5/6/19 Auditing of State Asset Forfeitures District Attorney’s Office 61 ST COUNTY AUDITORS INSTITUTE Presenter: Toni Ramirez Director of Audit Services MAY 7-10, 2019 and Special Projects AUSTIN TEXAS OVERVIEW Ø PURPOSE Ø DISTRICT ATTORNEY’S OFFICE Ø AUDIT Ø CONTINUOUS MONITORING 1
5/6/19 PURPOSE COMMISSIONERS COURT RESPONSIBILITY Code of Criminal Procedure § 59.06 (g)(1): All law enforcement agencies and attorneys representing the state who receive proceeds or property under this chapter shall account for the seizure, forfeiture, receipt, and specific expenditure of in an audit, which is to be performed annually by the Commissioners Court or governing body of a municipality, as appropriate. 2
5/6/19 OUR RESPONSIBILITY Chapter 59 Asset Forfeiture Report- 2013 Obtain Resolution and Order to perform Asset Forfeiture Audits Approval of the resolution and order authorizing the County Auditor to conduct all audits on behalf of Commissioners Court required by Article 59.06 of the Code of Criminal Procedure for fiscal year 2014 and henceforth until otherwise directed by Commissioners Court. DISTRICT ATTORNEY’S OFFICE 3
5/6/19 DISTRICT ATTORNEY’S OFFICE Bexar County District Attorney Bexar County University & Bexar County City of San Constable’s State School Other LEA Sheriff’s Antonio Police Offices & Fire Agencies Districts Police Office Department Marshal’s Departments Office DA ACCOUNTING SYSTEMS Seized and Forfeited Assets § Quickbooks § BOA Court Online Banking Asset Forfeiture Revenue and Expenditures § County Financial System 4
5/6/19 SEIZED ASSET FLOW LEA DA DA Civil Bookkeeper Attorney & Paralegals •Seizes •Creates •Receives Currency subaccount Seizure Affidavit from •Notifies DA at BOA LEA Bookkeeper •Provides LEA •Adds case to •Deposits with BOA Agency Log Currency at subaccount •Accepts or BOA info Denies •Files Seizure •Records •Prepares and Affidavit Deposit in Files Notice of Quickbooks Seizure with District Clerk’s Office BOA COURT ONLINE BANKING 5
5/6/19 QUICKBOOKS REPORT AGENCY LOG 6
5/6/19 AUDIT 7
5/6/19 PLANNING- INFORMATION Review prior audit and any notes for next year § Review statutes and County Purchasing/Travel Policies § for any changes Review OAG website for any changes to the State § Report Review General Ledger Report for DA’s Fund § Make sure you include the expenditures for • September of the PY Perform analysis of the expenditures for August of • PY to capture any changes Obtain any new or updated LEA agreements § Gather Information on any Major Changes to the DA’s § Office PLANNING- RISK ASSESSMENT § Complete Risk Assessment § Focus on Risky Areas § Determine Testing Statistical • Stratified • Judgmental • 100% Selection • 8
5/6/19 RISK ASSESSMENT- SEIZED FUNDS AUDIT PROGRAM § Use Risk Assessment to Build Audit Program § Audit Program Should Follow the CH. 59 Report § Audit Procedures Should be Detailed Update as needed • Notate the Name of the Reports and Who • Provided them on Workpapers 9
5/6/19 I. SEIZED FUNDS I. B) 2) Seizure During Reporting Period Objective : To determine if the Seized Funds Amount properly includes seized cases that meet the following criteria: § §59.03 CCP, LEA must file a Seizure Affidavit with the District Attorney’s Office § Funds have been transferred to the custody of the District Attorney’s Office Testing § Reconcile the DA’s Agency Report to the Seized Funds Report (QB) Research discrepancies to determine if the case should be • included or excluded § Validate the seized case meets the qualifications of §59.023 § Verify the seized case was deposited in DA’s Account (BOA) I. SEIZED FUNDS I. C) Forfeiture Petitions Filed For All Agencies Objective : To determine if the Forfeiture Petitions Filed amount properly includes seized cases that meet the following criteria: § §59.04 CCP, Notice of Seizure (NOS)was filed no later than the 30 th day after the seizure per §59.04 CCP § NOS was filed during the reporting period 09/01/20XX TO 08/31/20XX Testing: § Obtain the list of NOS cases filed from the Docket System for the reporting period § Reconcile List of NOS cases to the Agency Log • Research discrepancies • Does not include seized assets that were filed after 8/31 • Include PY seizures filed during the audit period Verify NOS was filed no later than the 30 th day after the seizure § 10
5/6/19 I. SEIZED FUNDS I. F) Amount Returned to Defendants/Respondents Request list of Rejected Cases § Verify to supporting documentation § I. SEIZED FUNDS I. G) Amount Transferred to Forfeiture Account Objective: To determine if the Amount Transferred to the Forfeiture Account properly includes seized cases that meet the following criteria: § Forfeited and Final Judgement was issued § Seized Case funds were transferred to the forfeiture account Testing: § Request the QB Check Register for the audit period to recalculate the total Deduct Checks Issued for Rejected Cases, Non Asset Forfeiture • Deposits, & PY Reissuance Checks § Agree the recalculated total to the amount notated for the Amount Transferred to Forfeiture Account § Verify seized funds were transferred to the forfeiture account § Verify the forfeiture is disbursed according to the Judgement • Payee names agree to the Judgement- Respondent & Attorney § Recalculate the disbursement per the inter-local agreements 70%/30% § Verify court cost is paid for forfeitures > $2,500 11
5/6/19 II. FORFEITED FUNDS & OTHER COURT AWARDS II. B) Amount Forfeited For All Agencies You Represent B) 2) Amount Forfeited and Received By your Agency § Verify amounts agree to the reports provided § Agree amount to the revenues reported in the DA’s Fund per the County’s System II. F) Auction Proceeds § Agree the auction proceeds to the sale documents § Verify the DA marked the asset as sold on the Asset Listing § Agree the auction disbursement agrees to the inter-local agreement 70/30 or after in-service of 3 years the LEA maintains 100% of • the proceeds PROPERTY SECTIONS III. Other Property Request Property Worksheet § Clarify Property Categories § Standard- Motor Vehicles, Real Property, Computers, Firearms Other-Clothing and Jewelry, Electronic and Tools, etc… Review the LEA Property Reports attached to the § Seizure Affidavits IV. Forfeiture Property Received & V . Forfeiture Property Transferred/Loaned - Interlocal Agreements, available Supporting § Documentation 12
5/6/19 VI. EXPENDITURES Unallowable Expenditures: §59.06(d-1) May not use proceeds or property received for: 1. Contribute to a Political Campaign 2. Make a donation to any entity, except as provided by Subsection (d-2) 3. Pay training or education expenses for judges 4. Pay any travel expenses related to attendance at training or education seminars that violate Commissioners Court policies 5. Purchase alcoholic beverages 6. Make any expenditure not approved by Commissioners Court if the current elected official does not file for reelection or loses in a primary, general, or runoff election 7. Increase a salary, expense, or allowance for an employee who is budgeted by Commissioners Court VI. ALLOWABLE EXPENDITURES Allowable §59.06 (D-4) : If the expenditure is made for an activity of an attorney or office of an attorney representing the state that relates to the preservation, enforcement, or administration of the laws of this state it is an allowable expenditure. 13
5/6/19 VI. A) PAYROLL & B) OVERTIME Represents: Employee salaries paid 100% or Partial from Asset § Forfeiture Funds Overtime salaries paid from Asset Forfeiture Funds § Testing: Verify work performed by employee meets the § requirement of §59.06 • Job Description • Location of employee Verify Commissioners Court approved any increases to § an employee’s salary, allowance, or expenditure VI. C) EQUIPMENT & D) SUPPLIES Represents: Vehicles, Computers, Firearms, Protective Body Armor, § Personal Equipment, Furniture, Maintenance Costs, Uniforms, K9 Related Costs, Visual Aid Equipment for Litigation Office Supplies, Mobile Phone and Data Account Fees, § Internet, Other Testing: Verify expenditure qualifies as a §59.06 CCP § expenditure If it is an asset purchase- Validate the asset’s existence § and location PY Asset Purchase- verify existence and location § 14
5/6/19 VI. E) TRAVEL (IN & OUT OF STATE) Represents: Transportation, Meals & Lodging, Mileage, Incidental § Expenses Testing: Review the detail documentation for travel § especially travel advances and T-Cards Verify travel was completed by individual § Review for County Travel Policy violations § Travel should be completed in the most efficient, cost- • effective method Meal reimbursement classification • VI. REMAINING EXPENDITURES § Determine if testing is necessary • Threshold Amount § Trace to supporting documentation 15
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