Use of Equitable Sharing Revenues by the Compton Police Department
Compton, California

Report No. GR-90-03-014
June 2003
Office of the Inspector General

The U.S. Department of Justice (DOJ), Office of the Inspector General, Audit Division, has completed an audit of the use of DOJ equitable sharing revenues by the Compton Police Department (CPD). Equitable sharing revenues represent a share of the proceeds from the forfeiture of assets seized in the course of certain criminal investigations.¹ Our audit covered the period from July 1, 1993, through June 30, 2002, which represented the fiscal years (FY) 1994 through 2002.² During this period, the CPD reported $2,172,040 in equitable sharing revenues received and interest income earned.

We found that the CPD and the City of Compton were in material noncompliance with DOJ guidelines governing the accountability and use of equitably shared forfeited assets. As a result we question $2,172,040, or all of the equitable sharing revenues received by the CPD from FYs 1994 through 2000, and the interest income earned by those revenues.

The CPD was the local law enforcement agency until it was dissolved in September 2000. From September 17, 2000 to date the Los Angeles County Sheriff's Department (LASD) has performed local law enforcement in Compton. The LASD at Compton generally complied with the DOJ guidelines, so we do not question any of the equitable sharing awarded to the LASD.

We reviewed the CPD's compliance with six essential equitable sharing guidelines: local reporting requirements, accounting for equitable sharing receipts, use of equitably shared property, use of equitable sharing funds, interest earned on equitable sharing funds, and supplanting. In each of these areas, we found material weaknesses on the part of the CPD and/or the City of Compton.

The major instances of noncompliance are listed below.

• The City of Compton improperly transferred a total of $1,485,379 from the equitable sharing fund account to the city's general fund account.
• The City of Compton could not show evidence that equitable sharing funds were spent for the intended law enforcement purpose(s).
• There was no supporting documentation for the $1,981,800 of equitable sharing funds that the CPD reportedly used for salary expenditures in FYs 1994 and 1995.
• The City of Compton used equitable sharing funds to replace or supplant the resources of the city.
• All of the CPD's equitable sharing records had been misplaced or destroyed.
• There was no assurance that all equitably shared revenues were properly accounted for and deposited.
• The CPD and the City of Compton did not submit the required Federal Sharing Agreement for the 3-year period covering FYs 2000 through 2002.
• The CPD and the City of Compton did not submit the required Annual Certification Report for FY 1996.
• In the Certification Reports for FYs 1994 and 1995, the CPD and the City of Compton improperly recorded a negative ending balance of shared funds resulting from the claim of having more salary expenses than equitable sharing revenue.
• In the Certification Reports for FYs 1997 through 2001, the City of Compton improperly made offsets of equitable sharing funds resulting in negative ending balances.
• The Certification Reports for FYs 1995 and 1997 through 2001 contained errors in beginning and ending fund balances and numerous unexplained dollar amount discrepancies.

The results of our work are discussed in greater detail in the Findings and Recommendations section of the report. The audit objectives, scope, and methodology appear in Appendix I.

1. The DOJ asset forfeiture program has three primary goals: (1) to punish and deter criminal activity by depriving criminals of property used or acquired through illegal activities; (2) to enhance cooperation among foreign, federal, state, and local law enforcement agencies through equitable sharing of assets recovered through this program; and, as a by-product, (3) to produce revenues to enhance forfeitures and strengthen law enforcement
2. The City of Compton's fiscal year is from July 1 through June 30.