Maintenance and Disposal of Seized and Forfeited Assets
in Selected Western Districts
Report No. 02-07
Office of the Inspector General
The United States Marshals Service (USMS) maintains custody for various assets seized by agencies of the Department of Justice (DOJ). The USMS also disposes of assets after their ownership has been forfeited to the federal government. At the end of fiscal year (FY) 2000, the inventory of seized and forfeited assets in USMS custody was valued at more than $800 million.
Since 1990 the Comptroller General of the United States has designated asset forfeiture as a high-risk area. Earlier audits by our office and the General Accounting Office (GAO) identified significant problems in USMS management of seized and forfeited assets.
Although recent audit reports by GAO and others have documented improvements in the USMS's management of seized and forfeited assets, we initiated this audit because asset forfeiture remains a high-risk area and we have a continuing responsibility for audit oversight of such areas. Our objectives were to determine whether: (1) current management practices assure that the USMS properly secures, stores, and accounts for seized and forfeited assets; (2) the USMS disposes of forfeited assets in a timely and cost-effective manner; and (3) the USMS has implemented sufficient management actions to correct prior audit findings.
We audited sites in three western USMS districts (Southern California, Nevada, and Arizona) where we tested USMS maintenance and disposal of vehicles, vessels, cash/currency, and financial instruments. We also evaluated the disposal of forfeited jewelry at a nationwide auction held in Las Vegas, NV, in March 2001. In brief, our audit did not identify any significant deficiencies in USMS's management of seized and forfeited assets in the categories we selected at the locations where we audited.
We performed fieldwork in the Southern District of California as a follow-up to our prior work, which had found numerous problems in that district's management of seized and forfeited assets. Our current audit found significant improvements in all areas that we examined in this district.
We performed fieldwork in the District of Nevada in conjunction with our observation of the nationwide jewelry auction held in Las Vegas. We also selected the District of Arizona for testing based on the volume of asset seizure and forfeiture activity in that district. Our testing in those two districts did not find significant problems in the management of seized and forfeited assets.
For our testing in all the districts audited, we physically verified the existence and location of assets, confirmed the reasonableness of their valuation, and tested whether the USMS promptly disposed of assets after forfeiture. Our methodology included -- as appropriate for the size of the universe of assets at each location -- statistical sampling, judgmental sampling, and 100 percent review. In the tests on assets using statistically selected samples we noted no exceptions; consequently, we are able to state with 95 percent confidence that errors, if any, at the locations tested would not exceed 5 percent of the universe in question. In each instance where we used judgmental sampling or 100 percent review, we were able to account for all selected assets.
Our testing in the three districts also disclosed that the valuation of assets in the Consolidated Assets Tracking System was generally reasonable, and we found that the USMS generally disposed of forfeited assets in a timely manner.
Our audit objectives, scope, and methodology appear in Appendix III.