ASSET FORFEITURE PROGRAM
FISCAL YEAR 1996
Audit Report 98-23, (9/98)
TABLE OF CONTENTS
OFFICE OF THE INSPECTOR GENERAL COMMENTARY AND SUMMARY
REPORT TO MANAGEMENT
Closing Procedures and Reconciliations
Segregation of Duties
Gross Proceeds From the Sale of Forfeited Property
Cash not on Deposit
Obligations and Payments
APPENDIX I-Management's Response to the Draft Report
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 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 Asset Forfeiture Program: the Drug Enforcement Administration, the Federal Bureau of Investigation, the Immigration and Naturalization Service, the U.S. Marshals Service (USMS), 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 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, 1996 (OIG Report #97-32A). The Office of the Inspector General (OIG) contracted with Brown & Company to perform the audit. 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.
Brown & Company noted control issues in the following areas: (1) closing procedures
and reconciliations, (2) cash not on deposit, and (3) obligations and payments. The
auditors again reported issues, previously reported in the FY 1995 Management Letter in
the following areas: (1) segregation of duties, (2) gross proceeds from the sale of
(3) contracts/procurement, (4) property appraisals, and (5) 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.
Note: The attachments referred to in the responses to Draft Recommendations 3 and 5
have been excluded.
OFFICE OF THE INSPECTOR GENERAL, AUDIT DIVISION
ANALYSIS AND SUMMARY OF ACTIONS NECESSARY
TO CLOSE THE REPORT
1. Closed. This issue will be reexamined in future financial statement audits.
2. Closed. This issue will be reexamined in future financial statement audits.
4. Closed. This issue will be reexamined in future financial statement audits.
6. Closed. This issue will be reexamined in future financial statement audits.
7. Resolved. This recommendation can be closed when the seizing agencies inform us of how they will ensure seized currency will be promptly turned over to the USMS for timely deposit into the Seized Asset Deposit Fund.
8. Resolved. This recommendation can be closed when we receive a copy of the Policy and Procedures Bulletin issued to ensure the proper monitoring and reviewing of obligations and expenditures.