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 Fort Lauderdale, Florida, Police Department (Police Department). Equitable sharing revenues represent a share of the proceeds from the forfeiture of assets seized in the course of certain criminal investigations.1 During the period October 1, 2001, through April 30, 2004, the Police Department was awarded DOJ equitable sharing revenues totaling $4,181,609 to support its law enforcement operations.
We reviewed the Police Department's compliance with six essential equitable sharing guidelines and found weaknesses in four areas as identified below.
- Federal Sharing Agreements and Annual Certification Reports: The Police Department did not submit an updated Federal Sharing Agreement for the 3-year periods ended FY 2002 and FY 2005 when its administration changed. The Police Department also did not submit complete and timely Annual Certification Reports for FY 2002 and FY 2003. Subsequent to our fieldwork, the Police Department submitted an updated Federal Sharing Agreement for the 3-year period ending FY 2005. The Police Department also instituted new procedures to verify all deposits received from other law enforcement agencies with its legal division to ensure that the funds are deposited and recorded in the correct accounts.
- Accounting for Equitable Sharing Receipts: The Police Department did not record or update its Application for Transfer of Federally Forfeited Property (DAG-71) control log to show it had requested $101,304 in four cases and received $612,816 in eight cases. In addition, the Police Department did not timely deposit five receipts totaling $128,925 and inappropriately deposited DOJ equitable sharing funds totaling $54,109 received from other law enforcement agencies into its State confiscation account. Subsequent to our audit fieldwork, the Police Department:
1) recorded and updated its DAG-71 control log; 2) established procedures to ensure that when the individual responsible for maintaining the DAG-71 control log and making deposits is out, another individual is assigned to perform those duties;
3) transferred the $54,109 plus interest to the DOJ Equitable Sharing account; and 4) established procedures to ensure that funds received from other law enforcement agencies are properly classified before being deposited.
- Use of Equitable Sharing Funds: In FY 2004, the Police Department appropriated $48,000 of DOJ equitable sharing funds for a non-law enforcement position. Subsequent to our audit fieldwork, the Police Department took corrective action to ensure the $48,000 was not used for non-law enforcement purposes. Also, the Police Department failed to reimburse $7,992 to the DOJ equitable sharing account from which it used the funds to satisfy the liens of 10 state confiscated vehicles that were eventually sold. Subsequent to our audit fieldwork, the Police Department reimbursed the $7,992 plus interest to the DOJ equitable sharing account.
- Interest Earned On Equitable Sharing Funds: The Police Department commingled interest earned on DOJ equitable sharing funds with interest earned on U.S. Department of Treasury equitable sharing funds. Subsequent to our audit fieldwork, the Police Department activated the interest revenue account to record the interest earned on U.S. Department of Treasury equitable sharing funds and to keep the Treasury revenue interest separate from the DOJ revenue interest.
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.
- The DOJ asset forfeiture program has three primary goals to: 1) punish and deter criminal activity by depriving criminals of property used or acquired through illegal activities; 2) 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) produce revenues to enhance forfeitures and strengthen law enforcement.