jurisdiction: US

text: b'AUDIT OF THE OFFICE OF JUSTICE PROGRAMS NATIONAL\n\n INSTITUTE OF JUSTICE COOPERATIVE AGREEMENTS\n\n AWARDED TO THE SHERIFFS\xe2\x80\x99 ASSOCIATION OF TEXAS\n\n AUSTIN, TEXAS\n\n\n\n\n\n U.S. Department of Justice\n\n Office of the Inspector General\n\n Audit Division\n\n Audit Report GR-60-13-002\n\n December 2012\n\n\x0c AUDIT OF THE OFFICE OF JUSTICE PROGRAMS NATIONAL\n\n INSTITUTE OF JUSTICE COOPERATIVE AGREEMENTS\n\n AWARDED TO THE SHERIFFS\xe2\x80\x99 ASSOCIATION OF TEXAS\n\n AUSTIN, TEXAS\n\n\n EXECUTIVE SUMMARY\n\n\n The U.S. Department of Justice, Office of the Inspector General (OIG),\nAudit Division, has completed an audit of two cooperative agreements\ntotaling $5,094,642, awarded by the Office of Justice Programs (OJP),\nNational Institute of Justice (NIJ) to the Sheriffs\xe2\x80\x99 Association of Texas (SAT),\nas shown in Exhibit 1.\n\nEXHIBIT 1: COOPERATIVE AGREEMENTS AWARDED TO THE\n\n SHERIFFS\xe2\x80\x99 ASSOCIATION OF TEXAS\n\n PROJECT PROJECT\n AWARD NUMBER AWARD DATE START DATE END DATE AWARD AMOUNT\n 2006-IJ-CX-K016 09/14/06 07/01/06 09/30/11 $ 4,609,496\n 2009-IJ-CX-K017 09/23/09 10/01/09 09/30/11 485,146\n Total: $5,094,642\nSource: Office of Justice Programs\xe2\x80\x99 (OJP) Grants Management System (GMS)\n\nBackground\n\n OJP\xe2\x80\x99s mission is to increase public safety and improve the fair\nadministration of justice across America through innovative leadership and\nprograms. OJP seeks to accomplish its mission by disseminating\nstate-of-the-art knowledge and practices across America by providing grants\nfor the implementation of these crime fighting strategies. To support this\nmission, the NIJ provides objective and independent knowledge and tools to\nreduce crime and promote justice, particularly at the state and local levels.\n\n Cooperative agreement 2006-IJ-CX-K016 provides for the operation\nand maintenance of the Border Research and Technology Center (BRTC),\nwhich provides science and engineering advice and support, technology\ninformation, and outreach services on border-related issues, resulting in the\nadoption of new tools and technologies for use by local law enforcement\nagencies. The purpose of cooperative agreement 2009-IJ-CX-K017 was to\ndetermine the need by the law enforcement community for lower cost\naviation platforms, then determining what technology might be required to\nenhance the effectiveness of those platforms.\n\x0cOur Audit Approach\n\n The purpose of the audit was to determine whether costs claimed\nunder the cooperative agreements were allowable, reasonable, and in\naccordance with applicable laws, regulations, guidelines, and terms and\nconditions of the cooperative agreements. The objective of the audit was to\nreview performance in the following areas: (1) internal control\nenvironment; (2) drawdowns; (3) cooperative agreement expenditures,\nincluding personnel and indirect costs; (4) budget management and control;\n(5) property management; (6) program income; (7) financial and progress\nreports; (8) cooperative agreement requirements; (9) program performance\nand accomplishments; and (10) monitoring of subgrantees and contractors.\nWe tested compliance with what we consider to be the most important\nconditions of the cooperative agreements. Unless otherwise stated in this\nreport, the criteria we audit against are contained in the OJP Financial Guide\nand the award documents.\n\n We examined the SAT\xe2\x80\x99s accounting records, financial and progress\nreports, and operating policies and procedures and found:\n\n \xe2\x80\xa2\t drawdowns were properly deposited, and were equal to the actual\n expenditures per accounting records;\n\n \xe2\x80\xa2\t cooperative agreement expenditures were within the 10-percent\n threshold allowed per the OJP Financial Guide for cooperative\n agreement 2006-IJ-CX-K016, but the general ledger for cooperative\n agreement 2009-IJ-CX-K017 was not organized to compare to the\n approved cooperative agreement budget (therefore, we could not\n verify if cumulative expenditures were within the 10-percent threshold\n allowed per the OJP Financial Guide);\n\n \xe2\x80\xa2\t the Financial Reports were submitted in a timely manner and reported\n expenditures were cumulatively accurate for cooperative agreement\n 2009-IJ-CX-K017, but were not cumulatively accurate for cooperative\n agreement 2006-IJ-CX-K016;\n\n \xe2\x80\xa2\t the Progress Reports were generally submitted in a timely manner and\n were generally accurate for cooperative agreement 2009-IJ-CX-K017,\n but were not accurate for cooperative agreement 2006-IJ-CX-K016;\n and\n\n \xe2\x80\xa2\t there was no indication that SAT officials did not complete the goals\n and objectives of the Active Shooter Simulation Technology, FY 2008\n\n\n ii\n\x0c NIJ Applied Technologies Conference, License Plate Reader technology,\n and Low Cost Aviation Program areas mentioned for cooperative\n agreements 2006-IJ-CX-K016 and 2009-IJ-CX-K017; however, SAT\n officials did not demonstrate performance for the remaining objectives.\n\n The SAT did not have documented policies and procedures related to\naccounting functions; however SAT\xe2\x80\x99s accounting system provided for\nsegregation of duties and system security. However, we identified internal\ncontrol weaknesses, which resulted in: unsupported and unallowable direct\ncost expenditures, unsupported indirect costs, inadequate property\nmanagement, inadequate budget oversight, no record of program income,\nand a lack of documentation regarding proper approval of cooperative\nagreement expenditures. Specifically, we found:\n\n \xe2\x80\xa2\t since SAT officials did not provide copies of contracts, we could not\n assess the adequacy of SAT\xe2\x80\x99s monitoring activities or whether the\n requirements in the contracts were fulfilled;\n\n \xe2\x80\xa2\t instances where the appropriate SAT official did not provide written\n approvals for expenditures;\n\n \xe2\x80\xa2\t expenditures for which SAT officials did not provide complete and\n adequate supporting documentation, totaling $177,517, as well as\n $303,995 in unsupported contractor costs;\n\n \xe2\x80\xa2\t unallowable expenditures relating to telephone charges and computer\n purchases that were loaned to NIJ officials, totaling $5,907;\n\n \xe2\x80\xa2\t financial reports did not reflect program income generated by the sale\n of accountable property acquired using cooperative agreement funds;\n\n \xe2\x80\xa2\t SAT officials did not maintain property records relating to the\n management, sale, and disposal of accountable property acquired\n using award funds, including the sale price or method used to\n determine the market value of the asset, which resulted in\n unsupported accountable property costs, totaling $72,776; and\n\n \xe2\x80\xa2\t unsupported indirect cost charges, totaling $23,065.\n\n These items are detailed in the Findings and Recommendations section\nof the report. Our audit objectives, scope, and methodology are discussed\nin Appendix I.\n\n\n\n iii\n\x0c Table of Contents\n\n\nINTRODUCTION ..........................................................................................1\n\n Background................................................................................................ 1\n\n Our Audit Approach ..................................................................................... 2\n\nFINDINGS AND RECOMMENDATIONS ..........................................................4\n\n Prior Audits ................................................................................................ 4\n\n Single Audit............................................................................................. 4\n\n OJP Site Visits ......................................................................................... 5\n\n Internal Control Environment ....................................................................... 5\n\n Contractors ............................................................................................. 6\n\n Drawdowns ................................................................................................ 7\n\n Budget Management and Control .................................................................. 8\n\n Cooperative Agreement Expenditures .......................................................... 10\n\n Direct Costs .......................................................................................... 10\n\n Indirect Costs ........................................................................................ 13\n\n Property Management ............................................................................... 14\n\n Grant Reporting ........................................................................................ 15\n\n Financial Reporting................................................................................. 15\n\n Program Income .................................................................................... 16\n\n Categorical Assistance Progress Reports ................................................... 17\n\n Program Performance and Accomplishments ................................................ 18\n\n Program Objectives ................................................................................ 19\n\n Analysis of Program Performance ............................................................. 20\n\n Closeout Activity ....................................................................................... 22\n\n Conclusion ............................................................................................... 23\n\n Recommendations..................................................................................... 25\n\nAPPENDIX I: OBJECTIVES, SCOPE, AND METHODOLOGY ..........................26\n\nAPPENDIX II: SCHEDULE OF DOLLAR-RELATED FINDINGS ...................... 28\n\nAPPENDIX III: DETAILED UNSUPPORTED COSTS ..................................... 29\n\nAPPENDIX IV: OTHER REPORTABLE MATTERS.......................................... 32\n\n Sale of Aviation Equipment...................................................................... 32\n\n Conference Expenditures ........................................................................ 32\n\nAPPENDIX V: SHERIFFS\xe2\x80\x99 ASSOCIATION OF TEXAS RESPONSE TO DRAFT\n\nAUDIT REPORT..........................................................................................34\n\nAPPENDIX VI: OFFICE OF JUSTICE PROGRAMS RESPONSE TO DRAFT\n\nAUDIT REPORT..........................................................................................39\n\nAPPENDIX VII: OFFICE OF THE INSPECTOR GENERAL ANALYSIS AND\n\nSUMMARY OF ACTIONS NECESSARY TO CLOSE THE REPORT ..................... 42\n\n\x0c AUDIT OF THE OFFICE OF JUSTICE PROGRAMS NATIONAL\n\n INSTITUTE OF JUSTICE COOPERATIVE AGREEMENTS\n\n AWARDED TO THE SHERIFFS\xe2\x80\x99 ASSOCIATION OF TEXAS\n\n AUSTIN, TEXAS\n\n\n\n INTRODUCTION\n\n\n The U.S. Department of Justice, Office of the Inspector General (OIG),\nAudit Division, has completed an audit of two cooperative agreements\ntotaling $5,094,642, awarded by the Office of Justice Programs (OJP),\nNational Institute of Justice (NIJ) to the Sheriffs\xe2\x80\x99 Association of Texas (SAT),\nas shown in Exhibit 1.\n\nEXHIBIT 1: COOPERATIVE AGREEMENTS AWARDED TO THE\n SHERIFFS\xe2\x80\x99 ASSOCIATION OF TEXAS\n PROJECT PROJECT\n COOPERATIVE AWARD START END AWARD\n AWARD NUMBER AGREEMENT PROGRAM DATE DATE DATE AMOUNT\n Border Research and\n2006-IJ-CX-K016 Technology Center 09/14/06 07/01/06 09/30/11 $4,609,496\n (BRTC) Support\n Evaluation of Low\n2009-IJ-CX-K017 Cost Aviation for 09/23/09 10/01/09 09/30/11 485,146\n Law Enforcement\n Total: $5,094,642\nSource: Office of Justice Programs\xe2\x80\x99 (OJP) Grants Management System (GMS)\n\nBackground\n\n OJP\xe2\x80\x99s mission is to increase public safety and improve the fair\nadministration of justice across America through innovative leadership and\nprograms. OJP seeks to accomplish its mission by disseminating\nstate-of-the-art knowledge and practices across America by providing grants\nfor the implementation of these crime fighting strategies. To support this\nmission, the NIJ provides objective and independent knowledge and tools to\nreduce crime and promote justice, particularly at the state and local levels.\n\n Cooperative agreement 2006-IJ-CX-K016 provides for the operation\nand maintenance of the Border Research and Technology Center (BRTC).\nThe BRTC provides science and engineering advice and support, technology\ninformation, and outreach services on border-related issues, resulting in the\nadoption of new tools and technologies for use by local law enforcement\n\n\n 1\n\n\x0cagencies. The BRTC also works with law enforcement agencies at ports of\nentry that are interested in technologies to respond to critical incidents at\nschools, as well as tools for detecting contraband. The purpose of\ncooperative agreement 2009-IJ-CX-K017 is to determine the need by the\nlaw enforcement community for lower cost aviation platforms, then\ndetermining what technology might be required to enhance the effectiveness\nof those platforms. This project examines technologies such as airborne still\ncamera systems, video camera systems, video downlinks, and air-to-ground\nlaw enforcement communication systems. Further, this project facilitates\nthe exchange of information between state, local, and tribal criminal justice\nagencies and the NIJ\xe2\x80\x99s research, development, test and evaluation\nprograms.\n\n According to the SAT\'s website, their mission is, "That we, as Sheriffs,\nhave assembled in convention for no political purpose whatsoever, but for\nthe purpose of more successfully aiding each other as officers, to execute\nthe laws, in the discharge of our duties against criminals, and for the further\nand better protection of the citizens of our respective counties and the State\nat large."\n\n Also, according to the Association\'s website, the SAT is one of the\noldest law enforcement associations in the nation. The SAT met for the first\ntime on August 14, 1874, in the courthouse in Corsicana, Navarro County,\nTexas. The Sheriffs began annual training conferences in 1878. According\nto the SAT\xe2\x80\x99s website, these training conferences are the largest composite\ngathering of law enforcement officers in Texas. Sheriffs and other county\nand local law enforcement officers, federal and state officers, and major\nindustry security personnel attend.\n\nOur Audit Approach\n\n We tested compliance with what we consider to be the most important\nconditions of the cooperative agreements. Unless otherwise stated in our\nreport, the criteria we audit against are contained in the OJP Financial Guide\nand cooperative agreement award documents. We tested the SAT\xe2\x80\x99s:\n\n \xe2\x80\xa2\t internal control environment to determine whether the internal\n controls in place for the processing and payment of funds were\n adequate to safeguard cooperative agreement funds and ensure\n compliance with the terms and conditions of the cooperative\n agreements;\n\n\n\n\n 2\n\n\x0c \xe2\x80\xa2\t cooperative agreement drawdowns to determine whether\n cooperative agreement drawdowns were adequately supported and if\n SAT was managing cooperative agreement receipts in accordance with\n federal requirements;\n\n \xe2\x80\xa2\t budget management and control to determine SAT\xe2\x80\x99s compliance\n with the costs approved in the cooperative agreement budgets;\n\n \xe2\x80\xa2\t cooperative agreement expenditures to determine the accuracy\n and allowability of costs charged to the cooperative agreements;\n\n \xe2\x80\xa2\t property management to determine the existence of capital\n property purchased using cooperative agreement funds as well as\n reasonable assurance that the property was used properly in\n accordance with cooperative agreement requirements;\n\n \xe2\x80\xa2\t Federal Financial Reports (FFRs) and Progress Reports to\n determine if the required FFRs and Progress Reports were submitted in\n a timely manner and accurately reflect cooperative agreement activity;\n\n \xe2\x80\xa2\t cooperative agreement objectives and accomplishments to\n determine whether the SAT has met the cooperative agreement\n objectives; and\n\n \xe2\x80\xa2\t closeout activity to determine that appropriate action had been\n taken to administratively close cooperative agreements that had\n reached their end date.\n\n The findings and recommendations are detailed in the Findings and\nRecommendations section of this report. Our audit objectives, scope, and\nmethodology appear in Appendix I.\n\n\n\n\n 3\n\n\x0c FINDINGS AND RECOMMENDATIONS\n\n We determined that the SAT did not have documented policies\n and procedures related to accounting functions; however SAT\xe2\x80\x99s\n accounting system provided for segregation of duties and system\n security. We also found that the SAT was generally in\n compliance in the following areas: drawdowns, financial reports,\n and Progress Reports. Additionally, there was no indication that\n SAT officials did not complete the goals and objectives of the\n Active Shooter Simulation Technology, FY 2008 NIJ Applied\n Technologies Conference, License Plate Reader technology and\n Low Cost Aviation Program areas mentioned for cooperative\n agreements 2006-IJ-CX-K016 and 2009-IJ-CX-K017; however,\n SAT officials did not demonstrate performance for the remaining\n objectives. Furthermore, SAT officials did not provide copies of\n contracts, so we could not assess the adequacy of SAT\xe2\x80\x99s\n monitoring activities or whether the requirements in the\n contracts were fulfilled. Finally, during our review, we identified\n internal control weaknesses, which resulted in unsupported\n direct costs totaling $177,517; unsupported contractor costs\n totaling $303,995; unallowable expenditures for a phone and a\n computer that were loaned to NIJ officials, totaling $5,907;\n unsupported accountable property costs totaling $72,776;\n transactions without proper documented approval; and\n unsupported indirect cost charges totaling $23,065.\n\nPrior Audits\n\nSingle Audit\n\n The Office of Management and Budget (OMB) Circular A-133 requires\nthat non-Federal entities that expend $500,000 or more per year in Federal\nawards have a single audit performed annually. We determined that the\nthree most recent Single Audits of the SAT were for Fiscal Years (FY) 2008,\n2009, and 2010. We reviewed these audit reports and identified the\nfollowing issues relating to cooperative agreements 2006-IJ-CX-K016 and\n2009-IJ-CX-K017:\n\n \xe2\x80\xa2\t Proceeds from the sale of equipment purchased with award funds were\n retained and were not utilized for obtaining other program assets or\n for other program purposes.\n\n\n\n\n 4\n\n\x0c \xe2\x80\xa2\t Depreciation expenses related to equipment acquired with award funds\n were charged to the award. Depreciation is not an allowable cost.\n\n \xe2\x80\xa2\t The drawdown requests for direct federal awards were not reconciled\n against the cumulative award expenditures in the accounting records.\n\n \xe2\x80\xa2\t Procedures were not in place to effectively monitor budget versus\n actual performance for the federal awards. Reliable budget versus\n actual reports were not available for program management\xe2\x80\x99s review.\n\n \xe2\x80\xa2\t The organization\xe2\x80\x99s single audit reporting package was submitted late\n to the Federal Clearinghouse. OMB Circular A-133 states that the\n reporting package must be submitted no later than nine months after\n the end of the audit period.\n\n \xe2\x80\xa2\t Certain wages paid to an employee included in the indirect cost pool\n for purposes of the indirect cost rate were also charged to the award\n as direct costs.\n\n \xe2\x80\xa2\t Procedures were not in place to ensure the accuracy of the quarterly\n Federal Financial Reports (FFRs) submitted to the grantor. Cumulative\n grant expenditures shown on the quarterly FFRs were not reconciled\n against cumulative grant expenditures per the accounting records.\n\nOJP Site Visits\n\n We also noted that the NIJ Program Manager responsible for\ncooperative agreements 2006-IJ-CX-K016 and 2009-IJ-CX-K017 had\nperformed three site visits in August 2009, April 2010, and April 2011.\nAccording to reports of the three site visits, obtained from the OJP Grants\nManagement System (GMS), the NIJ Program Manager stated in the reports\nthat they did not identify any programmatic or administrative problems\nrequiring formal resolution. All three site visit reports also stated that the\nSAT appeared to be progressing according to the plan presented in the\napproved applications, and that it was in compliance with NIJ guidelines.\n\nInternal Control Environment\n\n We reviewed the SAT\xe2\x80\x99s internal control environment, including\nprocurement, receiving, payment, and payroll procedures to determine\ncompliance with the terms and conditions of the cooperative agreements and\nto assess risk.\n\n\n\n\n 5\n\n\x0c SAT officials stated that the SAT had procured accounting services\nfrom an outside accounting firm for cooperative agreement\n2006-IJ-CX-K016. SAT used an online system from which the accounting\nservices firm performed data entry. SAT officials stated that the SAT did not\nhave written policies and procedures regarding accounting functions.\nHowever, SAT officials described the accounting processes that were\nfollowed at the SAT. First, SAT officials received invoices, which were then\nsubmitted to the Project Director for review and approval. Second, the\nProject Director forwarded approved invoices to his assistant. Third, after\nthe invoices were approved by the Project Director, the assistant copied the\napproved invoices and supporting documentation, added accounting code\ninformation and submitted the approved invoices to the accounting services\nfirm for data entry into the accounting system. Fourth, the accounting\nservices firm completed data entry of the information and provided it to the\nSAT Executive Director who reviewed the invoices online and provided\napproval for payment.\n\n Towards the end of 2009, SAT officials explained that there was\ndissatisfaction with the system provided by the accounting firm, primarily for\nbudget reporting, and the SAT changed to a new accounting system. The\nSAT contracted with a new company to implement the new accounting\nsystem and provide general assistance to the SAT. The SAT was responsible\nfor data entry into the new accounting system. After the new accounting\nsystem was established, vendor invoices were received and provided to the\nProject Director for approval. Once the Project Director approved the\ninvoices, the SAT Executive Director reviewed the documentation and\nprovided a higher level approval for invoices approved by the Project\nDirector. SAT officials also explained that vendor invoice payment entries\nwere entered in the accounting system, by another SAT employee. Officials\nfrom the company who provided the new accounting system also explained\nthat the system was secured with restricted access.\n\nContractors\n\n SAT officials stated that the contractors included one sole source\ncontract, approved by NIJ, as well as former SAT employees who became\ncontractors at the request of NIJ. Contractors provided services including\nresearch, transportation of assets, and running the various areas supported\nby the BRTC including the Low Cost Aviation Program. SAT officials\nexplained that they monitored the contractors by reviewing the work\nsubmitted by the contractors. SAT officials also stated that they monitored\nthe contractor\xe2\x80\x99s activities by staying in contact with the contractors by phone\n\n\n\n 6\n\n\x0cas well as reviewing vouchers, reports and supporting documentation\nsubmitted with their invoices.\n\n According to 28 CFR 70, a system for contract administration must be\nmaintained to ensure contractor conformance with the terms, conditions,\nand specifications of the contract and to ensure adequate and timely follow\nup of all purchases. Recipients must evaluate contractor performance and\ndocument, as appropriate, whether contractors have met the terms,\nconditions and specifications of the contract.\n\n During our transaction testing, we noted that when invoices were\nsubmitted to SAT officials for approval and payment, a list of activities\nperformed generally would be included. In order to review the adequacy of\nSAT\xe2\x80\x99s monitoring procedures, we requested copies of the contracts. We\nwere able to review one contract that had been included in the supporting\ndocumentation reviewed during transaction testing. Also, during our review\nof Progress Reports, we were able to review the aviation mission reports SAT\nofficials used to monitor this contractor. However, with the exception of this\ninstance, SAT officials did not provide copies of contracts paid using\ncooperative agreements 2006-IJ-CX-K016 and 2009-IJ-CX-K017. Since, we\nwere not able to obtain these contracts, we could not assess the adequacy of\nSAT\xe2\x80\x99s monitoring activities or whether the requirements in the contracts\nwere fulfilled.\n\n The SAT\xe2\x80\x99s accounting system provided for segregation of duties and\nsystem security; however, SAT did not have documented policies and\nprocedures related to accounting functions. We identified internal control\nweaknesses, which resulted in: unsupported and unallowable direct cost\nexpenditures, unsupported indirect costs, inadequate property management,\ninadequate budget oversight, no record of program income, and a lack of\ndocumentation regarding proper approval of cooperative agreement\nexpenditures. These discrepancies are outlined in more detail in the\nremainder of this report. We recommend that prior to SAT receiving any\nfuture awards, SAT officials provide formal accounting procedures which\naddress these internal control weaknesses.\n\nDrawdowns\n\n To determine the procedures for drawing down cooperative agreement\nfunds, we reviewed the award documentation and conducted interviews with\nSAT officials. We determined that the cooperative agreements awarded to\nthe SAT are reimbursement based, and are therefore subject to the OJP\nFinancial Guide requirement that drawdown requests be timed to ensure that\n\n\n 7\n\n\x0cFederal cash on hand is the minimum needed for disbursements or\nreimbursements to be made immediately or within ten days.\n\n We reviewed a judgmental sample of bank statements for four months\nin which the SAT had drawn down cooperative agreement funds, and\ndetermined that the drawdowns were properly deposited into a bank account\nmaintained by SAT officials. Also, we analyzed each cooperative agreement\nin our audit to determine if the total actual costs recorded in the accounting\nrecords were equal to the cumulative drawdowns as reported by the OJP.\nWe determined that cumulative drawdowns equaled total cooperative\nagreement expenditures.\n\nBudget Management and Control\n\n According to the OJP Financial Guide, movement of dollars between\napproved budget categories without a Grant Adjustment Notice (GAN) is\nallowable up to 10 percent of the total award amount for awards greater\nthan $100,000. As noted in Exhibit 1, the SAT received two awards; both\nawards were greater than $100,000. SAT officials stated that cooperative\nagreement budgets were developed in cooperation with the Program\nManager for NIJ, who provided guidance and made recommendations for\nbudget category amounts in order to fulfill cooperative agreement\nobjectives. SAT officials also stated that during the execution phase of the\ncooperative agreements, the NIJ Program Manager made recommendations\nand authorized changes, through email, in amounts expended for budget\ncategories of less than 10 percent of the approved budget amounts. We\ncompared the approved budgets for this award to the actual expenditures as\nshown in the SAT\xe2\x80\x99s accounting records.\n\n SAT officials stated that in accordance with the budgets, if an\nexpenditure did not fall into an item identified specifically in the cooperative\nagreement budgets then it would be placed in the "Other" budget category.\nFor example, SAT officials explained that travel charges like lodging,\ntransportation, and meals were in either the \xe2\x80\x9cTravel\xe2\x80\x9d or the \xe2\x80\x9cOther\xe2\x80\x9d budget\ncategories. SAT officials referred OIG auditors to the company, which\nassisted SAT with their change in accounting systems, so OIG auditors could\nsegregate cooperative agreement expenditures to correlate to the approved\nbudgets. These officials provided a spreadsheet linking general ledger\ncategories and subcategories to the approved cooperative agreement budget\nfor cooperative agreement 2006-IJ-CX-K016. As shown in Exhibit 2, we\ndetermined that SAT officials spent in excess of the budgeted amount in five\nof the seven approved budget categories, totaling $378,692. However, we\n\n\n\n 8\n\n\x0cdetermined that this was within the 10-percent threshold allowed per the\nOJP Financial Guide.\n\nEXHIBIT 2:\t BUDGET MANAGEMENT AND CONTROL FOR\n COOPERATIVE AGREEMENT 2006-IJ-CX-K016 1\n BUDGET CATEGORY AMOUNT OVER\n BUDGET CATEGORY AMOUNT ACTUAL COSTS BUDGET\n Personnel $ 1,052,170 $ 1,144,614 $ (92,444)\n\n Fringe Benefits 166,450 148,489 -\n\n Travel 566,311 734,471 (168,160)\n\n Equipment 25,969 97,649 (71,680)\n\n Supplies 12,834 17,567 (4,733)\n\n Construction - - -\n\n Contractual 608,000 649,675 (41,675)\n\n Other 1,806,268 1,432,208 -\n\n TOTAL DIRECT COSTS $4,238,002 $4,224,674 $378,692\n\n Indirect Costs 2 371,494 384,822 N/A\n\n TOTAL AMOUNT $4,609,496 $4,609,496 $378,692\n\n Ten Percent Threshold for 2006-IJ-CX-K016: $460,950\n Difference Between Over Budget Amounts and\n $ 82,257\n Ten Percent Threshold:\n\n\n When we asked the company about being able to provide the same\ntype of documentation for cooperative agreement 2009-IJ-CX-K017, officials\nstated that they were not as familiar with this cooperative agreement as\nthey were with cooperative agreement 2006-IJ-CX-K016 and that they could\nnot provide additional explanation to compare expenditures in the general\nledger to the approved budget categories for cooperative agreement\n2009-IJ-CX-K017. The approved budget for cooperative agreement\n2009-IJ-CX-K017 is shown in Exhibit 3.\n\n\n\n\n 1\n Differences in total amounts are due to rounding. The sum of individual numbers\nprior to rounding may differ from the sum of the individual numbers rounded.\n 2\n It should be noted that indirect costs were not factored into our budget analysis.\nIndirect costs were included to illustrate total costs when compared to total grant budgets.\nOur analysis of indirect costs is noted further in this report.\n\n 9\n\n\x0c EXHIBIT 3: APPROVED BUDGET FOR COOPERATIVE\n AGREEMENT 2009-IJ-CX-K017\n BUDGET CATEGORY BUDGET CATEGORY AMOUNT\n Personnel $ -\n Fringe Benefits -\n Travel 22,125\n Equipment 65,000\n Supplies 5,400\n Construction -\n Contractual 205,450\n\n Other 113,759\n\n TOTAL DIRECT COSTS $411,734\n\n Indirect Costs 73,412\n\n TOTAL BUDGETED AWARD AMOUNT $485,146\n\n\n After further discussion with SAT officials, SAT officials were not able\nto provide any additional explanation regarding the segregation of\ncooperative agreement expenditures relating to the approved budgets for\ncooperative agreement 2009-IJ-CX-K017. According to the OJP Financial\nGuide, an adequate accounting system should let you compare actual\nexpenditures or outlays with budgeted amounts for each award and\nsubaward. Therefore, the categories that organize the general ledgers\nshould be organized so that actual expenditures can be properly compared\nto the amounts stated in the approved cooperative agreement budgets. We\nrecommend that in the future if the SAT is to receive additional OJP funding,\nthe OJP require that the SAT establish a general ledger that is capable of\ncategorizing expenditures that will allow comparison with the approved\nbudget.\n\nCooperative Agreement Expenditures\n\nDirect Costs\n\n Initially, for cooperative agreement 2006-IJ-CX-K016, we judgmentally\nselected 86 of 4,749 transactions totaling $1,345,851 (32 percent of direct\ncooperative agreement expenditures). For cooperative agreement\n2009-IJ-CX-K017, we judgmentally selected 28 of 327 transactions, totaling\n$301,513 (71 percent of direct cooperative agreement expenditures).\nAccording to the OJP Financial Guide, all financial records, supporting\ndocuments, statistical records, and all other records pertinent to the award\n\n 10\n\n\x0cshall be retained by each organization for at least three years following\nnotification by the awarding agency that the grant has been\nprogrammatically and fiscally closed or at least three years following the\nclosure of its single audit report covering the entire award period, whichever\nis later. The OJP Financial Guide also states that all recipients are required\nto establish and maintain adequate accounting systems and financial records\nto accurately account for funds awarded to them.\n\n During our review, we noted that SAT officials did not provide any\nsupporting documentation or did not provide adequate supporting\ndocumentation for six transactions, totaling $177,517. In four of the six\ntransactions mentioned, SAT officials provided a quotation or estimate for\ncharges but did not provide an invoice or other adequate documentation\nindicating the actual amount paid or that actual goods and services had been\nreceived and were properly charged. Therefore, we determined these\ntransactions to be unsupported. Detailed information regarding these costs\ncan be found in Appendix III.\n\n Also, as stated in the contractors section of this report, SAT officials\ndid not provide copies of contracts that were paid using cooperative\nagreement funds. Without documentation of the contracts, we could not\nverify that contractors performed the work required under those contracts\nand we could not verify that contractors were compensated appropriately as\nstated in those contracts. Therefore, we determined that 15 transactions\ninvolving contractors, totaling $303,995, were unsupported. Detailed\ninformation regarding these costs can also be found in Appendix III.\n\n During transaction testing of expenditures for SAT cooperative\nagreement 2006-IJ-CX-K016, we noted that the SAT provided the NIJ\nProgram Manager cellular phone service and charged expenditures for this\nservice to the cooperative agreement. According to the budget narratives\nfor cooperative agreement 2006-IJ-CX-K016, wireless communications\nservice (including cell phone and wireless email access devices) were for the\nuse of BRTC staff. Also, the budget narratives stated that computers were\npurchased for use by SAT staff and management as may be determined by\nthe BRTC Director with concurrence of the NIJ Program Manager. We\nexpanded our testing by 175 transactions, totaling $30,621, to include the\nremaining phone transactions as well as a laptop computer that was noted in\nthe general ledger to be allocated to the NIJ Program Manager.\n\n SAT officials stated that the service was initiated after discussions with\nthe NIJ Program Manager prior to the DOJ providing the Program Manager a\ncellular phone. SAT officials further explained since they were new to the\n\n\n 11\n\n\x0cNIJ program they were concerned about their ability to readily contact the\nProgram Manager in a timely manner. In addition, SAT officials stated they\nalso purchased a laptop computer at the request of the NIJ Program\nManager and that the laptop was used for developing and making slide\npresentations for conferences and meetings supported by NIJ funding.\n\n The NIJ Program Manager explained that the phone and the laptop\nwere loaned to him as part of the SAT\xe2\x80\x99s programmatic support to the\nprograms that he manages as part of the cooperative agreements and that\nthey were not purchased so that SAT officials had the ability to contact him\nin an easier manner, even if it had that unintended result. The NIJ Program\nManager also explained that the smart phone technology was used to\ndemonstrate a project in which smart phone technology could be used as a\nlow cost mobile computing platform for law enforcement, demonstrate a\nproject for a Situational Awareness Tool, demonstrate NIJ\xe2\x80\x99s smart phone\napplications, and demonstrate its use in the Low Cost Aviation Technology\nProgram. The NIJ Program Manager confirmed the explanation of SAT\nofficials stating that the loaned laptop was used in making slide\npresentations for the various conferences that NIJ\xe2\x80\x99s programs had presented\nas well as at their display at various law enforcement trade shows. The NIJ\nProgram Manager also stated that the laptop was returned to the current\ngrantee after their last booth presentation at the NIJ annual conference in\nJune 2012.\n\n We determined that the use of equipment loaned to NIJ officials was\nnot included in the approved budgets since the budgets indicated that the\nequipment purchased using cooperative agreement funds was for the use of\nSAT staff. Therefore, we determined that the $5,907 in telephone and\nequipment charges to be unallowable. Detailed information regarding these\ncosts can also be found in Appendix III.\n\n As previously mentioned in this report, the OJP Financial Guide states\nthe recipient is responsible for establishing and maintaining an adequate\nsystem of accounting and internal controls. The OJP Financial Guide also\nstates that an acceptable and adequate accounting system provides cost and\nproperty control to ensure optimal use of funds. In order to verify the\ncontrols and procedures described by SAT officials, we reviewed supporting\ndocumentation to verify that transactions were properly approved by the\nappropriate SAT official. During our testing, we determined that 40 of the\n290 transactions we reviewed did not have any written indication of approval\nfrom an appropriate SAT official. Without proper approval, expenditures\nmay not be an optimal, reasonable, or allowable use of cooperative\nagreement funds.\n\n\n 12\n\n\x0cIndirect Costs\n\n As shown in Exhibits 2 and 3, indirect costs were approved for\ncooperative agreements 2006-IJ-CX-K016 and 2009-IJ-CX-K017. According\nto documentation provided by SAT officials, indirect cost rates are\ndetermined by negotiating through the Office of the Chief Financial Officer,\nOJP. According to an indirect cost agreement dated September 16, 2011,\nthe indirect costs rate uses a base that includes total direct costs excluding\ncapitalized equipment, and each subcontract and subaward/subgrant in\nexcess of $25,000.\n\n When we asked SAT officials about indirect costs and the indirect cost\nrate, SAT officials deferred us to the independent auditor who performed\ntheir Single Audit. The independent auditor explained that the Project\nDirector performed the drawdowns and would use reports of direct costs\nincurred from the accounting system and would then calculate a percentage\nof those costs to determine the appropriate amount of indirect costs. In\nresponse to a question from OIG auditors, the independent auditor stated\nthat she believed that the exclusions of capitalized equipment and\nsubcontracts, noted in the previous paragraph, were not used by SAT\nofficials when calculating indirect costs. Instead, the independent auditor\nexplained that SAT officials used a rate that was lower than the approved\nrate and calculated indirect costs using total direct costs.\n\n Therefore, we compared the amounts spent for indirect costs to the\namounts allowed per the approved indirect cost agreements. We\ndetermined that the cumulative indirect costs charged for cooperative\nagreement 2006-IJ-CX-K016 did not exceed the cumulative amount allowed\nper the approved indirect cost rate agreement. However, as shown in\nExhibit 4, we determined that the indirect costs charged to cooperative\nagreement 2009-IJ-CX-K017 exceeded the amount allowed using direct cost\namounts and the approved indirect cost rate agreement. Therefore, we\ndetermined that $23,065 in indirect costs was unsupported due to spending\nbeyond the parameters and limitations of the indirect cost agreement.\n\n\n\n\n 13\n\n\x0cEXHIBIT 4: COOPERATIVE AGREEMENT 2009-IJ-CX-K017 INDIRECT\n COST CHARGES PER YEAR\n INDIRECT\n COSTS ACTUAL\n APPROVED ALLOWED INDIRECT\n DIRECT COST INDIRECT COST PER COSTS\n FY ENDING BASIS RATE AGREEMENT CHARGED DIFFERENCE\n 12/31/2009 $ - 13.70% $ - $ - $ -\n\n 12/31/2010 123,751 13.70% 16,954 - 16,954\n\n 12/31/2011 119,731 13.70% 16,403 56,422 (40,018)\n\nTOTAL COSTS $243,482 $33,357 $56,422 $(23,065)\n\nSource: Sheriffs\xe2\x80\x99 Association of Texas\n\nProperty Management\n\n As shown in Exhibits 2 and 3, expenditures for accountable property\nwere allowed for cooperative agreements 2006-IJ-CX-K016 and\n2009-IJ-CX-K017. The criteria that SAT officials used to define an\nexpenditure for capital property was expenditures greater than $5,000 and a\nuseful life of greater than one year. SAT officials stated that they retain an\ninventory of all federally funded property and equipment. SAT officials also\nexplained that accountable property purchased using cooperative agreement\nfunds were transferred to a partner agency (who also received a cooperative\nagreement in the Low Cost Aviation Program) upon the expiration of the\ncooperative agreements to continue the program. SAT officials also advised\nthat the NIJ Program Manager was involved in decisions to acquire\nequipment for execution of the cooperative agreements. SAT officials stated\nthat they used mission reports from the users of the equipment in order to\nensure that the equipment was used in accordance to the terms and\nconditions of the cooperative agreements. According to the OJP Financial\nGuide, property records should be maintained accurately and include, the\ndate of disposal and sales price or the method used to determine current fair\nmarket value where a recipient compensates the Federal awarding agency\nfor its share.\n\n During our review of aviation mission reports for Progress Report\ntesting, we verified that accountable property was used in accordance to the\nterms and conditions of the cooperative agreement. Also, to ensure the\nexistence of accountable property purchased using cooperative agreement\nfunds, we requested SAT officials coordinate with their partner agency as\nwell as the users of the cooperative agreement-funded accountable property\nto provide photographs of the accountable property and serial numbers so\n\n\n 14\n\n\x0cthat we could reconcile them to the expenditures and supporting\ndocumentation already reviewed. After reviewing the photographs provided\nby SAT officials, with the exception of one instance, we verified the existence\nof capital property purchased using cooperative agreement funds. However,\naccording to a property list obtained from SAT officials as well as\nexplanations and documented correspondence from SAT officials we noted\nthat two pieces of accountable property had been sold prior to the transfer\nof accountable property to the partner agency. The two pieces of\naccountable property were identified as a RANS S-12 and a Revo Trike.\nAfter reviewing the property list as well as equipment transactions in the\ngeneral ledgers we determined that the Revo Trike had been purchased\nusing cooperative agreement 2009-IJ-CX-K017. After reviewing the\nsupporting documentation relating to the purchase of the Revo Trike, we\ndetermined that it initially cost $72,776. We requested that SAT provide\nsupporting documentation for the sale of this asset so that we could verify\nwhether appropriate disposition requirements were followed. However, SAT\nofficials did not provide documentation relating to the custody and\ndisposition relating to the Revo Trike. Therefore, we determined that the\ntransactions for the Revo Trike, totaling $72,776 were unsupported. Further\ndetail regarding these costs can be found in Appendix III.\n\nGrant Reporting\n\n We reviewed the Financial Reports and Categorical Assistance Progress\nReports (Progress Reports) to determine if the required reports had been\nsubmitted accurately, and within the timeframes required by the OJP\nFinancial Guide.\n\nFinancial Reporting\n\n The OJP Financial Guide states that effective for the quarter beginning\nOctober 1, 2009, grant recipients must report expenditures online using the\nFederal Financial Report (FFR) no later than 30 days after the end of each\ncalendar quarter. The OJP Financial Guide also states that the final report\nmust be submitted no later than 90 days following the end of the grant\nperiod. We reviewed the four most recent FFRs for each cooperative\nagreement and determined that financial reporting had been submitted in a\ntimely manner.\n\n As shown in Exhibit 5, we also reviewed financial reporting for\naccuracy. According to the OJP Financial Guide, recipients shall report the\nactual expenditures and unliquidated obligations incurred for the reporting\nperiod on each financial report. Also, the award recipients should report\n\n\n 15\n\n\x0cprogram outlays and revenue on a cash or accrual basis in accordance with\ntheir accounting system. For cooperative agreement 2006-IJ-CX-K016, we\ndetermined that reported period expenditures were accurate to expenditures\nin the general ledger on a cumulative basis. For cooperative agreement\n2009-IJ-CX-K017, we determined that financial reports were not accurate to\nthe general ledger.\n\nEXHIBIT 5: FEDERAL FINANCIAL REPORT EXPENDITURE ACCURACY\n CUMULATIVE CUMULATIVE\n AWARD DIFFERENCE\n CUMULATIVE EXPENDITURES BETWEEN\n AWARD PER REPORTS &\n REPORT REPORT PERIOD EXPENDITURES ACCOUNTING ACCOUNTING\n NO. FROM - TO DATES PER REPORT RECORDS RECORDS\nCooperative Agreement 2006-IJ-CX-K016\n 18 10/01/10 - 12/31/10 $4,195,050 $ 4,221,111 $ 26,061\n 19 01/01/11 - 03/31/11 4,285,730 4,307,389 21,659\n 20 04/01/11 - 06/30/11 4,389,264 4,378,936 (10,328)\n 21 07/01/11 - 09/30/11 4,609,496 4,609,496 -\nCooperative Agreement 2009-IJ-CX-K017\n 5 10/01/10 - 12/31/10 $ 315,236 $ 302,637 $ (12,598)\n 6 01/01/11 - 03/31/11 388,187 316,351 (71,836)\n 7 04/01/11 - 06/30/11 362,021 336,602 (25,419)\n 8 07/01/11 - 09/30/11 481,661 480,146 (1,515)\nSource: OJP Grants Management System (GMS) and SAT\n\nProgram Income\n\n The OJP Financial Guide requires recipients to report summary\ninformation on funds generated by the organization, including program\nincome. Also, the OJP Financial Guide describes the sale of property as a\nsource of program income. As stated previously in the Accountable Property\nsection of this report, SAT officials stated that they sold two aircraft and that\nthe NIJ Program Manager directed the SAT to acquire similar assets with the\nproceeds of the sales. Also, the independent auditor who performed SAT\xe2\x80\x99s\nsingle audit stated that the journal entry used for the sale of equipment\nwould not include an entry for revenue, but would provide a reversing entry\nfor the sale amount of the asset.\n\n As stated previously in the Property Management section of this\nreport, OIG auditors requested documentation regarding the sale of these\nassets. However, SAT officials did not provide any documentation relating to\nthe sale of accountable property. Also, after reviewing the accuracy of FFRs,\nwe noted that SAT reported there was no program income. Therefore, we\n\n\n 16\n\n\x0cdetermined that SAT officials did not report program income on the sale of\naccountable property and that SAT officials did not provide documentation\nrelating to the sale of accountable property.\n\nCategorical Assistance Progress Reports\n\n According to the OJP Financial Guide, Categorical Assistance Progress\nReports are due semiannually on January 30 and July 30 for the life of the\naward. To verify the timely submission of Progress Reports, we reviewed\nthe last four Progress Reports submitted for each grant to determine if the\nreport had been submitted as required by the OJP Financial Guide. As\nshown in Exhibit 6, we determined that one Progress Report for cooperative\nagreement 2009-IJ-CX-K017 had been submitted late. When we inquired\nabout why the last Progress Report was late, SAT officials stated that they\nwere not aware that this Progress Report had been submitted late or why it\nwas submitted late. SAT officials also explained that the final report\nrequired for the NIJ Aviation Program was incomplete because the program\nwas not completed and the report was sent to a partner agency for the third\nyear of the Aviation Program.\n\nEXHIBIT 6: CATEGORICAL ASSISTANCE PROGRESS REPORT HISTORY\n REPORT PERIOD\n REPORT NO. FROM - TO DATES DUE DATE DATE SUBMITTED DAYS LATE\nCooperative Agreement 2006-IJ-CX-K016\n 8 01/01/10 - 06/30/10 07/30/10 07/30/10 0\n 9 07/01/10 - 12/31/10 01/30/11 01/21/11 0\n 10 01/01/11 - 06/30/11 07/30/11 07/29/11 0\n 11 07/01/11 - 09/30/11 12/29/11 12/29/11 0\nCooperative Agreement 2009-IJ-CX-K017\n 2 01/01/10 - 06/30/10 07/30/10 07/30/10 0\n 3 07/01/10 - 12/31/10 01/30/11 01/21/11 0\n 4 01/01/11 - 06/30/11 07/30/11 07/29/11 0\n 5 07/01/11 - 09/30/11 12/29/11 03/13/12 75\nSource: OJP Grants Management System (GMS)\n\n We also reviewed Progress Reports for accuracy. According to the OJP\nFinancial Guide, the funding recipient agrees to collect data appropriate for\nfacilitating reporting requirements established by Public Law 103-62 for the\nGovernment Performance and Results Act. The funding recipient will ensure\nthat valid and auditable source documentation is available to support all data\ncollected for each performance measure specified in the program solicitation.\nIn order to verify the information in Progress Reports, we selected a sample\nof information from the last two Progress Reports submitted for each\n\n\n\n 17\n\n\x0ccooperative agreement and traced it to supporting documentation\nmaintained by SAT officials.\n\n SAT officials stated that the information for the Progress Reports is\ncompiled by the Project Director who then completes the Progress Reports.\nAccording to the Project Director, statements made in the Progress Reports\nwere derived by referring to the cooperative agreement requirements and\nmeasuring them against the accomplishments attained during the period of\nreview. Furthermore, the Project Director stated that he used general ledger\nexpenditures, direct communications with the NIJ Program Manager, and his\nrecollection of program activities to measure and report progress towards\naward objectives.\n\n For cooperative agreement 2006-IJ-CX-K016, we reviewed supporting\ndocumentation for activities and accomplishments of the various programs of\nthe BRTC that were stated within the Progress Reports. We were not able to\nverify 9 of the 15 statements made in the Progress Reports for cooperative\nagreement 2006-IJ-CX-K016. In several instances supporting\ndocumentation provided to us was insufficient or were not provided to us to\nsupport statements made in Progress Reports. For cooperative agreement\n2009-IJ-CX-K017, we reviewed the supporting documentation for the\nnumber and types of aviation missions flown for the NIJ Aviation Program\nand found the statements made by SAT in the Progress Reports to be\ngenerally supported.\n\nProgram Performance and Accomplishments\n\n As previously mentioned in this report, cooperative agreement\n2006-IJ-CX-K016 provides for the operation and maintenance of the BRTC.\nThe BRTC provides scientific and engineering advice and support, technology\ninformation, and outreach services on border-related issues, resulting in the\nadoption of new tools and technologies for use by local law enforcement\nagencies. The BRTC also works with law enforcement agencies at ports of\nentry that are interested in technologies to respond to critical incidents at\nschools, as well as tools for detecting contraband. The purpose of\ncooperative agreement 2009-IJ-CX-K017 is to determine the need by the\nlaw enforcement community for lower cost aviation platforms, then\ndetermining what technology might be required to enhance the effectiveness\nof those platforms. This project examines technologies such as airborne still\ncamera systems, video camera systems, video downlinks, and air-to-ground\nlaw enforcement communication systems.\n\n\n\n\n 18\n\n\x0cProgram Objectives\n\n For cooperative agreement 2006-IJ-CX-K016, we reviewed documents\nsubmitted by SAT officials in their application for the cooperative agreement\nawards as well as Grant Adjustment Notices (GANs). The SAT proposed to\nsupport the BRTC by providing outreach and technical assistance to state\nand local public safety agencies in the United States border areas as well as\ntechnical support to research and development programs supported by the\nNIJ and relevant NIJ Centers of Excellence. In order to support the BRTC,\nSAT officials stated in the applications for the cooperative agreements that\nthey would support various projects and activities including:\n\n \xe2\x80\xa2\t represent the BRTC at conferences, making presentations, and\n conducting demonstrations as appropriate for target personnel in\n appropriate venues;\n\n \xe2\x80\xa2\t work with the Communications Technology Center of Excellence to\n develop pilot program(s) to demonstrate and evaluate technology\n solutions to law enforcement communications needs in border area\n jurisdictions;\n\n \xe2\x80\xa2\t conduct on-site technology demonstrations and capacity building upon\n request from state and local public safety agencies;\n\n \xe2\x80\xa2\t provide assistance, as requested, to state and local agencies in the\n development of plans and strategies and selection and implementation\n of technology solutions than may enhance force multiplication with the\n greatest return on investment;\n\n \xe2\x80\xa2\t provide information and assistance on request to agencies considering\n purchase or deployment of technology products and capabilities,\n including site visits;\n\n \xe2\x80\xa2\t provide technical support to the NIJ Research and Development\n\n process, including technical input and recommendations to NIJ\n\n officials; and\n\n\n \xe2\x80\xa2\t SAT officials stated they would provide support for various activities\n and projects including Law Enforcement Thermographers Association\n training sessions, License Plate Reader technology, Computer Assisted\n Pre-Coordination Resource and Database system, 700/800 MHz\n Regional Planning Committee Chairs, evidence recovery and tunnel\n detection technologies, Active Shooter Simulation Technology, Surplus\n\n\n 19\n\n\x0c Property Program, and annual International Homicide Investigators\xe2\x80\x99\n Association meeting.\n\nAnalysis of Program Performance\n\n The SAT, through cooperative agreement 2006-IJ-CX-K016, received\nBRTC funding to provide support for a college or university to conduct an\noperational evaluation of the Active Shooter Simulation Technology, funded\nby NIJ. The SAT contracted with Washington State University to conduct an\nevaluation of the Active Shooter Training for Responding Officers (ASTRO)\nsoftware. The goal of the evaluation was to experimentally assess whether\nthe addition of the ASTRO software would significantly improve experienced\nofficer performance in a highly realistic assessment scenario. The SAT\nprovided the ASTRO evaluation report to the NIJ affixed to their final\nProgress Report for the period ending September 30, 2011.\n\n Also, the SAT received funding to host and support the FY 2008 NIJ\nApplied Technologies Conference. The conference was held in Point Clear,\nAlabama and was primarily attended by Federal, state, and local law\nenforcement community individuals. Meeting agenda discussions included\nLow Cost Aviation Assets as a Sensor and Surveillance Platform for Small\nand Large Agencies; License Plate Reading Cameras: Seeing is Believing;\nActive Shooter/School Safety; Protecting Law Enforcement Against New\nThreats; and Federal Excess Property Programs. The SAT provided support\nfor the conference to include expenditures for participant meals, hotel,\ntravel, and conference related expenses.\n\n Another project that SAT focused on through cooperative agreement\n2006-IJ-CX-K016 was to conduct an operational evaluation of the cost\neffectiveness and applicability of License Plate Reader technology along the\nborders of the United States. The evaluation attempted to determine the\nefficacy of the technology in varying locations and distances from\nestablished or clandestine border crossing locations for detecting and\napprehending human and drug smugglers and other persons of interest\noperating on primary and secondary roadways leading to or from targeted\nborder areas. The SAT acquired LPR system equipment to identify stolen or\nunwanted vehicles within the state of Texas prior to reaching and crossing\nthe border into Mexico. The BRTC also acquired and deployed a fixed site\nLPR system for evaluation on the Chesapeake Bay Bridge in Maryland, in\ncooperation with the Maryland Transportation Authority. The SAT provided\nresults from their evaluations of LPR systems to the National Law\nEnforcement and Corrections Technology Center (NLECTC) Small, Rural,\nTribal and Border Regional Center (SRTB-RC). The NLECTC SRTB-RC\nproduced a report titled License Plate Reader Systems \xe2\x80\x9cFunction,\n\n 20\n\n\x0cPerformance and Considerations for Law Enforcement Agencies,\xe2\x80\x9d which\ndiscusses the types of LPR systems, performance and expectations, as well\nas considerations such as location, communications and system costs for law\nenforcement agencies contemplating the purchase and deployment of LPR\ntechnology.\n\n Through the BRTC, the SAT funded a program to evaluate lower cost\naviation assets, affordable to smaller public safety agencies for search and\nrescue missions, surveillance and the ability to provide enhanced airborne\ncommunications capabilities. The NIJ Aviation Program evaluation began\nwith cooperative agreement 2006-IJ-CX-K016 and received additional\nfunding to continue the program under cooperative agreement\n2009-IJ-CX-K017. The program evaluation included analysis of manned\naircraft such as fixed wing light sport, powered parachutes, weight shift\ncontrol aircraft, gyroplanes, and small unmanned aircraft systems, which\nwere remotely piloted. For 2010, the NIJ Aviation Program reported a total\nof 640 law enforcement missions flown. During the year, the program\nreported operating between 10 to 12 aircraft for approximately 983 hours of\naircraft operation. These aircraft completed various types of missions\nincluding patrol, surveillance, search and rescue, photography, and\nnarcotics. The SAT declined to accept a supplemental award for cooperative\nagreement 2009-IJ-CX-K017. As a result, SAT transferred all federally\nacquired capital property to a partner agency, effective October 1, 2011, to\ncontinue the NIJ Aviation Program evaluation. The SAT also transferred\nresponsibility for completing the NIJ aviation program evaluation to this\npartner agency. Since the award end date preceded the completion of the\nevaluation, the SAT did not complete the Aviation Technology Program\nTechnical Report, which was required by the cooperative agreement award\ndocuments, by the end of the award period. The SAT provided the partner\nagency a draft version of the technical report with program results through\nthe award performance period for completion under cooperative agreement\n2009-IJ-CX-K019. Also, based on our review of the documentation provided\nby SAT officials regarding the Aviation Program, we do not take exception to\nSAT\xe2\x80\x99s performance and accomplishments for meeting the goals and\nobjectives for the NIJ Aviation Program.\n\n Based on the evidence noted above, we determined there is no\nindication that SAT officials did not complete the goals and objectives of the\nActive Shooter Simulation Technology, FY 2008 NIJ Applied Technologies\nConference, LPR technology, and Low Cost Aviation Program areas\nmentioned for cooperative agreements 2006-IJ-CX-K016 and\n2009-IJ-CX-K017.\n\n\n\n 21\n\n\x0c However, we were not able to perform an analysis of SAT\xe2\x80\x99s program\nsupport for various cooperative agreement projects and activities, other than\nthose discussed immediately above. We requested SAT officials provide\nwritten responses and supporting documentation to support each NIJ\nprogram goal and associated accomplishments for the two cooperative\nagreements to include: (1) program goals and objectives; (2) SAT provided\nservices; (3) lessons learned; (4) SAT measurement of program goals and\nobjectives; and (5) meeting minutes, conference agendas, and listing of\nattendees for all NIJ funded conferences and meetings. With exception to\nthe program areas mentioned in the previous paragraph, SAT officials did\nnot provide written explanations and supporting documentation for activities\nlisted in the program objectives section of this report.\n\nCloseout Activity\n\n According to the OJP Financial Guide, award recipients have 90 days\nafter the end date of the award to close out the award. Also, award\nrecipients are to provide a cash reconciliation, the final financial report, and\nthe final Progress Report to the granting agency as well as make a final\ndrawdown (before 90 days after the award).\n\nEXHIBIT 7:\t CLOSEOUT STATUS OF COOPERATIVE AGREEMENTS\n AWARDED TO THE SHERIFFS\xe2\x80\x99 ASSOCIATION OF TEXAS\n REQUIRED\n PROJECT\n PROJECT PROJECT CLOSEOUT CLOSEOUT STATUS PER OJP\n AWARD NUMBER START DATE END DATE DATE GRANTS MANAGEMENT SYSTEM\n 2006-IJ-CX-K016 07/01/06 09/30/11 12/29/2011 Overdue \xe2\x80\x93 Open ARD Audit 3\n 2009-IJ-CX-K017 10/01/09 09/30/11 12/29/2011 Closeout In Process\nSource: OJP Grants Management System (GMS)\n\n As shown in Exhibit 7, both of the cooperative agreements reviewed\nhad reached their end date at the time of this audit, and we determined that\nthose cooperative agreements were in the process of being closed. OJP\nofficials explained that cooperative agreement 2006-IJ-CX-K016 had not\nbeen closed out due to outstanding issues relating to SAT\xe2\x80\x99s FY 2008 Single\nAudit and that these single audit issues had been resolved. We also verified\nthat the final FFR was submitted, the final Progress Report was submitted,\nand that final drawdowns were in compliance with the terms and conditions\nrequired by the OJP Financial Guide.\n\n\n\n 3\n OJP officials explained that ARD stands for the Audit and Review Division within\nthe Office of Audit, Assessment, and Management.\n\n 22\n\n\x0cConclusion\n\n The purpose of this audit was to determine whether reimbursements\nclaimed for costs under the cooperative agreements were allowable,\nsupported, and in accordance with applicable laws, regulations, guidelines,\nterms and conditions of the cooperative agreements, and to determine\nprogram performance and accomplishments. We performed detailed\ntransaction testing and examined the SAT\xe2\x80\x99s accounting records, budget\ndocuments, financial and progress reports, and operating policies and\nprocedures. We found that the SAT:\n\n \xe2\x80\xa2\t drawdowns were properly deposited, and were equal to the actual\n expenditures per accounting records;\n\n \xe2\x80\xa2\t cooperative agreement expenditures were within the 10-percent\n threshold allowed per the OJP Financial Guide for cooperative\n agreement 2006-IJ-CX-K016, but the general ledger for cooperative\n agreement 2009-IJ-CX-K017 was not organized to allow for\n comparison to the approved cooperative agreement budget (therefore,\n we could not verify if cumulative expenditures were within the 10\xc2\xad\n percent threshold allowed per the OJP Financial Guide);\n\n \xe2\x80\xa2\t the Federal Financial Reports were submitted in a timely manner and\n reported expenditures were cumulatively accurate for cooperative\n agreement 2009-IJ-CX-K017, but were not cumulatively accurate for\n cooperative agreement 2006-IJ-CX-K016;\n\n \xe2\x80\xa2\t the Progress Reports were generally submitted in a timely manner and\n were generally accurate for cooperative agreement 2009-IJ-CX-K017,\n but were not accurate for cooperative agreement 2006-IJ-CX-K016;\n and\n\n \xe2\x80\xa2\t there was no indication that SAT officials did not complete the goals\n and objectives of the Active Shooter Simulation Technology, FY 2008\n NIJ Applied Technologies Conference, License Plate Reader technology,\n and Low Cost Aviation Program areas mentioned for cooperative\n agreements 2006-IJ-CX-K016 and 2009-IJ-CX-K017; however, SAT\n officials did not demonstrate performance for the remaining objectives.\n\n The SAT\xe2\x80\x99s accounting system provided for segregation of duties and\nsystem security; however, SAT did not have documented policies and\nprocedures related to accounting functions. We identified internal control\nweaknesses, which resulted in: unsupported and unallowable direct cost\n\n\n 23\n\n\x0cexpenditures, unsupported indirect costs, inadequate property management,\ninadequate budget oversight, no record of program income, and a lack of\ndocumentation regarding proper approval of cooperative agreement\nexpenditures. Specifically, we found:\n\n \xe2\x80\xa2\t since SAT officials did not provide copies of contracts, we could not\n assess the adequacy of SAT\xe2\x80\x99s monitoring activities or whether the\n requirements in the contracts were fulfilled;\n\n \xe2\x80\xa2\t instances where the appropriate SAT official did not provide written\n approvals for expenditures;\n\n \xe2\x80\xa2\t expenditures for which SAT officials did not provide complete and\n adequate supporting documentation; totaling $177,517; as well as\n $303,995 in unsupported contractor costs;\n\n \xe2\x80\xa2\t unallowable expenditures relating to telephone charges and computer\n purchases that were loaned to NIJ officials, totaling $5,907;\n\n \xe2\x80\xa2\t financial reports did not reflect program income generated by the sale\n of accountable property acquired using cooperative agreement funds;\n\n \xe2\x80\xa2\t SAT officials did not maintain property records relating to the\n management, sale, and disposal of accountable property acquired\n using award funds, including the sale price or method used to\n determine the market value of the asset, which resulted in\n unsupported accountable property costs, totaling $72,776; and\n\n \xe2\x80\xa2\t unsupported indirect cost charges, totaling $23,065.\n\n\n\n\n 24\n\n\x0cRecommendations\n\nWe recommend that OJP coordinate with the SAT to:\n\n1.\t Implement adequate formal accounting procedures in the event that\n SAT receives future awards.\n\n2.\t Establish a general ledger that is capable of categorizing expenditures\n in order to compare to the approved budget in the event that SAT\n receives future awards.\n\n3.\t Remedy the $177,517 in unsupported direct costs.\n\n4.\t Remedy the $303,995 in unsupported contractor costs.\n\n5.\t Remedy the $5,907 in unallowable telephone and computer costs.\n\n6.\t Remedy the $23,065 in unsupported indirect costs.\n\n7.\t Remedy the $72,776 in unsupported equipment costs.\n\n\n\n\n 25\n\n\x0c APPENDIX I\n\n OBJECTIVES, SCOPE, AND METHODOLOGY\n\n The purpose of the audit was to determine whether reimbursements\nclaimed for costs under the cooperative agreements were allowable,\nreasonable, and in accordance with applicable laws, regulations, guidelines,\nand terms and conditions of the cooperative agreements, and to determine\nprogram performance and accomplishments. The objective of the audit was\nto review performance in the following areas: (1) internal control\nenvironment; (2) drawdowns; (3) cooperative agreement expenditures,\nincluding personnel and indirect costs; (4) budget management and control;\n(5) matching; (6) property management; (7) program income; (8) financial\nand progress reports; (9) cooperative agreement requirements;\n(10) program performance and accomplishments; and (11) monitoring of\nsubgrantees and contractors. We determined that matching costs were not\napplicable to this audit.\n\n We conducted this performance audit in accordance with generally\naccepted government auditing standards. Those standards require that\nwe plan and perform the audit to obtain sufficient, appropriate evidence\nto provide a reasonable basis for our findings and conclusions based on\nour audit objectives. We believe that the evidence obtained provides a\nreasonable basis for our findings and conclusions based on our audit\nobjectives. Our audit concentrated on, but was not limited to, the award\ndate of cooperative agreement 2006-IJ-CX-K016 on September 14, 2006,\nthrough January 3, 2012. This was an audit of the OJP cooperative\nagreements 2006-IJ-CX-K016 and 2009-IJ-CX-K017 awarded to the\nSheriffs\xe2\x80\x99 Association of Texas (SAT). The SAT has drawn down a total of\n$5,089,642 in cooperative agreement funds through January 3, 2012.\n\n We tested compliance with what we consider to be the most important\nconditions of the cooperative agreements. Unless otherwise stated in our\nreport, the criteria we audit against are contained in the OJP Financial Guide\nand the award documents.\n\n In conducting our audit, we performed sample testing in three areas,\nwhich were cooperative agreement expenditures (including personnel\nexpenditures), Financial Reports, and Progress Reports. In this effort, we\nemployed a judgmental sampling design to obtain broad exposure to\nnumerous facets of the awards reviewed, such as dollar amounts,\nexpenditure category, or risk. However, this non-statistical sample design\n\n\n 26\n\n\x0cdoes not allow a projection of the test results for all cooperative agreement\nexpenditures or internal controls and procedures.\n\n In addition, we evaluated internal control procedures, performance to\ncooperative agreement objectives, cooperative agreement drawdowns,\nprogram income, property management, indirect costs, and evaluated the\nrecipient\xe2\x80\x99s monitoring of subrecipients. However, we did not test the\nreliability of the financial management system as a whole and reliance on\ncomputer based data was not significant to our objective.\n\n\n\n\n 27\n\n\x0c APPENDIX II\n\n\n SCHEDULE OF DOLLAR-RELATED FINDINGS4\n\n\n\nQUESTIONED COSTS: AMOUNT PAGE\n\n Unsupported Direct Cost Expenditures $177,517 11\n\n\n Unsupported Contractor Cost Expenditures 303,995 11\n\n\n Unallowable Telephone and Equipment Cost 5,907 12\n\n Expenditures\n\n\n Unsupported Indirect Cost Expenditures 23,065 13\n\n\n Unsupported Equipment Cost Expenditures 72,776 14-15\n\n\nTOTAL QUESTIONED COSTS: $ 583,260\n\nTOTAL DOLLAR-RELATED FINDINGS $ 583,260\n\n\n\n\n 4\n Questioned Costs are expenditures that do not comply with legal, regulatory, or\ncontractual requirements, or are not supported by adequate documentation at the time of\nthe audit, or are unnecessary or unreasonable. Questioned costs may be remedied by\noffset, waiver, recovery of funds, or the provision of supporting documentation.\n\n 28\n\n\x0c APPENDIX III\n\n DETAILED UNSUPPORTED COSTS\n\n UNSUPPORTED COSTS RESULTING FROM DIRECT TRANSACTION TESTING\n GRANT TRANSACTION DATE AMOUNT\n 2006-IJ-CX-K016 Employee A 12/31/2007 $ 4,167\n 2006-IJ-CX-K016 ELSAG North America 12/31/2008 23,030\n 2006-IJ-CX-K016 Hyatt Regency 03/26/2007 48,555\n 2006-IJ-CX-K016 Hyatt Regency 03/26/2007 22,000\n 2006-IJ-CX-K016 Hyatt Regency 03/26/2007 77,764\n 2006-IJ-CX-K016 Individual A 03/28/2008 2,002\n TOTAL UNSUPPORTED COSTS: $177,517\n\n\n UNSUPPORTED COSTS INVOLVING CONTRACTORS\n GRANT TRANSACTION DATE AMOUNT\n 2006-IJ-CX-K016 Contractor A 09/21/2007 $ 13,622\n 2006-IJ-CX-K016 Contractor B 12/21/2007 45,000\n 2006-IJ-CX-K016 Contractor C 05/22/2008 18,963\n 2006-IJ-CX-K016 Contractor D 07/11/2008 7,742\n 2006-IJ-CX-K016 Contractor E 12/05/2008 12,000\n 2006-IJ-CX-K016 Contractor F 03/04/2009 5,833\n 2006-IJ-CX-K016 Contractor F 11/05/2009 46,667\n 2006-IJ-CX-K016 Contractor G 12/14/2009 42,557\n 2006-IJ-CX-K016 Contractor H 03/04/2010 7,606\n 2006-IJ-CX-K016 Contractor G 05/20/2010 60,671\n 2009-IJ-CX-K017 Contractor F 05/20/2010 5,833\n 2009-IJ-CX-K017 Contractor F 10/19/2010 5,833\n 2009-IJ-CX-K017 Contractor I 05/31/2011 20,000\n 2009-IJ-CX-K017 Contractor F 07/12/2011 5,833\n 2009-IJ-CX-K017 Contractor F 08/12/2011 5,833\n TOTAL UNSUPPORTED COSTS: $303,995\n\n\n UNSUPPORTED EQUIPMENT COSTS\n AMOUNT LISTED AMOUNT\n IN GENERAL QUESTIONED\n GRANT TRANSACTION DATE LEDGER\n2009-IJ-CX-K017 Silver Lining Aviation 02/16/2010 $ 72,376 $ 36,188\n2009-IJ-CX-K017 Silver Lining Aviation 04/08/2010 73,176 36,588\n TOTAL UNSUPPORTED COSTS: $72,776\n\n\n\n\n 29\n\n\x0c UNALLOWABLE PHONE AND COMPUTER COSTS\n AMOUNT LISTED AMOUNT\n IN GENERAL QUESTIONED\n GRANT TRANSACTION DATE LEDGER\n2006-IJ-CX-K016 AT&T Mobility 04/20/2010 $ 1,089 $ 313\n2006-IJ-CX-K016 AT&T Mobility 12/14/2009 655 42\n2006-IJ-CX-K016 AT&T Mobility 05/20/2010 744 69\n2006-IJ-CX-K016 AT&T Mobility 06/17/2010 747 73\n2006-IJ-CX-K016 AT&T Mobility 07/19/2010 776 69\n2006-IJ-CX-K016 Verizon 01/11/2008 79 79\n2006-IJ-CX-K016 Verizon 02/05/2008 78 78\n2006-IJ-CX-K016 Verizon 03/05/2008 78 78\n2006-IJ-CX-K016 Verizon 04/10/2008 79 79\n2006-IJ-CX-K016 Verizon 05/23/2008 79 79\n2006-IJ-CX-K016 Verizon 06/12/2008 88 88\n2006-IJ-CX-K016 Verizon 07/15/2008 79 79\n2006-IJ-CX-K016 AT&T Mobility 08/01/2008 362 91\n2006-IJ-CX-K016 Verizon 08/13/2008 64 64\n2006-IJ-CX-K016 AT&T Mobility 10/03/2008 457 125\n2006-IJ-CX-K016 AT&T Mobility 10/30/2008 580 60\n2006-IJ-CX-K016 AT&T Mobility 12/05/2008 559 60\n2006-IJ-CX-K016 AT&T Mobility 01/08/2009 545 62\n2006-IJ-CX-K016 AT&T Mobility 01/29/2009 544 60\n2006-IJ-CX-K016 AT&T Mobility 03/04/2009 491 60\n2006-IJ-CX-K016 AT&T Mobility 04/01/2009 437 60\n2006-IJ-CX-K016 AT&T Mobility 04/28/2009 435 60\n2006-IJ-CX-K016 AT&T Mobility 05/27/2009 514 31\n2006-IJ-CX-K016 AT&T Mobility 07/02/2009 430 41\n2006-IJ-CX-K016 AT&T Mobility 07/30/2009 455 41\n2006-IJ-CX-K016 Verizon 08/06/2009 63 63\n2006-IJ-CX-K016 AT&T Mobility 08/27/2009 470 41\n2006-IJ-CX-K016 Verizon 09/03/2009 63 63\n2006-IJ-CX-K016 Verizon 10/01/2009 63 63\n2006-IJ-CX-K016 AT&T Mobility 10/01/2009 613 41\n2006-IJ-CX-K016 Verizon 11/05/2009 63 63\n2006-IJ-CX-K016 AT&T Mobility 11/05/2009 533 41\n2006-IJ-CX-K016 Verizon 12/07/2009 63 63\n2006-IJ-CX-K016 AT&T Mobility 12/07/2009 324 17\n2006-IJ-CX-K016 AT&T Mobility 12/14/2009 655 42\n2006-IJ-CX-K016 Verizon 01/07/2010 63 63\n2006-IJ-CX-K016 AT&T Mobility 01/14/2010 651 38\n2006-IJ-CX-K016 Verizon 02/01/2010 63 63\n2006-IJ-CX-K016 AT&T Mobility 02/10/2010 651 38\n2006-IJ-CX-K016 Verizon 03/04/2010 63 63\n2006-IJ-CX-K016 AT&T Mobility 03/18/2010 651 38\n2006-IJ-CX-K016 Verizon 03/31/2010 63 63\n2006-IJ-CX-K016 Verizon 04/29/2010 63 63\n2006-IJ-CX-K016 Verizon 06/03/2010 205 63\n2006-IJ-CX-K016 Verizon 07/01/2010 129 63\n2006-IJ-CX-K016 Verizon 08/10/2010 $ 128 $ 63\n\n\n 30\n\n\x0c AMOUNT LISTED AMOUNT\n IN GENERAL QUESTIONED\n GRANT TRANSACTION DATE LEDGER\n2006-IJ-CX-K016 AT&T Mobility 08/17/2010 617 27\n2006-IJ-CX-K016 Verizon 09/01/2010 128 63\n2006-IJ-CX-K016 AT&T Mobility 09/28/2010 56 56\n2006-IJ-CX-K016 Verizon 09/29/2010 128 63\n2006-IJ-CX-K016 AT&T Mobility 10/19/2010 39 39\n2006-IJ-CX-K016 Verizon 11/03/2010 63 63\n2006-IJ-CX-K016 AT&T Mobility 11/22/2010 38 38\n2006-IJ-CX-K016 AT&T Mobility 12/15/2010 127 127\n2006-IJ-CX-K016 AT&T Mobility 01/19/2011 38 38\n2006-IJ-CX-K016 AT&T Mobility 02/15/2011 38 38\n2006-IJ-CX-K016 AT&T Mobility 03/16/2011 39 39\n2006-IJ-CX-K016 AT&T Mobility 04/13/2011 38 38\n2006-IJ-CX-K016 AT&T Mobility 05/16/2011 38 38\n2006-IJ-CX-K016 AT&T Mobility 06/15/2011 38 38\n2006-IJ-CX-K016 AT&T Mobility 07/26/2011 38 38\n2006-IJ-CX-K016 AT&T Mobility 08/22/2011 38 38\n2006-IJ-CX-K016 Verizon 09/08/2011 226 63\n2006-IJ-CX-K016 AT&T Mobility 10/12/2011 482 121\n2006-IJ-CX-K016 Dell Commercial Credit 12/21/2006 1881 1881\n TOTAL UNALLOWABLE COSTS: $5,907\n\n\n\n\n 31\n\n\x0c APPENDIX IV\n\n OTHER REPORTABLE MATTERS\n\n The purpose of this section is to bring to OJP\xe2\x80\x99s attention other matters\nthat we noted during the course of our audit. These matters are not part of\nthe audit report\xe2\x80\x99s Findings and Recommendations section because they are\nnot directly related to the audit scope and objectives or because they are\nless significant in nature. Thus, no response is necessary since this section\nis for informational purposes only.\n\nSale of Aviation Equipment\n\n During our review of Property Management, we reviewed photographic\nevidence of the pieces of accountable property and serial number for each\npiece of accountable property so that we could reconcile these pieces to the\nexpenditures and supporting documentation already reviewed. As of\nOctober 1, 2011, the SAT had transferred all federally accountable property\nto a partner agency for continuation of the NIJ Aviation Program through\ncooperative agreement 2009-IJ-CX-K019. SAT officials explained that the\npartner agency had sold one of the pieces of accountable property after it\nhad been transferred from the SAT and provided documentation relating to\nthe sale of that property. We noted that the supporting documentation\nindicates that this piece of accountable property was sold for $50,000. We\nalso reviewed the FFRs submitted to OJP by SAT\xe2\x80\x99s partner agency. We\nnoted that through June 30, 2012, the partner agency had reported no\nprogram income within their FFRs submitted to OJP.\n\nConference Expenditures\n\n According to the OJP Financial Guide, expenses incurred for food\nand/or beverages and provided at training sessions, meetings, or\nconferences must satisfy the following three tests: (1) the cost of the food\nand/or beverages provided is considered to be reasonable; (2) the food\nand/or beverages provided are incidental to a work-related event; and\n(3) the food and/or beverages provided are not related directly to\namusement and/or social events. Regarding our analysis, we determined\nthat a reasonable amount for food was 150 percent of the GSA maximum\ndaily allowed per diem rate. 5 As shown in Exhibit 8, during transaction\n\n 5\n We used 150 percent of the GSA maximum daily allowed per diem rate for each\nlocality in order to account for service charges and taxes that were charged at the\nconferences.\n\n 32\n\n\x0ctesting of expenditures for cooperative agreement 2006-IJ-CX-K016, we\nidentified three conferences where expenditures for meals provided to\nconference attendees were in excess of what we consider as reasonable.\n\nEXHIBIT 8: ANALYSIS OF CONFERENCE EXPENDITURES FOR\n COOPERATIVE AGREEMENT 2006-IJ-CX-K016\n MAXIMUM TOTAL\n AMOUNT ALLOWED PER AMOUNT IN\n CHARGED PER GSA DIFFERENCE EXCESS OF\n DATE TYPE OF MEAL PERSON GUIDELINES PER PERSON PER DIEM\nNIJ Technology & Partnership Conference 6 (Garden Grove, CA)\nNumber of Participants: 400 7\nDaily Per Diem Allowed Per GSA Guidelines: $64\n 04/03/2007 Breakfast $ 24 $ 18 $ 6 $ 2,435\n 04/03/2007 Lunch 50 27 23 9,017\n 04/04/2007 Breakfast 24 18 6 2,350\n 04/04/2007 Lunch 50 27 23 9,017\n 04/05/2007 Breakfast 9 18 N/A N/A\n 04/05/2007 Lunch - 27 N/A N/A\nNIJ Applied Technologies Conference (Point Clear, AL)\nNumber of Participants Reported: 300\nDaily Per Diem Allowed Per GSA Guidelines: $39\n 03/18/2008 Breakfast $ 34 $ 11 $ 23 $ 6,976\n 03/18/2008 Lunch 53 17 37 10,977\n 03/19/2008 Breakfast 38 11 28 8,327\n 03/19/2008 Lunch 48 17 32 9,527\n 03/20/2008 Breakfast 16 11 6 1,725\n 03/20/2008 Lunch - 17 N/A N/A\nNational Regional Planning Council Conference (Orlando, FL)\nNumber of Participants Reported: 47\nDaily Per Diem Allowed Per GSA Guidelines: $49\n 02/12/2009 Breakfast $ 41 $ 14 $ 28 $ 1,314\n 02/12/2009 Lunch 62 20 43 2,007\n 02/13/2009 Breakfast 33 14 20 925\n 02/13/2009 Lunch 54 20 34 1,617\n\n\n\n\n 6\n SAT officials only provided a quotation for the expenditures concerning the NIJ\nTechnology and Partnership Conference. Therefore, we used the quoted amount in our\nanalysis.\n 7\n For the NIJ Technology and Partnership Conference, SAT was not required to\nreport in GMS the number of participants at this conference. Therefore, we estimated the\nnumber of participants using the information provided in the quotation.\n\n 33\n\x0c APPENDIX V\n SHERIFFS\xe2\x80\x99 ASSOCIATION OF TEXAS\n RESPONSE TO DRAFT AUDIT REPORT\n\nSHERIFFS\' ASSOCIATION OF TEXAS\nSteve M. Weotbro<>k. Executive D ire<\'or\n160 1 SoothIH\xc2\xb71S\n ,..,. Ii,.\nAuMin. T, ... 737-11\xc2\xb71101\n!\'boo" SI1 ... S\xc2\xb7 $I&1\nF.. , Sll ... S-0111\n November 5, 2012\n\nSh.riIT. col..... n CoU"ty\nL\xc2\xab kh.rt. T.,. .. David M. Sheeren\n~1ax<y Cet\\lono\n Regional Audit Manager\nFIr.t \\\' ic~Pre,ld. n\' Iknver Regional Audit Office\nSheriIT, G"\'l8 Coun\'y Office of the Inspector General\nLo"gviow. T.",.\n U.S. Department of Justice\n... . J . \xe2\x80\xa2 Andy" Loud .. b ock 1120 Lincoln, Suite 1500\nSec<>nd Vice-Pr .. ideD\'\nSheriIT. Jocl<",n Coun\'y Denver, CO 80203\n Ed" .. T....\n\n R. P. \xc2\xb7 P.." B......". k Subject: Response to the Office of the Inspector General\'s Draft Audit\n Third Vice-Pr...Jd<n\' Report, Office of Justice Programs, Nationai lnstitutc of Justice,\n S heriff, Von Z.M, Coun\'y\n Can ",,, T.",. Cooperative Agreement Awarded to the Sheriffs- Association of\n Texas, Austin, Texas, #2006"IJ\xc2\xb7CX\xc2\xb7 K016 and #2009- IJ-CX\xc2\xad\n Don.old So ....U\n S<q,,<on,_At_.......,.\n K017.\n S1><.riff.Grime. Coun\'y\n "\'n d..",,, T .... Dear Mr. Shecren:\n J. W. Jankow,ki\n Imm.diate Pu , Pr"",ident Thank you for this opportunity to respond to the draft audit report Audit of\n Sheriff. W.. hington CoU"\'y\n Brenham, T.... the Office of .lustice Programs National Inslilufe of Jus/ice Cooperative\n Agreemenls Awarded 10 the Sheriffs\' Associalion of Texas. Austin. Texas\n Gr .,Toylor\n Director\n by the U.S. Department of Justice (DOJ), Office of the Inspector General\n Sh.riff.... ndo....,n Coun\'y (OIG), Dt:nvt:r Regional Audit Office to the Office of Justice Programs\n P, I."i"". To. .. (OJP), related to the National institute of Justice (N IJ) cooperative\n RIchard Will. agreement numbers 2006-IJ-CX\xc2\xb7K016 and 2009\xc2\xb7]J-CX\xc2\xb7KOI7. We look\n nir\xc2\xab ,. r forward to resolving the issues noted in the audit report.\n Sh.rilf, Bailoy County\n Mol .., -. Tex ..\n General Comments\n Jo e-10<le\xc2\xb7 C. Z",\'uk,\n Oiroct.,.\xc2\xad\n The draft audit report contains seven recomme ndations and $583,260 in\n Shoriff.n.Wiu Couflty questioned costs. The questiom:d costs were primarily attributable to\n Cuero. Te". inadequate documentation provided to the auditors at the time of the audit.\n This doc umentation is being provided by SAT as referenced in SAT\'s\n Diroo,or response to the recommendations and questioned costs below. Inadequate\n Sh.,.ilf. MOrTi. County\n Ooing<rf.. ld. T .... documentation was provided at thc timc of the audit because grant funded\n personnel for the awards were no longer employed by SAT as of July\n " "IIli.om"Oint"" ~I<:D<lno1d, Jr.\n D;""ct.,.. 20 II. External accountants employed by SAT to gather the infonnation\n SI><riITT..",n Coun\'y for the audit were not familiar with the requested documents or with the\n S.nde""" T .... extent of documentation needed to properly support the transactions.\n L an\')\' G. Spenc. Further, SAT received numerous additional requests for documentation\n o.opl>ln after the audit onsite visit concluded, making coordination to provide the\n Sh.riff, willO<}\' County\n R\' ymo.,!,-ill .. T .... documentation difficult. We believe that this is remedied now by\n including in our response adequate documentation to support the\n Con, \xe2\x80\xa2 ..., questioned costs.\n inf<>@t,.~\'iff._o.g\n\n\n W eb, ;,.,\n w~\xc2\xb7,," _ \'\'\'\'\'\'\'riff.,o\'g\n\n\n IH\'~ Annual Training Conference, J"ly 20-\'1$ , \'101$ " Corpu. Christi. T eus\n\n\n\n\n 34\n\n\x0c SAT Re5ponses to Specific Recommendations\n\nRecommendation 1: Implement adequate fonnal accounting procedures in the event that SAT\nreceives future awards.\n\nResponse;\nWhile management believes that accounti ng proct.-dures for SAT\'s current activities arc\nadequate. management would implement adequate fonnal accounting procedures should SAT\nplan on receiving future fedcral awards.\n\n\nUccommcndation 2: Establish a general ledger that is capable of categorizing expenditures in\norder to compare to the approved budget in the event that SAT receives future awards.\n\nResponse\nThe ge neral ledger is currently capable of categorizing expenditures in order to compare to the\napproved budget. Budget versus actual expenditure reports ""-ere prepared for Award Number\n2009-I1-CX-KOI6. However, budgct versus actual cxpenditure reports were not prepared for\nAward Number 2009-IJ-CX-KOI7. The rcport for 2009-lJ-CX-KO I7 has now been prepared and\nis being submitted with this response. St.\'\\! Attachment I.\n\nRecommendation 3: Remedy the $177,517 in unsupported direcl costs.\n\nResponse\nSAT concurs thai adcquatc supporting documentation was not provided to the auditors during the\naudit fieldwork for six transactions totaling $177,517. The supporting documentation is being\nprovided as referenced in Attachment 2.\n\nRecommendation 4: Remedy the $303,995 in unsupported contmctor costs.\n\nResponse\nSAT concurs thai contmcts wcre not provided to the auditors during the audi t fieldwo rk fo r 15\ntransactio ns totaling $303 ,995. The contracts and other pertinent information arc being provided\nas referenced in Attachment 3. As per Attachment 3, one of the contract documents could nOI be\nlocated, but a copy has been requcsted from the contractor, and will be provided when received.\n\nRecommenda tion 5: Remedy the $5,907 in unallowable telephone and computer costs.\n\nResponse\nSAT program management does not concur that this is an unallowable cost. SAT program\nmanagement purchased a Blackberry initially for use by the NIJ grant management staff to\nimprove SAT\'s abili ty to deliver programmatic requirements in a timely fashion through timely\ninteraction with NlJ grant management. The initial Blackberry was latcr replaced by a smart\nphone which was utilized by the NlJ Program Manager to demonstrate smart phone technology\nas a low cost mobile computing platform for law enforccment, demonstrate NIJ \'s smart phone\napplieation~, and demonstnlte its usc in the Low Cost Aviation Technology Program. The laptop\nwas purchased solely to enhance program delivery by making slide presentations for the various\n\n\n\n\n 35\n\n\x0cconferences where NU\'s programs were presented as well as their djsplay at various law\nenforcement trade shows. Approval of the expenditures by NIJ grant management was\ndemonstrated by their continued acceptance and use ofthe equipment. This cost does not exceed\n10% of the budget, and therefore a GAN is not required. The expenditure was in full compliance\nwith the wishes of the NIJ program manager. All equipment has been returned.\n\nRecommendation 6: Remedy the $23,065 in unsupported indirect costs.\n\nResponse\nOn August 29, 20 12 SAT refunded $ 11 , 156 indirect costs to OJP pursuant to the close-out of\nAward 2009-lJ-CX-KOI7. That refund serves to reduce the above questi oned amount. The\ndiscrepancy noted in this recommendation arose because SAT mis-interpreted the direct cost\nbase to which the indirect cost rate was applied. However, budgeted indirect costs were $73,41 2\nand only $46,78 1 was claimed and received by SAT. SAT wi ll work with OlP to determine\nproper resolution of the questioned costs.\n\nRecommendation 7: Remedy the $72,776 in unsupported equipment costs.\n\nResponse\nSAT concurs that adequate documentation for the disposition of this piece of eq ui pment was not\nprovided to the auditors during the audit field work. The piece of equipment in question was\ndamaged beyond repair and deemed to be a total loss. The insurer determined the market va lue\nof the property at the time of the loss, and insurance proceeds were received. SAT will change\nthe classification of this amount to program income in the Federal Financial Report if that is\nneeded or desired and if the OJP would allow a change to the FFR. Documentation evidencing\ndisposition of the property is provided as referenced in Attachment 4\n\n\nThank you for your consideration of thi s response. Please feel free to contact me at 512-445-\n5888 with any questions or if anything else is needed to clarify or enhance the information\nprovided. Again, we look forward to resolving these issues.\n\nSincerely,\n\n\n~~~\nSteve Westbrook\nExecutive Director\n\nAttachments:\n Attachment I - Budget Vs. Actual Report - 2009-IJ-CX-KO I7\n Attachment 2 - Unsupported Direct Cost Expenditures and List of Documents Attached\n Attachment 3 - Unsupported Costs Involving Contractors and List of Documents Attached\n Attachment 4 - Unsupported Equipment Costs and List of Documents Attached\n\n\n\n\n 36\n\n\x0cSHERIFFS. ASSO CIATION OF TExAs\nSteve M. Westbrook, E:xocu. ive Di~,or\n\ntfm _ IH\xc2\xb7I! ..... lOt.\n\' \'.,<In.T.... 7J ~1 \xc2\xb7 2 50l\nPhon \xe2\x80\xa2 \xe2\x80\xa2 112"\'l_ S"1\nf .. , 1 12 .... l \'0211\n\n November 14, 2012\nDaniel C. IA ..\n\nSher ilf, Caldwell CoU"t,\nLoc kh. rt, T .... David M. Shccrcn\nMoxe, C.,.llano Regional Audit Manager\nflrs t Vio",\' reslden, Denver Regional Audit Office\nSher iff, G",U Count)\'\nL>n S" ...... T\xe2\x80\xa2 \xe2\x80\xa2 \xe2\x80\xa2 \xe2\x80\xa2 Office of the lnspl-ctor General\n U.S. Department of Justice\n A.I. -Andy" Loud .. b.tk\n 1120 Li ncoln, Suite I SOD\n ~ and Vlu-Pr .. id.".\n Sheriff. )"\'\'"0" CoU"\'Y Denver, CO 80203\n Edn .. T....\n\n R. P . -P,,"llumeu, Jr. Subject: Additional Document Submitted\n Third Viu-President Re: Response to the Office of the Inspector General \'s Draft\n Sho. ";!T, V\'n Z",d,Coun \'J\n Conton, T.... Audit Report, Office of Justice Programs, National Institute of\n Justice, Cooperative Agreement Awarded to the Sheri ITs\'\n OonlldS.,.,\xc2\xb7.u\n S<o- gNll\' _A. _Artn$ Association of Texas, Austin, Texas, #2006-IJ-CX-KO I6 and\n Sheriff: Gri",., Coun\'y #2009-IJ-CX-K017.\n And\xc2\xabwn. T.u,\n\n J. ,"v. J ......... oo Dear Mr. Sheeren:\n IIDm..!i\xe2\x80\xa2 \xe2\x80\xa2\xe2\x80\xa2 P ... Pre>id.m\n Sh<orill, Wllruni\'\'\'\'\' Coun\'y\n B.... nh.m, T n .. Thank you for this opponunity to add a document to the information\n contained in SAT\'s response ofNovembcr 5, 2012 to the draft audit reJXln\n CresT. )"lor\n Dir ~o r\n Audil of the Office of Justice Programs National Instilllte of Justice\n Sh. riff: Ando,,,,n c, u n t ~ Cooperath\'e Agreements Awarded If) Ihe Sheriff.~\' As~\xc2\xb7ocialion of Texas.\n P.I." ..... Tex .. Austin. Texas by thc U.S. Dcpanment of Justice (001), Office of the\n Ri chard \\\\->11, Inspector General (OlG), Denver Regional Audit Office to the Office of\n Direct"\'" Justice Programs (OJP), related to the National Institute of Justice (NIJ)\n Sh ~ ill.lhil.y County\n Mul.. oo.. Tu .. cooperative agreement numbers 2006-IJ-CX-KOI6 and 2009-lJ-CX-KOI7.\n J oe -Jod.- C. Z ..\n .,.\n ky\n The document being submitted was noted as missing in SAT\'s response to\n Din<,OT\n Sheriff. D,Witt c,un\'y the draft audit report, as per the following excerpt from that resJXlnse. The\n Cuero. Tn ..\n excerpt is shown in italics:\n Ja ck Mutin\n Dir.ctor Recommendation 4; Remedy the $303.995 in IInsupported cOlllraclor\n Sheriff. 1.10<,;" Coun\',\n D.i" ~.. ld. T .... COSI~\xc2\xb7.\n\n\n \\\\-LIIiam "Oint"" M cDonold, Jr.\n Dineto. Resoonse\n Sheriff. T er ... l] County SAT concurs that CO!1lra("/~\xc2\xb7 were not provided to the auditors during the\n Sand \xe2\x80\xa2 ....,n, Tn ..\n oudil fieldwork for 15 IronSOC lions fotaling $303,995. The conlra\'\xc2\xb7/~\xc2\xb7 and\n Lon")" G. Spence a/her pertinent information are being pravided as referenced in\n e h \' pl.oln Allachment 3. As per Altachmelll 3, one of the contracl documenls could\n S~.riff, W iIlO<)\' Coon\' y\n l!.oy"",nd"\'II., T .... nOI he loco/ed, bUI a copy has been requested from the contraClOr, ond\n will he provil/ed when reeeh\'ed.\n Conu,""\n info@\' .. ... ,ill\xe2\x80\xa2.org\n\n W .b,i",\n ..... ww.""be,iJf, .or\'\n\n l~5\'~ Annual Training Conference, July I!o-I!S, I!OU - Corpus Christi, Texas\n\n\n\n\n 37\n\n\x0c Update to SAT Response to Recommendation 4\n\n The copy of the contract document referred to above has been located and is being provided\n as referenced in Attachment 3-Updated.\n\n\nThank you for your consideration of this additional information. Please reel free to contact me at\n512-445-5888 with any questions or if anything else is needed to clarify or enhance the\ninformation provided. Again, we look forward to resolving these issues.\n\nSincerely,\n\n\ndt:-~\nSteve Westbrook\nExecutive Director\n\nAttachments:\n Attachment 3-Updated\n 3.9-Contractor F\n\n\n\n\n 38\n\n\x0c APPENDIX VI\n OFFICE OF JUSTICE PROGRAMS\xe2\x80\x99\n RESPONSE TO DRAFT AUDIT REPORT\n\n U.S. Department of Justice\n\n Office ofJustice Programs\n\n Off/ce ofAudit, Assessment, and Management\n\n ,\n W""\'ing_ D.C. 2MJI\n\n\n NOV -9 2012.\n\n\n\nMEMORANDUM TO; David M. Sheeren\n Regional Audit Manager\n Denver Regional Audit Office\n Office of the Inspector General\n\nFROM: Maurcen..4._ Henneberg\n Director ~~e;\n\nSUBJECT: Response to the Draft Audit Report, Audit ofthe Office ofJustice\n Programs, National Institute ofJus/ice. Cooperative Agreements\n Awarded /0 the Sheriffs Association of Texas, Austin, Texa~\n\nThis memorandum is in response to your correspondence, dated October 15, 2012, transmiUing\nthe subject draft audit report for the Shcrlfrs Association of Texas (SAT). We consider the\nsubject report resolved and request written acceptance of this action from your office.\n\nThe draft audi t report contains seven reconunendations and $583,260 in questioned co~ts. The\nfollowing is the Office of lu~1ice Programs\' (Ol P) analysis of the draft audit report\nrecommendations_ For eaw of review, the recommendations are restated in bold and are\nfollowed by OUf response.\n\nI. \\Ve recommend that OJP coordinate with SAT to implement adequate formal\n accounting procedures in the event that SAT rcceives future awards.\n\n We agree with the recommendation. We will coordinate with SAT to obtain a copy of\n its fonnal accounti ng procedures, which have been implemented by the organization.\n\n2. We recommend that OJP coordinate with SAT to establish a generallcdger that is\n capable of categorizing expenditures in ordcr to compare to the approved budget in\n the event that SAT receives future awards.\n\n We agree with the recommendation. We will coordinate with SAT to obtain a copy of its\n revised gcncrallcdgcr, which is capable of categorizing expenditures by approved budget\n ci\\tegor:y.\n\n\n\n\n 39\n\n\x0c3. We recommend that Q,\'P coordinate with SAT to remedy the S177,517 in\n unsupported direct costs.\n\n We agree with the recommendation. We will coordinate with SAT to remedy the\n $\\77,5\\7 in unsupported direct costs.\n\n4. We recommend tbat OJP coordinate with SAT to remedy the $303,995 in\n unsupported contractor ClIst~.\n\n We agree with the recommendation. We will coordinate with SAT to remed y the\n $303,995 in unsupported contractor costs.\n\nS. We recommend that OJP coordinate with SAT to remedy the $5,907 in unallowable\n telephone and computer costs.\n\n We agree with the recommendation. We will coordinate with SAT to remedy the $5,907\n in questioned telephone and computer costs.\n\n6. We recommend that O.TP coordinate with SAT to remedy the $23,065 in\n unsupported indirect costs.\n\n We agree with the recommendation. We will coordinate with SAT to remcdy the\n $23,065 in unsupported indirect costs.\n\n7. We recommend that OJP coordinaje with SAT to remcdy the S72,776 in\n unsupported equipment costs.\n\n We agree with the recommendation. We wi ll coordinate with SAT to remedy the\n $72,776 in unsupJX}rted equipment costs.\n\nWe appreciate the opportunity to review and comment on the draft audit report. If you have any\nquestions or require additional infonnalion, please contact Jeffery A. Haley, Deputy Director,\nAudit and Review Division, On (202) 616-2936.\n\nce: Jeffery A. Haley\n Deputy Director, Audit and Review Division\n Office of Audit, Assessment, and Management\n\n Portia Graham\n Acting Office Director, Office of Operations\n National Institute of Justice\n\n\n\n\n 2\n\n\n\n\n 40\n\n\x0ccc: Charlene Hunter\n Program Analyst\n National Institute of Justice\n\n Jack Harne\n Grant Program Manager\n National Institute of Justice\n\n Michael O \'Shea\n Program Manager\n National Institute of Justice\n\n Louise Duhamel, Ph.D.\n Acting Assistant Director, Audit Liaison Group\n Internal Review and Evaluation Office\n Justice Management Di vis ion\n\n 011\' Executive Secretariat\n Control Number 20121653\n\n\n\n\n 3\n\n\n\n\n 41\n\n\x0c APPENDIX VII\n\n OFFICE OF THE INSPECTOR GENERAL\n\n ANALYSIS AND SUMMARY OF ACTIONS\n\n NECESSARY TO CLOSE THE REPORT\n\n\n\n The Department of Justice (DOJ), Office of the Inspector General (OIG)\nprovided a draft of this audit report to the Office of Justice Programs (OJP)\nand the Sheriffs\xe2\x80\x99 Association of Texas (SAT). The SAT\xe2\x80\x99s response is\nincorporated in Appendix V of this final report. OJP\xe2\x80\x99s response is\nincorporated in Appendix VI of this final report. The following provides the\nOIG analysis of the response and summary of actions necessary to resolve\nthe report.\n\nSummary of Actions Necessary to Close the Report\n\n1.\t Resolved. OJP agreed with our recommendation that the SAT\n implement adequate formal accounting procedures in the event that\n SAT receives future awards. OJP stated in its response that it will\n coordinate with the SAT to obtain a copy of its formal accounting\n procedures which have been implemented by the organization. In its\n response SAT officials concurred with this recommendation. The SAT\n stated that while management believes that accounting procedures for\n SAT\xe2\x80\x99s current activities are adequate, SAT\xe2\x80\x99s management would\n implement adequate formal accounting procedures should SAT plan on\n receiving future federal awards.\n\n This recommendation can be closed when we receive evidence that the\n SAT has implemented adequate formal accounting procedures in the\n event that SAT receives future awards.\n\n2.\t Resolved. OJP agreed with our recommendation that the SAT\n establish a general ledger that is capable of categorizing expenditures\n in order to compare to the approved budget in the event that SAT\n receives future awards. OJP stated in its response that it will\n coordinate with SAT to obtain a copy of its revised general ledger,\n which is capable of categorizing expenditures by approved budget\n category. In its response, the SAT stated that the general ledger is\n currently capable of categorizing expenditures in order to compare to\n the approved budget. The SAT also stated in their response that\n budget versus actual expenditure reports were not prepared for\n cooperative agreement 2009-IJ-CX-K017. The SAT provided a budget\n\n\n 42\n\n\x0c versus actual expenditures report for cooperative agreement\n 2009-IJ-CX-K017 in their response.\n\n We reviewed this documentation and determined that it does not\n adequately address our recommendation. The report provided\n appears to be contrary to explanations provided by SAT officials during\n our analysis. This recommendation can be closed when we receive\n evidence that the SAT has established a general ledger that is capable\n of categorizing expenditures in order to compare to the approved\n budget in the event that SAT receives future awards.\n\n3.\t Resolved. OJP agreed with our recommendation to remedy $177,517\n in unsupported direct costs. OJP stated in its response that it will\n coordinate with the SAT to remedy the $177,517 in unsupported direct\n costs. In its response, the SAT concurred with recommendation and\n provided additional support for the six unsupported transactions. Our\n responses for these transactions and the additional supporting\n documentation submitted by the SAT in their response are detailed\n below.\n\n Employee A\n\n In the SAT\xe2\x80\x99s response, it explained that the $4,167 transaction for\n Employee A was a payroll transaction and attached documentation\n showing the transaction journal entries. However, the SAT did not\n provide a timesheet supporting the time that should have been\n charged to cooperative agreement 2006-IJ-CX-K016. Therefore, we\n determined that the $4,167 in payroll charges to be unsupported.\n\n ELSAG North America\n\n In regards to the transaction for ELSAG North America, we questioned\n this transaction as unsupported because we only received a quotation\n and did not receive an invoice for the transaction. In the SAT\xe2\x80\x99s\n response, it included supporting documentation including the invoice\n for the transaction. However, we noted inconsistencies between the\n delivery date of the equipment provided, the date of the quotation,\n and the date of the invoice. Therefore, without any further\n documentation or explanation from SAT officials regarding this\n transaction, we determined that the $23,030 in charges were\n unsupported.\n\n\n\n\n 43\n\n\x0c Hyatt Regency\n\n In regards to the transaction for Hyatt Regency, we questioned this\n transaction as unsupported because we only received a quotation and\n did not receive an invoice for the transaction. In the SAT\xe2\x80\x99s response,\n it included supporting documentation including the invoice for the\n transaction. In the invoice, the amount paid is shown based on the\n amount in the quotation. However, there were no detailed invoices\n showing what was paid for, including the dates that the goods and\n services were incurred, in comparison with the quotation that was\n already provided. Therefore, without further detailed information\n regarding what was provided and the dates that they were provided,\n we determined that the transaction charges, totaling $148,319 were\n unsupported.\n\n Individual A\n\n In SAT\xe2\x80\x99s response, it included a travel advance for Individual A to\n transport aviation equipment. However, there was no documentation\n indicating the dates of travel or any confirmation that the aviation\n equipment had been delivered. Therefore, without this\n documentation, we determined that the $2,002 travel advance charges\n were unsupported.\n\n After considering the SAT\xe2\x80\x99s response to questioned costs for\n unsupported direct costs, we determined that the SAT has not\n provided adequate documentation to support the reduction of any of\n the questioned costs noted in our audit due to unsupported\n expenditures. This recommendation can be closed when we receive\n evidence that the OJP has remedied the $177,517 in questioned costs\n identified as unsupported.\n\n4.\t Closed. We recommended that OJP remedy the $303,995 in\n unsupported contractor costs. OJP agreed with our recommendation\n to remedy $303,995 in unsupported contractor costs. OJP stated in its\n response that it will coordinate with the SAT to remedy the $303,995\n in questioned telephone and computer costs. The SAT also concurred\n with the recommendation and provided documentation supporting the\n nine contracts included in questioned costs.\n\n We reviewed this documentation and determined that it adequately\n addresses our recommendation. Therefore, this recommendation is\n closed.\n\n\n 44\n\n\x0c5.\t Resolved. OJP agreed with our recommendation to remedy $5,907 in\n unallowable telephone and computer costs. OJP stated in its response\n that it will coordinate with the SAT to remedy the $5,907 in questioned\n telephone and computer costs. The SAT stated in its response that it\n did not concur with this recommendation. In their response, SAT\n stated that the approval of the expenditures by NIJ grant management\n was demonstrated by their continued acceptance and use of the\n equipment. The SAT also stated that these costs were within 10\n percent of the cooperative agreement budget, the expenditures were\n in full compliance with the wishes of the NIJ program manager, and\n that all equipment purchased through these expenditures had been\n returned. However, we do not consider the \xe2\x80\x9cuse of equipment\xe2\x80\x9d to be\n adequate documentation that the equipment was approved to be used\n in a manner different than that specified in the approved grant budget.\n Because SAT officials did not provide documentation showing that the\n revised use of the equipment was officially approved by OJP, we\n continue to question the $5,907 in telephone and computer costs that\n were not used in accordance with the use specified in the grant\n budget.\n\n This recommendation can be closed when we receive evidence that\n OJP has remedied the $5,907 in unallowable telephone and computer\n costs.\n\n6.\t Resolved. OJP agreed with our recommendation to remedy the\n $23,065 in unsupported indirect costs. OJP stated in its response that\n it will coordinate with the SAT to remedy the $23,065 in unsupported\n indirect costs. In its response, the SAT concurred with the\n recommendation and explained that the SAT misinterpreted the direct\n cost base to which the indirect cost rate was applied. The SAT also\n stated in their response that on August 29, 2012, the SAT refunded\n $11,156 in indirect costs to OJP pursuant to the closeout of\n cooperative agreement 2009-IJ-CX-K017. However, the SAT did not\n provide documentation relating to the $11,156 refund. Therefore, we\n determined that the $23,065 in indirect costs were still unsupported.\n\n This recommendation can be closed when we receive evidence that\n OJP has remedied the $23,065 in unsupported indirect costs.\n\n7.\t Closed. We recommended that OJP remedy the $72,776 in\n unsupported equipment costs. OJP agreed with our recommendation\n to remedy the $72,776 in unsupported equipment costs. OJP stated in\n\n\n 45\n\n\x0ctheir response that it will coordinate with the SAT to remedy the\n$72,776 in unsupported equipment costs. In its response, the SAT\nconcurred with the recommendation and provided documentation\ndemonstrating the disposal of the equipment included in questioned\ncosts.\n\nWe reviewed this documentation and determined that it adequately\naddresses our recommendation. Therefore, this recommendation is\nclosed.\n\n\n\n\n 46\n\n\x0c'