REVIEW OF OPERATION CEASEFIRE FINANCIAL CONTROLS

We interviewed the USAO Financial Officer and personnel from the MPD Office of Finance and Budget to assess the administrative and financial controls related to expenditures. Overall, the USAO's financial controls over the VCTF funds were inadequate. We reviewed expenditures totaling $348,265, or 36 percent, of the total approved funding, to determine the allowability and reasonableness of costs incurred for each budget category. We performed a 100 percent review of the expenditures for the vehicles, office, computer, and investigative equipment budget categories. For overtime, we selected transactions totaling $137,416 and questioned $78,982, or 57 percent, of these costs because of inaccurate or duplicate claims. Other errors by the USAO resulted in overpayments totaling $78,254 that exceeded the allowable overtime limit established by the EOUSA. Table II illustrates the approved funds, transfers, costs incurred, dollars reviewed and the available balance.

TABLE II - OPERATION CEASEFIRE FUNDING

Source: Approved task force budget and accounting records.

* According to the Financial Management Information System as of June 3, 1998, the USAO had not paid the MPD $94,608 for its final invoice submission covering overtime for the period of October 1, 1996, to March 1, 1997, nor had the MPD been paid $5,000 for fingerprint kits.

On December 18, 1995, the EOUSA approved the USAO's request to transfer $50,000 from the office equipment to the computer equipment budget category for the purchase of computers and printers for Operation Ceasefire. The EOUSA also approved a transfer of funds on May 9, 1996, from the office equipment to the vehicle and investigative equipment budget categories. The USAO received approval to reimburse the MPD $165,000 for vehicles and $5,000 for fingerprint kits in support of Operation Ceasefire.

The USAO Financial Officer and other task force personnel we interviewed believed all the funds for Operation Ceasefire had been expended. However, we found that as of June 3, 1998, the USAO had $123,151 remaining in the office and computer equipment categories and that these funds had not been obligated. We determined that the USAO had not obligated and expended all Operation Ceasefire funds by reviewing the funding approval letter, the Financial Management Information System (FMIS) Operation Ceasefire account, transfer documents, the reimbursable agreement, and all task force related purchase orders. Although we did not review all of the USAO accounting records, we made a good-faith effort to identify all Operation Ceasefire obligations and expenditures.

Quarterly Financial and Progress Reports Not Always Submitted

In accordance with EOUSA guidance, the USAOs were required to submit a quarterly financial and progress report on the activities of the VCTFs. Our review disclosed that the USAO did not submit 7 of the 11 quarterly financial and progress reports to the EOUSA. The USAO Financial Officer stated that the USAO Program Coordinator, who was responsible for submitting these reports, left the office in June 1997. The quarterly financial and progress reports were not prepared and submitted thereafter.

In addition, the USAO's four reports that were submitted between June 1996 and March 1997 were inaccurate or incomplete. Specifically, the transfer of funds from the office equipment category for computer equipment and fingerprint kits was not identified on any of the four quarterly financial and progress reports. The transfer of funds from the office equipment category for vehicles also was not identified on three of the four quarterly financial and progress reports. The EOUSA Budget Analyst for the VCTFs stated that the USAO was required to resubmit the March 1997 quarterly financial and progress report because the transfer of funds for the vehicles was not originally identified, but the EOUSA did not require the USAO to revise the other categories to reflect additional transfers. The USAO Financial Officer stated that she was not aware of the approvals to transfer funds from the office equipment category to the other budget categories.

Accounting Records Reflect Inaccuracies

We identified inaccuracies in the USAO's posting of expenditures to the Operation Ceasefire account. We reviewed all of the purchases posted to the FMIS by the USAO and could not locate the computer and fingerprint kit purchases. Moreover, the USAO Financial Officer could not locate the supporting documentation for these purchases. We obtained a copy of the purchase order, receiving report, and contractor invoice for the computers from the MPD Program Coordinator and another USAO representative. We then provided this information to the USAO Financial Officer. Subsequently, she located the entry for the purchase of the computers in the FY 1996 FMIS operating account for the USAO. Apparently, the purchase of these computers was incorrectly posted to the USAO's operating account and not to the Operation Ceasefire account. The USAO's Financial Officer stated that corrective action would be initiated to adjust the accounting entry in the FMIS for this purchase.

We also noted that the Operation Ceasefire FMIS account did not identify the $5,000 expenditure for the fingerprint kits. The USAO Financial Officer could not locate the supporting documentation for this purchase. We obtained a copy of the purchase order, receiving report, and contractor invoice from the MPD. These documents indicated that the MPD made this purchase. We provided this information to the USAO Financial Officer. The USAO Financial Officer stated that corrective action would be initiated to reimburse the MPD for the fingerprint kits and an accounting entry would be made for this purchase in the FMIS.

Overtime Invoices Not Submitted Regularly

The EOUSA issued guidance to the USAOs concerning the use of VCTF overtime funds. The guidance stated that the USAOs are responsible for entering into reimbursable agreements with the state and local participating agencies to reimburse them for overtime. The USAOs were instructed to include in the reimbursable agreement the total dollar amount available, the maximum amount of overtime per police officer, the frequency of the billings, and the billing procedures and supporting documentation required.

On June 1, 1995, the USAO and the MPD established a $634,000 reimbursable agreement to provide funding for reimbursement of overtime incurred by police officers that testified in court for Operation Ceasefire cases. The agreement required the MPD to certify that all the hours of overtime invoiced were for court appearances by police officers in Operation Ceasefire cases. By the terms of the agreement, the MPD had the option of submitting overtime invoices on a monthly or quarterly basis. The agreement also required the MPD to submit supporting documentation such as police officer time and attendance sheets.

The MPD submitted six overtime invoices to the USAO from June 5, 1995, through March 1, 1997, for GRU police officers. Each invoice's summary cover sheet individually identified GRU police officers and each officer's reimbursement request. The MPD included court appearance sheets for court overtime as well as time and attendance sheets for street overtime with the submissions. According to the USAO Program Coordinator, the MPD was permitted to submit invoices for street overtime despite the terms of the reimbursable agreement. None of the invoices was submitted monthly or quarterly. Rather, they were forwarded at irregular intervals. Table III illustrates the length of invoice periods and the time between submissions.

TABLE III - MPD OVERTIME INVOICE SUBMISSIONS

Source: MPD Overtime Invoices.

Overtime Invoices Reflect Inaccuracies

We performed a 100 percent review of the MPD's six summary overtime invoices to ensure that only GRU officers received overtime payments, that GRU officers' hourly overtime rates were accurate and the MPD's summary invoices were accurately totaled. We found that the USAO financial personnel responsible for reviewing the six invoices did not adequately review the invoices. Our review disclosed errors, which are explained in more detail in the following paragraphs.

• The MPD incorrectly totaled its request for reimbursement on its fourth invoice submission to the USAO. The amount requested was $168,891. The correct total was $171,218. This resulted in an underpayment of $2,327 to the MPD.

• The MPD incorrectly calculated hourly overtime pay rates for five GRU officers. This resulted in an overpayment of $2,175 to the MPD.

• The MPD included on the monthly invoices court appearance and time and attendance sheets for six police officers not assigned to Operation Ceasefire. These officers' names did not appear on any training list or active GRU roster provided by the MPD Program Coordinator. This resulted in an overpayment of $7,496 to the MPD.

To verify the individual overtime charges for a GRU officer, we performed a limited review of the supporting documentation, i.e., time and attendance and court appearance sheets submitted by the MPD with each summary overtime invoice. The six MPD invoices totaled $634,000 and included 281 overtime claims for 77 police officers. We reviewed overtime claims for 15 GRU officers. Attached to these claims were time and attendance and court appearance sheets. We identified duplicate records for 8 of the 15 police officers. Specifically, we identified 23 duplicate court appearance sheets (121.25 hours for an overpayment of $3,008). For example, a GRU police officer claimed a total of 132.75 hours of overtime from August 5, 1995, through September 30, 1995. The MPD invoice included 22 court appearance sheets for the GRU police officer. We found that the GRU officer during this time period made 12 court appearances. The MPD included duplicate court appearance sheets in the invoice for 10 of the 12 court appearances. These duplicate court appearance sheets totaled 62.25 hours of overtime.

In addition, the MPD submitted unusual overtime claims for 6 of the 15 police officers (53.75 hours for an overpayment of $910). We found that 3 police officers claimed overtime for court appearances and street work simultaneously, 2 police officers claimed overtime for a non-GRU activity (presidential inaugural), one GRU officer claimed overtime for a vice enforcement activity, and the MPD included a non-GRU police officer's court appearance sheet in an invoice for a GRU police officer. As a result of our review of the GRU police officer overtime invoices, we questioned $11,262 in overtime reimbursements by the USAO.

Overtime Invoices Included Claims for Non-Operation Ceasefire Cases

To determine that a GRU officer was entitled to receive overtime pay for a court appearance and that the court appearance was related to an Operation Ceasefire case, we selected 17 cases from the MPD court appearance worksheets submitted with the six invoices. We reviewed 9 of the 17 USAO case files. The USAO could not locate the other eight case files. Our review of the USAO case files disclosed that eight of the nine defendants were arrested before Operation Ceasefire officially began on June 5, 1995. One defendant was arrested on February 21, 1996. Although the eight arrests were made by officers who held GRU status at the time they were required to appear in court, the arrests themselves were not made as a result of Operation Ceasefire. Therefore, the overtime incurred for court appearances resulting from these arrests should not have been submitted to the USAO for reimbursement. The incorrect reimbursement to the MPD for non-Operation Ceasefire arrests totaled $8,111. Table IV illustrates the date of the arrest for the eight cases, the number of GRU police officers who made the court appearances, and the funds incorrectly reimbursed to the MPD for non-Operation Ceasefire cases.

TABLE IV - OVERTIME CHARGED TO NON-OPERATION CEASEFIRE CASES

Source: USAO case files and MPD overtime invoices.

In addition, we noted that the court appearance worksheets submitted by the MPD with the six overtime invoices cited 1994 case numbers. According to the USAO gun coordinator, District of Columbia Superior Court and United States District Court case numbers are assigned by the court. Case numbers beginning and ending in 94 indicate that the case originated in calendar year 1994. Operation Ceasefire began in June 1995. Therefore, any court appearances for 1994 cases should not have been reimbursed with Operation Ceasefire funds.

We performed a 100 percent review of the six MPD invoices to identify all court appearance worksheets that cited 1994 case numbers. We determined that all six of the MPD invoices cited 1994 case numbers. For example, under invoice number two, six GRU police officers claimed a total of 36 court appearances during August and September 1995 for a defendant charged with murder. The USAO reimbursed the MPD a total of 182.75 hours of overtime for these court appearances. Under invoice number three, two GRU police officers claimed a total of 18 court appearances during November 1995 through February 1996 for another defendant charged with murder. The USAO reimbursed the MPD a total of 92.5 hours of overtime for these court appearances. Both of these arrests were made before Operation Ceasefire commenced and the MPD should not have claimed overtime reimbursement for the police officers' court appearances. We determined that the USAO improperly reimbursed the MPD $59,609 for GRU police officer court appearances for the 1994 cases.

We did not perform a review of the MPD invoices to identify all court appearance worksheets that cited 1995 case numbers assigned from January 1, 1995, through June 4, 1995. The USAO may have improperly reimbursed the MPD for these GRU police officers' court appearances for this period. We suggest that the USAO review the court appearance worksheets that cite 1995 case numbers to determine whether the arrests were made as a result of Operation Ceasefire.

The MPD personnel submitted GRU police officers' court appearance sheets for reimbursement that included both Operation Ceasefire and non-Operation Ceasefire cases. The MPD Office of Finance and Budget did not identify the individual Operation Ceasefire cases on the court appearance worksheets. As a result, the MPD invoices did not accurately reflect the actual court appearance hours worked for Operation Ceasefire cases. According to the USAO Financial Officer, she relied on the MPD to submit invoices containing only court appearance sheets for Operation Ceasefire police officer overtime. The USAO Financial Officer also stated that she reviewed the MPD invoices for mathematical accuracy and not to determine whether all the overtime claimed was related to an Operation Ceasefire case.

The deficiencies noted in the review of the court appearance sheets were attributed to one or more of the following causes: (1) GRU police officers did not identify the Operation Ceasefire cases on the court appearance sheets; (2) timekeepers did not properly review the court appearance sheets to identify Operation Ceasefire cases; (3) supervisors were not adequately reviewing the court appearance sheets; (4) MPD Headquarters personnel had not developed internal procedures to identify Operation Ceasefire cases on the court appearance sheets, and (5) the USAO did not require that the MPD submit a copy of the police officer's arrest report to ensure overtime claimed was related to Operation Ceasefire cases.

As a result of our review of the MPD's overtime invoices, we questioned an additional $67,720 reimbursed to the MPD by the USAO for the GRU police officers' overtime. The MPD received overtime reimbursements for police officer court appearances that were not Operation Ceasefire cases. Specifically, the MPD submitted court appearance sheets for reimbursement that were for arrests made by the police officers before Operation Ceasefire began. The MPD financial personnel failed to adequately review the court appearance sheets before submission to the USAO and the USAO did not adequately review the invoices to determine whether all the court appearances were related to Operation Ceasefire cases. In our opinion, the USAO must strengthen its internal controls with respect to the MPD invoices. The USAO should ensure that the MPD can accurately identify Operation Ceasefire cases and any related overtime hours. Overall, the USAO should recover $78,982 in improperly reimbursed overtime costs from the MPD and restore those funds to the Operation Ceasefire account.

USAO Reimbursements Exceeded Overtime Limitations

The EOUSA issued guidance to the USAO instructing them to limit the maximum overtime reimbursement for task force officers to that of a Federal Employee at a General Schedule (GS) grade 10, step 01 annually. The Federal Employee GS Grade 10, step 01, annual overtime limitation in FY 1995, 1996, and 1997 was $7,906, $8,096, and $8,441, respectively. We determined that the USAO's overtime reimbursements to the MPD for some GRU officers in FY 1996 exceeded the annual overtime limitation. The USAO's reimbursements to the MPD in FY 1995 and 1997 did not exceed the annual overtime limitation. In FY 1996, the USAO reimbursed the MPD a total of $421,953 for 69 GRU officers' overtime. Twenty-one of the 69 GRU officers received overtime funds in excess of the annual overtime limitation. These reimbursements ranged between $9,217 and $20,656 and totaled $268,447.⁽⁸⁾ As a result, the USAO reimbursed the MPD $78,254 in excess of the annual maximum overtime amount allowed.

The EOUSA also established a monthly limitation, that is, a state or local law enforcement agency was to be reimbursed for no more than one-twelfth of the annual rate for an officer in any one month. The Federal Employee GS grade 10, step 01, monthly overtime limitation in fiscal years 1995, 1996, and 1997 was $658.81, $674.63, and $703.38, respectively. Our review of the six MPD invoice submissions for GRU police officers overtime disclosed that the USAO also did not enforce the monthly overtime limitation in the three fiscal years of Operation Ceasefire activity.

• In FY 1995, during a three-month period (July 1, 1995 to September 30, 1995), one GRU police officer claimed 49.25 hours, 76 hours, and 51.75 hours respectively. The MPD was reimbursed $4,129 (July $1,149, August $1,773, and September $1,207) during this time period for this police officer. If the USAO followed the FY 1995 monthly limitation, the MPD would have been reimbursed a total of $1,976 for the three-month period.

• In FY 1996, during a four-month period (June 1, 1996 to September 30, 1996), one GRU police officer claimed 39.75 hours, 71 hours, 38.5 hours, and 35 hours, respectively. The MPD was reimbursed $5,517 (June $1,190, July $2,126, August $1,153, and September $1,048) for this police officer. If the USAO followed the FY 1996 monthly limitation, the MPD would have been reimbursed a total of $2,699 for the four-month period.

• In FY 1997, during a four-month time period (October 1, 1996 to January 30, 1997), one GRU police officer, claimed 76 hours, 38.75 hours, 15.25 hours, and 67 hours, respectively. The MPD was reimbursed $4,786 (October $1,848, November $941, December $370, and January $1,628) for this police officer. If the USAO followed the FY 1997 monthly limitation, the MPD would have been reimbursed a total of $2,480 for the four-month period.

We reviewed the reimbursable agreement between the USAO and the MPD and found that the USAO did not identify the EOUSA's limitations on the $8,000 maximum annual amount of overtime or the maximum monthly amount of overtime per police officer. The reimbursable agreement went into effect one day after the EOUSA issued the guidance on overtime and the USAO did not incorporate this guidance into the reimbursable agreement with the MPD. Additionally, after the EOUSA guidance was issued, it appears that the USAO did not revise or amend the reimbursable agreement to include the limitations on overtime. The MPD Office of Finance and Budget personnel believed that the USAO had established a per-invoice police officer overtime limitation of $8,000 as opposed to a per-annum limitation. Our review of invoice three showed that the MPD requested $9,236 for one officer and, subsequently, adjusted the total reimbursement request for that period by exactly $1,236.

The reimbursable agreement was not revised by the USAO to reflect the EOUSA's overtime limitation. The USAO's failure to thoroughly review overtime reimbursements and failure to enforce the EOUSA's annual limitation on overtime resulted in overpayments totaling $78,982. We did not perform an exhaustive review of the Operation Ceasefire overtime invoices to determine whether all reimbursements exceeded the monthly limitation. However, based on the examples of monthly cap overpayments that we found, the USAO may have improperly reimbursed the MPD for GRU police officer overtime in other instances. We suggest that the EOUSA requires that the USAO review the MPD invoices to determine whether the funds reimbursed for overtime exceeded the monthly limitation.

8. The breakdown of overtime was as follows: four officers received between $9,217 and $10,000, eight officers received between $10,001 and $12,000, three officers received between $12,001 and $14,000, three officers received between $14,001 and $16,000, one officer received between $16,001 and $18,000, and two officers received over $20,000.

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