OIG Audit Report 07-18

The Federal Bureau of Investigation’s Control Over Weapons and Laptop Computers Follow-Up Audit

In 2001, the Attorney General requested that the Office of the Inspector General (OIG) conduct audits of the controls over weapons and laptop computers throughout the Department of Justice (DOJ) in response to concerns about the DOJ’s accountability for such property. Therefore, the OIG conducted separate audits of the controls over weapons and laptop computers at the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), the Federal Bureau of Prisons (BOP), and the United States Marshals Service (USMS).²⁶ The OIG issued separate reports on each component and an overall report summarizing the results from each audit.

In August 2002, we issued our report on the FBI’s control over weapons and laptop computers.²⁷ Our report disclosed significant losses of weapons and laptop computers and examined the inadequacy of the FBI’s response to these losses. The report concluded that the FBI’s procedures to prevent the loss of inventory were not adequate. Specifically, we found that the FBI:

identified 212 functional weapons, 142 inoperable training weapons, and 317 laptop computers as lost, missing, or stolen for our 28 month review period.
did not always report missing items to the DOJ or enter lost and stolen weapons and laptop computers into the National Crime Information Center (NCIC) database.²⁸
did not have policies requiring the reporting of lost or stolen laptop computers to its Office of Professional Responsibility (OPR), and was not investigating these incidents in a timely manner.
had not established deadlines for reporting losses.
was not conducting physical inventories as required.
was not reconciling its property records to its financial records.
was not always ensuring that exit procedures were followed for separating employees to ensure that they returned all issued property.
could not provide documentation to establish whether excessed laptop computers were properly disposed of as required.

To address these deficiencies, we recommended that the FBI: (1) revise its policy for protecting equipment from loss and for disciplining employees when they do not follow FBI policy; (2) establish deadlines for reporting, documenting, and investigating losses; (3) ensure it conducts periodic inventories; (4) reconcile the property records to the financial records; (5) ensure that departing employees return all property that was entrusted to them; and (6) improve documentation showing that excess property had been properly disposed. The FBI agreed with these recommendations and outlined a plan for taking corrective action.

Background

As of March 31, 2006, the FBI employed 1 2,515 Special Agents and 17,915 support personnel located in 56 field offices across the United States; the Training Academy at Quantico, Virginia; over 50 international offices; and FBI headquarters in Washington, D.C. In December 2005, the FBI reported that 52,263 weapons and 26,166 laptop computers were assigned to FBI offices and employees located around the country and abroad.²⁹

The FBI’s inventory of weapons includes semi-automatic pistols, rifles, carbines, shotguns, tear-gas guns, and submachine guns. The term “weapons” includes not only those used operationally, but also training weapons that the FBI refers to as “red handles,” which are incapable of firing live ammunition. In this report, we treat functional weapons and inoperable training weapons separately.³⁰

Laptop computers are assigned to most FBI special agents and many other FBI employees. Among other things, agents use laptops to prepare investigative reports, access various law enforcement databases, and support electronic surveillance activities.

Property Management Application System

The Office of Management and Budget Circular A‑123 requires federal agencies to: (1) establish a management control system that provides reasonable assurance that assets are safeguarded against waste, loss, unauthorized use, and misappropriation; and (2) ensure that transactions are promptly recorded, properly classified, and accounted for in order to prepare timely accounts and reliable financial and other reports.³¹ The Justice Property Management Regulations require that DOJ components issue detailed operating procedures to protect federal property against fraud, waste, and abuse.³²

The FBI guidelines for the general management of property are contained in its:

Accountable Property Manual,
Manual of Investigative Operations and Guidelines, and
Manual of Administrative Operations and Procedures (MAOP).

According to these guidelines, FBI employees are responsible for the proper and reasonable care and safeguarding of property assigned to them or located in their work area. An employee whose negligence causes the loss of FBI property may be subject to disciplinary action.

The FBI’s Accountable Property Manual defines the three principal categories of property as:

Capitalized Property which has an initial acquisition value of $25,000 or more, and that must be posted to the general ledger and accounted for on the annual financial statements;
Accountable Property which, because of its value or nature, must be accounted for on an individual basis in the Property Management Application (PMA). The PMA is an automated system that accounts for all property that the FBI acquires, transfers, and retires.³³ The FBI treats both weapons and laptop computers as accountable (non-expendable) property.
Expendable Property such as supplies and equipment that are normally consumed within a 1-year period.³⁴

Designated Property Management Employees

According to the Accountable Property Manual, the Chief of the Property Procurement and Management Section, located within the Finance Division, is the Property Management Officer (PMO) for the FBI. The PMO is responsible for administering the FBI’s Property Management Program and ensuring that controls are adequate for accounting for FBI property.

Within each field office or headquarters unit, the Special Agent in Charge or an Assistant Director is designated as the Accountable Property Officer (APO). An APO is responsible for coordinating property management activities and providing leadership and guidance to ensure effective internal control procedures are in compliance with FBI requirements. An APO also ensures property records are created, and the property management program within their office is in compliance with the FBI’s Accountable Property Manual and MAOP.

To assist them in the performance of their duties, APOs may designate one or more Property Custodians or Supply Technicians, depending on the size and complexity of an office. In addition, the Accountable Property Manual states that FBI employees are responsible for safeguarding property within their control.

According to the MAOP, the loss, misplacement, theft or destruction of government property issued to any employee must be reported to his or her superior within 5 calendar days of the loss, misplacement, theft or destruction. The division or field office must report the loss, misplacement, theft or destruction on a Form FD‑500, Report of Lost or Stolen Property form, to the Asset Management Unit, Property Procurement and Management Section, Finance Division within 10 calendar days. The APO for the division or field office must sign the Form FD‑500. In addition, the Security Division is required to be notified when laptop computers have been reported lost or stolen.

Once a loss is reported to the Asset Management Unit, the Property Management Officer is responsible for ensuring that all necessary information is obtained and it is forwarded to the proper headquarters units responsible for investigating and reviewing the losses. Also the PMO is responsible for updating the PMA to reflect the property loss.

Once a laptop loss is reported to the Security Division, the Security Compliance Unit is responsible for initiating an inquiry to the respective field office regarding the loss to assess the contents of the laptop, whether or not the laptop contained sensitive or classified information, and if National Security Information has been compromised.

Automated System – The FBI employs the automated PMA “to properly and accurately account for all property that the FBI acquires, transfers, and retires. ”³⁵ Information contained in the PMA includes the description, serial number, barcode number assigned by the FBI, code for the office where the item is located, and other necessary information. The PMA can produce a “Property Charged Out” report for any active or separated employee showing all accountable property that had been, or is still, assigned to that employee.

The FBI’s Firearms Training Unit supplements the PMA with an index card for each weapon in its inventory. Like the PMA, the index cards include the serial number, barcode number (if applied to the weapon), individual or office to whom the property is assigned, and the final disposition of the weapon. The index card also includes details of any repairs that had been made to the weapons.

Audit Approach

The FBI had the greatest number of losses, as well as the most significant deficiencies in controls, of all the DOJ components we reviewed in our 2002 audits of controls over weapons and laptops.³⁶ We conducted this follow-up audit to assess the FBI’s progress in addressing the deficiencies we identified related to its control over weapons and laptops.³⁷ Our follow-up audit focused on a 44-month review period (February 1, 2002, through September 30, 2005).

In this follow-up audit, we interviewed FBI officials, reviewed documents, and tested controls at the FBI Headquarters in Washington, D.C., the Training Academy at Quantico, Virginia, and field offices in Chicago, Illinois; Los Angeles, California; Miami, Florida; New York, New York; and Washington, D.C. Fifty two percent of all weapons and 54 percent of all laptop computers were assigned to these offices.

Our audit examined actions taken in response to the identification of lost or stolen weapons and laptop computers. We reviewed the FBI’s current procedures for responding to reports of missing weapons and laptop computers to determine whether losses are being reported in accordance with prior recommendations. We also queried NCIC and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) National Tracing Center to identify lost or stolen FBI weapons that were recovered or used in the commission of a crime.³⁸ For laptop computers, we queried NCIC to identify recovered property and assessed whether national security or investigative information may have been compromised. We address these issues in Finding I.

In addition, we reviewed the FBI’s internal controls over accountable property, exit procedures for departing employees, and disposal of property. Our assessment included physically verifying a sample of weapons and laptop computers. We also tested the accuracy and completeness of the property records. The results of these analyses are presented in Finding II.

Footnotes

The OIG also conducted a property audit, including weapons and laptop computers, of the Immigration and Naturalization Service (INS), but the report was issued prior to the Attorney General’s request. Department of Justice, Office of the Inspector General. Audit Report 01-09, Immigration and Naturalization Service Management of Property, March 2001. The INS was transferred to the Department of Homeland Security in 2003.
Department of Justice, Office of the Inspector General. Audit Report 02-27, The Federal Bureau of Investigation’s Control over Weapons and Laptop Computers, August 2002.
NCIC is a computerized index of criminal justice information, including criminal history information, fugitives, stolen property, and missing persons, that is available to federal, state, and local law enforcement and other criminal justice agencies.
See Appendix VIII for an analysis of FBI assigned weapons and laptops.
Training weapons include those that fire only blanks or paint-marking munitions. The FBI’s Firearms Training Unit (FTU) considers it unlikely that anyone would convert a training weapon to a functional weapon because the conversion would be more expensive than the cost of a new functional weapon. Further, the conversion would require the services of a skilled gunsmith and parts that are available only from the manufacturer or from a licensed gun dealer.
Office of Management and Budget. “Management’s Responsibility for Internal Control,” Circular A-123, December 21, 2004.
Department of Justice Order (DOJ Order) 2400.3, dated August 6, 1998.
The PMA uses a variety of data fields to identify each item, including a barcode number assigned by the FBI, serial number, cost center code for the office where the item is located, description of the item, and other necessary information.
The FBI Accountable Property Manual, Introduction and Section 2, paragraphs 2-4 and 2-22.
Accountable Property Manual, Section 2, Paragraph 2-38.
The problems in the INS were comparable, but INS functions were transferred to the Department of Homeland Security in 2003.
Appendix I contains more information on the current audit’s objectives, scope, and methodology.
The ATF National Tracing Center tracks the history of recovered crime guns for federal, state, local, and international law enforcement agencies.