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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


Congress established the United States Marshals Service (USMS) through the Judiciary Act of 1789. The mission of the USMS is to protect the federal courts and ensure the effective operation of the judicial system. 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.

Officials from the Management and Budget Division (MBD) of the USMS 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 examine the language as it changes to try to determine approximately how much funding the USMS may receive, what Congress intends as the use of the funds, and whether programs will receive increases or decreases. Once the funds are appropriated, MBD staff examines the law and the conference report side-by-side in an effort to define the Congressional intent of the appropriation, including whether new positions are associated with the funding.

During the budget execution process, the USMS manages allocations, obligations and expenditures through an accounting system called the Standardized Tracking, Accounting, and Reporting System (STARS). The USMS's Headquarters offices are able to access financial information through a reader version of STARS called the STARS Web. The districts use the Financial Management System (FMS) accounting system, and this data is uploaded into STARS on a daily basis.

Spending Centralization

During our audit, we found that the USMS centralized certain spending authority and budget execution under the administration of current Director Reyna. Prior to FY 2002 under former Director John Marshall, the USMS planned to decentralize salary funding from Headquarters control to the districts. The USMS scheduled this decentralization initiative to be phased in over two years by having fifty percent of the districts participate in FY 2001 and the remaining fifty percent included in FY 2002. However, Director Reyna discontinued the Salary Decentralization Pilot Project on February 7, 2002.

Until FY 2002, the MBD operated on the assumption of a base budget, meaning that the MBD automatically assumed that the base amount of funding for a particular program would remain the same as the previous year. However, for FY 2002 only, under instructions from the Director, the MBD implemented zero-based budgeting, under which a new base amount was calculated. With a base amount calculated, MBD officials stated that the MBD staff 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, in FY 2003, based on Director Reyna's instructions and because of the timing of the FY 2003 appropriation law, MBD personnel only loaded 75 percent of the project codes' annual allocations into the STARS system, and allowed spending only through the first three quarters of the fiscal year. MBD officials explained that the Director made this change when he learned MBD's practice was to issue the project codes an allocation amount and then have the project codes create a work plan around that amount. Instead, in FY 2003, the Director had the project codes create their full year work plan using only 75 percent of the fiscal year's funding and informed the project codes that they may not receive the other 25 percent. MBD officials noted that this change in practice was simply a way to require the project codes to add more justification to their budget requests.

In a related matter, in FY 2003, the Comptroller of the USMS further centralized budget control by informing all U.S. Marshals and Headquarters senior staff that any changes to spending plans, including changes to object classes, quarterly distributions, or programmatic requirements, now have to be approved by MBD, in advance. In the past, districts could realign funds between "decision units" without the approval of MBD officials. However, for FY 2003, the districts are required to notify and obtain approval from Headquarters whenever they decide to transfer funds between or among or object classes. The MBD budget analysts monitor the cost centers through monthly reports to observe spending levels and detect any misuse of funds. The budget analysts meet quarterly with supervisory MBD officials to discuss the monthly reports and any issues or concerns.

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 and the establishment of a USMS Hazardous Response Unit.1

Our Audit Approach

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 samples of ten percent of the transaction universes to verify the accuracy of the USMS's records and the relevancy of the transactions to the appropriations bills. We also reviewed the USMS's Standard Form 133 Reports on Budget Execution (SF-133) submitted to the Office of Management and Budget (OMB) for FY 2002 and FY 2003 to determine whether the USMS's total spending in these years is within its total budget authority. In this regard we accepted the amounts reported on the SF-133s based on our reliance on the results in the Office of the Inspector General Audit Report Number 03-26, the United States Marshals Service Annual Financial Statement Audit, Fiscal Year 2002, July 2003, which resulted in an unqualified opinion. Our audit objectives, scope, and methodology appear in Appendix I. The language of the FY 2002 and FY 2003 appropriation laws and conference reports that we audited against appears in Appendix III.

  1. In FY 2002 and FY 2003, Congress directed the USMS to submit a detailed spending plan identifying how the USMS intended to allocate its appropriations. For further discussion, see the finding on Adherence to Congressional Spending Instructions.