Internet Crimes Against Children Grant
Awarded to the City of Dallas, Texas

Audit Report GR-80-05-009
September 2005
Office of the Inspector General

The Office of the Inspector General, Audit Division, completed an audit of Internet Crimes Against Children (ICAC) Grant Number 1998-MC-CX-K009, awarded by the U.S. Department of Justice (DOJ), Office of Juvenile Justice and Delinquency Prevention (OJJDP), to the city of Dallas, Texas. The purpose of the ICAC Program is to help state and local law enforcement agencies develop an effective response to cyber-enticement and child pornography cases that encompasses forensic and investigative components, training and technical assistance, victim services, and community education. Unlike some adults who view the benefits of the Information Age dubiously, children and teenagers have seized the Internet’s educational and recreational opportunities with astonishing speed and casualness. Adapting information technology to meet everyday needs, young people are increasingly going online to meet friends, satisfy information needs, purchase goods and services, and complete school assignments. Although the Internet gives children and teenagers access to civilization’s greatest museums, libraries, and universities, it also increases their risk of being sexually exploited or victimized. OJJDP recognizes that the increasing online presence of children, the proliferation of child pornography, and the lure of predators searching for unsupervised contact with underage victims present a significant threat to the health and safety of children and a formidable challenge for law enforcement today and into the foreseeable future. Many factors complicate law enforcement’s response to these challenges. Conventional definitions of jurisdiction are practically meaningless in the electronic universe of cyberspace, and very few investigations begin and end within the same geographical area. Because they involve multiple jurisdictions, most investigations require close coordination and cooperation between federal, state, and local law enforcement agencies. The ICAC Task Force Program seeks to enhance the nation-wide response to child victimization by maintaining and expanding a state and local law enforcement network composed of regional task forces. The program encourages communities to develop multi-jurisdictional and multi-agency responses and provides funding to state and local law enforcement agencies to help them acquire the knowledge, personnel resources, and specialized equipment needed to prevent, interdict, or investigate ICAC offenses. Although the ICAC Task Force Program emphasizes law enforcement investigations, OJJDP encourages jurisdictions, including intervention, prevention, and victim services activities as part of their comprehensive approach. The Dallas Police Department (DPD) was awarded an initial grant and supplements in the amount of $1,474,136 for the period of October 1, 1998, through March 31, 2005. Our audit covered the period between September 12, 2002, and March 31, 2005, when the DPD was awarded two supplemental awards in the amount of $874,670. The grant was awarded to stimulate the creation of state and local law enforcement cyber units to investigate child sexual exploitation by offenders using the Internet or online communications technology. The ICAC Task Force Program aims to assist state and local law enforcement agencies to acquire the necessary knowledge, equipment, and personnel resources to prevent, interdict, or investigate Internet crimes against children offenses. As part of our audit, we tested the DPD’s compliance with five essential grant conditions — reporting, grant drawdowns, grant expenditures, budget management and control, and monitoring of subrecipients. We found weaknesses in four of the five areas tested. We also tested the accounting records to determine if reimbursements for costs were allowable, supported, and in accordance with applicable laws, regulations, guidelines, and the terms and conditions of the grant. As a result of deficiencies identified below, we question a total of $318,892 in grant and program funds received.1 Financial Status and Program Reporting The DPD did not accurately reflect grant activity on the Financial Status Report submitted December 31, 2004. Financial Status Reports submitted did not reconcile to drawdowns. Two of the five Program Reports submitted were received by OJJDP 266 and 82 days late. OJJDP could not confirm the receipt of Program Reports for the first and second semiannual reporting periods for 2003. The DPD was unable to provide reasonable supporting documentation that captured the activities being described within the Program Reports. Grant Drawdowns As of January 12, 2005, the DPD received $636,446, or 73 percent of the $874,670 award in seven drawdowns. All seven drawdowns did not agree with actual expenditures incurred during the respective calendar quarter. Three of the seven drawdowns exceeded expenses by $35,277 during the fourth quarter of 2002, second quarter of 2003, and third quarter of 2003. Although the DPD received reimbursement for expenditures that exceeded the amounts supported by the accounting records, the drawdowns were less than the expenses by $96,181 as of March 31, 2005. Grant Expenditures Of the 13 personnel cost transactions sampled, the DPD was unable to provide adequate supporting documentation for two transactions charged to the grant. Ten transactions did not agree with the pay rates listed in the approved budget. In addition, the following overlapping issues were noted: Three transactions were not computed correctly One transaction was not accurately recorded by category Two transactions were not properly allocated to the grant As a result, we question $36,039 in personnel costs transactions that were either due to the lack of supporting documentation or were unallowable when compared to the approved budget. Of the 15 fringe benefit transactions sampled, we found all (or 100 percent) did not agree with the rates in the approved budget. Specifically, six transactions appeared to have a higher fringe benefit compensation percentage allocated towards its compensation package when compared to other fringe benefits in our sample. We were unable to determine the cause of the higher allotment because supporting documentation was not provided. As a result, we question $2,500 in fringe benefit costs due to the lack of adequate supporting documentation. The remaining nine transactions sampled were reasonable; however, the amounts were much less than the amounts approved in the budget. Therefore, we categorized the costs related to these particular transactions as funds put to better use in the amount of $453. Of the 25 direct cost sampled transactions tested, we questioned 22 transactions (or 88 percent) that did not provide the assurances needed to conclude that the transactions were properly authorized, properly classified as direct charges, accurately recorded, and properly charged to the grant. We were not provided adequate supporting documentation for 19 of the 25 transactions and no supporting documentation for 1 transaction. We were unable to make a determination regarding the accuracy of these expenditures due to inadequate source documentation provided to support these transactions. As a result, we questioned $273,559 in grant funds received. The DPD was not able to provide support documentation for program income expenditures used for program-related activity. We were unable to make a determination whether 7 of the 14 transactions sampled were considered to be program-related activities either due to lack of adequate supporting documentation or the transactions were already archived by the city. Two of the 14 transactions were not program-related. Five of the 14 transactions sampled were program-related; however 1 transaction was questioned due to lack of support documentation. Overall, we question $6,794 in program income expenditures that were not utilized for program-related activities or did not contain sufficient supporting documentation to make a determination. Monitoring of Subrecipients The DPD had not established adequate policies and procedures for monitoring subrecipients, including monitoring activities, incorporation of OMB Circular A-133 audit requirements into the award documentation, verification of audit requirements, sanctions for non-compliance, and applicable corrective action plans. Recommendations Our report contains 13 recommendations to address the preceding issues. They are discussed in detail in the Findings and Recommendations section of the report. We discussed the results of our audit with the DPD and included their comments in the report as applicable. Our audit objectives, scope, and methodology appear in Appendix I. A summary schedule of budget amounts and related costs by category appear in Appendix II. A schedule of dollar-related findings appears in Appendix III. Footnotes The Inspector General Act of 1978, as amended, contains our reporting requirements for questioned costs and funds to better use. However, not all findings are dollar-related. See Appendix III for a breakdown of our dollar-related findings and for definitions of questioned costs and funds to better use.