Asset Forfeiture Funds

GAO discussed the Department of Justice's and the U.S. Customs Service's operation of forfeiture funds. GAO noted that the Justice Assets Forfeiture Fund: (1) increased substantially due to the elimination of the requirement to transfer surplus funds; (2) received little congressional oversight over fund expenditures; and (3) had inaccurate accounting and management systems. GAO also noted that the Customs Forfeiture Fund's: (1) allowed carryover of $20 million was unnecessarily high; (2) accounting system was inadequate; (3) practice of netting receipts and expenses was cumbersome; and (4) previous fiscal year reports did not identify such basic information as beginning or year-end balance, sources of receipts, or net amount realized. GAO believes that Congress should: (1) reestablish a limit on the amount of funds that Justice should carry forward; (2) eliminate annual authorization and appropriation limitations for the Customs fund and establish a carryover provision; and (3) require annual financial audits for the funds. GAO also believes that Customs should: (1) record and report all authorized receipts and expenses; (2) bring its accounting system into conformance with GAO requirements; and (3) report accounting system weaknesses under the Federal Managers' Financial Integrity Act.