Asset Forfeiture:

Legislation Needed to Improve Cash Processing and Financial Reporting

GGD-90-94: Published: Jun 19, 1990. Publicly Released: Jun 19, 1990.

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GAO reviewed aspects of the Department of Justice's and the U.S. Customs Service's asset forfeiture program, focusing on the need for Congress to enact legislative changes designed to speed up processing of seized cash and increase congressional and agency oversight.

GAO found that: (1) Justice and Customs must judicially forfeit cash seizures over $100,000, even though 89 percent of all judicially forfeited cash is never contested; (2) Customs and Justice judicial forfeitures averaged 15 and 12 months, respectively, while administrative forfeitures averaged about 8 months; (3) about 82 percent of the cash went through judicial proceedings and 18 percent through administrative proceedings; (4) as of December 1989, seized cash represented about 39 percent of Justice's and Customs' $1.4-billion property inventory; (5) Justice and Customs endorsed a proposal including a provision to allow uncontested cash seizures to be forfeited administratively, which would result in faster forfeiture of seized cash; (6) changing the law would reduce the court system's burden, permit more efficient use of legal resources, and allow faster use of seized cash without affecting individual due process rights; (7) both Justice and Customs established policies aimed at minimizing the practice of holding cash as evidence; and (8) Justice and Customs operated the asset forfeiture fund for 6 years, but never produced a full set of audited financial statements, even though the agencies designated the programs as being vulnerable to fraud, mismanagement, and waste.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: P.L. 101-647, November 29, 1990, 104 Stat. 4854, implemented this recommendation.

    Matter: Congress should amend 28 U.S.C. 524(c) to require that the Department of Justice annual forfeiture fund report to Congress include a complete set of audited financial statements prepared in a manner consistent with the requirements of the Comptroller General.

  2. Status: Closed - Implemented

    Comments: P.L. 101-382, August 20, 1990, 104 Stat. 629, implemented this recommendation.

    Matter: Congress should amend 19 U.S.C. 1613b to require that the U.S. Customs Service annual forfeiture fund report to Congress include a complete set of audited financial statements prepared in a manner consistent with the requirements of the Comptroller General.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Justice reminded its employees to report all seized cash held as evidence by March 16 of each year and to include the names, offices, and telephone numbers of the prosecutors. The EOAF is using this report monitoring the holding of seized cash for evidence purposes.

    Recommendation: To ensure compliance with existing cash management policies, the Attorney General and the Secretary of the Treasury should aggressively monitor the holding of seized cash for evidence purposes to ensure that cash is not being held without adequate justification. This can be accomplished by routinely following up with the seizing agencies and U.S. Attorney offices to determine if the reasons for initially holding seized cash as evidence remain valid and that the required approvals have been obtained.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Implemented

    Comments: Justice reminded its employees that a report of all cash held as evidence, the names, offices and telephone numbers of the prosecutors be submitted by March 16, 1991. Customs revised its cash management directive to require its employees to notify the U.S. Attorney's Office of its intent to deposit seized currency/monetary instruments as non-evidentiary and to allow 30 days for a response.

    Recommendation: To ensure compliance with existing cash management policies, the Attorney General and the Secretary of the Treasury should aggressively monitor the holding of seized cash for evidence purposes to ensure that cash is not being held without adequate justification. This can be accomplished by routinely following up with the seizing agencies and U.S. Attorney offices to determine if the reasons for initially holding seized cash as evidence remain valid and that the required approvals have been obtained.

    Agency Affected: Congress

 

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