U.S. attorneys serve as the federal government’s principal criminal and civil litigators and conduct most of the trial work in which the United States is a party. Under the direction of the Attorney General, 93 U.S. attorneys are stationed throughout the United States, Puerto Rico, U.S. Virgin Islands, Guam, and Northern Mariana Islands. More than 10,800 employees work in those offices and in the Executive Office for U.S. Attorneys.
The following are examples of cases involving the USAOs that the OIG’s Investigations Division handled during this reporting period:
An investigation by the OIG’s Miami Field Office resulted in the arrest and guilty plea of a Law Enforcement Coordinating Committee liaison assigned to the USAO in the Southern District of Alabama on charges of theft of public property. The investigation developed evidence that the liaison, in his collateral duty as the public information officer, obtained sensitive information on a federal grand jury investigation and provided that information to unauthorized persons. During his initial interview with the OIG, the public information officer denied providing sensitive information to unauthorized persons. However, during a subsequent interview and polygraph examination he admitted to disclosing information pertaining to a federal grand jury investigation to unauthorized persons. The public information officer resigned from his position with the USAO as a result of the investigation. Sentencing is pending.
An investigation by the OIG’s Chicago Field Office resulted in the arrest and guilty plea of a legal assistant employed at the USAO in the Eastern District of Wisconsin on charges of mail fraud. OIG investigators developed evidence that, while employed at the USAO, the legal assistant applied for and received unemployment benefits from the State of Wisconsin totaling $8,698. The State of Wisconsin was reimbursed for the unemployment benefits by drawing down funds from a U.S. Treasury account maintained for that purpose. The USAO terminated the legal assistant from her position as a result of our investigation. Sentencing is pending.
Review of Resource Management in the U.S. Attorneys Offices
The OIG is auditing the allocation of resources of the 93 U.S. attorneys. In particular, the audit is determining the criminal and civil areas to which federal prosecutors are allocated and utilized, as well as the type and number of cases being handled by USAOs.
Under the Department’s Forfeiture Program, state and local law enforcement agencies receive equitable sharing assets when participating directly with the Department’s law enforcement components in joint investigations that lead to the seizure or forfeiture of cash and property. To be eligible to receive equitable sharing proceeds, law enforcement agencies must submit a sharing request within 60 days of an asset seizure.
During this reporting period, the OIG’s Audit Division audited the Colorado State Patrol (CSP), a division of the Colorado Department of Public Safety, and the Boulder County, Colorado, Drug Task Force (BCDTF) and reviewed each auditee’s compliance with six essential equitable sharing guidelines.
The Department awarded CSP with equitable sharing revenues totaling more than $1 million and property valued at $10,737 to support law enforcement operations. We identified six non-compliance issues, including $135,570 in questioned costs related to expenditures of equitable sharing revenues for unallowable purposes. We made seven recommendations, including requiring the CSP to remedy the questioned costs, accurately account for equitable sharing revenue expenditures, discontinue the practice of moving lump sum costs into and out of the equitable sharing revenue fund, and use forfeited tangible property for law enforcement purposes only. The Criminal Division and CSP agreed with six of the recommendations.
The Department awarded BCDTF with equitable sharing revenues totaling more than $1.1 million and property valued at $15,611 to support law enforcement operations. We found that the BCDTF generally complied with the guidelines. However, we found weaknesses in the following areas: 1) the Annual Certification Reports submitted for FYs 2005 and 2006 contained inaccurate information, 2) a new Federal Sharing Agreement was not submitted when an administration change occurred, and 3) $88,352 in questioned costs were identified related to transfers of equitable sharing revenues from the BCDTF to participating agencies that did not submit the required Federal Equitable Sharing Agreement. We made three recommendations, and the Criminal Division and BCDTF agreed with the recommendations.
During this reporting period, the OIG audited various grants awarded by the Office of Community Oriented Policing Services (COPS). The purpose of our audits are to determine whether the costs reimbursed under the grants were allowable; supported; and in accordance with applicable laws, regulations, guidelines, and the terms and conditions of the grant. The following is an example of findings from OIG audits issued during this reporting period:
The OIG audited COPS’ $4 million grant to the City of Philadelphia Police Department (PDD) to fund police overtime for its Operation Safe Streets program and Counter-Terrorism Bureau. The PPD received a $3 million grant in September 2003 and contributed an additional $1 million for a required 25-percent share of its total program costs. We determined that the PPD did not fully comply with the grant requirements we tested. We reviewed compliance with six essential grant conditions and found material weaknesses in the areas of grant expenditures, matching expenditures, reporting, and program performance. COPS agreed with our 15 recommendations, including the questioned costs of $1.2 million.
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (Superfund) provides for liability, compensation, cleanup, and emergency response for hazardous substances released into the environment and for uncontrolled and abandoned hazardous waste sites. The Department conducts and controls all litigation arising under Superfund and is reimbursed through interagency agreements with the Environmental Protection Agency (EPA). These agreements authorize reimbursement to the Department’s Environment and Natural Resources Division (ENRD) for direct and indirect litigation costs. ENRD contracted with an accounting firm to maintain a system of accounting controls to document Superfund litigation costs. The EPA authorized ENRD reimbursements of $27.9 million for FY 2004 and $26.9 million for FY 2005 in accordance with the Interagency Agreements.
As required by Superfund, the OIG audited the cost allocation process used by ENRD and its contractor to see if it provided an equitable distribution of total labor costs, other direct costs, and indirect costs to Superfund cases during FYs 2004 and 2005. We compared costs reported on the contractor-developed accounting schedules and summaries for FYs 2004 and 2005 to the information recorded on the Department’s accounting records, and we reviewed the cost distribution system used by ENRD to allocate incurred costs to Superfund and non-Superfund cases. Based on the results of the audit, we concluded that ENRD provided an equitable distribution of total labor costs, other direct costs, and indirect costs to Superfund cases during FYs 2004 and 2005. However, we recommended that ENRD update its case designation procedures, ensure that travel authorizations are approved prior to the traveler proceeding on the trip, and ensure that all subject code 2508 transactions are allocated to the correct Superfund case number.
The following is an example of a case involving the Tax Division that the OIG’s Investigations Division handled during this reporting period:
- A joint investigation by the OIG’s Washington Field Office and the FBI led to the arrest of a paralegal specialist pursuant to an indictment returned in the Eastern District of Virginia on charges of harboring and concealing an FBI fugitive from arrest. The investigation determined that the paralegal specialist in the Tax Division knowingly harbored and concealed an FBI fugitive for over a year by allowing him to reside with her in Virginia and also by purchasing a residence for him in West Virginia. The Tax Division placed the paralegal specialist on leave without pay while her sentencing is pending.
Monitoring and Oversight of Chapter 7 Panel Trustees
The OIG is auditing the U.S. Trustee Program’s monitoring and oversight of Panel Trustees who collect, liquidate, and distribute personal and business cases under Chapter 7 of the Bankruptcy Code.