The U.S. Marshals Service's
Control Over Weapons and Laptop Computers

Report No. 02-29
August 2002
Office of the Inspector General


FINDINGS AND RECOMMENDATIONS

We assessed the USMS’s compliance with OMB Circular A-123 and Federal Property Management Regulations, as well as Department and USMS guidance.  Our review included an evaluation of the controls over property management activities, specifically related to weapons and laptop computers, at Headquarters and four field locations.  Specifically, we reviewed the procedures for purchases, receipt and assignment, physical inventories, and disposal of accountable weapons and laptop computers.  In addition, we tested, on a sample basis, the accuracy and reliability of the USMS property records.  The universe of weapons and laptop computers for the locations audited is displayed in Appendix IV, Table 1.  In total, we reviewed 461 items, as summarized in the following table and detailed in Appendix IV, Table 2.

TOTAL ITEMS REVIEWED
  USMS
Headquarters
FLETC Northern
District
of
Illinois
Southern
District
of
California
Special
Operations
Group
TOTALS
WEAPONS 105 66 64 33 42 310
LAPTOP COMPUTERS 41 33 17 35 25 151
TOTALS 146 99 81 68 67 461

Purchases

The procurement of all new weapons is centralized and is to be coordinated with the USMS Procurement Office.  District Offices or Headquarters Units in need of weapons are to submit a written request to the Procurement Office identifying the quantity, brand, and model of weapon.  The request must also certify that funds are available and no suitable excess USMS weapons exist, and identify a point of contact and delivery address.  The requested weapons must be a USMS-approved make and model, purchased from the manufacturer or an authorized distributor, and warranted as new.  If the weapon does not meet these specifications, written approval must be obtained from the USMS Director or Deputy Director.

Conversely, laptop computer purchases are decentralized.  Offices are allowed to use government credit cards or purchase orders for the acquisitions.  The related financial transactions for weapon and laptop computer purchases are entered into one of two accounting systems depending upon whether it is a Headquarters or field office purchase.  USMS Headquarters utilizes the Standardized Tracking, Accounting and Reporting System to record and execute financial transactions.  USMS District Offices use the Financial Management System to account for transactions and make payments.  Neither of these systems is integrated or reconciled with ARGIS to ensure that all accountable property is recorded in the official property system.

We judgmentally selected 118 weapons and 30 laptop computers from vendor invoices to determine if the items purchased were recorded in ARGIS; details of our sample, by location, appear in the following table.

ITEMS SELECTED FROM PURCHASE DOCUMENTS
  USMS Headquarters FLETC Northern District of Illinois Southern District of California Special Operations Group TOTALS
WEAPONS 76 35 0 0 7 118
LAPTOP COMPUTERS 10 3 0 14 3 30
TOTALS 86 38 0 14 10 148

Our tests revealed that 14 (11 weapons and 3 laptop computers) of the 148 items (9 percent) were not recorded in ARGIS as of August 28, 2001.  In our judgment, the lack of integration and automated reconciliation of the financial and property systems contributed to this condition.

According to USMS officials, the procedure for ensuring that all purchased property is entered into ARGIS upon receipt is entirely paper-driven.  Further, property system data for non-capitalized accountable property is not manually reconciled with purchase data from the accounting systems.  Generally, the Property Office relies on the receipt of a copy of the receiving report and purchase documents.  If the documents are misdirected, lost, or not submitted, the possibility exists that the property will not be entered into ARGIS until a physical inventory is completed.

As previously noted, lack of system integration and the untimely recording of property was reported in a prior OIG audit.  Further, a similar finding was reported in the USMS’s annual financial statements audit for FY 2000.19  The prior audit reported that the process for identifying and recording capitalized property additions did not ensure these functions were performed in a timely manner and recommended that the USMS improve controls to record property received by District Offices.

In our judgment, property not recorded in the official property system is highly susceptible to loss because its theft or misappropriation could go unnoticed. Further, integration of the financial and property systems would facilitate reconciliation between systems and improve data accuracy.  The reconciliation is consistent with the Joint Financial Management Improvement Program guidelines for property management systems, OMB Circular A-123, and the Justice Property Management Regulations, requiring reasonable assurance that assets are safeguarded and records are accurate and complete.  At the exit conference, officials informed us that plans are underway for full system integration; funds have been allocated and the interface should be functional in 2003.

Receipt and Assignment

Weapons and laptop computers are generally shipped directly from the vendor to therequesting office.  Upon receipt, the receiving officer is to inspect and barcode20 the property, and complete a receiving report. This report and the procurement documents are to be submitted to the Property Office in order to update ARGIS.

The USMS has designated about 180 property accounts in ARGIS that identify the responsible office, such as each of the 94 District Offices and various Headquarters Units.  Each piece of accountable property is assigned to one of these accounts. Generally, the database does not identify the sub-office within a District Office or Headquarters Unit, or identify the person to whom an item is assigned.

At the four field locations reviewed, the Property Officers used secondary systems to track items that were under their control on a day-to-day basis.  An automated spreadsheet or database was used at three locations, and in one location, the Property Officer maintained a written list of all property in the property account.  The Property Officers informed us that they used these systems to track individual assignments, make immediate changes to an item’s specific location, and enter additional information as needed to manage and track the property (e.g., annotating items sent out for repair).  According to USMS officials, when ARGIS is deployed to the District Offices, it should provide flexibility in maintaining detailed location information.

When a Property Custodian or Officer issues a laptop computer or weapon to an individual, the individual acknowledges acceptance of the item by signing a hand receipt (Form USM-325).21  USMS guidelines require hand receipts to be renewed at least annually for accountable property and every six months for weapons.  The USMS generally maintained hand receipts to support the assignment of weapons and laptop computers to individuals.

The transfer of property items between property accounts is documented on a Property Transaction Document (USM-170).22 The transferring Property Custodian forwards the form to the receiving Property Custodian for notification.  The form is signed, returned to acknowledge acceptance, and the transferred item is physically moved to its new location.  The form is then sent to the Property Office so that ARGIS can be updated.

To test the accuracy and completeness of the property records, we attempted to physically verify the existence of selected weapons and laptop computers appearing in ARGIS.  In addition, we selected a sample of weapons and laptop computers found at each location reviewed and attempted to trace them to ARGIS.  In total, we physically inspected 313 items (192 weapons and 121 laptop computers), as shown in the following table.  Further details of our sample, by property type, location, and type of test, appear in Appendix IV, Tables 3 and 4.

ITEMS PHYSICALLY INSPECTED
  USMS Headquarters FLETC Northern District of Illinois Southern District of California Special Operations Group TOTALS
WEAPONS 29 31 64 33 35 192
LAPTOP COMPUTERS 31 30 17 21 22 121
TOTALS 60 61 81 54 57 313

All weapons were located.  One laptop computer could not be located; it was assigned in ARGIS to the Information Technology Services (ITS) office at USMS Headquarters.  According to ITS officials, the computer was sent to another office without transfer documents.  It was later learned that the receiving office destroyed it because it was inoperable and they were unable to obtain necessary replacement parts.  Upon our discovery of these events, ITS officials advised us they would prepare the necessary loss report and a copy of the report was provided to us after the exit conference.  In another location, a laptop computer was identified as lost the week before our on-site work.  According to officials at the site, the loss was identified during a physical inventory; we verified that a loss report was submitted.

In addition to the two unaccounted-for items discussed above, we identified five items which we inspected (two weapons and three laptop computers) that were not on the official listing dated August 28, 2001, provided to us by the Property Office.23  No documentation was provided to explain why these items were not accounted for on the official listing provided to us.

Pooled Property – At each of the sites audited, the Property Custodian was responsible for unassigned weapons that were available for special assignment or issuance as needed.  These weapons were physically secured either in a vault, in a cage within a vault, or in a separate armory building.  In all cases, physical safeguards such as alarms, numeric keypads, and combination locks were used to limit access to the physical area and to secure the weapons. According to USMS officials, pooled weapons are temporarily assigned to individuals using the hand receipt process. At the time of our audit, one location reviewed had pooled weapons on temporary assignment.  We verified that these assignments were properly documented.

Only three sites had pooled laptop computers.  According to the Property Officers, the process for temporarily issuing the property using hand receipts was the same as for the pooled weapons.  Similarly, the items were adequately protected in a vault or secured area.  None of these laptops were temporarily assigned at the time of our audit.

Specialized Equipment and Rapid Mobilization Teams – The USMS has a Special Operations Group (SOG), which is a specially trained tactical unit established to respond to emergencies anywhere in the United States or its territories.  The SOG is made up of a small, full-time contingent of operational and administrative personnel located in Camp Beauregard, Louisiana, and Deputy Marshals who are on call in various District Offices.

On September 11, 2001, we were on site when the SOG received its mobilization orders to respond to the terrorist attacks.  We observed the highly organized weapons storage system and their mobilization efforts. According to the Weapons Custodians, their procedure is to gather needed equipment and create hand receipts. They further advised that the hand receipts are later signed by the individual receiving the weapon in the field and again upon return to the Weapons Custodians.  At the completion of an assignment and return to Camp Beauregard, the equipment is to be inventoried, reconciled with the count of items removed upon mobilization, and secured in the armory.

Separated Employees – USMS guidelines require departing USMS employees to sign the Employee Exit Check Out Record (Form USM-199)24 certifying that all equipment was returned. Although the form specifically refers to the return of keys and access materials, computer equipment, and badges and credentials, it does not expressly identify weapons and does not require the signature of the Property or Weapons Custodian.

We requested USM-199s for 17 separated employees and none were readily available.  According to responsible officials, they were unaware of the form or were unsure if it had been completed.  At the exit conference, USMS officials provided us copies of three USM-199s, which they located after an exhaustive search.  The inability to produce the other documents is further aggravated by the fact that USMS guidelines require hand receipts for separated individuals to be destroyed upon return of the property.  Once these are destroyed, it is not possible to identify what property was assigned to the individual and, therefore, to verify that it was returned.

In our judgment, the USMS must ensure that adequate steps are taken to make certain that all property is retrieved from separated employees and the process is adequately documented.  For example, the USM-199 can be modified to specify weapons and include the signature of the Property and Weapons Custodians, and the related hand receipts can be cancelled and retained for a specified time period.

Physical Inventories

USMS guidelines require each District Office and Headquarters Unit that represents a property account in ARGIS to conduct biennial physical inventories of all non-capitalized25 accountable property, unless a recent inventory was required due to a change in Property Custodian.  The 2-year cycle is implemented on a continual basis. According to Property Office officials, they maintain a list of physical inventories conducted and generally initiate a new inventory before the end of the cycle.  Property Office officials further advised that this continuous method ensures that the entire USMS is not undergoing a biennial inventory at the same time.  In theory, one unit or another is in the inventory process at any given time.

The Property Office provides an ARGIS printout to the responsible office along with instructions for completing the inventory.  The instructions state that the Property Custodian must not take part in the inventory to ensure adequate separation of duties and to maintain the integrity of the process.  Upon completion of the inventory, all discrepancies between the ARGIS printout and the physical inventory are to be researched, and additions, deletions, or changes are to be listed on an Inventory Adjustment Voucher (Form USM-215).26  The annotated inventory and USM-215s, certified by the Property Custodian, are to be returned to the Property Office within 45 days, where the necessary adjustments are made to the official property records in ARGIS.  Once ARGIS is updated, the Property Office sends a revised printout to the submitting office for its review and use.

In addition to biennial accountable property inventories, the USMS requires annual firearms inventories; weapons assignments and hand receipts are renewed semiannually during firearms qualifications.27  Specifically, the Property Office must receive, by October 1 of each year, a memorandum certifying the completion of a weapons inventory and renewal of hand receipts.28  However, USMS policy does not require the Property Office to prompt Property Custodians to submit these certifications or monitor the certifications to ensure that all are submitted and include the renewal of hand receipts.

For the locations audited, we reviewed weapons inventory certifications and biennial physical inventory records to determine if the inventories were conducted as required.  We found that the duties were adequately separated.  However, in one location, an inventory was not conducted upon a change in Property Custodian.  In two locations, the last biennial inventories exceeded the 2-year cycle by an average of 8 months.  In another location, the scheduled biennial inventory was postponed due to the deployment of resources in response to the September 11 terrorist attacks.

Stun Guns and Stun Belts - The USMS’s physical inventory policies raise a security concern for the control of stun guns and stun belts.  According to USMS officials, the agency maintains a limited stock of these items and they are not designated as accountable property.  Since non-accountable property is not subject to inclusion on the official USMS property records and physical inventory procedures, these potentially dangerous items are not adequately safeguarded against loss.  Further, as the ownership and use of stun guns is restricted in some cities and states, the USMS should strengthen the control of these items and categorize them as accountable property.

Disposals

USMS policy allows for the transfer of excess weapons to other law enforcement agencies in need.  However, according to Property Office personnel, excess, obsolete, or damaged firearms are generally destroyed.  Excess laptop computers can be destroyed, transferred to another agency, or donated to a school.  When disposing of laptop computers, USMS guidelines require the hard drives to be degaussed,29 or removed entirely, to eliminate all data.

Property Custodians wishing to dispose of USMS property by any of the means detailed above are to request approval from the Property Office.  Upon approval, the Property Custodian is responsible for providing a disposal certification within 30 days, which requires the signatures of the disposing individual and two witnesses, and includes the date and place of disposal.30 USMS policy requires disposals to take place within 30 days of the Property Office’s authorization; otherwise, the authorization is to be cancelled and the item is to remain in ARGIS.

Disposal actions are annotated in ARGIS as "deleted" and "authorized."  The same designation is used when errors are made in recording property in the database; the incorrect entry is denoted as an authorized deletion so that duplicate records do not exist.  Although the term "deleted" is used, these records are not permanently removed from the system.

Using ARGIS, we selected a sample of 15 weapons and 12 laptop computers that were designated as authorized deletions. Of the 27 records reviewed, 14 (6 weapons and 8 laptop computers) were the result of input errors and 13 were property disposals (9 weapons and 4 laptop computers).  We verified that all deletions were supported by proper documentation, including the witnessing of weapon destruction and certification of data removal from laptop computers.

Conclusion

Our audit revealed weaknesses in the USMS’s management controls over weapons and laptop computers.  First, the accounting systems are not integrated with the property management system.  As a result, accountable property is not always entered into the property system timely.  At the exit conference, officials informed us that system integration is planned and is expected to be functional in 2003.

Second, the USMS should revise its policies and practices related to separated employees, physical inventories, and stun guns and stun belts.  Specifically, the USMS must ensure that all property is returned from departing employees and that the process is adequately documented.  Further, the USMS’s physical inventory policy should require the Property Office to monitor the completion of annual weapons inventories.  In addition, stun guns and stun belts should be categorized as accountable property.

Recommendations

We recommend that the Director of the USMS:

  1. Integrate the property management and accounting systems to ensure that all purchased accountable property is added to ARGIS.
  2. Instruct the Property Office to correct omissions identified in the property records, as discussed on pages 15 and 17.
  3. Revise the policies and practices for documenting the return of property from separated employees to ensure that proper supporting documentation exists, including revising the USM-199 to expressly document the return of weapons and the signature of the Property Custodian.
  4. Ensure that inventories are conducted as required, including those that were suspended or postponed due to recent emergencies.
  5. Instruct the Property Office to begin prompting Property Custodians to take annual weapons inventories and institute a policy to ensure that related certifications are submitted and include the renewal of hand receipts.
  6. Instruct the Property Office to categorize stun guns and stun belts as accountable property and include them in the official property records.


Footnotes

  1. OIG Audit Report number 01-30 "USMS Annual Financial Statement Fiscal Year 2000," issued September 2001.
  2. The barcodes assign a unique identifier to each piece of USMS property, excluding weapons.
  3. A sample USM-325 is displayed at Appendix VI [Not available electronically].

  4. A sample USM-170 is displayed at Appendix VII [Not available electronically].
  5. At the exit conference, we provided USMS officials with a detailed listing of the omissions noted during our audit.
  6. A sample USM-199 is displayed in Appendix VIII [Not available electronically].
  7. Capitalized property is required to be inventoried annually.
  8. A sample USM-215 is displayed at Appendix IX [Not available electronically].
  9. In weapons qualifications tests, USMS employees and contract personnel are required to substantiate their proficiency in firing weapons they are authorized to carry.
  10. The current USMS Firearms Policy was issued in May 2001. The prior policy, number 99‑10 dated April 5, 1999, contained the same certification requirement; however, the submission date was September 1st of each year.

  11. Degaussing is the process of erasing computer data by neutralizing the magnetic field of the equipment.
  12. A sample certification is displayed in Appendix X [Not available electronically].