Inadequate controls over AGIU confidential informant cash funds
(March 10, 2003)
This report presents the results of the Office of the Public Auditor’s (OPA) audit of the Attorney General’s Investigation Unit (AGIU) Confidential Informant cash funds from August 24, 1995 through April 30, 2002. The objectives of the audit were to determine whether: (1) monies issued to the four funds were properly accounted for; and (2) disbursements from the funds were made in accordance with existing guidelines and control procedures.
In a memorandum dated April 18, 2002, the AGIU requested OPA to conduct an audit of the AGIU Confidential Informant Funds. The four funds maintained by the AGIU are: (1) Fund 4834 - Witness Protection Fund; (2) Fund 4874 - Labor and Immigration Federal Grant Fund; (3) Fund 1187 - Witness/Informant Fund ; and (4) Fund 1188 - Special Investigation Fund.
Under the Fiscal Year 1995 Federal Covenant Grant totaling $1.5 million, the AGIU was allocated $375,000 which included $60,000 for the Witness Protection Fund. Fund allotment was made on May 2, 1995 and the initial grant drawdown of the $60,000 was made on August 24, 1995, in the amount of $3,000. As of April 30, 2002, grant drawdowns from the Witness Protection Fund from this grant totaled $32,000. Another federally funded grant totaling $245,000 was made available to AGIU by the U.S. Department of Interior on May 14, 1999, to be used to resolve problems involving labor, immigration, and law enforcement as it pertains to labor and immigration. A total of $40,000 was allocated to the Witness Protection/Informant Fund. As of April 30, 2002, the total grant drawdowns from this fund were $5,000. Funds 1187 and 1188 are funded through local appropriations of the CNMI Legislature. There are no restrictions on the use of these funds. They can be expended on white collar crime, immigration, labor cases, and law enforcement. Fund 1187 was established in 1996 and Fund 1188 was established on April 29, 1997. A comparison of the drawdowns and disbursements for the four confidential funds is presented below.
Our audit showed that the AGIU did not have adequate internal control over the four funds maintained. More specifically, (1) the custodian of the fund handles incompatible functions; (2) complete and accurate records were not maintained; (3) the four funds were handled by one person resulting in commingling of the funds; (4) no one was authorized to review or check the funds; and lastly, (5) there were no clear written guidelines on allowable disbursements from the funds.
