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Body-by-Guinness:
Hmm, yes the IG. Let's cherry pick from their report:

An objective of our prior review was to examine the AFF, based on industry concerns raised to us that NOAA's fines were excessive, constituting a form of bounty, partly because ofNOAA s ability to retain and use proceeds from its enforcement cases. However, we found that despite OLE reporting a balance of $8.4 million as of December 31, 2009, OLE officials could not provide evidence that the AFF had ever been audited. We found that while the AFF's balance is included in the Department's overall annual financial statements, internal controls over the fund were weak and were not tested as part of the Department's annual financial statement audit due to the relatively small size of the fund within NOAA's overall budget. Accordingly, we could not readily determine how   OAA had utilized the AFF and were unable to address the concerns raised to us regarding its use; therefore, we commissioned the forensic review.

....

KPMG’s analysis suggests that the AFF’s current balance likely falls within a broader range. Based on complicated definitional, data analysis, and reconciliation efforts, KPMG found that during the period of its forensic review (January 1, 2005, through June 30, 2009), the AFF received approximately $96 million (including interest on prior balances), while expending about $49 million through over 82,000 transactions. This analysis suggests that the balance could be much higher than $8.4 million; however, NOAA must review KPMG’s analysis and determine what a more accurate figure may be. NOAA should work with the Department to better define the fund and determine its balance.

....

Moreover, while OLE and GCEL use the AFF for wide-ranging purposes, NOAA has no legal opinion on the applicable language in the MSA regarding authorized uses of the AFF. On its
face, the following statutory language would appear to restrict AFF expenditures to specific enforcement investigations or proceedings.

“Any expenses directly related to investigations and civil or criminal enforcement proceedings, including any necessary expenses for equipment, training, travel, witnesses, and contracting services directly related to such investigations or proceedings.” 16 U.S.C. § 1861(e)(1)(C)

NOAA, however, has interpreted this statutory passage to allow for use of the AFF to cover a variety of expenses which do not appear to be “...directly related to investigations and civil or criminal enforcement proceedings...” Specific examples of these types of expenditures, such as travel associated with international enforcement conferences, are contained in this report.

Clear from KPMG’s findings is that the AFF has not functioned as a coherent program, despite being a substantial source of agency operational funding―outside and supplemental to annual appropriations―drawn solely from the proceeds of NOAA enforcement actions against industry parties. Rather, as KPMG found, the AFF has operated through poorly defined, disjointed, and inconsistent processes that lack effective internal controls, and for which no single NOAA office appears to be in charge or accountable because it is so decentralized.

....

More fundamentally, OLE’s leadership could have established and updated policy guidance for employees on authorized uses of AFF monies. For instance, current guidance was issued by the then-Director’s predecessor over ten years ago and does not include authorization of AFF expenditures for the purchase of vehicles and vessels—nearly all of which have been charged to the AFF. Instead, the then-Director and then-Deputy Director largely maintained the status quo of AFF spending without adequate and effective policy and internal controls, including for high- dollar items such as vehicles and vessels, as well as travel, training, computers, firearms, and fuel, among other expenditures—including SOF expenditures for covert/undercover operations.

....

Based on KPMG’s results and our findings, we recommend that NOAA:
• Precisely define the AFF and comprehensively audit it, initially and annually. To arrive at its findings, KPMG expended significant time attempting to define the AFF since NOAA could not provide a consistent definition. As such, KPMG was unable to assess individual transactions beyond review of available supporting documentation. A comprehensive audit should entail detailed transaction testing and additional data mining.
•   Communicate the results of initial and annual audits of the AFF to NOAA and Department of Commerce senior leadership, as well as outside stakeholders (Congress, Office of Management and Budget, etc.).
•   Specifically identify and account for the AFF in NOAA’s annual budget submissions.
•   Modify OLE’s and GCEL’s processes for budgeting and spending AFF proceeds to be comparable to other agencies with similar asset forfeiture funds; and benchmark the asset forfeiture fund programs of the Treasury and Justice Departments for applicable best practices.
•   Document a formal interpretation of the statutory language in the Magnuson-Stevens Act as to authorized uses of the AFF; and establish and update formal policy for OLE and GCEL to clearly prescribe both authorized and unauthorized expenditures of AFF monies.
•   Take steps to greater centralize AFF approval processes for expenditures. •   Ensure that approved AFF expenditure transactions have required electronic/hard-copy
supporting documentation (a recurring KPMG finding).
•   Develop improved processes to (a) clearly identify and track AFF monies received and expended, and (b) ensure that AFF funds are not commingled.
•   Implement more stringent internal reviews for split purchase card transactions (i.e., those involving the same credit card holder, date, vendor, and the same or different amounts) and duplicate purchase transactions. KPMG found evidence of multiple split transactions, which circumvent single purchase limits and competitive procurement procedures, as well as duplicate transactions.
•   Determine the cost-effectiveness of General Services Administration-leased vs. purchased vehicles; establish formal policy for vehicle acquisition and management, based on operational need; and apply appropriate disposition procedures for excess vehicles.
•   Establish formal policy for which OLE personnel should be authorized use of daily take- home vehicles; and review and determine the number of “pool” vehicles per locale based on justified need.
•   Review and set policy for which OLE personnel should be authorized use of purchase cards, based on operational need. Presently, nearly every OLE special agent and enforcement officer is issued a purchase card. This is not consistent with current government-wide policy for internal controls to limit the risk of misuse of purchase cards5.
•   Determine whether NOAA’s inability to adequately track AFF expenditures constitutes violation of any federal financial management law or standard. For example, while the Magnuson-Stevens Act requires that fines and penalties imposed for violations of the Northeast Multispecies Fishery Management Plan are to be specifically used to enforce that Plan, NOAA has not tracked the use of these funds. The then-Director was unfamiliar with this requirement when we initially addressed it with him.

....

DETAILED KPMG FINDINGS
•   Due to the high volume of AFF transactions, the process-oriented focus of its review, and because considerable time was required in attempting to define the AFF, KPMG analyzed a relatively small percentage of transactions. Though it did not identify many anomalous transactions, KPMG was limited to, and relied on available supporting documentation, and did not carry out additional inquiries beyond review of existing records to identify evidence of potential irregularities.
•   No single unit, nor any individual, within NOAA has a detailed understanding of the AFF from start to finish; and as a result, it has different meanings to different entities and officials within NOAA. Essentially, the AFF refers to no single source of revenue, no one accounting fund, program, or project, and is more of an abstract concept than a specific fund that can be tracked with a high degree of detail. After KPMG requested that NOAA provide specific criteria for defining which transactions were related to the AFF, NOAA gave KPMG effectively three different definitions of the AFF.
First, NOAA informed KPMG that the AFF comprised three distinct funds, containing ten project codes. In reviewing NOAA-supplied data, KPMG discovered that the data referenced an unexpected fund code with an additional project code. KPMG’s follow-on inquiries established that this data was related to the AFF and should have been provided to KPMG
6 Supporting documentation was provided after the agreed upon cut-off date and, as such, was not reviewed by KPMG due to its time constraints. However, based on our assessment of the additional documentation provided, it would not have significantly affected these reported percentages.
initially. KPMG’s inquiries later yielded yet a third definition of the AFF through the addition of two additional program codes. KPMG’s analysis of the data showed that these three definitions of the AFF did not yield consistent data sets; thus, KPMG could not utilize any of the AFF definitions provided by NOAA for analysis. KPMG ultimately selected all project codes categorized as part of the Civil Monetary Penalties Fund (CMP) and all project codes utilized by OLE and GCEL, in order to define the AFF, while realizing that it would likely capture more data than NOAA would consider part of the AFF.
•   Current processes have caused a lack of visibility over the entire fund by any one organization within NOAA. Between collection and disbursement, there are a significant number of “hand- offs” from one NOAA organization to another, without a consistent method of tracking the funds. As monies pass through different NOAA Finance accounting funds, they are labeled with several different Finance accounting program and project codes. Revenues comprising the AFF are co-mingled with other funds in various finance funds, making it nearly impossible to delineate, track, and oversee the receipt and expenditure of only those monies which comprise the AFF.
For example, KPMG found that of the relevant 99,251 records examined, there were 20,589 Accounts Payable records with organization codes that did not correspond with the 11 OLE or GCEL organization codes applicable to the AFF. Similarly, while the MSA requires that fines and penalties imposed for violations of the Northeast Multispecies Fishery Management Plan are to be specifically used to enforce that Plan, NOAA has not tracked the use of these funds.
• OLE headquarters does not have a formal budget for its use of the AFF. Although there are annual estimated expenditures for the use of the AFF, there is no formal process or reconciliation of budgeted funds to actual expenditures. Budget appropriations for each OLE division cover only a portion of their total operating costs and as a result, OLE divisions plan for wide use of AFF monies which are drawn from AFF accounts throughout the fiscal year. Other agencies with funds similar to the AFF fully appropriate operating budgets and then determine the amount to be withdrawn from the funds to reimburse the department-level agency based on a review of expenditures. Similarly, GCEL has two funding sources for its operations: appropriated funds and the AFF. GCEL receives a minimal (usually less than $1,000) appropriated budget for its total annual operating costs (exclusive of salary), but assumes that virtually all (approximately 99 percent) of its operating costs are AFF- reimbursable.
•   OLE’s processes for use of AFF monies, including procurements, are highly decentralized and inconsistent. OLE is not a large agency, but personnel within each of OLE’s six divisions (regions) determine when an expenditure is appropriate to charge to the AFF. As a result, approval processes are different for each division. Each division has a Special Agent-in- Charge (SAC), who require differing levels of approval within their regions based on dollar amounts of requested purchases. While some SACs appear to have instituted local policies to provide greater oversight for AFF expenditures, there is a clear lack of consistency between divisions.
•   Further, KPMG found that between January 1, 2005, and June 30, 2009, 466 individuals in OLE were issued purchase cards, which could be used to charge expenditures against AFF accounts. Approximately 25 percent of the issued cards had four or fewer transactions during this four-and-a-half year period, suggesting that those cards were not necessary for OLE operations and should not have been issued in the first place. This finding underscores the need for better management and internal controls for purchase cards.
•   Different types and amounts of documentary support were maintained in each of the six OLE divisions, OLE headquarters, and GCEL. KPMG found that 62 percent of 604 transactions it selected for further analysis (i.e., document review) did not have required supporting documentation and 27 percent did not have required approvals7. It is unclear whether verbal approvals were provided for these transactions. OLE’s six divisions and headquarters, along with GCEL, have different requirements for AFF-related document retention and preservation. As a result, the same types of documentation were often not present from one division/region to another, and it was difficult to determine what constituted a “complete” set of supporting documentation. Even within divisions, varying amounts of support documentation were provided. Further, transaction authorizations were not consistently noted or documented. NOAA should consider establishing an approved set of documentation to be used for all divisions/regions.
•   KPMG identified approximately 4,000 OLE and GCEL purchase card transactions that appeared to be split into two or more transactions (i.e., those involving the same card holder, date, vendor, and the same or different amounts) to circumvent single purchase limits and/or avoid competitive procedures—in violation of Federal Acquisition Regulation requirements that protect against improper or fraudulent purchases. Of this population, approximately 400 were selected for further review, 41 of which were determined to be improperly split. Further, KPMG reported that over 50 percent of the transactions selected for further review lacked supporting documentation and, 34 percent had incomplete or missing approvals.
One example KPMG identified involved three separate transactions (for transcription services on a single case) with the same vendor, on the same date, in the amounts of $1,243.29, $1,201.74, and $666.70, for a total charge of $3,111.73. This total exceeded the $3,000 micro-purchase transaction ceiling for purchase cards. KPMG was unable to determine why these transactions were split.
•   KPMG identified approximately 1,200 potential duplicate purchase card transactions, of which 290 were selected for further review. Fifteen were confirmed to be duplicates based on analysis of supporting documentation. However, KPMG noted that 62 percent of the selected transactions lacked supporting documentation, and 30 percent had incomplete or missing approvals. Further, KPMG identified nearly 11,000 potential duplicate non-purchase card transactions (i.e., purchase orders and contracts) and 13 of these were selected for further assessment. This review disclosed that these 13 transactions, totaling $126,600, did not have required supporting documentation.
7 Supporting documentation was provided after the agreed upon cut-off date and, as such, was not reviewed by KPMG due to its time constraints. However, based on our assessment of the additional documentation provided, it would not have significantly affected these reported percentages.

For example, KPMG identified a Citibank statement containing two $2,782 charges. One of these charges appears to be reversed on the Citibank statement. However, this charge was submitted to the accounting system twice, but KPMG could not determine why this charge was submitted to the accounting system a second time, or whether this second submission was reversed or paid.

And that's from the summary. Plenty of more juicy details to be found in the full report: http://www.oig.doc.gov/oig/reports/correspondence/2010.07.01_IG_to_NOAA.pdf

We use to have a saying in the restaurant biz: if you want an honest crew, lock the back door. The KPMG report makes it clear the back door of NOAA's Asset Forfeiture Fund has been open for over a decade, rudimentary controls are not in place, 170 odd employees, including desk jockeys, drove 200 odd vehicles for which they had no statutory authority to purchase, much less fuel, maintain, or drive for personal use, while the opening paragraph of the IG report mentions that this incredibly lax procedures inspired the perception that the AFF was a "form of bounty" while forty million dollars remain unaccounted for.

I will make any wager you care to name that a proper investigation will find criminal wrongdoing, and I'll go double or nothing on a bet that enforcement decisions were made based on an assessment of how much money would be forfeited and hence fed into the maw of an organization clearly run amok where any reasonable standard of accountability is concerned.

G M:
OIGs in the federal government refer cases to the DOJ for prosecution all the time. This report makes no claim of criminal conduct, yes? Sloppy internal controls of money does not make a criminal case. Beyond the internal audit, is there any validated claim of criminal conduct by any LEO employed by NOAA?

Body-by-Guinness:
Nope, cause there is a decade worth of accounting so incredibly sloppy that KPMG could only audit a tiny fraction of it. Again, my experience is that when there is poor oversight, no accountability and forty million dollars missing criminal misconduct is a given, and would make any wager you'd care to that this is the case here. You don't leave that kind of cash unminded for a decade without someone stuffing their pockets. Love to see an inventory of the computers and guns bought with those often times duplicate and or split purchase orders as that's the sort of thing that commonly walks. I've chased this stuff down before; hand me the POs and I'll demonstrate the inventory is missing.

Body-by-Guinness:
Oh my, just bumped into another OIG report released Friday that is very damning, including findings like this:

• AlthoughfishingregulationspromulgatedbytheFisheriesManagementCouncilsare complex and can change significantly, NOAA appears overly rigid in its interpretation and application of provisions of the regulations. This contributes to industry’s negative belief that NOAA only exercises its regulatory discretion to its own benefit.
While NOAA’s fisheries enforcement program operates according to a strict liability system, an element of discretion in the issuance of some citations and in the assessment of penalties is authorized. In our examination, we found an instance where NOAA refused to exercise discretionary leniency in a case that appeared appropriate for such, citing absence of specific policy direction and taking the position that doing so leads them down a “slippery slope.” Specifically, a fishing vessel experienced a mechanical breakdown and returned to port, never setting its gear to capture fish, yet NOAA charged the vessel for fishing during that time because it has no policy to credit vessel days-at-sea for mechanical breakdowns and NOAA officials did not want to set a precedent even though it would have promoted a fair implementation of the regulations.
Also, we confirmed complaints of disparate treatment and inconsistent penalties for NOAA’s enforcement of restrictions on fishing in yellowtail flounder stock areas. During the approximate four-year period when fishermen were required to have a NOAA Letter of Authorization (LOA) to fish in yellowtail flounder stock areas in the Northeast Region, GCEL did not impose a single fine on any of the 7 cases that were referred to it for enforcement action. However, after the LOA requirement was eliminated, GCEL nonetheless retroactively charged 14 LOA cases—one of the original 7 and 13 new—resulting in assessed penalties ranging from $1,600 to $58,700. All 14 cases were charged solely for the referenced LOA violation. These cases caused many fishermen to believe that GCEL was levying fines to target a particular fish dealer facility and those who did business there, rather than enforcing statutes and regulations for the expressed purpose of protecting the fish stock.
•   Untimely enforcement actions impair both deterrence and the ability of respondents to defend themselves.
In our review we confirmed complaints about the time-consuming, lengthy process which makes it difficult for fishermen to defend against charges, because of such problems as having to recall details from a single incident years in the past. Delays in case disposition fuel the industry’s negative perception of NOAA’s motives and clearly exhibit NOAA’s willingness to pursue stale claims and call into question the integrity of NOAA’s adjudicatory processes. In one case we examined, nearly two years after a fisherman allegedly exceeded the limit for codfish on a single day, OLE notified him of the violation. The fisherman eventually settled the case in September 2009, forfeiting 10 days-at-sea (DAS) from his 2009 DAS allocation, nearly four years after the date of the alleged violation. As an OLE agent told us, in concurring with this observation regarding the timeliness of GCEL enforcement actions, “Justice delayed is justice denied.” Our findings illustrate that NOAA needs better case management policies and guidelines for timeliness. We note that NOAA is working to reduce its backlog of enforcement cases, including for the purpose of improving timeliness.
10
• OLEagentslacknecessaryguidancetoensurethatwarrantlessinspectionsare conducted properly.
We found that OLE agents have been provided limited training and inadequate guidance for warrantless inspections, particularly concerning the extent of their permissible access to inspect records and documents and, in at least one significant instance, to properly state the nature and purpose of their entry into a facility. As such, NOAA should review its regulations and internal guidance concerning warrantless inspections and provide detailed direction to OLE agents. While OLE internal policy addresses the administrative inspection warrant process, it does not guide the discretion of enforcement agents conducting warrantless inspections. Without such limitations, NOAA risks subjecting regulated entities to acts that could constitute unconstitutional searches and seizures. This could violate citizens’ constitutional rights and result in meritorious cases being successfully challenged.

Just a small piece of the report, more here: http://www.oig.doc.gov/oig/reports/correspondence/2010.07.01_IG_to_NOAA.pdf

G M:
Damming to you, looks like pretty weak tea to me.  If NOAA LEOs exceed their statutory authority regarding inspections, the the "fruit of the poison tree" doctrine applies and any evidence gathered is inadmissible in court.

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