Auditing of State Asset Forfeitures District Attorneys Office 61 ST - - PDF document

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61ST COUNTY AUDITORS INSTITUTE MAY 7-10, 2019 AUSTIN TEXAS

Presenter: Toni Ramirez Director of Audit Services and Special Projects

Auditing of State Asset Forfeitures District Attorney’s Office

OVERVIEW

ØPURPOSE ØDISTRICT ATTORNEY’S OFFICE ØAUDIT ØCONTINUOUS MONITORING

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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.

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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

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DISTRICT ATTORNEY’S OFFICE

Bexar County District Attorney Bexar County Sheriff’s Office City of San Antonio Police Department Bexar County Constable’s Offices & Fire Marshal’s Office University & School Districts Police Departments Other LEA State Agencies

DA ACCOUNTING SYSTEMS

Seized and Forfeited Assets

§ Quickbooks § BOA Court Online Banking

Asset Forfeiture Revenue and Expenditures

§ County Financial System

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SEIZED ASSET FLOW

LEA

• Seizes

Currency

• Notifies DA

Bookkeeper

• Deposits

Currency at BOA

• Files Seizure

Affidavit DA Bookkeeper

• Creates

subaccount at BOA

• Provides LEA

with BOA subaccount info

• Records

Deposit in Quickbooks DA Civil Attorney & Paralegals

• Receives

Seizure Affidavit from LEA

• Adds case to

Agency Log

• Accepts or

Denies

• Prepares and

Files Notice of Seizure with District Clerk’s Office

BOA COURT ONLINE BANKING

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QUICKBOOKS REPORT AGENCY LOG

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AUDIT

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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

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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

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• 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 30th 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 30th day after the seizure

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• 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

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• 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

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• 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
• r 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

• r 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.

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• 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

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• 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

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QUESTIONABLE EXPENDITURES

Medals, Promotional items, etc…: § Answer the question – How does the expenditure relate to the “preservation, enforcement, and administration of state laws” § Should not have Official’s Name § Request picture of item if invoice does not contain enough descriptive information Still Questionable § Request a memo (email) stating the reasons the expenditure is allowed under §59.06

AUDIT REPORT

§59.06 (g)(1) § Due 60 days from the last day of the State Fiscal Year which is 10/30/20XX § Allows 5 days to submit the report §59.06 (g)(2) § Request Extension

• Report must be in before the 76th day after 8/31/XX

Commissioners Court § File Report for Record

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MONITORING

Quickbooks § Monthly Reconciliation of Cash Accounts § Verify Bank Transactions are Recorded Expenditures § Work with AP to monitor expenditures for unallowable items § Review purchases with P-Cards and T-Cards Judgments § Sample Quarterly § Review Judgment Accounts in QB for unusual transactions

FEDERAL ASSET REPORTING (EQUITABLE SHARING)

Issued Revised Manual Report Changes § Requires Jurisdiction Finance Contact Information Ø Important- Must approve, sign, and submit the Account Request for eShare Access for the Admin Access § Requires the Auditor’s Information and the County’s Single Audit Number Assigned by Harvester Database