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 Ohio State Highway Patrol (OSHP), a part of the Ohio Department of Public Safety umbrella for fiscal services and administration. 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 of July 1, 2002, through June 30, 2004, the OSHP was awarded DOJ equitable sharing revenues totaling $1,685,391 and property valued at $23,150 to support law enforcement operations.
We reviewed the OSHP’s compliance with six essential equitable sharing guidelines and identified issues of non-compliance, as identified below.
- A separate bank account for DOJ equitable sharing funds is not maintained by the OSHP, nor is a separate accounting code used to distinguish between DOJ, Treasury, or state of Ohio funds. Detailed fund activity is tracked using manual spreadsheets and all interest earned is commingled in the OSHP’s official records. The 1994 Guide to Equitable Sharing and terms of the Equitable Sharing Agreement specify that local and state funds must not be commingled with federal equitable sharing funds and that interest earned on the DOJ fund balance should be tracked separately from revenues from other sources on the official accounting records.
- None of the ten equitable sharing receipts that we reviewed were deposited in a timely manner. According to the 1994 Guide to Equitable Sharing, receipts should be deposited on the same day of receipt or on the next business day.
- The fiscal year (FY) 2004 and FY 2003 Federal Annual Certification Reports contained inaccurate information and were not complete. The amount of revenue reported for FY 2004 was overstated by $4,115 because three state of Ohio receipts were erroneously recorded as DOJ funds. In addition, the amount of revenue for FY 2004 was understated by $23,150 because a transferred piece of tangible property was not reported. For the FY 2003 Federal Annual Certification Report, an intrastate fund transfer totaling $1.5 million from the OSHP to the Attorney General of Ohio Finance Section (of which $831,078 was allocated to DOJ equitable sharing funds) should have been recorded as a transfer of funds between agencies. Additionally, a transfer of $101,705 from the OSHP to the Ohio Troopers Coalition (of which $56,350 was allocated to DOJ equitable sharing funds) should have been identified as a permissible use transfer.2
- An invoice for lab equipment totaling $28,789, of which $15,951 was allocated to DOJ equitable sharing funds, was not entered into OSHP property records and was not capitalized in accordance with Ohio State capitalization guidelines.
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.
We discussed the results of our audit with OSHP and Ohio Department of Public Safety officials and have included their comments in the report, as applicable. In addition, we provided the OSHP and the DOJ Criminal Division, Asset Forfeiture and Money Laundering Section, with a draft of our audit report and requested formal responses, which were appended to this report.
- 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.
- The permissible use policy states that a state or local law enforcement agency may use not more that 15 percent of its shared monies for the costs associated with drug abuse treatment, drug and crime prevention education, housing and job skills programs or other nonprofit community-based programs or activities, which are formally approved by the chief law enforcement officer (i.e., chief, sheriff, or prosecutor) as being supportive of and consistent with a law enforcement effort, policy, and/or initiative.