Thursday, February 16, 2017

Department of Justice freezes local special investigations fund

Posted By on Thu, Feb 16, 2017 at 12:06 PM

A bundle of cash seized during a drug bust by the CSPD. - CSPD 2015 ANNUAL REPORT
  • CSPD 2015 annual report
  • A bundle of cash seized during a drug bust by the CSPD.
The contrarian website that's dogging El Paso County Sheriff Bill Elder recently posted allegations regarding the Special Investigations Fund.

From the posting:
A source close to Sheriff Bill Elder confirmed that last fall the Department of Justice (DOJ) completed an audit of the Special Investigation Fund (SIF), which is managed by The El Paso County Sheriff’s Office (EPSO), and found some “irregularities” and/or fraud with the handling of these accounts. The severity of these “irregularities” were such that the funds, which total approximately 900k, were frozen until further notice.
According to the Sheriff's Office, there has been no finding of fraud, but it's true the local fund was frozen for about five months. Also, there might, indeed, be findings of "irregularities" and/or fraud in the future, because the DOJ review is ongoing and there's no specific date on which it will be completed.

Sheriff's Department Administrator Larry Borland tells the Independent that the "compliance review" that resulted in the account being frozen was part of a wider effort by the Department of Justice to test compliance of federal regulations by task forces across the country. The local unit that combines efforts of many local agencies — commonly called Metro VNI (vice, narcotics and intelligence) — is a task force.

"We've always been organized as a task force," Borland says. "The DOJ doesn't like task forces."

The DOJ froze spending from the account on Aug. 24, 2016. At that time, the account contained $621,035, the Sheriff's Office says.

Borland explains that while the Colorado Springs Police Department kept paperwork on funding, the county served as fiscal agent. The DOJ didn't like that arrangement, he says, so officials determined the "best option was closing the account and moving the money to the city," adding that the accounting change happened in September 2016.

"It's the tracking and reporting that was the issue," he says.

The money comes from forfeitures of property and cash in federal cases. Because the feds are part of the local task force, if local officers take part in an operation that results in a seizure of assets, the local unit gets some of the money.

The money can be used for overtime pay, equipment and drug buys that are part of an investigation, among other things.

Borland says that going forward, every agency that participates in the unit will track their own special investigation funds. "We'll have our accounts and they'll have their accounts," he says.

Sheriff's spokesperson Jackie Kirby reports the DOJ lifted the freeze on Jan. 25.

Here's an explanation Kirby initially provided the Indy about the DOJ inspection:
The City of Colorado Springs Police Department (CSPD), the El Paso County Sheriff’s Office (EPSO) and the 4th Judicial District Attorney’s Office, along with a number of smaller law enforcement agencies have operated a special investigations fund (SIF) for well over thirty years under an intergovernmental agreement (IGA) approved by the Colorado Springs City Council and the Board of County Commissioners. The sources of funds for this account were seizures of property ordered by state courts as well as federal equitable sharing funds which came from seizures conducted by federal law enforcement as a result of joint task forces operated in conjunction with CSPD and EPSO. Funds in this account were used by the Metro Vice, Narcotics and Intelligence Unit (Metro VNI), acting as a joint task force, to support primarily narcotics investigations. The fund paid for such items as overtime, vehicle leases, phone bills, tactical equipment and other items, all specifically approved by the SIF Board, consisting of the Colorado Springs Police Chief, El Paso County Sheriff and District Attorney. The financial practices for this fund have been in place for many years to include the previous three EPSO administrations. EPSO has acted as the fiscal agent for this fund many years. The fund has been audited numerous times by independent auditors with no significant findings.

In August of 2016, the fund underwent a routine federal Department of Justice (DOJ) compliance review. During this compliance review federal authorities discovered that the way in which the fund was receiving and accounting for federal equitable sharing funds did not meet current federal requirements. Specifically, the funds were deposited into a bank account owned by the County, while the City of Colorado Springs applied for the federal funds, as the agencies operated as a joint task force. The operation of a task force has different federal requirements from those contained in the Metro VNI intergovernmental agreement. The DOJ requested that we stop spending federal funds while we worked with them to develop procedures that would meet federal requirements. CSPD and EPSO complied with that request. CSPD and EPSO, along with City and County Financial authorities are continuing to work with the DOJ to finalize the compliance review. The do not spend request has since been lifted by federal authorities.
Asked about the review, CSPD spokesman Lt. Howard Black says via email, "The DOJ compliance review has had no impact on the day-to-day operations of Metro VNI."

Borland further explained that each agency that participates in VNI funds salaries and other expenses for VNI personnel from their general funds.

Kirby says that while the account freeze has been lifted, the compliance review is continuing and it is not known when it will wrap up. So the final chapter hasn't been written. Stay tuned for findings of the compliance review at some point in the future.

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