THE AUDIT DIVISION
|The Audit Division is responsible for independent reviews of Department of Justice organizations, programs, functions, computers technology and security systems, and financial statement audits.|
The Audit Division (Audit) reviews Department organizations, programs, functions, computer technology and security systems, and financial statements. Audit also conducts or oversees external audits of expenditures made under Department contracts, grants, and other agreements. Audits are conducted in accordance with the Comptroller General's Government Auditing Standards and related professional auditing standards. Audit produces a wide variety of audit products designed to provide timely notification to Department management of issues needing attention. It also assists the Investigations Division in complex fraud cases.
Audit works with Department management to develop recommendations for corrective actions that will resolve identified weaknesses. By doing so, Audit remains responsive to its customers and promotes more efficient and effective Department operations. During the course of regularly scheduled work, Audit also lends fiscal and programmatic expertise to Department components.
Audit has field offices in Atlanta, Chicago, Dallas, Denver, Philadelphia, San Francisco, and Washington, D.C. The Financial Statement Audit Office and Computer Security and Information Technology Audit Office also are located in Washington, D.C. Audit Headquarters consists of the immediate office of the Assistant Inspector General for Audit, the Office of Operations, the Office of Policy and Planning, and an Advanced Audit Techniques Group. Auditors and analysts have formal education in fields such as accounting, program management, public administration, computer science, information systems, and statistics.
The field offices' geographic coverage is indicated on the map below. The San Francisco office also covers Alaska, Hawaii, Guam, the Northern Mariana Islands, and American Samoa, and the Atlanta office also covers Puerto Rico and the U.S. Virgin Islands.
During this reporting period, Audit issued 327 audit reports containing more than $29 million in questioned costs and $7 million in funds to better use and made 324 recommendations for management improvement. Specifically, Audit issued 17 internal reports of programs funded at more than $561 million; 43 external reports of contracts, grants, and other agreements funded at more than $56 million; 206 audits of bankruptcy trustees with responsibility for funds of more than $309 million; and 61 Single Audit Act audits. Audit issued 3 Management Information Memoranda, 2 Notifications of Irregularity, and 10 Management Letter Transmittals.
SIGNIFICANT AUDIT PRODUCTS
State Criminal Alien Assistance Grant Program
The Office of Justice Programs (OJP) provides grants to state and local governments to help defray the cost of incarcerating undocumented criminal aliens convicted of state or local felonies. The grants are administered by OJP under the State Criminal Alien Assistance Program (SCAAP). OJP made payments totaling $495 million to 146 state and local applicants for FY 1996 and $492 million to 270 applicants for FY 1997. For each of FYs 1998 through 2000, Congress appropriated $585 million for SCAAP grant awards.
During our review of five FY 1996 SCAAP grants, we found that OJP overcompensated California, Texas, New York, Florida, and Illinois approximately $19.3 million for unallowable inmate costs and ineligible inmates. We estimated that OJP overpaid these five states for at least 1,760 inmates whose immigration status was unknown. In addition, we found OJP's FY 1996 methodology for compensating applicants over-inclusive and offered suggestions for how it could be improved. We suggested that OJP consider basing qualifying costs on a cost category common to all applicants, such as salary, thus eliminating the need for OJP and the applicants to search cost categories for allowable costs.
We also recommended that OJP address the questioned costs, develop more specific guidelines for qualifying costs, ensure the applicants submit accurate data, develop more specific information on eligible inmates, and compensate applicants only for eligible inmates.
Community Oriented Policing Services Grant Audits
We continue to maintain extensive audit coverage of the Office of Community Oriented Policing Services (COPS) grant program. The Violent Crime Control and Law Enforcement Act of 1994 (Crime Act) authorized $8.8 billion over six years for grants to add 100,000 police officers to the nation's streets. During this reporting period, we performed 33 audits of COPS hiring and redeployment grants totaling more than $56 million. Our audits identified more than $4.5 million in questioned costs and more than $4.3 million in funds to better use.
The following are examples of findings reported in our audits of COPS grants during this period:
Computer Security Controls
Audit reviewed select computer security controls of the DEA, INS, and COPS computer systems. The computer system security audits address a significant management concern in the Department and assess whether certain computer security controls are in place to protect computer systems from unauthorized use, loss, or modification. We tested security controls related to password management, log-on management, account integrity, system auditing, and remote access service. We identified vulnerabilities at each component. For example, among the more serious security vulnerabilities at COPS, security test software correctly guessed about 33 percent of the user account passwords of the COPS computer system reviewed, thus exposing information to unauthorized use, loss, or modification. The DEA and INS audits are not publicly available because of the sensitivity of some items discussed in the reports. The results of our reviews were provided to management officials, and corrective action was initiated by the components.
The U.S. Marshals' Court Security Officer Program
The USMS has primary responsibility and authority for providing security for the federal judiciary. The USMS contracts out for court security officers (CSOs) to provide security at courthouses and federal buildings housing court operations. The purpose of our audit was to determine whether the USMS manages the CSO program effectively and efficiently.
Procurement of CSO contracts and management of the program are largely USMS headquarters functions. The program has grown more than 1,400 percent since 1983. The centralized manner in which it is run has raised concerns of whether a program of this size--3,100 CSOs dispersed across 94 USMS districts--can be effectively managed in a highly centralized environment.
We surveyed all 94 U.S. Marshals and 76 of 94 chief judges to obtain feedback about the program. Most U.S. Marshals and chief judges we surveyed indicated that they were satisfied with the program. However, there was some sentiment among USMS employees and members of the judiciary regarding the management of the program and the efficacy of using contract employees for judicial security. Because of the conflicting nature of the evidence obtained, we did not recommend a singular course of action. Instead, we suggested several options to the USMS: (1) continue utilizing the current CSO contracts, (2) eliminate the contract operation by converting contract guards to federal employees, or (3) effect a partial conversion by stratifying the current guard force into two separate units, one contract (for building security) and one federal (for courtroom security).
We also noted several areas of concern at the operational level of the program. Currently, the Administrative Office of the U.S. Courts only reimburses the USMS for program-related costs at the headquarters level. We estimated that the USMS incurs about $2.8 million annually in program-related costs at the district level for which it is not compensated. In addition, we found that training of the CSOs, from bomb detection to anti-terrorism programs, is inadequate. CSO contracts do not currently contain provisions for CSO in-service training. Unannounced tests of security screening posts are not conducted as required. CSO security clearances and medical certifications have not been consistently maintained at the district level. We made recommendations in each of these areas. The USMS agreed with our recommendations, with the exception of the need to maintain security clearances and medical certifications in the district offices. The OIG and USMS are working to resolve this issue.
Combined DNA Index System Laboratory Audits
Audit conducted reviews of eight state and local laboratories that participate in the FBI's Combined DNA Index System (CODIS). These laboratories are in Fort Lauderdale, Tallahassee, and Miami, Florida; Raleigh, North Carolina; Berkeley, California; Springfield, Illinois; Richmond, Virginia; and Greensburg, Pennsylvania. CODIS is a national information repository maintained by the FBI that permits the storing, maintaining, tracking, and searching of DNA specimen information to facilitate the exchange of DNA information by law enforcement agencies. Participating states and localities submit the DNA profiles to the FBI.
The laboratory audits were conducted at the request of the FBI to determine compliance with the FBI's Quality Assurance Standards and National DNA Index System (NDIS) requirements, and to evaluate the accuracy and appropriateness of the data the states and localities have submitted to the FBI. The Quality Assurance Standards place specific requirements on laboratories, and the NDIS requirements establish the laboratory responsibilities and obligations for program participation. In addition, state legislation establishes the specific crimes for which DNA profiles of convicted offenders must be obtained and may be submitted to the FBI.
During these audits, we interviewed laboratory officials, inspected laboratory facilities, reviewed laboratory policies and procedures, and reviewed supporting documentation for selected DNA profiles. The laboratories generally complied with the FBI's requirements, and the NDIS generally contained accurate, allowable DNA profiles. However, we found instances where state and local agencies inappropriately submitted victim profiles to the FBI and submitted inaccurate profiles or failed to submit available profile data to the FBI. We recommended that the FBI ensure the laboratories address the compliance deficiencies and incomplete, inaccurate, and unallowable DNA profiles in NDIS. The FBI has begun to address the issues remaining for the laboratories reviewed.
The Department's State and Local Equitable Sharing Program
The Department's equitable sharing program is designed to enhance cooperation among federal, state, and local law enforcement agencies through the sharing of proceeds resulting from federal forfeitures. State and local law enforcement agencies generally receive equitable sharing revenues by participating directly with Department components in joint investigations that lead to the seizure and forfeiture of property. The amount of forfeiture proceeds shared with state and local law enforcement agencies is based on the degree of the agencies' direct participation in a case.
Audit reviewed equitable sharing activities conducted by the DEA, FBI, USAOs, and USMS. In FY 1999, the Department shared approximately $231 million in cash and proceeds with state and local law enforcement agencies. The objectives of our work at the four Department components were to determine whether (1) equitable sharing amounts were based on net forfeiture proceeds in accordance with applicable guidelines, (2) equitable sharing percentages appeared reasonable based on the level of effort provided by the requesting agency, and (3) equitable sharing applications and related documentation were completed properly.
We concluded that the Department components we reviewed generally complied with applicable guidelines and regulations related to the equitable sharing program. However, we identified a $10,000 award paid by the DEA that should have been deducted from forfeiture proceeds prior to equitable sharing. We also determined that the DEA did not recover more than $500,000 in advertising costs prior to equitable sharing. The DEA immediately increased its recovery of advertising costs based on the results of our audit and took appropriate actions to address the concerns identified in the report.
Audit contributes significantly to the integrity of the bankruptcy program by conducting performance audits of trustees under a reimbursable agreement with the EOUST. During this reporting period, Audit issued 206 reports on the Chapter 7 bankruptcy practices of private trustees under Title 11, United States Code (Bankruptcy Code).
The Chapter 7 trustees are appointed to collect, liquidate, and distribute personal and business cases under Chapter 7 of the Bankruptcy Code. As a representative of the bankruptcy estate, the Chapter 7 trustee serves as a fiduciary, protecting the interests of all estate beneficiaries, including creditors and debtors.
Performance audits are conducted on Chapter 7 trustees to provide U.S. Trustees with an assessment of the trustees' compliance with bankruptcy laws, regulations, rules, and the requirements of the Handbook for Chapter 7 Trustees. Additionally, the audits assess the quality of the private trustees' accounting for bankruptcy estate assets, cash management practices, bonding, internal controls, file maintenance, and other administrative practices.
Department Financial Statement Audits
The Chief Financial Officers Act of 1990 and the Government Management Reform Act of 1994 require financial statement audits of the Department. Audit oversees and issues the reports based on the work performed by independent public accountants. During this reporting period, we issued 10 FY 1999 Department of Justice component reports:
Each of these audits was performed in support of the FY 1999 Consolidated Department of Justice audit, which was issued in the prior semiannual period and resulted in a qualified opinion on the consolidated financial statements. A comparison of the audit results for FY 1999 and FY 1998 follows:
Single Audit Act
The Single Audit Act of 1984 requires recipients of federal funds to arrange for audits of their activities. Federal agencies that award federal funds must review these audits to determine whether prompt and appropriate corrective action has been taken in response to audit findings.
During this reporting period, Audit reviewed and transmitted to OJP 61 reports encompassing 419 Department contracts, grants, and other agreements totaling more than $716 million. These audits report on financial activities, compliance with applicable laws, and the adequacy of recipients' management controls over federal expenditures.
OMB Circular A-50
OMB Circular A-50, Audit Follow-Up, requires audit reports to be resolved within six months of the audit report issuance date. Audit continuously monitors the status of open audit reports to track the audit resolution and closure process. As of September 30, 2000, the OIG had closed 277 audit reports and was monitoring the resolution process of 378 open audit reports.
Audits Over Six Months Old Without Management Decisions or in Disagreement
As of September 30, 2000, the following audits had no management decision or were in disagreement: