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Budget Execution in the United States Marshals Service During Fiscal Years 2002 and 2003

Report No. 04-02
October 2003
Office of the Inspector General

Executive Summary

The Office of the Inspector General has completed this audit of the budget execution process in the United States Marshals Service (USMS) for fiscal year (FY) 2002 and FY 2003. The primary purpose of the audit was to determine whether the USMS executed its appropriated budgets for FY 2002 and FY 2003 in accordance with Congressional intent. In addition, during our review we identified a number of budget execution and appropriations?related issues that we discuss in this audit, including the age of the USMS fleet of vehicles.

Among other duties, the USMS provides security for federal court facilities; provides secure confinement, transportation, and production of prisoners for judicial proceedings; apprehends fugitives; and ensures the long?term safety of protected government witnesses. The current Director and Deputy Director of the USMS have been in office since 2001. The USMS's operations extend across 94 judicial districts and a Headquarters office in Arlington, Virginia.

In FY 2002, the USMS received approximately $1.5 billion in Congressional appropriations. In FY 2003, the USMS received approximately $879 million in Congressional appropriations. The significant decrease from FY 2002 to FY 2003 is due to the transfer of funds for detention services from the USMS to the Office of the Federal Detention Trustee.

The USMS budget formulation process normally begins 18 months prior to the start of each fiscal year. Officials from the USMS's Management and Budget Division (MBD) stated that their office begins examining the language included in the House and Senate budget bills even before the final appropriations are enacted. Throughout the bills' progress, MBD staff examines the language as it changes to try to determine approximately how much funding the USMS may receive, what Congress intends for the use of the funds, and which USMS programs will receive increases or decreases. Once the funds are appropriated, MBD staff said they examine the law and the conference report side?by-side in an effort to identify the Congressional intent of the appropriation, including whether new positions are associated with the funding.

Beginning in FY 2002, the USMS began centralizing certain spending and budget authority at the USMS Headquarters. For example, until FY 2002, the MBD operated on the assumption of a base budget adjusted annually to reflect increases. However, for FY 2002 only, the USMS implemented "zero-based budgeting" under which a new base amount was calculated for each decision unit and program area. With the base amount calculated, MBD officials stated that they provide each cost center, including the 94 districts, with an initial allocation amount. Each cost center must then create a work plan that details the amount of money the cost center plans to spend during each quarter of the fiscal year. That work plan is sent to the MBD for review and approval. The work plan does not include salary and benefits, because these funds are held and disbursed centrally by the MBD.

In addition, districts previously could realign funds between project codes or object classes without the approval of MBD officials. However, beginning in FY 2003, the districts were required to notify and obtain approval from Headquarters whenever they decide to transfer funds between or among project codes or object classes.

In conducting this audit, we reviewed the FY 2002 and FY 2003 appropriation laws, and the corresponding House, Senate, and conference reports. Using the laws and conference reports, we focused our review on the Congressional spending instructions for FY 2002 and FY 2003. We reviewed the USMS's documentation of its allocations and obligations and, whenever possible, tested judgmental samples of ten percent of the transaction universes to verify the accuracy of the USMS's records and to determine if the charges were allocable to the appropriations bills. We also reviewed the USMS's budget execution reports submitted to the Office of Management and Budget for FY 2002 and FY 2003 to determine whether the USMS's total spending in these years was within its total budget authority.

We conclude that the USMS cannot demonstrate clearly that budgeted funds are executed in accordance with Congressional instructions. In FY 2002 the USMS appropriations included 17 spending instructions from Congress, and for FY 2003, 22 spending instructions. In our judgment, the USMS could not demonstrate adherence to 7 of the 17 FY 2002 spending instructions and 9 of the 22 in FY 2003, in the following areas:

FY 2002
  • Prisoner Information System
  • Electronic Surveillance Unit
  • East Coast/West Coast Task Forces
  • Courthouse Security Personnel
  • Prisoner Transportation
  • Courthouse Security Equipment
  • Construction
FY 2003
  • Courthouse Security Positions
  • Prisoner Information System
  • Special Assignments
  • Positions for Protection of the Judiciary
  • Positions for High Priority Districts
  • Annualization of Existing Task Forces
  • Task Forces for the Heartland
  • ESU Personnel, Training, and Equipment
  • Foreign Offices

Generally, these deficiencies were due to two factors. First, the USMS does not track changes, obligations, and expenditures to cost centers or against estimates developed from cost modules. Second, while USMS records document that funds were allocated for the purpose intended by Congress, the USMS could not document that the funds actually were expended for these purposes.

Similar to other Department of Justice agencies, the USMS uses cost modules to develop estimates of the total cost for new positions. The cost module contains line items and allows the USMS to budget for costs associated with positions, such as salaries, benefits, weaponry, vehicles, furniture, computers, travel, telephones, postage, and background investigations. A cost module is based on an average. Although the cost module may allocate $100,000 for each new position, some new positions may cost more than that amount and some less. This could be due to any number of variables in the estimate. For instance, the cost of travel in New York City is different from the cost of travel in Houston. Furthermore, personnel in these two cities do not receive the same pay increases.

The USMS allocates its budget based on the cost modules. Specifically, the USMS allocates the appropriation directly to the cost centers where the expense will be incurred. For example, for the appropriation relating to new positions in a unit, the amount representing vehicles in the cost module is allocated directly to the Business Services Division (BSD), training funds to the Training Academy, and computer network funds to the Information Technology Department.

However, we found that once the funds are allocated to individual cost centers, the MBD is unable to track the related expenditures. For instance, the MBD is unable to determine whether the BSD actually spends all of the funds for vehicles specifically allocated for a unit. To further complicate the situation, because the cost module is based on an average, it is not necessarily improper for the BSD to be spending less than the allocated amount for the unit's vehicles. Thus, the USMS's use of a cost module for allocation purposes, without expenditure tracking, reduces or eliminates from the outset the possibility that the USMS will be 100 percent in compliance with Congressional intent.

In addition, because the USMS cannot trace corresponding expenditures, the USMS cannot verify the accuracy of the estimates formulated by the cost module, on which the USMS bases its allocations to cost centers. Thus, any errors in the cost module may be perpetuated year after year. For example, a variation between formulated costs and actual costs for vehicles for a particular unit required the BSD to compensate for over $32,000 of expenses for which it had received no funding. While the actual costs of other vehicles the BSD acquired in FY 2002 may have fallen short of their estimates and offset any loss to the BSD, under its current system, the USMS cannot track these expenditures to ensure that the vehicles line item, as well as the other line items in the cost module, remain accurate.

When questioned, MBD officials asserted their support for the use of the cost modules, which they have been using consistently for the last four years. MBD officials also stated that they do not have the staff available to track expenditures related to the cost modules, and that the practice would be an inefficient use of resources. In our opinion, by allocating funds using cost modules without being able to track actual expenditures to the cost module estimates, the USMS could not demonstrate that the funds provided by Congress were used for the specific purposes identified in the estimates. Therefore, we conclude that the USMS needs to implement a methodology for tracking expenditures to cost module estimates in order to demonstrate to Congress that it is adhering to its spending instructions.

During our audit, we also reviewed the resources used by the USMS to maintain its vehicle fleet in accordance with replacement criteria established by the General Services Administration (GSA), in response to Congressional interest in this area. We found that the average mileage of the USMS motor vehicle fleet was about 105,000 miles. According to the GSA criteria, sedans and station wagons may be replaced every 3 years or 60,000 miles, whichever comes first; and, 4 to 6 wheel drive motor vehicles and trucks weighing less than 12,500 pounds may be replaced every 6 years or 40,000 miles, whichever comes first. We determined that 55 percent of the vehicles in the USMS districts and 37 percent of the vehicles at the USMS Headquarters exceeded the GSA minimum mileage replacement criteria. Although the USMS has a vehicle maintenance plan, it does not have a regular vehicle replacement plan to address needed vehicle upgrades. In order to reduce the average mileage of the USMS motor vehicle fleet from the current 105,000 miles and to increase the safety of the staff who use the vehicles, we recommend that the USMS develop and implement a vehicle replacement plan.

Finally, we reviewed the Justice Detainee Information System (JDIS) as part of our review of the Congressional spending instructions. The JDIS is an automated prisoner information system. Since FY 1997, Congress has allocated the USMS up to $4 million annually, or $28 million in total, to develop the JDIS. However, to date the USMS has allocated the JDIS only $5.5 million of the available $28 million over the past 7 years. According to MBD officials, the JDIS remains in the preliminary planning phase.

While we understand from the appropriations language that the USMS is not required to obligate the full $4 million to JDIS each fiscal year, we believe the USMS should clarify the need for and intent of this annual appropriation to ensure that it is meeting congressional expectations with respect to development of the JDIS.

These issues are discussed in detail in the Findings and Recommendations section of the report.