KPMG finds NOAA's administration of fund "neither transparent nor conducive to accountability." According to the report:
The Inspector General (IG) determined that despite the Office of Law Enforcement (OLE) reporting a balance of $8.4 million as of December 31,2009, OLE officials could not provide evidence that the AFF had ever been audited. Accordingly, the IG commissioned a major public accounting and auditing firm, KPMG, to conduct a forensic review of the collection of fines and penalties into, and expenditures from, the Asset Forfeiture Fund (AFF).
Using a broad interpretation of the Magnuson-Stevens Fishery Conservation and Management Act (MSA), OLE has extensively used the AFF to pay for materials and services such as vehicles, vessels, travel, and training, while Office of General Counsel for Enforcement and Litigation (GCEL) uses the AFF to fund over 99 percent of its non-salary operating expenses.
KPMG was unable to discern the current balance of the AFF because it found that NOAA did not have a consistent definition of the AFF, and indicated the AFF was more of an abstract concept than a tangible entity within NOAA.
KPMG determined that no unit or individual within NOAA has a clear understanding of the AFF and how it functions from start to finish.
KPMG was unable to verify the $8.4 million balance provided by OLE and NOAA's Office of Finance, as cited in our January 2010 report.
KPMG found that during the period of its forensic review (January 1, 2005, through June 30, 2009), the AFF received approximately $96 million (including interest on prior balances), while expending about $49 million through over 82,000 transactions.
KPMG's review showed a history of inattention within NOAA to a substantial and highly sensitive monetary function of the agency.
KPMG's findings show that NOAA has administered the AFF in a manner that is neither transparent nor conducive to accountability.
While OLE and GCEL use the AFF for wide-ranging purposes, NOAA has no legal opinion on the applicable language in the MSA regarding authorized uses of the AFF.
The statutory language "Any expenses directly related to investigations and civil or criminal enforcement proceedings, including any necessary expenses for equipment, training, travel, witnesses, and contracting services directly related to such investigations or proceedings." 16 U.S.C. § 1861(e)(1)(C) would appear to restrict AFF expenditures to specific enforcement investigations or proceedings. NOAA, however, has interpreted this statutory passage to allow for use of the AFF to cover a variety of expenses which do not appear to be "…directly related to investigations and civil or criminal enforcement proceedings…" Specific examples of these types of expenditures, such as travel associated with international enforcement conferences, are contained in the report.
Clear from KPMG's findings is that the AFF has not functioned as a coherent program, despite being a substantial source of agency operational funding — outside and supplemental to annual appropriations — drawn solely from the proceeds of NOAA enforcement actions against industry.
The complete report may be read at the website of the Office of the Inspector General.