Inspection of the Violent Crime Task Forces
in the Southern District of New York
Report Number I-2000-03

When EOUSA notified the United States Attorneys that VCTF funding was available, it stated that funds could only be used to provide additional support for new or existing violent crime task forces and that these funds were not available to pay for the direct expenses of the USAOs. Although the USAO expended VCTF funds to combat crime, our review found that the funds awarded to the USAO were not used to provide additional support for existing task forces or to establish new task forces. The USAO received approval from the EOUSA review committee to use the funds to develop computer capabilities to aid in its overall effort to fight violent crime - an objective outside the original funding criteria of the VCTF program but one the USAO believed to be a better use of the funds. In addition, the USAO was not aware that DEA's task force had ended and that DEA was expending funds for activities that were not in its original proposal. VCTF funds were not used by the FBI VCTFs because the costs were absorbed by the FBI.

ASIAN GANG VCTF ACCOMPLISHMENTS

The USAO submitted a proposal to EOUSA requesting funding to support an Asian Gang VCTF composed of the various agencies involved in investigating Asian violent crime. In March 1995, the USAO received $668,000 to accomplish this goal.

The USAO determined that because the situation described in its proposal had changed significantly,⁷ it did not need to use the VCTF funds for an Asian Gang task force. The USAO indicated it significantly reduced the Asian Gang threat in Chinatown and shifted its focus to the development of a photo-imaging system (PIMS). Thus, in January 1996, the USAO requested a transfer of all Asian Gang VCTF funds, except for $50,000 in overtime, stating that these funds could be better spent on the development of PIMS (see Table I).

The EOUSA recommended to the review committee that the USAO's request to use the Asian Gang VCTF funds for the development of PIMS be approved. The documents provided by the EOUSA to the review committee members, however, described the reprogramming request as equipment for a photo-imaging library and did not indicate that the PIMS was a network - a category that was not included in the funding criteria. The formal reprogramming request sent to the review committee referred to it as a photo-imaging library. The review committee subsequently approved the reprogramming request, which would provide all law enforcement agencies access to information on persons arrested in the New York City area. Although the USAO described its proposed project in various ways, i.e., as a photo-imaging library, photo-imaging system and photo-imaging network, EOUSA officials stated that they fully understood the type of project the USAO was proposing and believed it was a good use of the funds.

USAO Expanded Unified Asian Intelligence Database (UAID) into a Photo-Imaging System

From May 1995 through November 1995, the USAO developed the UAID, which contained approximately 2,000 entries on Asian gang members. In November, the USAO informed EOUSA that it planned to expand the database into a photo-imaging system. The USAO projected that PIMS would include approximately 500,000 photographs and biographical information on all New York City federal and local arrests, not just Asian gang or violent offenders, and would enable law enforcement agencies to access this information.

On January 22, 1996, the USAO requested a transfer of $618,000 -- all task force funds except $50,000 from the overtime budget category -- to develop the PIMS. The USAO requested to reprogram the funds to obtain additional computer equipment, software, and support services so that New York City law enforcement organizations could access the PIMS. The EOUSA review committee approved the USAO's request to reprogram $180,000 from rent, $150,000 from overtime, and $138,000 from support staff to computer equipment. Earlier, the USAO also requested funds be reprogrammed for the purchase of photographic equipment. EOUSA did not recommend that the request for photographic equipment be approved, and the review committee did not approve it because photographic equipment was considered to be investigative equipment, and therefore not an approved funding category.

Table I illustrates the APPROVED FUNDS, TRANSFERS, OBLIGATIONS, COSTS INCURRED, and DOLLARS REVIEWED. The AVAILABLE BALANCE is the sum of the APPROVED FUNDS and TRANSFERS categories less the OBLIGATIONS.

TABLE I - ASIAN GANG VCTF FUNDING
BUDGET CATEGORY	APPROVED FUNDS	TRANSFERS	OBLIGATIONS	COSTS INCURRED	DOLLARS REVIEWED	AVAILABLE BALANCE
Rent	$180,000	($180,000)	0	0	0	0
Overtime	$200,000	($150,000)	$ 22,582	$ 22,582	$ 22,582	$ 27,418
Support Staff	$138,000	($138,000)	0	0	0	0
Computer Equipment	$150,000	$468,000	$576,850	$576,850	$576,850	$ 41,150
Totals	$668,000	0	$599,432	$599,432	$599,432	$ 68,568*

Source: Approved task force budget, accounting records, and funding transfer documents.

* The EOUSA review committee approved a transfer of this amount to the Latin Kings VCTF.

The USAO provided PIMS workstations to the offices of the New York-New Jersey High Intensity Drug Trafficking Area (HIDTA), DEA, FBI, INS, USMS Eastern District, Manhattan District Attorney, and the NYPD. The PIMS workstations include "capture" or "retrieval" stations linking the New York City law enforcement community. Photographs and biographical data on arrestees are entered at capture stations at the NYPD booking stations and the USMS offices. At both capture and retrieval stations, investigators can retrieve arrest photographs and conduct investigative searches. The capture and retrieval stations are linked through a server at HIDTA headquarters.

The USAO appointed an AUSA to oversee the development and implementation of the PIMS.⁸ At the time of our review, the PIMS was fully operational, and this AUSA stated that the system contained data on approximately 600,000 persons arrested in the New York City area. Representatives of the USAO, FBI, and NYPD told us that the PIMS is a useful system.

In December 1996, the USAO reported to EOUSA that the PIMS had increased the success rate in identifying violent criminals. According to the USAO, the success rate using "mug shot books" was 12 percent. The USAO reported that the PIMS increased the identification success rate to 30 percent. We could not verify the success rates of the "mug shot book" or the PIMS because USAO officials could not provide us with documentation to support reported rates of identification.

PIMS Does Not Meet Funding Criteria

The EOUSA review committee's original funding criteria excluded computer networks. A review of the original proposals showed that five other USAOs submitted proposals to develop computer networks, one of which was very similar to the PIMS, but these proposals were not funded. We also reviewed 111 reprogramming requests from other USAOs. These USAOs requested movement of VCTF funds among the approved funding categories, not for new projects. EOUSA consistently recommended approval for reprogramming requests that adhered to the criteria and recommended disapproval for those requests that did not comply.

We interviewed EOUSA officials and the review committee members to determine why they deviated from the criteria and approved the USAO's request to use the funds for PIMS. EOUSA officials told us that the VCTF funds were ultimately intended to help the USAOs with their missions, that the funding criteria were not compulsory, and that some decision-making discretion was necessary. EOUSA officials believed the proposed project was a good use of the funds, even though the EOUSA review committee's original funding criteria excluded computer networks.

The review committee members we interviewed, however, indicated that they believed EOUSA recommended approval for only those projects that met the funding criteria. The review committee members voted to approve the USAO's reprogramming request -- as EOUSA recommended -- but two of the five members that we interviewed stated that they would have questioned the use of the VCTF funds if the reprogramming request had been clear that the computer equipment was for the development of a network. Another committee member stated that, although task forces should not be penalized for advancing technology, the VCTF funds were allocated specifically for task forces comprised of sworn agents engaged in investigations. A fourth review committee member reiterated that he voted the way EOUSA recommended. The fifth review committee member told us the USAO may not have fully described the magnitude of the PIMS, but it was not particularly unusual for a task force to have a such a system, and that it was not necessarily an inappropriate use of the VCTF funds.

CONCLUSION

The USAO did not establish a VCTF for investigating Asian Gang violent crime. It shifted its original focus to the development of a photo-imaging system, which it believed was a better use of the funds. Our review of the system shows that PIMS is a network, similar to those proposed by other USAOs that were denied funding. The USAO, FBI, and NYPD viewed the PIMS as a useful law enforcement tool, and they believed that it has increased the success rate of federal, state, and local law enforcement personnel in identifying violent criminals. We did not challenge whether PIMS was a worthwhile project for the USAO, and we did not assess whether PIMS improved the USAO's efforts to fight violent crime. We believe, however, that the development of PIMS was outside the funding criteria of the VCTF program. Allowing the USAO to use VCTF funds for the PIMS was not consistent with other funding decisions made by the EOUSA review committee.

LATIN KINGS VCTF ACCOMPLISHMENTS

The USAO submitted a proposal to EOUSA requesting funds to formalize the Latin Kings VCTF by providing it with overtime funds, computer equipment, and support staff. In March 1995, EOUSA approved the USAO's proposal.

We found that the USAO did not formalize the Latin Kings VCTF or use the VCTF funds to support the task force's activities. According to the USAO Chief of Crime Control Strategies, most of the USAO's involvement with the Latin Kings VCTF concluded in December 1996, with prosecutions and convictions of the top leaders and members of the gang. USAO officials stated that because the Latin Kings gang had been dismantled at the federal level,⁹ they decided to pursue a project they believed would make better use of the VCTF funds. FBI officials, however, told us that there were ongoing Latin Kings investigations beyond December 1996, for which they requested overtime funding. In August 1997, the USAO requested to reprogram the majority of VCTF funds to develop a computer system that could track and map investigative information from all of its cases, not just Latin Kings cases.

USAO Denied the FBI Overtime Funding for Latin Kings Investigations

According to FBI officials, the FBI was the lead agency of the Latin Kings VCTF but did not control the funding, including $100,000 for overtime. These officials told us that in March 1997, the FBI requested Latin Kings VCTF overtime funding to pay the NYPD officers who worked surveillance on these cases. The USAO denied the FBI's request.

The FBI believed that the Latin Kings investigations it began in September 1996 warranted the use of VCTF overtime funds. FBI officials provided information that disclosed its investigative activities regarding the Latin Kings gang led to approximately 90 arrests in May 1998. The AUSA who worked with the FBI on the investigations stated that approximately 35 defendants from these arrests were being prosecuted by the USAO. Of those defendants, 21 were charged with conspiracy to commit assault in aid of racketeering and 4 were charged with conspiracy to commit murder. After the USAO denied the overtime request, the FBI sought overtime funds from another source. Because the investigations targeted gang members' criminal activity in federally subsidized housing, the Department of Housing and Urban Development paid $105,120 of overtime costs that were incurred between February and May 1998 for these investigations.

According to USAO officials, the case they recall the FBI requesting overtime funds for was not the same as the cases the FBI told us about. The USAO's Chief of Crime Control Strategies told us that the USAO denied the FBI's request for overtime funding because the USAO believed the FBI wanted to use the funds for its investigations and wiretaps for a Brooklyn District Attorney's office case. Based on the investigative information available in March 1997, the USAO determined that the case was a drug case and was too low level to reach the federal system; therefore, the USAO did not want to expend federal overtime funding to support the investigations.

USAO Developed a Case and Cooperator Mapping System

The original Latin Kings VCTF funding request included $6,000 for computer hardware and software and $40,000 for support staff (see Table II). These funds were to be used to create a database containing information gathered from task force participants about the Latin Kings and other gangs. After concluding that the Latin Kings gang had been dismantled at the federal level, the USAO requested approval to use the funds to expand the database and develop an investigative tool known as the Case and Cooperator Mapping System (CCMS). According to the USAO's Chief of Crime Control Strategies, the USAO was uniquely situated to obtain information on Latin Kings and other gangs. Therefore, the USAO proposed to design, maintain, and operate the database in its facilities.

In August 1997, the USAO requested the transfer of previously approved VCTF funds from the rent and overtime categories. It requested that all of the $72,000 from the rent category and half of the $100,000 from the overtime category be transferred to the support staff category to continue development of the CCMS. EOUSA and the review committee members approved the USAO's request to reprogram funds from the rent category, but disapproved the transfer from overtime. Later, EOUSA verbally approved the transfer of $40,000 in overtime funds to the computer equipment category. The review committee also approved transferring $68,568 from the Asian Gangs VCTF funding to the Latin Kings VCTF for support staff.¹⁰ The total amount of VCTF funds provided for the CCMS was $226,568.

TABLE II - LATIN KINGS VCTF FUNDING
BUDGET CATEGORY	APPROVED FUNDS	TRANSFERS	OBLIGATIONS	COSTS INCURRED	DOLLARS REVIEWED	AVAILABLE BALANCE
Rent	$ 72,000	($ 72,000)	0	0	0	0
Overtime	$100,000	($ 40,000)	$ 25,000	0	0	$ 35,000
Support Staff	$ 40,000	$140,568*	$173,159	$ 81,335	$ 78,135	$ 7,409
Computer Equipment	$ 6,000	$ 40,000**	$ 9,372	$ 9,372	$ 9,372	$ 36,628
Totals	$218,000	$68,568	$207,531	$ 90,707	$ 87,507	$ 79,037

Source: Approved task force budget, accounting records, and funding transfer documents.

*Includes $68,568 transferred from the Asian Gang VCTF and $72,000 from the rent category. **Transferred from the overtime category.

To aid in the development of the CCMS, the USAO contracted with the Center for Applied Studies of the Environment at Hunter College (Hunter College) in July 1997. The USAO also entered into a reimbursable agreement with the New York County District Attorney's Office (DANY) for Hunter College to provide professional services regarding the CCMS.¹¹ In October 1997, Hunter College applied for a National Institute of Justice (NIJ) grant to help the USAO continue developing the CCMS. The grant was to pay for services performed by Hunter College staff who worked on the system. The USAO funded the first three months of the project, and the $63,648 NIJ grant funded professional services for the remaining nine months of the year.

With the VCTF funding from the USAO and the NIJ grant, Hunter College provided the USAO with research associates to begin working on the CCMS. At the outset, Hunter College worked on designing the database and ensuring that the system would be able to link defendant and cooperator information to a map, thus enabling the USAO to track cases geographically. The CCMS was also designed to track cooperators and defendants being prosecuted or investigated by the USAO. Data in the system includes details from the USAO case files, such as the defendant's name, address, type of arrest, crime location, address of arrest, and other related data.

Additionally, the CCMS includes data downloaded from the USMS, photographs of all arrested defendants, gun tracing and ballistics information, data obtained through weekly interviews with the AUSAs about their cases and defendants, and indictment records.¹² At the time of our review, the CCMS was operational but still being developed, and data were entered and updated daily. According to the USAO quarterly financial and progress reports submitted to EOUSA, the USAO used the CCMS to identify potential cooperators to aid in solving crimes committed by violent gangs.

CONCLUSION

When the USAO asked to reprogram the majority of the Latin Kings VCTF funds to develop the CCMS, it reported to the EOUSA review committee that the Latin Kings gang had been dismantled at the federal level and that the VCTF funds were no longer needed to support a Latin Kings VCTF. Meanwhile, the FBI was still investigating Latin Kings criminal activities and had requested overtime funds previously approved for the Latin Kings VCTF. The USAO denied the request because it did not believe the case warranted use of the overtime funds. By approving the use of VCTF funds for the development of the CCMS -- a computer system to be used as an investigative tool for the USAO's broader violent crime-fighting effort -- the EOUSA review committee deviated from the original purpose of funding task force activities. If EOUSA determined that the USAO could use funds to support its broader mission objectives, it should have revised its guidance and allowed other USAOs to request funding for broader violent crime fighting projects.

DEA HOUSING AUTHORITY VCTF ACCOMPLISHMENTS

The DEA New York Field Division submitted a funding request to the USAO to continue the efforts of an existing Housing Authority VCTF, which began in March 1994. This task force was formed to investigate drug gangs operating in housing projects and to assist the New York City Housing Authority police who had limited overtime funding. The task force consisted of three enforcement groups in DEA's Division 10.

When first established, the Housing Authority VCTF conducted investigations in housing projects that led to the prosecution of the Nasty Boys and Bryant Avenue Boys gang cases in 1994 and early 1995. The USAO had reported the successful prosecution of these gang cases in its quarterly financial and progress reports to EOUSA. However, VCTF funds were not used to support these activities. Thus, they cannot be considered VCTF accomplishments, according to EOUSA guidance on reporting.

Shortly after the USAO received VCTF funding in March 1995, the New York City Housing Authority and Transit Police Departments were merged with the NYPD. After the arrival of a new Special-Agent-in-Charge (SAC), the three DEA enforcement groups shifted focus from investigating housing project gangs to investigating drug suppliers and traffickers of brand-name heroin. Officials in the DEA New York Field Division who we interviewed during our review disagreed about whether the Housing Authority VCTF actually ended. Several DEA officials stated that they believed the Housing Authority VCTF ended with the arrival of the new SAC, who refocused the Division on the investigation of brand-name heroin in July 1995. A former group supervisor believed that the end of the Housing Authority VCTF coincided with the merger of the New York City Housing Authority with the NYPD. Other DEA officials believed the Housing Authority VCTF did not end but evolved into investigating other violent crime cases instead of investigating cases solely in the housing projects. With the merger of the New York City Housing Authority and NYPD, and the shift in investigative focus, we concluded that the Housing Authority VCTF described in the funding proposal had ended. We attempted to determine whether the accomplishments of the refocused DEA enforcement groups and the NYPD still met the objectives of investigating housing project cases. However, during our field work DEA could not locate case, arrest, or seized asset logs for the enforcement groups. In addition, DEA could not provide us with a roster of special agents and NYPD police officers assigned to the Housing Authority VCTF, nor did the case files identify a particular agent or officer as a member of the Housing Authority VCTF. In the absence of this record-keeping, we provided the DEA with a list of seven cases for two of the three enforcement groups listed on the USAO's quarterly financial and progress reports for the VCTF. ¹³ We reviewed four of seven case files and found that we could not identify the investigations as VCTF-related. ¹⁴ Following the completion of our field work, DEA provided us with excerpts from arrest logs, case status data, asset seizure information, and rosters of participant special agents and NYPD police officers. DEA noted in the latest correspondence that they do not track VCTF cases as such, nor were they ever instructed to do so.

DEA Did Not Notify USAO of Task Force End

Based on information obtained from interviews with DEA officials, and our review of case files and other records, the Housing Authority VCTF as described in the funding proposal ended by July 1995 as a result of a reorganization. However, the DEA did not notify the USAO that the Housing Authority VCTF had ended, and that it wanted to use the VCTF funding to support the new focus of the law enforcement groups that comprised the original task force. The guidance issued by EOUSA states that, "funds provided in support of VCTFs must be obligated in support of the initiatives and items authorized. Any deviation from the approved plan must be requested prior to the obligation of the funds. Requests to obligate funds for a purpose other than for the purposes authorized must be submitted to the EOUSA." We believe that the DEA should have notified the USAO that the Housing Authority VCTF had ended. The USAO officials we spoke with stated that they did not believe the USAO had an oversight role and believed DEA could use the VCTF funds however it wanted. The USAO was not monitoring the activities of the Housing Authority VCTF and was not aware of the change in the VCTF. Had it been aware of the change, the USAO could have questioned DEA's use of VCTF funds.

USAO Obtained Support Staff for the DEA

The USAO forwarded to EOUSA a DEA request to transfer $144,000 from overtime to support staff ($135,500) and computer equipment ($8,500) in August 1995 to obtain clerk typists for the three enforcement groups. In addition, the DEA requested the transfer of $15,000 from office equipment to computer equipment (see Table III). According to the transfer request, overtime funding was no longer needed. Although EOUSA approved the request in October 1995, the DEA did not submit to the USAO a requisition for support staff at that time. In July 1996, the SAC for the DEA New York Field Division petitioned the USAO to transfer these support staff funds back to the overtime category because hiring clerical support staff was cost prohibitive. The USAO's Deputy Administrative Officer stated the USAO allowed this transfer request to expire after EOUSA questioned the request. In November 1996, on behalf of the DEA, the USAO submitted a requisition to EOUSA for data analysts. According to the DEA official who oversaw the three enforcement groups, he wanted to build a support unit with these analysts. EOUSA processed this request, and, in June 1997, the first of three contract data analysts began work at the DEA New York Field Division.

TABLE III - HOUSING AUTHORITY VCTF FUNDING
BUDGET CATEGORY	APPROVED FUNDS	TRANSFERS	OBLIGATIONS	COSTS INCURRED	DOLLARS REVIEWED	AVAILABLE BALANCE
Overtime	$144,000	($144,000)	0	0	0	0
Support Staff	0	$138,042	$138,400	$138,346	$138,346	$(358)
Office Equipment	$ 15,000	($ 15,000)	0	0	0	0
Computer Equipment	0	$ 20,958	$ 20,958	$ 20,958	$ 20,958	0
Totals	$159,000	o	$159,358	$159,304	$159,304	$ (358)

Source: Approved task force budget, accounting records, and funding transfer documents.

Data Analysts Worked on Non-Housing Authority VCTF Cases

Each data analyst was assigned to one of the three enforcement groups that previously comprised the Housing Authority VCTF. We attempted to account for the work that the data analysts performed because they were reimbursed with VCTF funds. According to the data analysts, they assessed pen register information from wire-tap investigations, prepared subpoenas for telephone toll information, and received and processed that data. ¹⁵ Other duties included performing general administrative work, completing arrest notices, working with various computer systems, and managing case files. In addition, one data analyst supervised work assignments for the other two data analysts.

We found that the data analysts did not maintain records of their work or assignments, nor did they have to submit formal progress reports to the DEA group supervisors or their immediate contract supervisor. The DEA officials we interviewed stated that the DEA did not keep a written log of the work that the data analysts performed. We also interviewed the Regional Manager for the contractor and the Justice Management Division Contracting Officer regarding progress reports. Both stated that the DOJ contract did not require the contractor to submit progress reports or other documentation detailing the data analysts' activities and accomplishments. We reviewed four of the seven case files listed on the quarterly financial and progress reports that the data analysts stated they supported. We found that the case files did not contain any documentation that identified the data analysts as having performed work for these investigations that had been reported as accomplishments.

CONCLUSION

The Housing Authority VCTF, which began in March 1994, conducted activities that resulted in the prosecution of housing project gang cases. However, most of the work was performed before the Housing Authority VCTF was awarded funds from EOUSA. Our review concluded that the USAO did not expend VCTF funding to further these activities. We found that the New York City Housing Authority Police Department ceased to exist shortly after the DEA Housing Authority VCTF received funding. The DEA enforcement groups that participated in the Housing Authority VCTF were refocused on other DEA priorities. However, the DEA failed to notify the USAO that the task force had ended. We found that the USAO, which retained control over the VCTF funds, was not monitoring the Housing Authority VCTF and was not aware that the task force had ended. In the absence of this monitoring, the USAO processed the DEA's request to transfer VCTF funds to obtain data analysts, whose work could not be connected to the VCTF effort.

FBI VCTFs ACCOMPLISHMENTS

The USAO requested VCTF funding to support the activities of the six investigative task force squads in the Violent Crime and Major Offenders Branch and the Drug Branch of the FBI's New York Office. In March 1995, the USAO received $150,000 for support staff to provide the FBI VCTFs with foreign language specialists, financial analysts, accounting specialists, and intelligence analysts. However, the FBI did not submit a requisition to obtain this support staff. According to officials from the FBI's New York Office, the funding of support staff was no longer considered to be a necessity by the FBI. Although the FBI VCTFs conducted investigations after the USAO received VCTF funding in March 1995, costs associated with these efforts were absorbed within the FBI's budget. The USAO had not expended any VCTF funding in support of the FBI VCTFs and therefore, should not have reported any accomplishments at the time of our review.

In February 1997, after almost two years without expending the VCTF funds allocated for support staff, the FBI submitted a request to the USAO to transfer $150,000 from support staff to obtain office, computer, and investigative equipment. The EOUSA review committee denied this request but later approved an October 1997 request to expend $150,000 for computer equipment and investigative equipment (see Table IV). Specifically, the FBI requested five PIMS workstations and a mobile digital cellular telephone locating device known as a triggerfish. EOUSA recommended approval of the reprogramming request for computer equipment, but did not recommend approval for the triggerfish. The review committee approved the request for the computer equipment, but split its vote on the triggerfish three to three. The Director, EOUSA, cast the deciding vote to permit purchase of the triggerfish.

TABLE IV - FBI VCTFs FUNDING
BUDGET CATEGORY	APPROVED FUNDS	TRANSFERS	OBLIGATIONS	COSTS INCURRED	DOLLARS REVIEWED	AVAILABLE BALANCE
Support Staff	$150,000	($150,000)	0	0	0	0
Computer Equipment	0	$ 75,000	$ 75,000	0	0	0
Investigative Equipment	0	$ 75,000	$ 75,000	0	0	0
Totals	$150,000	0	$150,000*	0	0	0

Source: Approved task force budget, accounting records, and funding transfer documents.

*The USAO established one obligation for the total approved funding amount instead of establishing individual obligations for the computer and investigative equipment categories.

In March 1998, the USAO and the DANY established a reimbursable agreement to provide PIMS workstations and triggerfish equipment to the FBI VCTFs. The agreement required the DANY to purchase the equipment, submit invoices for reimbursement after the equipment had been received, and provide suitable documentation to support the invoiced amount. The workstations would allow the member organizations of the six investigative task force squads to access the USAO's photo-imaging system. According to an FBI official, the triggerfish would be operated by the FBI's Special Operations unit and used by trained staff to support the efforts of the FBI VCTFs as well as other squads within the FBI's criminal division. At the time of our review, the USAO was awaiting the acquisition of the PIMS workstations and triggerfish equipment.

The FBI reported accomplishments, including arrests, indictments, complaints, convictions, and seizures. Although the six investigative squads generated these accomplishments, the USAO had not expended any VCTF funding to achieve these results. Therefore, the results reported to EOUSA for the FBI VCTFs were not the results of VCTF funding and should not have been included in the USAO's quarterly financial and progress reports to EOUSA.

CONCLUSION

For nearly two years after the award, the USAO had not expended any VCTF funds for the FBI VCTFs. Although the FBI reported accomplishments for the task forces, the costs associated with these accomplishments were fully absorbed by the FBI. Thus, VCTF funds were not needed or used to support their activities, and the accomplishments cannot be attributed to the VCTF program.

ADMINISTRATIVE AND FINANCIAL CONTROLS OVER THE VCTFs

We assessed the USAO's administrative and financial controls for each of the task forces. We reviewed VCTF expenditures totaling $846,243 of the nearly $1.2 million awarded to the USAO. We found no major material weaknesses in the financial controls. However, we found a lack of oversight regarding administrative controls. Specifically, the USAO did not properly account for VCTF property, failed to perform a security background investigation, and reported inaccurate quarterly report data.

USAO Did Not Properly Account for VCTF Property

In September 1995, EOUSA issued guidance to the USAOs concerning VCTF property stating that the USAO was to appoint a qualified individual from the task force as VCTF property custodian. The guidance made a differentiation between the VCTF and USAO property custodians, adding that the USAO custodian would not be held accountable for property assigned to the VCTF.

Responsibilities of the VCTF property custodian included:

• maintaining the physical custody of all property,

• documenting all actions affecting personal property control,

• maintaining records of equipment and furniture assigned to the task force,

• reporting the acquisition of accountable property over $1,000, and

• conducting a biannual inventory of the VCTF property.

Our review disclosed that the USAO failed to appoint VCTF property custodians, did not establish complete property records, and failed to conduct biannual inventories of the VCTF property. The Deputy Administrative Officer acknowledged that it was his responsibility to properly account for the VCTF property; however, he did not adhere to the requirements of the EOUSA guidance. For the Asian Gang VCTF, we attempted to account for the VCTF property, which cost $342,268, by performing an inventory of 14 items of computer equipment purchased by the USAO for the PIMS. However, we could not match the serial numbers on the equipment with the contractor invoices for five of these items. Therefore, we could not fully account for all property purchased with VCTF funds for the PIMS.

We observed the property purchased for the Latin Kings VCTF (one computer and monitor), confirming only that it was in place and operational. We also performed an inventory of the eight pieces of computer equipment that the USAO purchased for the DEA. Our review showed that the USAO had not affixed USAO barcodes to this computer equipment. Two laptop computers, costing approximately $4,000 each, could not be located. At the time we concluded our review, the USAO could not account for the laptop computers, and the USAO Deputy Administrative Officer stated that he did not expect to locate these items.

The USAO should appoint VCTF property custodians to account for all VCTF property, as required in EOUSA's guidance. The appointed property custodians should review the guidance describing the responsibilities of their position, ensure complete property records are established and maintained, and conduct an inventory of all equipment.

USAO Failed to Perform Security Background Investigation

According to EOUSA guidance for VCTF funding, dated May 31, 1995, "all positions in the USAO are considered critical-sensitive . . ., and it is necessary for all private sector temporaries to undergo security processing prior to performing any work in the office." This process required a satisfactory name and fingerprint check and the completion of an SF-86, Questionnaire for National Security Positions.

We found a lack of administrative oversight by the USAO regarding this procedure. The Deputy Administrative Officer stated that the research associate contracted from Hunter College to develop the CCMS did not receive a security clearance prior to working in the USAO. The research associate began working at the USAO in July 1997 and was still on site one year later. The Deputy Administrative Officer stated that he completed the paperwork for the security investigation but did not submit it for processing. As a result, the USAO violated the DOJ's security requirement thereby compromising the security of its office and the information therein by having non-cleared personnel working in a critical-sensitive position.

Quarterly Report Data Inaccurate and Incomplete

In the May 31, 1995, guidance, EOUSA required that the USAOs, "provide a narrative report outlining Violent Crime Task Force accomplishments, including significant cases, as a result of additional funds authorized to support your office's initiatives." These reports were to identify any financial obligations established for the task force. We reviewed the information that was submitted by the USAO and found that accomplishments for two of the four VCTFs were incorrectly reported. We also found that EOUSA, in using these reports for its quarterly report to Congress, inaccurately forwarded statistics as accomplishments of VCTF funding.

We reviewed the DEA and FBI quarterly progress reports submitted to the USAO. We found that they reported accomplishments that were not the result of the VCTF funding. The USAO forwarded this data to EOUSA. The USAO Deputy Administrative Officer, who was responsible for submitting VCTF quarterly financial and progress reports to EOUSA, stated that he was unaware that the accomplishments reported had to be associated with the task force funding. However, he stated that the EOUSA Budget Analyst specifically requested that he submit accomplishments for the FBI VCTFs. The USAO Deputy Administrative Officer acknowledged that, although the reported accomplishments were the result of the FBI's task forces, they were not the result of VCTF funds. Subsequently, in its June 1998 quarterly report to EOUSA for the FBI VCTFs, the USAO reported that because VCTF funds had not been expended at that time, no accomplishments could be reported as the result of VCTF funds.

Based on this finding, we reviewed EOUSA's quarterly reports to Congress to determine whether EOUSA forwarded these DEA and FBI statistics without ensuring that these accomplishments were achieved with VCTF funding.¹⁶ These reports summarized the information that the USAOs submitted on their quarterly financial and progress reports and therefore, included inaccurate statistics for the DEA and FBI VCTFs.

We also found that the USAO's March 1998 quarterly financial and progress report for the FBI VCTFs was incomplete. Specifically, the USAO did not submit a report on the financial status of the FBI VCTFs. As a result, the transfer of funds from the support staff category for computer and investigative equipment was not identified on the quarterly financial and progress report for that period. ¹⁷ In addition, our review disclosed that the USAO did not submit quarterly financial and progress reports to EOUSA in September and December 1995 for all four VCTFs.

RECOMMENDATIONS

The Inspections Division recommends that the Director, Executive Office for United States Attorneys, requires that the United States Attorney for the Southern District of New York:

1. Appoint VCTF property custodians and ensure they are properly trained on the position's responsibilities, establish complete property records, and inventory all VCTF property.

2. Complete the security background investigation for contractor personnel.

OVERSIGHT OF THE VCTFs

As part of its oversight of the VCTF program, EOUSA issued written guidance to the USAOs regarding administrative and financial controls for the VCTF funds. We found that the USAO Deputy Administrative Officer, who assumed fiduciary responsibilities for the VCTF funds, did not follow the VCTF guidance. This resulted in administrative problems in each of the four VCTF initiatives. In addition, we found that EOUSA failed to establish procedures that would ensure that the USAOs were adhering to the requirements of the VCTF guidance. For example, EOUSA could have required the USAOs to submit property inventories, or it could have compared DOJ's Financial Management Information System expenditure data and USAO quarterly financial and program reports to verify VCTF activities and to monitor expenditures. We believe that EOUSA, as the recipient of the VCTF funds, has the responsibility to provide internal management controls over the VCTF program.

Although EOUSA specified administrative and financial requirements in its VCTF guidance, it did not identify the USAOs' responsibilities for the management and oversight of task force activities. We found that the USAO was actively involved in the development and implementation of the PIMS and the CCMS. However, there was no USAO representative assigned to monitor the activities of the Housing Authority VCTF or the FBI VCTFs. EOUSA did not require that the USAOs appoint a representative to monitor the activities of each task force or to ensure that other lead federal agencies were informed of the program, administrative, and financial requirements of the VCTF program. We believe the guidance should require that someone in the USAO be appointed in this capacity to ensure that the task forces were achieving their objectives and VCTF funds were expended for approved purposes. The USAO could have used memoranda of understanding to identify responsibilities for each VCTF participant, including oversight and monitoring of task force activities.

In addition, as part of administering the VCTF funds and as required by the VCTF appropriation language, EOUSA was responsible for collecting VCTF accomplishment data from the USAOs and reporting these accomplishments to Congress each quarter. We found that EOUSA did not ensure that the data received from the USAO for the Housing Authority VCTF and the FBI VCTFs were the result of task force activities or task force expenditures, respectively. By erroneously reporting this data to Congress as VCTF accomplishments, EOUSA failed to adequately meet this Congressional reporting requirement. We suggest that EOUSA strengthen its review of reported VCTF accomplishment data to ensure that this data resulted from task force activities funded by VCTF funds.

RECOMMENDATIONS

The Inspection Division recommends that the Director, Executive Office for United States Attorneys:

1. Establish procedures for monitoring USAOs' adherence to the requirements of the VCTF guidance.

2. Issue guidance that requires the USAOs to appoint a representative to monitor the activities of each VCTF within their districts.

EOUSA DELEGATION OF AUTHORITY

In 1996, EOUSA issued a delegation of authority memorandum to the United States Attorneys and USAO Administrative Officers to permit them to execute reimbursable agreements with state and local law enforcement agencies for VCTF expenses.¹⁸ The delegation cited section 601 of the Economy Act as the justification to place orders with another agency for materials, supplies, equipment, work or services. We reviewed the EOUSA delegation memorandum and found that EOUSA used the incorrect citation as its basis for granting this authority, as Section 601 of the Economy Act applied to agreements between federal agencies, not federal and state or local agencies.

Public Law 103-317, the DOJ Appropriation Act for 1995, provided funding for the VCTFs and granted authority for USAOs to enter into contracts and cooperative and task force agreements with state and local agencies engaged in the investigation and prosecution of violent crimes and drug trafficking crimes. We determined that the delegation of authority for the VCTFs was unnecessary because Public Law 103-317 already provided this authority to the USAOs. Because EOUSA's delegation of authority memorandum also applies to other initiatives, we suggest that it be amended to reflect the correct legal citation.

7. Plans to relocate the USAO had been abandoned and the various groups investigating Asian gangs had begun working "more harmoniously" together.

8. The AUSA, who was also the Director of HIDTA, was nominated for an Attorney General Award for the system.

9. Latin Kings cases were still being worked at the local level.

10. Transferring funds between task forces and from the overtime category to other categories was not allowed, according to the original EOUSA guidance. However, after receiving several similar requests for transfers from other USAOs, the review committee reconsidered that policy and changed it in July 1998. An EOUSA official stated that the USAO for the Southern District of New York's request to transfer the $40,000 of overtime funding was verbally approved by EOUSA. We found no documentation indicating that the review committee ever saw the request or voted on it.

11. Public Law 103-317, the DOJ Appropriation Act for 1995, granted authority to USAOs to enter into contracts and cooperative and task force agreements with state and local agencies.

12. The USAO Chief of Crime Control Strategies received an Attorney General Award, and the USAO, USMS and NIJ received a nomination for a Vice Presidential Hammer Award for the CCMS.

13. The seven cases selected involved drug trafficking investigations. We did not select the other 19 cases listed on the quarterly financial and progress reports because they were the result of arrests made at the Port Authority and Amtrak Stations, and thus were not Housing Authority cases.

14. The other three case files were not available for review, as they either were in storage, signed out, or transferred to another DEA office.

15. A pen register is a dedicated telephone number recorder on a telephone line that is being investigated.

16. As required by the Senate Report (103-309) on the 1995 Department of Justice Appropriations Act (103-317), the EOUSA, through the Assistant Attorney General for Administration, submitted quarterly reports to the Chairman of the House Appropriations Subcommittee on the Departments of Commerce, Justice and State, the Judiciary, and Related Agencies, on the United States Attorneys' use of VCTF funds.

17. Following completion of our field work, the USAO provided us with the complete March 1998 quarterly financial and progress report, which identified the transfer of funds.

18. The delegation of authority also applied to HIDTA and Health Care Fraud Projects funded with the Asset Forfeiture Fund Super-Surplus.