeiture fund bank account commingled revenue from federal, state, and local forfeitures, the posting of 2005 federal interest was understated by $7,829, and the posting of 2006 federal interest was understated by $129,721. The Detroit PD subsequently prepared correcting journal entries to reflect interest earned in the correct amount and year and placed the federal forfeiture funds in a separate bank account. Finally, FYs 2005, 2006, and 2007 reports were filed 373, 1, and 6 days late, respectively.
The equitable sharing guidelines require that the receiving entity specify the intended purpose of the funds requested. The Detroit PD used the same generic statement in each of its DAG‑71s that funds would be used “for law enforcement purposes.” We do not believe that this statement is specific enough. In our opinion, the lack of details regarding the use of funds creates the opportunity that funds will be used for impermissible purposes and that any misuse would not be detected in a timely manner, if at all.
Under OMB Circular A-133, the city of Detroit was required to have an annual Single Audit. However, the most recent Single Audit available was for FY 2004, and we noted that it did not include the Asset Forfeiture Fund. Additionally, an open FY 2007 program review of the Detroit PD’s Equitable Sharing Fund by the city of Detroit noted numerous material internal control weaknesses.
Our report contains nine recommendations to address the weaknesses we identified, which are discussed in detail in the Findings and Recommendations Section of the report. Our audit objective, scope, and methodology appear in Appendix I of the report. We discussed the results of our audit with Detroit PD officials, and we included their comments in the report, as applicable. In addition, we provided our draft audit report to the Detroit PD and the DOJ Criminal Division and received written comments. These comments have been appended to our report along with our analysis of the responses.
The DOJ asset forfeiture program has three primary goals: (1) to punish and deter criminal activity by depriving criminals of property used or acquired through illegal activities; (2) to enhance cooperation among foreign, federal, state, and local law enforcement agencies through equitable sharing of assets recovered through this program; and, as a by-product, (3) to produce revenues to enhance forfeitures and strengthen law enforcement.
A consent decree is a judicial order that expresses a voluntary agreement by the participants in a suit, especially an agreement by a defendant to cease activities alleged by the government to be illegal in return for an end to the charges. The consent decree in question is between DOJ and the Detroit PD and, among other conditions, stipulated that the Detroit PD provide an intermediate force option for its officers. The Detroit PD agreed to do so by purchasing and issuing batons.