DRUG FORFEITURE AGENCY FUND

Document Sample
DRUG FORFEITURE AGENCY FUND Powered By Docstoc
					                                         Audit Report

                                    DRUG FORFEITURE
                                     AGENCY FUND
     County Controller               As of September 30, 2010
   Stephen J. Barron, Jr., CFE

       Audit Manager
      Frank S. Kedl, CIA

           Solicitor
   Timothy P. Brennan, Esq.


     County Executive
          John Stoffa


      County Council
    John Cusick, President
Margaret Ferraro, Vice-President
           Ron Angle
      Thomas H. Dietrich
       J. Michael Dowd
       Bruce A. Gilbert            Office of the Controller
   Lamont G. McClure, Esq.         County of Northampton
          Ann McHale                    Pennsylvania
        Barbara Thierry
                                                   STEPHEN J. BARRON, JR., CFE

                                          CONTROLLER OF NORTHAMPTON COUNTY
                                                    NORTHAMPTON COUNTY COURTHOUSE
                                                         669 WASHINGTON STREET
                                                       EASTON, PENNSYLVANIA 18042
FRANK S. KEDL, CIA
Audit Manager
                                                              PHONE (610) 559-3186
TIMOTHY P. BRENNAN, ESQ.                                       FAX (610) 559-3137
Solicitor




January 26, 2011

Members of the Northampton County Council
John Stoffa, County Executive
County of Northampton, Pennsylvania


We have completed an audit of the Drug Forfeiture Agency Fund as of September 30, 2010.
The Executive Summary on page 1 summarizes the audit results and identifies opportunities for
improvement, while the Audit Results section provides a detailed explanation.
We acknowledge the cooperation and assistance that we received from Detectives in the District
Attorney’s office. Their help was essential to the performance of this audit.
Management’s response is included in the Audit Results section of the report.


Very truly yours,




Stephen J. Barron, Jr., CFE                                Frank G. Sabol, Jr.
County Controller                                          Staff Auditor
Table of Contents
                                                                                                                    PAGE



EXECUTIVE SUMMARY - OPPORTUNITIES FOR IMPROVEMENT................. 1

INTRODUCTION ............................................................................................................. 2

PURPOSE AND SCOPE................................................................................................... 3

METHODOLOGY ............................................................................................................ 3

AUDIT RESULTS ............................................................................................................. 4

Section A – Internal Controls
1.         Monthly Bank Reconciliations .................................................................................. 4
2.         Approval Process for Cash Disbursements............................................................. 5
3.         Supporting Documentation for Disbursements ....................................................... 6
EXECUTIVE SUMMARY - OPPORTUNITIES FOR IMPROVEMENT


The following is a summary of the content of the enclosed report. See report references noted
below for full detail.


Section A – Internal Controls

              1. Performing bank reconciliations on a monthly basis for the Federal Forfeiture
                 checking account will enforce a strategic internal control which is needed to
                 confirm that the bank balance and the County’s book balance are in
                 agreement. (Section A-1, pg. 4)

              2. Acquiring a written approval from the District Attorney or a designated
                 Assistant DA for all disbursements made from the Drug Task Force and the
                 Federal Forfeiture accounts will enhance the approval process and will
                 confirm that all spending is within the District Attorney’s objectives. (Section
                 A-2, pg. 5)

              3. Improvements in the filing and retention of invoices that support
                 disbursements from the Federal Forfeiture account will help document all
                 spending and confirm that all spending falls within the guidelines set by the
                 Department of Justice.     (Section A-3, pg. 6)




                                               1
INTRODUCTION


        Two detectives in the District Attorney’s office are responsible for maintaining five
        bank accounts that are included in the DA Drug Forfeiture Agency Fund. Two
        accounts are used to maintain Drug-related forfeitures. Local police departments
        within Northampton County seize cash, vehicles and property at the time of a
        drug-related arrest. Forfeited cash and proceeds from the sale of forfeited
        vehicles and property are deposited into these accounts and are identified by
        court order number or case number. All withdrawals from these accounts are
        approved by the District Attorney for drug-related salaries, education, training,
        and drug case expenses.

        A third account is used to maintain Drug Task Force activity. Various local police
        departments within Northampton County work together as a team or task force to
        investigate drug-related activity. Each quarter this account receives $32,000
        from the State Attorney General’s Office which equates to $128,000 annually.
        The majority of this money is used to reimburse local police departments for
        overtime needed to perform specific task force activity. Also, money is used for
        case expenses, to purchase drugs and drug-related equipment, and to pay
        informants. Any money that is not used during the year is returned to the
        Attorney General. All spending in this account is documented by reports
        submitted to the County Detective from the local police departments.
        Reimbursement payments to the local police departments are made by the Drug
        Task Force Coordinator/County Detective and at the end of each quarter a report
        of spending is furnished to the District Attorney for review and approval. This
        report is then forwarded to the Office of the Attorney General for accounting
        purposes.

        A fourth account is used to maintain General Forfeiture activity. Local police
        departments within Northampton County seize cash and equipment at the time of
        an illegal gambling-related arrest. Also, forfeited cash and fines paid for
        trademark and counterfeit material violations are deposited into this account and
        are identified by court order number. All withdrawals from this account are
        approved by the District Attorney for miscellaneous general expenses primarily
        related to investigative equipment and service contracts.

        The fifth or last account is used to maintain Federal Forfeiture activity. A one-
        time federal forfeiture of $74,000 was received in 2006. Based on the Guide to
        Equitable Sharing for State and Local Law Enforcement Agencies issued by the US
        Department of Justice this money is available for specific law enforcement
        expenses. All withdrawals from this account are approved by the District
        Attorney or his 1st Assistant DA.




                                          2
PURPOSE AND SCOPE


        This audit is one in a series of periodic audits of all agency funds performed for
        the purpose of supplementing the year-end work prescribed by the County’s
        external auditor. The focus of this audit was on the receipt and disbursement
        functions and on compliance with laws and regulations of the Drug Forfeiture
        Agency. Since we performed a total audit of County Drug-Related Forfeitures
        prior to submitting the State Controlled Substance Report (9/27/2010) we
        focused this review on the Drug Task Force, the General Forfeitures and the
        Federal Forfeitures.

        The purpose of the audit was:
              • To determine the adequacy of internal controls.
              • To test compliance with laws, regulations, policies and procedures.

        Our tests were conducted on transactions occurring during the nine months
        ended September 30, 2010.




METHODOLOGY


        Our methodology included:

        •   Interviewing personnel in the District Attorney’s Detective Bureau to
            document the receipt and disbursement processes.

        •   Identifying applicable policies, procedures, laws and regulations.

        •   Identifying and assessing controls.

        •   Testing transactions for compliance with internal controls and regulations.

        We conducted this performance audit in accordance with generally accepted
        government auditing standards. Those standards require that we plan and
        perform the audit to obtain sufficient, appropriate evidence to provide a
        reasonable basis for our findings and conclusions based on our audit objectives.
        We believe that the evidence obtained provides a reasonable basis for our
        findings and conclusions based on our audit objectives.




                                         3
AUDIT RESULTS


Section A – Internal Controls




1. Monthly Bank Reconciliations

            OBSERVATION

            During our initial internal control review we found that Bank Reconciliations are
            not being performed on a monthly basis for the Federal Forfeiture checking
            account.

            RECOMMENDATION

            The detective responsible for maintaining the Federal Forfeiture checking
            account should perform a bank reconciliation at the end of each month or as
            soon as he receives the bank statement. This is a strategic internal control
            needed to confirm that the bank balance and the County’s book balance are in
            agreement. Any undocumented differences between the bank and book
            balances need to be investigated.

            MANAGEMENT RESPONSE

            John M. Morganelli, District Attorney

            We agree that bank reconciliations on a monthly basis should be done with
            respect to the Federal Forfeiture checking account and I have advised the
            responsible detective of same.




                                             4
2. Approval Process for Cash Disbursements

           OBSERVATION

           Initial cash disbursements paid in 2010 to various police departments from the
           Drug Task Force account did not have written approval from the District Attorney
           or a designated Assistant DA. There appeared to be some confusion early in the
           year which was resolved in the 2nd quarter of 2010. All disbursements made later
           in the year were properly approved and documented.

           Also, during our review of the Federal Forfeiture account we noted that 8 out of 9
           disbursements tested did not have the written approval from the District Attorney
           or a designated Assistant DA.

           RECOMMENDATION

           The detectives responsible for maintaining the Drug Task Force account and the
           Federal Forfeiture account should enhance the approval process by consistently
           acquiring a written approval from the District Attorney or a designated Assistant
           DA for all disbursements. This control is necessary to confirm that all spending is
           within the District Attorney’s objectives.

           MANAGEMENT RESPONSE

           John M. Morganelli, District Attorney

           We agree with the recommendation that cash disbursements for the Drug Task
           Force account should have written approval from the District Attorney and/or
           designated Assistant District Attorney. We also acknowledge the deficiencies in
           the Federal Forfeiture account which noted that eight of nine disbursements
           tested did not have the written approval from the District Attorney. The
           responsible detectives for these accounts have been advised to implement this
           specific recommendation.




                                            5
3. Supporting Documentation for Disbursements

           OBSERVATION

           We were unable to attain an invoice or supporting documentation for 2 out of 9
           disbursements tested that were made from the Federal Forfeiture account.

           RECOMMENDATION

           The detective responsible for maintaining the Federal Forfeiture account should
           improve his filing system and retain all invoices and supporting documentation
           corresponding to all disbursements. This control will document all spending from
           this account and will confirm that spending falls within the guidelines of the
           Department of Justice.

           MANAGEMENT RESPONSE

           John M. Morganelli, District Attorney

           We agree that an invoice or supporting document should be maintained for all
           disbursements out of this account. With respect to your specific reference to the
           Federal Forfeiture account, the responsible detective has been advised of same.




                                           6

				
DOCUMENT INFO
Categories:
Tags:
Stats:
views:3
posted:6/6/2012
language:
pages:9