Financial Management

Customs' Accountability for Seized Property and Special Operation Advances Was Weak Gao ID: AIMD-94-6 November 22, 1993

The U.S. Customs Service has not adequately safeguarded millions of dollars in cash and luxury items and tons of illegal drugs, leaving them vulnerable to theft and misuse. Customs often did not (1) promptly transfer, deposit, or dispose of seized property; (2) properly weight, count, and test seized drug; and (3) provide adequate facilities and sufficiently restrict access to stored items. These shortcomings allowed large quantities of cash and drugs to remain on hand for long periods, increasing the risk of theft, misuse, and loss. Also, Customs' inventory records to control and manage seized property and prepare agency financial reports were incomplete and inaccurate. These records omitted large quantities of seized property; showed incorrect locations for some items; included erroneous values, such as those for counterfeit items; and included transactions recorded in the wrong period. Further, Customs did not adequately control millions of dollars in funds advanced to Customs agents for special operations or the sensitive documents related to these advances.

GAO found that: (1) Customs does not adequately safeguard seized property because of inconsistent and ineffective inventory control policies and procedures; (2) Customs does not ensure prompt transfer, deposit, or disposal of seized property, particularly drugs, that is no longer needed as evidence; (3) Customs' seized property inventory and financial records are incomplete and inaccurate; (4) Customs does not adequately control or account for the funds advanced to its agents for special operations or the sensitive documents related to these advances; (5) Customs has reduced its seized property and advanced fund account balances by $52 million and $18 million, respectively, because of its failure to accurately and timely record its inventory and cash transactions; and (6) although Customs has improved its management of seized property, it has not met all accountability requirements.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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