The USAO Did Not Properly Account for Operation Ceasefire Property

On September 22, 1995, the EOUSA issued guidance concerning VCTF property. The guidance stated that the USAO was to appoint a qualified individual from the task force as VCTF property custodian. A clear differentiation was made between the VCTF and USAO property custodian in the guidance, adding that the USAO custodian would not be held accountable for property assigned to the VCTF. Responsibilities of the VCTF property custodian included maintaining the physical custody of all property, documenting all actions affecting personal property control, maintaining records of equipment and furniture assigned to the GRU, preparing and forwarding all documentation affecting the status of personal property located in a cost center, and reporting the acquisition of accountable property over $1,000. The property custodian also was responsible for the identification of equipment and furniture acquisition and reporting all information directly to the USAO property custodian. The EOUSA also issued guidance requiring a bi-annual inventory of the VCTF property. In addition, the EOUSA guidance stated that if the USAO reimbursed a state or local agency for task force property purchases that property belongs to the USAO.

The USAO's Law Enforcement Coordination Specialist was appointed as the Operation Ceasefire property custodian. However, the property custodian was not supplied with EOUSA guidance relating to VCTF property nor was she aware of the guidance requiring a bi-annual property inventory. The property custodian did not maintain a list of property purchased for Operation Ceasefire and, therefore, did not have knowledge of the computer and vehicle purchases. Our review disclosed that the equipment and vehicles were used by the MPD to support Operation Ceasefire.

Our review of computer equipment purchased by the USAO for Operation Ceasefire showed that all monitors, computers, and printers had a District of Columbia inventory sticker affixed. We also inventoried 6 of the 12 vehicles purchased by the MPD for Operation Ceasefire. Despite EOUSA guidance that the USAO retain the titles to all purchases with VCTF funds, the District of Columbia retained the titles to these vehicles, according to the MPD Program Coordinator.

We provided the Operation Ceasefire property custodian with a copy of the EOUSA's VCTF property guidance and acquisition documents for all Operation Ceasefire property. We believe the USAO property custodian should review the guidance with the Operation Ceasefire property custodian, explain the responsibilities of a property custodian, and ensure property records are established. We also believe that the USAO should obtain title to the vehicles purchased with VCTF funds.

The USAO's administrative and internal controls over the expenditure of funds for Operation Ceasefire need improvement. The USAO's inadequate review of overtime invoices and failure to ensure that funds were expended in accordance with EOUSA guidance resulted in the improper expenditure of funds. The USAO did not submit all of the quarterly financial and progress reports to the EOUSA as required and the reports that were submitted were inaccurate and lacked pertinent information. The USAO accounting records also did not identify all expenditures. Additionally, the USAO's review of MPD overtime invoices was inadequate. Specifically, the MPD submitted inaccurate overtime invoices and some invoices contained court appearance sheets for non-Operation Ceasefire cases. The USAO failed to enforce the overtime limitation for GRU officers. Furthermore, property accountability procedures were not followed, and the funds remaining were not identified for a specific purpose.

The USAO needs to determine a use for the remaining funds in the office and computer equipment budget categories. If the USAO decides to continue funding MPD gun recovery activities and requests the transfer of the remaining funds into the overtime category, we believe that the USAO needs to strengthen the administrative and operational controls over the expenditure of the funds. Specifically, the USAO should ensure that quarterly financial and progress reports are prepared accurately and timely, accounting records are correct, overtime invoices are adequately reviewed, reimbursable agreements include all restrictions, and property accountability is established. In addition, the USAO should recover $78,982 in improperly reimbursed overtime costs and restore those funds to the Operation Ceasefire account.

The Inspections Division recommends that the Director, Executive Office for United States Attorneys, requires that the United States Attorney for the District of Columbia:

The FBI requested VCTF funding from the EOUSA to continue Safe Streets operations. Based on Safe Streets activities, the FBI reported success in the apprehension of violent offenders, the investigation and prosecution of violent gang members, and the closure of major homicide cases. The number of violent crimes reported in the District of Columbia has decreased by 19.75 percent since 1995. The FBI believes that Safe Streets has contributed to this decrease. Although the stated results of Safe Streets are noteworthy, we did not assess whether this reduction in the number of violent crimes is attributable to the activities of Safe Streets. However, according to the FBI's Safe Streets Coordinator in the WFO, the three Safe Streets squads that received VCTF funds were successful in carrying out their missions. The Coordinator based his opinion on the reported statistical accomplishments of each squad illustrated below in Table V and by the overall reduction in the number of violent crimes reported in the District of Columbia.

Accomplishment Types⁽⁹⁾	Fugitive Squad	Gang Squad	Homicide Squad
Complaints	307	20	9
Informations	1	5	2
Indictments	0	58	9
Arrests	379	150	19
Locates	103	0	2
Convictions	12	72	13
Recoveries - Cash	0	$235,917	$12,575
Restitutions	$37,042	0	0
Fines	$1,325	$210	$60

We also reviewed each squad's FY 1997 statistics from FBI Headquarters for only those activities accomplished with VCTF funds. The FBI expended 32 percent of the VCTF funds during a portion of FY 1997 and applied those funds to the activities of the fugitive, gang, and homicide squads. In the first two months, the fugitive squad reported 30 arrests, 1 complaint, 2 indictments, and 8 locates. From October through January, the gang squad reported 29 arrests, 2 complaints, 3 informations, 7 indictments, and 24 convictions. The gang squad also reported the recovery of $14,000 in cash and the receipt of $1,050 in fines and restitution. Additionally, in the first half of FY 1997, the homicide squad reported 5 arrests and 10 convictions. The remaining FY 1997 statistics were not related to the VCTF funds.

According to the Safe Streets Coordinator, the success of Safe Streets cannot be measured only by the above individual statistics. The Coordinator stated that the FBI Special Agents and the MPD officers assigned to the squads perform other activities that are not recorded on the accomplishment reports. We reviewed the MPD's police officer overtime worksheets and a limited number of FBI case files to identify these other types of activities. The MPD police officers assigned to the gang and homicide squads reported that they worked on various investigative activities during the month. Overtime activities included performing surveillance, serving subpoenas, writing reports, transporting informants, preparing witnesses for court, attending trial and court hearings, and conducting interviews and interrogations.

For example, in the first quarter of FY 1996, ten MPD police officers assigned to the gang squad reported that they performed investigative overtime totaling 697 hours. Our review of three FBI gang case files disclosed that the MPD police officers participated in conducting these investigations and in arresting gang members. In the fourth quarter of FY 1996, eight police officers assigned to the homicide squad also reported that they performed the above activities during 520 hours of investigative overtime. Our review of three FBI homicide case files disclosed that the MPD detectives participated in conducting these homicide investigations.

In March 1995, the USAO was notified by the EOUSA Director that the FBI's FY 1995 Safe Streets proposal for the WFO was approved for $166,000. In all, 71 United States Attorneys received overtime funds for FBI-led task forces. According to the EOUSA Budget Officer, the FBI requested that the EOUSA establish a single reimbursable agreement for the funds rather than enter into 71 individual agreements. The EOUSA instituted a $3.6 million nationwide interagency reimbursable agreement with the FBI's Safe Streets and Gang Unit for the VCTF overtime funds. Based on the reimbursable agreement, responsibility for review and approval of overtime invoices was delegated to the FBI. The MPD's overtime invoices were submitted to the WFO for review and approval. The WFO submitted the overtime invoices to the Safe Streets and Gang Unit for their review and certification. The FBI's Accounting Section then submitted a quarterly invoice directly to the EOUSA for payment. The FBI's quarterly invoice included expenditures for multiple sites receiving overtime funds. Despite EOUSA guidance clearly stating that United States Attorneys are accountable for the VCTF funds, the MPD's overtime invoices were not processed through the USAO, according to the USAO Financial Officer. The USAO, therefore, did not monitor or review the $166,000 it received from the EOUSA for Safe Streets.

In September 1995, the FBI established a $166,000 reimbursable agreement with the MPD for overtime costs for police officers assigned to the three WFO Safe Streets squads. The reimbursable agreement identified the MPD police officers assigned to the task force, approved overtime costs, and established an annual and monthly overtime limitation. The MPD was required to maintain complete and accurate records and accounts of obligations and expenditures of funds. The WFO was required to monitor the overtime funds.

The FBI did not use the VCTF funds awarded in March 1995 for overtime expenditures in FY 1995 as proposed in its funding request. According to officials of the FBI's Safe Streets and Gang Unit and accounting personnel, the FBI did not establish the VCTF account until August 1995 and used other funds in FY 1995 for Safe Streets. In FY 1996, the FBI reimbursed the MPD $113,634 of the $166,000, or 68 percent, for overtime expenses ($16,087 fugitive squad, $54,718 gang squad, and $42,829 homicide squad). The FBI used the remaining funds in FY 1997 to reimburse the MPD $52,366 ($8,079 fugitive squad, $15,860 gang squad, and $28,427 homicide squad). These funds were applied to the fugitive, gang, and homicide squads overtime expenses for the first two months, four months and six months of FY 1997, respectively.

To assess the FBI's administrative and financial controls related to overtime expenditures for Safe Streets, we interviewed the USAO Financial Officer, personnel from the FBI Headquarters and WFO, and staff from the MPD Office of Finance and Budget. We also verified the accuracy and timeliness of the quarterly financial and progress reports prepared by the USAO for Safe Streets. To determine the allowability and reasonableness of costs incurred for each squad, we selected a judgmental sample of overtime transactions totaling $14,256.

We reviewed the MPD's overtime invoices submitted to the WFO for the police officers assigned to Safe Streets. We found that the MPD submitted inaccurate overtime invoices to the FBI and that the FBI did not adequately review the invoices for accuracy and completeness. Specifically, the MPD's invoices contained hourly overtime rates and totals of overtime hours submitted for reimbursement that were incorrect.

We compared the MPD's monthly invoice to the police officers' time and attendance records and other supporting documentation to verify the actual number of overtime hours worked. The FBI's reimbursable agreement with the MPD included a monthly overtime limitation based on 25 percent of the current GS-10, Step 1 Federal annual salary rate. The MPD Office of Finance and Budget personnel stated that they adjusted both the number of hours worked and the hourly overtime rate for officers to stay under the monthly overtime limitation. Based on our limited review of overtime documentation for a number of officers, we found that the MPD understated the hourly overtime rates and number of hours worked on overtime invoices in some instances. However, we also found that the MPD overstated the number of hours worked for officers in some instances as well as overstating the hourly overtime rates on overtime documentation.

The Supervisory Special Agent in the Safe Streets and Gang Unit in Headquarters stated that his staff reviewed the invoices to ensure MPD's reimbursement per police officer did not exceed a monthly overtime limitation in accordance with 25 percent of the Federal employee Grade GS-10 Step 01 annual salary rate. However, he stated that his staff did not check the accuracy of the total number of hours worked or the correctness of the hourly overtime rates. The Supervisory Special Agent believed that the WFO was responsible for reviewing the MPD invoices for accuracy and completeness.

The WFO Safe Streets Coordinator stated that the responsibility for reviewing each invoice and checking for accuracy rested with the FBI's Safe Streets and Gang Unit in Headquarters. However, he also stated that he certified the MPD police officers' information identified on each monthly invoice. The Coordinator did not compare the MPD's monthly invoice to the police officers' time and attendance record or to any other supporting documentation. He stated that the FBI's internal procedures for reviewing and certifying invoices did not require the MPD to submit documentation to establish an officer's hourly overtime rate.

The Coordinator also stated that the WFO has an internal policy of not reimbursing the MPD for overtime worked by supervisory positions above that of a Sergeant. He identified a Lieutenant on an October 1996 fugitive squad overtime invoice that should not have been reimbursed. Although personnel from the MPD Office of Finance and Budget stated that they were not aware that the FBI would not reimburse the MPD for these supervisor positions, the Safe Streets Coordinator stated that the MPD had been informed of this internal policy. Our review of the MPD overtime invoices for each squad from January 1, 1996, through November 30, 1996, disclosed that the FBI incorrectly reimbursed the MPD $4,489 for one Lieutenant's overtime.

According to the FBI's WFO Safe Streets Coordinator, the fugitive, gang, and homicide squads that received VCTF funding were successful in carrying out their missions. The FBI reported success in the apprehension of violent offenders, the investigation and prosecution of violent gang members, and the closure of major homicide cases. The Coordinator based his assessment of the success of these squads on their statistical accomplishments and the reduction in the number of reported violent crimes in the District of Columbia. Although these reported accomplishments are noteworthy, we did not assess whether this reduction in the number of violent crimes is attributable to the activities of the three Safe Streets squads.

Based on our review of FBI accounting records, MPD overtime invoices, and interviews with FBI and USAO personnel, we found that the EOUSA developed a direct reimbursable agreement with the FBI. The MPD's overtime invoices, therefore, were not processed through the USAO despite EOUSA guidance clearly stating that United States Attorneys are accountable for the VCTF funds. Rather, EOUSA's direct reimbursable agreement with the FBI delegated responsibility for review and approval of Safe Streets overtime invoices to the FBI. Overtime invoices were not submitted through the USAO and the USAO did not monitor or review the $166,000 it received from the EOUSA for Safe Streets. As petitioner for and recipient of these federal funds, we believe that the USAO should have overseen the expenditure of VCTF funds for Safe Streets as required by EOUSA guidance.

Additionally, we believe that the FBI needs to strengthen its administrative and internal controls over its review of overtime invoices. Specifically, the FBI needs to clarify the administrative responsibilities of the WFO and the Headquarters' Safe Streets and Gang Unit for reviewing invoices. If the FBI continues to reimburse the MPD for overtime, we suggest that the FBI request documentation from the MPD to determine the correct hourly overtime rates for officers assigned to Safe Streets. We believe that the MPD's time and attendance records, annual salary records, and monthly overtime invoices should be reviewed periodically by the FBI to ensure the overtime payments to the MPD are accurate. The FBI should also obtain a reimbursement from the MPD for the incorrect supervisory overtime payment.

The Inspections Division recommends that the Director, Executive Office for United States Attorneys:

9. A complaint occurs when an arrest warrant is issued for an individual. An information occurs when a prosecutor, instead of a grand jury, makes a formal accusation of a crime. An indictment occurs when an individual is charged with a crime by presentment of a grand jury. A locate occurs when the whereabouts of a fugitive is identified and, although the apprehension of that individual does not occur at that time, the identification eventually leads to the arrest of that individual.