The Drug Enforcement Administrationís Handling of Cash Seizures

Audit Report 07-06
January 2007
Office of the Inspector General


Appendix XI
DEAís Response to the Draft Audit Report


The text in this Appendix was prepared by the auditee and uncorrected by the OIG.

MEMORANDUM

 
TO:  Guy K. Zimmerman
Assistant Inspector General for Audit
Office of the Inspector General
 
FROM:  Gary W. Oetjen, Deputy Chief Inspector
Office of Inspections
Inspection Division
 
SUBJECT:  DEAís Response to the OIGís Draft Report:  Audit of the Drug Enforcement Administrationís Handling of Cash Seizures
 

The Drug Enforcement Administration (DEA) has reviewed the Department of Justice, Office of the Inspector General’s (OIG) draft audit report, entitled Audit of the DEA’s Handling of Cash Seizures. We appreciate the opportunity to provide comments on the report and its recommendations.

DEA concurs with recommendations 1 through 6 resulting from this audit and will take steps to implement the recommendations or, where appropriate, explore alternatives to strengthen DEA’s High Value Seized and Recovered Monies program (HVSRM). The DEA does not concur with recommendation 7.

DEA regularly evaluates its programs and processes and responds internally to correct noted deficiencies. The OIG report even details DEA’s cyclical inspection process of Division offices which cover key program areas, including the handling of seized and recovered monies. Since Fiscal Year 2005, DEA’s Office of Inspections (IN) has inspected 5 domestic divisions and issued findings in the HVSRM program. IN also conducted 26 unannounced audits of the HVSRM program in January, August, and September 2006. An additional 6 offices received findings and 20 offices received on-site corrections. DEA is already in compliance with recommendation 7, as inspection procedures are already in place to ensure that controls for counting cash and transporting seized cash to the bank are done in a timely manner. The inspections process and procedures are also reviewed and updated as changes are made to existing DEA policy.

DEA Response to OIG Recommendations

Recommendation 1:  Clarify the policy on counting seized cash and clearly define the circumstances under which it is and is not required to count cash at the time of seizure.

DEA concurs with the recommendation. DEA is currently in the pilot phase of implementing procedures concerning the use of a self-sealing evidence envelope (SSEE). The SSEE is designed to self-authenticate the chain of custody and ensure that United States Currency (USC) is secured prior to an official bank count. Once the SSEE pilot program is completed, operational policy will change to state that DEA personnel will not count USC before placing the USC in the SSEE. The exception to this policy will be where DEA seizes USC in conjunction with state and local law enforcement agencies, wherein these agencies are required, by internal policy, to conduct an immediate count of the USC. In the event an unofficial count is conducted by DEA personnel, this will be noted in a DEA-6, Report of Investigation.

Recommendation 2:  Research best practices associated with timely transport of seized cash to banks, including those in several DEA offices that timely transfer cash to banks, and implement those practices as widely as possible.

DEA concurs with the recommendation. Operational policy will be developed requiring that arrangements be made to transport seized cash to the bank within two-working days of the seizure, unless the seizing office has established protocol, e.g., regularly scheduled appointments, with a financial institution to count seized cash.

Recommendation 3:  Ensure that seized cash is wire-transferred to the USMS whenever possible.

DEA concurs with the recommendation. DEA is currently in the pilot phase of implementing new procedures requiring all USC seizures be wire transferred to the United States Marshals Service (USMS) Seized Assets Deposit Fund (SADF). Once this program is approved, policy will dictate that DEA will electronically deposit USC seizures into the USMS SADF, via an Electronic Funds Transfer.

Recommendation 4:  Issue to all staff involved in cash seizure activities periodic reminders of the internal controls to be followed and documented, including: 

DEA concurs with the recommendation. IN conducted an inspection of the seized and recovered monies program in FY 2006 and found similar issues consistent with this OIG recommendation. IN has been in discussion with the Office of Training and OM to issue reminders of internal controls procedures to be followed relative to the HVSRM program. OM will coordinate with the Office of Training to incorporate this instruction in Basic Agent Training, Advanced Agent Training, Basic Asset Forfeiture Training, Financial Investigations Seminar, Money Laundering Seminar, Basic Asset Forfeiture Contractor, Advanced Asset Forfeiture Contractor, Headquarters Asset Forfeiture Contractor, Group Supervisor Institute, and Supervisor In-Service Program.

Recommendation 5:  Instruct DEA staff who supervise cash handling activities to monitor documentation such as the Report of Investigation (DEA-6) and other cash handling forms completed by agents to ensure the forms are sufficiently detailed to show cash handling controls are followed. In addition, instruct the supervisors to ensure that the required forms are maintained in the case files.

DEA concurs with the recommendation. The Agents Manual subchapter 6654 was recently revised to include that a detailed description of surrounding circumstances be included in the custody of evidence section of all reports. OM will coordinate with the Office of Training to incorporate this instruction in the Group Supervisor Institute curriculum.

Recommendation 6:  Identify all evidence custodians who have not attended the DEA’s comprehensive classroom training course that includes training on cash handling controls. Ensure these custodians receive the appropriate training.

DEA concurs with this recommendation. Policy will state that all Evidence Custodians must attend the formal training provided by the Office of Training (TR). Section 6681 has already been revised to incorporate this language and should be approved and published within the next 30 days. In addition, OM will advise TR to revise the invitational teletype stating that this training is mandatory for all evidence custodians.

Recommendation 7:  After the DEA clarifies its policies on counting cash and implements best practices for timely transferring cash to banks, ensure that inspection procedures are revised to include steps to measure DEA’s implementation of the controls established for counting cash and for transporting seized cash to the bank in a timely manner.

DEA does not concur with this recommendation. The Office of Inspections (IN) currently conducts a comprehensive review of the Seized Monies program. As part of this review, IN utilizes inspection checklists that reflect current DEA policies and procedures at the time of its review. As policy changes occur, checklists are updated to reflect said changes, thus measuring overall compliance to program. Based on established DEA policy and the information provided herein, DEA is in compliance with this recommendation and requests that it be closed.

DEA will continue to keep OIG apprised of its actions to implement the report’s remaining recommendations. If you have any questions regarding this information, please contact Janice Hewitt, Audit Liaison, at 202-307-5411.



« Previous Table of Contents Next »