Oversight of Intergovernmental Agreements by the United States
Marshals Service and the Office of the Federal Detention Trustee

Audit Report 07-26
March 2007
Office of the Inspector General


Appendix XII
USMS Response to the Draft Audit Report

MEMORANDUM TO: Guy K. Zimmerman
Assistant Inspector General for Audit
Office of the Inspector General

FROM: John F. Clark
Director
United States Marshals Service

SUBJECT: Response to Draft Audit Report Oversight of Intergovernmental Agreements by the United States Marshals Service and the Office of the Federal Detention Trustee

The United States Marshals Service (USMS) has reviewed the draft audit report cited above and provides responses to recommendations for which this agency is responsible. As you are aware, the USMS and the Office of the Federal Detention Trustee (OFDT) are jointly responsible for responding to this report. The USMS has responded to Recommendations #1, 7, 8, 9, and 10 and consulted with OFDT on our responses. There are some general comments related to the report at the end of the document.

We appreciate the opportunity to review and respond to the draft report.

If you have any questions, please contact Assistant Director Sylvester Jones, Witness Security and Prisoner Operations, at (202) 307-5100.

cc:

Richard Theis
DOJ Audit Liaison

Yvonne Athanasaw
USMS Audit Liaison

Stacia Hylton
Federal Detention Trustee

Recommendation #1 – Address each open audit recommendation from prior OIG audits of IGAs, which collectively contain dollar-related findings of $40 million.

RESPONSE: In consultation with the Office of the Federal Detention Trustee (OFDT), t he United States Marshals Service (USMS) disagrees with Recommendation #1. With regard to 11 open audits which were listed as an attachment to the OFDT’s March 17, 2006, Memorandum to Guy K. Zimmerman, the OFDT has instructed the USMS to refrain from efforts to collect the amounts which the Office of the Inspector General (OIG) has determined were overpayments. The agreements which were the subject of the audits incorporated a fixed rate which was mutually accepted by the parties at the time the agreements were entered into. Even if the IGAs were ambiguous as to the issue of the rate to be paid (which the USMS specifically disputes); it was the intention of the parties that the USMS would reimburse the local government at the fixed day rate.

Indeed, as the OIG has conceded in its report, in many instances, conditions other than cost data influenced the establishment of the fixed rate per diem.2 Where there has been a meeting of the minds with regard to the fixed rate per diem that was established based upon cost and other conditions, the USMS simply cannot now seek to recoup the payments that were made pursuant to that fixed rate.

As provided in a recent response to DOJ’s data call for responses to the Inspector General’s List of Top Management Challenges, OFDT’s position is that, “…the agreements incorporated a “fixed rate” and, accordingly, that the agreements with the state and local governments were negotiated, fixed price agreements… OFDT believes that, in the absence of fraud, the agreements are not subject to retroactive adjustment. Once the USMS and the state or local government negotiated and reached an agreement on a price for the services, that price was fixed and the parties were bound. OFDT believes that the Government cannot, years later, reexamine the state or local government’s costs and prisoner population for the period in question and seek to recover an amount by which, in hindsight, appears to have exceeded those costs.”

Although the USMS disagrees with the OIG’s assertion that IGAs are cost reimbursement-type arrangements, we agree that in cases where fraud or misrepresentation of costs exists, action must be initiated to recover payments. To accomplish this, the USMS will re-review all OIG audits cited in the IGA audit to determine if cases of fraud or misrepresentation exist. To supplement this review, the USMS may use internal or external documents such as: jail documents; IGA supporting documents; or OIG working papers. In concert with OFDT, the USMS will review each audit on a case-by-case basis to make a final decision as to a remedy. Should a decision be made that it is in the best interest of the USMS and OFDT to do so, an agreement will be negotiated with the jail to implement the remedy, including, potentially, prospective per diem offsets.

Recommendation #7 – Develop annual training plans for IGA analysts that will provide appropriate procurement core competencies such as those outlined by the Federal Acquisition Institute.

RESPONSE: The USMS agrees with this recommendation and will develop annual training plans for all staff working in the Programs and Assistance Branch (PAB). These plans will be developed no later than February 28, 2007, and pending implementation of e-IGA. The USMS recently received funding from OFDT to send PAB staff to Price Analysis training. PAB staff will complete the Price Analysis training by February 28, 2007. Additional training requirements will be annotated on the training plans and PAB staff will attend training provided resources are available upon passage of the USMS appropriation.

Recommendation #8 – Update policies that clearly describe PAB and USMS responsibilities for establishing and monitoring IGAs.

RESPONSE: The USMS agrees with this recommendation. While some policies have recently been updated, more work can be done on current policy or new policy should be prepared. In order to effectively and efficiently revise/produce policy, the USMS estimates that a six month period is required after OFDT provides the information required under Recommendations 5 and 6 of this report. It is anticipated that based on e-IGA, a comprehensive overhaul of the policies related to IGAs will be necessary.

Recommendation #9 – Review all IGAs to ensure that the agreements are current and prepare new agreements for those that have expired.

RESPONSE: The USMS agrees with this recommendation. Ninety-nine percent of identified expired permanent IGAs have been extended. All remaining expired IGAs will be extended by January 31, 2007. Beginning in CY07, PAB staff will issue a memorandum to the field, under the Assistant Director’s signature, on a monthly basis identifying usage of expired IGAs and require they discontinue use until the execution of a new agreement.

Recommendation #10 – Ensure adequate resources are provided to oversee IGAs. This includes adequate staffing for the review and approval of IGA actions, and for the audit of IGAs.

RESPONSE: The USMS agrees with this recommendation. Additional staffing for review, approval and audit of IGAs is critical to successful operation of the program. Inadequate staffing has resulted in the USMS’s inability to accomplish the mission. Currently two positions are announced and selection of personnel is expected in January 2007. Filling of these vacancies is expected to improve the program. Upon implementation of e-IGA, a workgroup will be convened to discuss PAB staffing and needed resources. A proposal will be made to USMS management requesting adequate resources for the program. Completion of this step is incumbent upon implementation of e-IGA but it is estimated a period no longer than six months after e-IGA is implemented would be necessary to accomplish this goal.

Other comments:



Footnotes
  1. Draft Audit Report, pp. xviii, 30.



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