ASSET FORFEITURE PROGRAM
MANAGEMENT LETTER REPORT
FISCAL YEAR 1995
Audit Report 98-03, (1/98)
TABLE OF CONTENTS
OFFICE OF THE INSPECTOR GENERAL COMMENTARY AND SUMMARY
REPORT TO MANAGEMENT
UNITED STATES MARSHALS SERVICE
Segregation of Duties
Gross Proceeds from Sale of Forfeited Property
Issues Repeated from the FY 1994 Management Letter Report
FEDERAL BUREAU OF INVESTIGATION
Asset Management and Disposal Costs
IMMIGRATION AND NATURALIZATION SERVICE
APPENDIX I--Justice Management Division's Response to the Draft Report dated October 7, 1997
APPENDIX II--Audit Division's Analysis and Summary of Actions Necessary to Close the Report
OFFICE OF THE INSPECTOR GENERAL
COMMENTARY AND SUMMARY
The Department of Justice Asset Forfeiture Program (Program) is a nationwide law enforcement program. Federal employees, contract personnel, and state and local law enforcement officials work cooperatively in the investigation and prosecution of cases involving asset seizure and forfeiture. There are six Department of Justice components that execute the Program: the Drug Enforcement Administration; the Federal Bureau of Investigation; the Immigration and Naturalization Service; the U.S. Marshals Service; the U.S. Attorneys; and the Criminal Division. The U.S. Postal Inspection Service, the U.S. Park Police, and the Food and Drug Administration are the non-Department of Justice federal participants in the Program.
The Justice Management Division's Asset Forfeiture Management Staff provides administrative and financial management functions for the Program. The legal, policy, and oversight responsibilities reside with the Asset Forfeiture and Money Laundering Section, Criminal Division.
The Office of the Inspector General (OIG) contracted with Brown & Company to perform the audit. The management letter report was prepared by Brown & Company, Certified Public Accountants, as part of their audit of the Program's annual financial statement for the fiscal year ended September 30, 1995 (OIG Report #96-21A). The auditors were not contracted to perform control testing sufficient to enable them to express an opinion on management's assertions about the effectiveness of the internal control structure. However, certain conditions involving the internal control structure and its operations were identified and are being reported to management through this report. The management letter presents those areas of concern that, in the independent auditors' judgment, do not adversely affect the Program's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. However, strengthening internal controls in these areas is considered important and presents an opportunity to improve operating efficiency.
The OIG performs an oversight role in the audit process and ensures compliance with the Chief Financial Officers Act of 1990 by monitoring the progress of the audit, reviewing supporting workpapers, coordinating the issuance of reports, following up on management letter issues, and performing other functions deemed necessary under the circumstances. The audit was conducted in accordance with generally accepted government auditing standards.
Brown & Company noted control issues in the following areas: (1) segregation of duties, (2) gross proceeds from the sale of forfeited property, (3) contracts/procurement, (4) asset management and disposal costs, and (5) reimbursable expenses. The auditors again reported issues, previously reported in the FY 1994 Management Letter Report (OIG Report #96-03) in the following areas: (1) property appraisals, (2) property inspections, and (3) compliance reviews. Although the conditions are the same, it should be noted that the control deficiencies occurred in different locations than those of the prior report.
OFFICE OF THE INSPECTOR GENERAL, AUDIT DIVISION
ANALYSIS AND SUMMARY OF ACTIONS NECESSARY
TO CLOSE THE REPORT
Your response stated that the compliance review policy is meant to cover only those contractors whose aggregate business exceeds $25,000 and that the requirement for reviews used as a basis for the recommendation is considered beyond the intent of the USMS policy. We accept your response on this point; however, we would advise that your policy be clarified to reflect the actual meanings and intentions.