Audit Report

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High Intensity Drug Trafficking Areas Grant

Objective:

To determine whether the Denver Police Department is complying with requirements of the High Intensity Drug Trafficking Areas grant and whether the department has adequate controls to properly manage and track grant expenditures and assets.

The High Intensity Drug Trafficking Areas, or HIDTA, grant is administered by the White House’s Office of National Drug Control Policy. The program enables cooperation between federal, state, local, and tribal law enforcement in disrupting large-scale drug trafficking operations around the country.

The grant has been awarded annually to the Denver Police Department since the inception of the HIDTA’s Rocky Mountain region in 1996. To fulfill the mission of the HIDTA grant, the Denver Police Department acts as fiduciary, or fiscal agent, of the Front Range Task Force — helping to administer expenditures and subsequent reimbursements.

The Denver Police Department Substantially Complied with Requirements for the High Intensity Drug Trafficking Areas Grant, but Process and Policy Gaps Exist

  • The HIDTA equipment inventory process lacks adequate internal controls to ensure proper accountability of grant-funded assets.
  • The Front Range Task Force is not consistently following its own policies for the purchase of information and evidence, and the duties of those responsible for handling the funds are not properly segregated.
  • Denver police officers working on the Front Range Task Force do not track overtime to the minute, as required by policy.
  • We identified questioned costs related to incorrect use of travel reimbursement rates and a lack of proper approval on a training expenditure.
  • The Front Range Task Force did not submit the budget proposal for the 2018 grant period on time, and the proposal was incomplete.
  • The Denver Police Department and the Front Range Task Force did not submit on time two of the required financial and performance reports for the 2018 grant period.
  • The Front Range Task Force does not have required position descriptions on file for the two full-time positions funded by the grant.

1.1 Adhere to Existing Grant Equipment Requirements – The Denver Police Department should ensure equipment-related requirements for the High Intensity Drug Trafficking Areas grant are adhered to by:

  • Ensuring the inventory listing includes all required elements, such as asset condition, source, and percentage of HIDTA funding used to purchase the equipment; and

  • Creating and following maintenance procedures for HIDTA-funded equipment. 

Agency Response: Agree, Implementation Date – May 8, 2020

1.2 Establish Physical Inventory Procedures – The Denver Police Department should establish written procedures for physically counting equipment funded by the High Intensity Drug Trafficking Areas grant — including defining the count process and defining the individual tasks associated with that process.

Agency Response: Agree, Implementation Date – May 8, 2020

1.3 Segregate Equipment-Related Duties – The Denver Police Department should segregate the duties related to equipment funded by the High Intensity Drug Trafficking Areas grant, so that no one person has responsibility for more than one of the following:

  • Custody or physical control of equipment

  • Processing and recording of equipment transactions

  • Approval of equipment transactions and adjustments

  • Performance of the physical inventory at least every two years

Agency Response: Agree, Implementation Date – May 8, 2020

1.4 Update Operational Guidelines – The Denver Police Department should amend Section 1.72 of the Front Range Task Force’s operational guidelines to align the guidelines with task force members’ actual practices regarding how soon unused funds can and should be returned to the safe.

Agency Response: Agree, Implementation Date – May 8, 2020

1.5 Segregate Duties for Purchases of Confidential Information and Evidence – The Denver Police Department should segregate the duties related to the purchase of confidential information and evidence as part of High Intensity Drug Trafficking Areas grant initiatives, so that no one person has responsibility for more than one of the following:

  • Custody or physical control of the funds

  • Processing and recording of confidential information and evidence purchases

  • Approval of confidential information and evidence purchases

Agency Response: Agree, Implementation Date – June 1, 2020

1.6 Develop Procedures for Reconciliations – The Denver Police Department should create procedures for High Intensity Drug Trafficking Areas grant funds that document how to reconcile cash in the safe with the expenditure record (i.e., the cash log). These procedures should contain:

  • Segregation of duties, so that the person responsible for reconciliation is also not responsible for the functions listed in Recommendation 1.5

  • How the reconciliation should be performed

  • How often the reconciliation should be performed 

Agency Response: Agree, Implementation Date – May 8, 2020

1.7 Track Overtime Costs Accurately – The Denver Police Department should ensure overtime for its investigative personnel working on the Front Range Task Force is tracked in accordance with the department’s policy included in its collective bargaining agreement with the Denver Police Protective Association.

Agency Response: Agree, Implementation Date – May 6, 2020

1.8 Request Reimbursement Only for Allowable Costs – The Denver Police Department should ensure reimbursement requests for High Intensity Drug Trafficking Areas grant funds are submitted only for allowable costs, as prescribed by grant guidelines.

Agency Response: Agree, Implementation Date – Feb. 25, 2020

1.9 Comply with Budget Reporting Deadline and Required Format – The Denver Police Department should ensure the annual budget proposal is submitted to the Rocky Mountain High Intensity Drug Trafficking Areas office on time and that the budget proposal includes all required elements.

Agency Response: Agree, Implementation Date – May 8, 2020

1.10 Comply with Reporting Deadlines – The Denver Police Department should ensure both the quarterly financial and performance reports of the High Intensity Drug Trafficking Areas grant are submitted on time to comply with regional and national grant reporting requirements.

Agency Response: Agree, Implementation Date – April 30, 2020

1.11 Create and Maintain Grant-Funded Position Descriptions – The Denver Police Department should create and maintain on file the position descriptions for both full-time personnel supported by the High Intensity Drug Trafficking Areas grant. These descriptions should detail the duties and responsibilities performed by each employee under the grant.

Agency Response: Agree, Implementation Date – May 8, 2020

The objective of our audit of the High Intensity Drug Trafficking Areas grant was to determine whether the Denver Police Department and the Front Range Task Force are complying with grant requirements. I am pleased to present the results of this audit.

The audit revealed the Denver Police Department and the Front Range Task Force are substantially compliant with grant requirements. Despite this, though, we did note some gaps in compliance. The Denver Police Department and the Front Range Task Force need to ensure compliance with all grant regulations and develop any further supplemental procedures to assist in compliance activities.

Through stronger policies and procedures and better adherence to existing grant requirements, the Denver Police Department and the Front Range Task Force will be better equipped to ensure compliance with grant requirements. This would help ensure the city continues receiving grant funding. Our report lists several related recommendations.

This performance audit is authorized pursuant to the City and County of Denver Charter, Article V, Part 2, Section 1, “General Powers and Duties of Auditor,” and was conducted in accordance with generally accepted government auditing standards. Those standards require we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

We extend our appreciation to the Denver Police Department and the Front Range Task Force personnel who assisted and cooperated with us during the audit. For any questions, please feel free to contact me at 720- 913-5000.

Follow-up report

A follow-up report is forthcoming. 

Audit Team: Kevin Sear, Patrick Schafer, Rob Farol, Marc Hoffman