The Drug Enforcement Administrationís Handling of Cash Seizures

Audit Report 07-06
January 2007
Office of the Inspector General


Appendix I
Objective, Scope, and Methodology

Objective

The objective of the audit was to determine whether the DEA complied with appropriate requirements governing the handling of cash from seizure through distribution.

Scope and Methodology

The audit was performed in accordance with the Government Auditing Standards issued by the Comptroller General of the United States, and included tests and procedures necessary to accomplish the objective. We performed fieldwork at the following locations.

DEA Headquarters Arlington, Virginia
Washington Division
Washington Division Office
Baltimore District Office
Richmond District Office
Norfolk Resident Office
Washington, D.C.
Baltimore, Maryland
Richmond, Virginia
Norfolk, Virginia
Los Angeles Division
Los Angeles Division
Riverside District Office
Ventura Resident Office
Los Angeles Airport Group Office
Office Los Angeles, California
Riverside, California
Ventura, California
Los Angeles, California
New York Division
New York Division Office
Long Island District Office
New York Task Force Office
New York John F. Kennedy Airport Office
Syracuse Resident Office
New York, New York
New York, New York
New York, New York
New York, New York
Syracuse, New York
Houston Division
Houston Division Office
McAllen District Office
Austin Resident Office
Brownsville Resident Office
Houston, Texas
McAllen, Texas
Austin, Texas
Brownsville, Texas
New Orleans Division
Montgomery District Office
Birmingham Resident Office
Oxford Resident Office
Montgomery, Alabama
Birmingham, Alabama
Oxford, Mississippi
Miami Division
Miami Division Office
Ft. Lauderdale District Office
Orlando District Office
Tampa District Office
West Palm Beach Resident Office
Miami, Florida
Ft. Lauderdale, Florida
Orlando, Florida
Tampa, Florida
West Palm Beach, Florida
Detroit Division
Detroit Division Office
Columbus District Office
Cleveland Resident Office
Dayton Resident Office
Detroit, Michigan
Columbus, Ohio
Cleveland, Ohio
Dayton, Ohio

As a result of prior external and internal audits, inspections, reviews, and investigations, the DEA revised and updated its controls for safeguarding seized cash during FY 2005. The new controls became effective on April 5, 2005. To determine whether the DEA complied with appropriate requirements governing the handling of cash from seizure through distribution, we initially identified and evaluated the controls established by the DEA to safeguard seized cash. We tested a preliminary statistical sample of 239 cash seizures totaling $4,314,740 from the Washington Division’s universe of 1,304 cash seizures totaling $21,119,512 from October 1, 2003, through September 30, 2005. The 239 cash seizures tested were handled by four Washington Division offices (Washington Division Office, Baltimore District Office, Richmond District Office, and Norfolk Resident Office). Our sample included: (1) seizures made by the DEA as well as seizures made by state and local agencies and subsequently adopted by the DEA for processing under federal laws, and (2) seizures made before and after the new controls were established.

For each of the seizures sampled, we interviewed DEA officials and reviewed documentation from case files to determine the following.

Based on our preliminary audit testing that showed controls for safeguarding seized cash were not always followed, we performed additional testing to include other DEA offices. The scope of our audit work was limited because we excluded many cash seizures from our testing based on requests from the DEA or based on the results of our preliminary testing as follows.

After the preliminary audit testing, we selected an additional 503 cash seizures totaling $40,665,978 at 24 additional DEA locations within 6 additional DEA Divisions. Including the preliminary sample reviewed for the Washington Division, our total sample consisted of 742 cash seizures totaling $44,980,718 at 28 DEA locations within 7 DEA Divisions from the sample universe of 3,705 seizures valued at $160,680,618. Further details of our statistical sample design are presented in Appendix II. The number and dollar value of seizures we tested at each DEA office and Division are shown in the following table.

Number and Dollar Value of Cash Seizures Tested

Division/Office Number of
Seizures
Dollar Value of
Seizures
New York Division
New York Division Office
New York Task Force Office
Long Island District Office
Syracuse Resident Office
John F. Kennedy Airport Office
Total

30
30
21
15
9
105

$975,235
$7,740,242
$631,870
$1,285,106
$619,646
$11,252,099
Houston Division
Houston Division Office
McAllen District Office
Brownsville Resident Office
Austin Resident Office
Total
30
25
6
4
65
$1,214,181
$9,240,962
$37,843
$66,119
$10,559,105
Detroit Division
Detroit Division Office
Columbus District Office
Cleveland Resident Office
Dayton Resident Office
Total
30
29
24
6
89
$2,693,179
$3,437,611
$331,043
$109,495
$6,571,328
Los Angeles Division
Los Angeles Division Office51
Riverside District Office
Ventura Resident Office
Total
50
30
7
87
$3,657,064
$2,082,283
$248,576
$5,987,923
Washington Division52
Washington Division Office
Baltimore District Office
Richmond District Office
Norfolk Resident Office
Total
117
89
23
10
239
$798,716
$1,855,260
$1,447,647
$213,117
$4,314,740
New Orleans Division
Birmingham Resident Office
Montgomery District Office
Oxford Resident Office
Total
30
29
9
68
$2,035,693
$1,043,643
$314,194
$3,393,530
Miami Division
Miami Division Office
Orlando District Office
Tampa District Office
West Palm Beach Resident Office
Ft. Lauderdale District Office
Total
32
24
16
9
8
89
$1,315,102
$548,041
$673,088
$222,832
$142,930
$2,901,993

Grand Total

742

$44,980,718

Source: Statistical sample taken from CATS



Footnotes
  1. To complete this test we compared the date of seizure to the date the currency was converted to a cashier’s check. If those dates were different, we concluded agents should have placed the currency in secure storage along with the appropriate transferring documentation and made a entry in an overnight ledger.

  2. The 50 seizures tested for the Los Angeles Division Office included 20 seizures for the Los Angeles Airport Group Office.

  3. The number of cash seizures tested in the Washington Division included both adopted seizures and DEA seizures. As previously noted, after our preliminary testing in the Washington Division, we excluded adopted seizures from our expanded testing. Thus, we tested more seizures in the Washington Division than in the other DEA Divisions.



« Previous Table of Contents Next »