Audit of the Department of Justice Counterterrorism Fund

Report No. 99-28
September 1999
Office of the Inspector General

Fighting terrorism is a high priority of the Attorney General and the Department of Justice (DOJ). Recently, acts of terrorism against the United States have received worldwide attention, including bombings of the federal building in Oklahoma City, Oklahoma, and two United States embassies in Africa. In the wake of the Oklahoma City bombing, Congress created the DOJ Counterterrorism Fund (the Fund) to assist Department components with the high cost of responding to terrorism. For fiscal years (FYs) 1995 through 1998, Congress appropriated over $133 million to the Fund, of which about $106 million has been obligated to DOJ components for reimbursement of certain counterterrorism expenses.

The Justice Management Division (JMD), the administrative arm of the Department, administers the Fund for the Attorney General. In brief, our audit of the Fund determined that, although JMD maintains strong controls over the initial approval of planned expenditures, it needs to take a more proactive approach to its administrative duties and the actual expenditure of funds. Our review of transactions totaling almost $26 million revealed over $4 million (16 percent) in dollar-related deficiencies. In summary:

• Funds disseminated to state, local, and non-DOJ federal agencies were particularly at risk due to the lack of federal oversight, as evidenced by $1.1 million in funds that were either improperly used or could be better used elsewhere.

• JMD approved Executive Office for United States Attorneys' reimbursement requests for regular pay and benefits costs, while legislative and departmental guidance disallow the payment of non-extraordinary expenses under the Fund.

• DOJ components improperly used or could not support a total of $2.9 million.

The need for stronger management controls is especially important in light of recent congressional action that has greatly increased the Fund balance and the amount of funds designated for non-DOJ agencies. Approximately $145 million has been allocated to the Fund for FY 1999, a significant increase over past appropriations. Thus, without adequate oversight of Fund expenditures, even more funds are at risk. This can diminish the amount of funds immediately available to respond to a terrorist incident.

The details of our results are contained in the Findings and Recommendations section of the report. Our audit objectives, scope, and methodology are contained in Appendix I.