Office of the Inspector General

U.S. Department of Justice

OVERSIGHT ★ INTEGRITY ★ GUIDANCE

Audit of the Alabama Law

Enforcement Agency’s Equitable 

Sharing Program Activities, 

Montgomery, Alabama

Audit Division 20-075 June 2020
Objective 

The U.S. Department of Justice (DOJ) Office of the 

Inspector General (OIG) has completed an audit to 

assess whether the Alabama Law Enforcement Agency 

(ALEA) accounted for DOJ equitable sharing funds and 

used such assets for allowable purposes as defined by 

applicable guidelines. 

Results in Brief 

We concluded that ALEA properly accounted for its 

equitable sharing funds and used its funds for allowable 

purposes. 

Recommendations 

Our report contains no recommendations. We requested 

a response to our draft audit report from the Criminal 

Division and ALEA. The Criminal Division's response can 

be found in Appendix 2. ALEA decl ined to provide a 

response. 

Audit Results 

This audit covered ALEA's fiscal years (FYs) 2017 

through 2019. ALEA began the audit period with an 

equitable sharing fund balance of $92,305. During the 

period of October 1, 2016, through September 30, 2019, 

ALEA received $2,587,445 and spent $47,878 in 

equitable sharing funds to purchase two sport utility 

vehicles. 

Equitable sharing revenues represent a share of the 

proceeds from the forfeiture of assets seized in the 

course of certain criminal investigations. We found that 

ALEA submitted timely, complete, and accurate 

equitable sharing reports; properly accounted for its 

equitable sharing receipts; and made expenditures from 

equitable sharing funds that were allowable and 

supported. 
 

 

AUDIT OF THE ALABAMA LAW ENFORCEMENT AGENCY’S 

EQUITABLE SHARING PROGRAM ACTIVITIES 

MONTGOMERY, ALABAMA 

TABLE OF CONTENTS 

INTRODUCTION .......................................................................................... 1 

DOJ Equitable Sharing Program ............................................................ 1 

Alabama Law Enforcement Agency ........................................................ 2 

OIG Audit Approach ............................................................................ 2 

AUDIT RESULTS.......................................................................................... 4 

Equitable Sharing Agreement and Certification Reports............................. 4 

Completeness and Timeliness of ESAC Reports ............................... 4 

Accuracy of ESAC Reports ........................................................... 4 

Accounting for Equitable Sharing Resources............................................ 5 

Testing of Equitable Sharing Revenues and Receipts........................ 5 

Testing of Equitable Sharing Requests........................................... 6 

Equitable Sharing Resources ................................................................ 7 

Use of Equitable Sharing Funds.................................................... 7 

Supplanting .............................................................................. 8 

Compliance with Audit Requirements ..................................................... 8 

MLARS Compliance Review.......................................................... 9 

CONCLUSION ........................................................................................... 11 

APPENDIX 1 - OBJECTIVE, SCOPE, AND METHODOLOGY.................................. 12 

APPENDIX 2 - CRIMINAL DIVISION RESPONSE TO THE DRAFT AUDIT REPORT .... 15 
 

 

 

 

 

 

 

 

AUDIT OF ALABAMA LAW ENFORCEMENT AGENCY’S 

EQUITABLE SHARING PROGRAM ACTIVITIES 

MONTGOMERY, ALABAMA 

INTRODUCTION 

The Department of Justice (DOJ) Office of the Inspector General (OIG) 

completed an audit of the equitable sharing funds received by the Alabama Law 

Enforcement Agency (ALEA) in Montgomery, Alabama. The objective of the audit 

was to assess whether the cash and property received by ALEA through the 

Equitable Sharing Program were accounted for properly and used for allowable 

purposes as defined by applicable regulations and guidelines. The audit covered 

October 1, 2016, through September 30, 2019.1 During that period, ALEA received 

$2,587,445 and spent $47,878 in equitable sharing revenues as a participant in the 

DOJ Equitable Sharing Program.2 ALEA did not receive any equitable sharing funds 

in FY 2017, and ALEA did not receive property under the program during our 3-year 

period of review. 

DOJ Equitable Sharing Program 

The Comprehensive Crime Control Act of 1984 authorized the implementation 

of the DOJ Asset Forfeiture Program (Asset Forfeiture Program). The Guide to 

Equitable Sharing for State, Local, and Tribal Law Enforcement Agencies describes 

the Asset Forfeiture Program as a nationwide law enforcement initiative that 

removes the tools of crime from criminal organizations, deprives wrongdoers of the 

proceeds of their crimes, recovers property that may be used to compensate 

victims, and deters crime. A key element of the Asset Forfeiture Program is the 

Equitable Sharing Program.3 The DOJ Equitable Sharing Program allows any state 

or local law enforcement agency that directly participated in an investigation or 

prosecution resulting in a federal forfeiture to claim a portion of federally forfeited 

cash, property, and proceeds. 

Although several DOJ agencies are involved in various aspects of the seizure, 

forfeiture, and disposition of equitable sharing revenues, three DOJ components 

work together to administer the Equitable Sharing Program – the United States 

Marshals Service (USMS), the Justice Management Division (JMD), and the Criminal 

Division’s Money Laundering and Asset Recovery Section (MLARS). The USMS is 

responsible for transferring asset forfeiture funds from DOJ to the receiving state or 

local agency. JMD manages the Consolidated Asset Tracking System (CATS), a 

database used to track federally seized assets throughout the forfeiture life-cycle. 

1 ALEA’s fiscal year begins October 1 and ends September 30. 

2 ALEA began the audit period with a balance of $92,305. 

3 The U.S. Department of the Treasury also administers a federal asset forfeiture program, 

which includes participants from Department of Homeland Security components. This audit was 

limited to equitable sharing revenues received through the DOJ Equitable Sharing Program. 

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Finally, MLARS is responsible for coordination, direction, and general oversight of 

DOJ’s Asset Forfeiture Program and administers equitable sharing assets. 

Equitable sharing revenues represent a share of the proceeds from the 

forfeiture of assets seized in the course of certain criminal investigations. State and 

local law enforcement agencies may receive equitable sharing funds by participating 

directly with DOJ agencies on investigations that lead to the seizure and forfeiture 

of property, or by seizing property and requesting one of the DOJ agencies to adopt 

the seizure and proceed with federal forfeiture. Once an investigation is completed 

and the seized assets are forfeited, the assisting state and local law enforcement 

agencies can request a share of the forfeited assets or a percentage of the proceeds 

derived from the sale of forfeited assets. Generally, the degree of a state or local 

agency’s direct participation in an investigation determines the equitable share 

allocated to that agency. 

To request a share of seized assets, a state or local law enforcement agency 

must first become a member of the DOJ Equitable Sharing Program. Agencies 

become members of the program by signing and submitting an annual Equitable 

Sharing Agreement and Certification (ESAC) report to MLARS. As part of each 

annual agreement, officials of participating agencies certify that they will use 

equitable sharing funds for allowable law enforcement purposes. The Guide to 

Equitable Sharing for State and Local Law Enforcement Agencies (Equitable Sharing 

Guide), issued by MLARS in April 2009, and the Interim Policy Guidance Regarding 

the Use of Equitable Sharing Funds (Interim Policy Guidance), issued by MLARS in 

July 2014, and the Guide to Equitable Sharing for State, Local, and Tribal Law 

Enforcement Agencies, issued in July 2018, outline categories of allowable and 

unallowable uses for equitable sharing funds and property. 

Alabama Law Enforcement Agency 

ALEA was established in January 2015 by a merger of 12 state law 

enforcement agencies with the intent of operating public safety in a more efficient 

and cost-effective manner. The agency consists of the Department of Public Safety 

and the State Bureau of Investigations, which operate statewide, and it serves a 

population of nearly 4.9 million residents. As of November 2019, ALEA had 810 

sworn officers and 613 civilian employees. ALEA’s predecessor organizations 

became members of the DOJ Equitable Sharing Program in 2011.4 

OIG Audit Approach 

We tested ALEA’s compliance with what we considered to be the most 

important conditions of the DOJ Equitable Sharing Program to assess whether it 

accounted for equitable sharing funds properly and used such revenues for 

allowable purposes. Unless otherwise stated, we applied the Equitable Sharing 

Guide, the Interim Policy Guidance, and the Guide to Equitable Sharing for State, 

Local, and Tribal Law Enforcement Agencies, as our primary criteria. The Equitable 

4 ALEA was formerly the Alabama Department of Public Safety and the Alabama Alcoholic 

Beverage Control Board-Law Enforcement. 

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Sharing Guide provides procedures for submitting sharing requests and discusses 

the proper use of and accounting for equitable sharing assets. To conduct the 

audit, we tested ALEA’s compliance with the following: 

• Equitable Sharing Agreement and Certification Reports to determine if 

these documents were complete and accurate. 

• Accounting for equitable sharing resources to determine whether 

standard accounting procedures were used to track equitable sharing assets. 

• Use of equitable sharing resources to determine if equitable sharing cash 

and property were used for allowable law enforcement purposes. 

• Compliance with audit requirements to ensure the accuracy, consistency, 

and uniformity of audited equitable sharing data. 

In July 2018 MLARS issued a report on ALEA’s compliance with DOJ Equitable 

Sharing Program requirements.5 The objectives of the review were to: (1) assess 

the impact of any significant non-compliance; (2) assess ALEA’s internal controls; 

(3) examine ALEA’s equitable sharing expenditures; and (4) verify that ALEA’s 

equitable sharing practices provided effective management, promoted public 

confidence and protected against waste, fraud, and abuse. MLARS found that ALEA 

commingled its DOJ equitable sharing funds with non-DOJ equitable sharing funds. 

Also, ALEA did not consistently document the approval of 17 equitable sharing 

expenditures totaling $34,165 and could not sufficiently support 16 equitable 

sharing expenditures totaling $372,531. Additionally, MLARS found errors within 

ALEA’s FY 2013 and FY 2014 ESAC reports. MLARS required ALEA to address these 

deficiencies and provide proof that the deficiencies were corrected. In a 

memorandum dated July 2015, MLARS restricted ALEA from accessing its equitable 

sharing funds until the agency adequately addressed the report findings and 

implemented required policies and procedures. 

As part of our audit, we assessed ALEA’s corrective actions to address the 

MLARS findings. We also expanded our audit testing, where possible, based on 

MLARS identification of deficiencies in ALEA’s internal controls. 

See Appendix 1 for more information on our objective, scope, and 

methodology. 

5 DOJ, Criminal Division, Alabama Law Enforcement Agency Equitable Sharing Program 

Compliance Review, (July 2018). 

The findings in the MLARS Compliance Report relate to the former Alabama Department of 

Public Safety and the Alabama Alcoholic Beverage Control Board, 2 of the 12 law enforcement 

agencies that merged to form ALEA in January 2015. 

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AUDIT RESULTS 

Equitable Sharing Agreement and Certification Reports 

Law enforcement agencies that participate in the Equitable Sharing Program 

are required to submit an ESAC report, on an annual basis, within 60 days after the 

end of an agency’s fiscal year. This must be accomplished regardless of whether 

equitable sharing funds were received or maintained that year. If an ESAC report is 

not accepted before the end of the 60-day filing timeframe, the law enforcement 

agency will be moved into a non-compliance status. Additionally, the ESAC report 

must be signed by the head of the law enforcement agency and a designated 

official of the local governing body. By signing and submitting the ESAC report, the 

signatories agree to be bound by and comply with the statutes and guidelines that 

regulate the Equitable Sharing Program. 

ALEA’s Senior Accountant prepares the ESAC report using information from 

ALEA’s accounting system and eShare, an online DOJ system that allows agencies 

to manage their equitable sharing requests.6 Next, the Senior Accountant forwards 

the report to ALEA’s Secretary and the Governor of Alabama to review and approve 

before the report is submitted to MLARS. We tested ALEA’s FYs 2017, 2018, and 

2019 ESAC reports for completeness, timeliness, and accuracy. 

Completeness and Timeliness of ESAC Reports 

We tested ALEA’s compliance with ESAC reporting requirements to determine 

if the reports were completed and submitted in a timely manner. All of the reports 

tested were completed and signed by appropriate officials. The FY 2018 and FY 2019 

reports were submitted timely; however, the FY 2017 report was 63 days late. 

ALEA’s Senior Accountant provided us with documentation that showed the report 

was late because ALEA experienced technical difficulties with eShare. Additionally, 

the Senior Accountant told us that a DOJ official requested that ALEA amend its 

FY 2015 and FY 2016 reports. The amendments were necessary because there 

were receipts that had not been reported on ALEA’s ESACs after the Alabama 

Department of Public Safety and the Alabama Alcoholic Beverage Control BoardLaw Enforcement merged with other law enforcement agencies to form ALEA. 

Therefore, ALEA made the necessary amendments to the FY 2015 and FY 2016 

ESACs prior to filing the FY 2017 ESAC submission, which resulted in the delay of 

ALEA’s FY 2017 ESAC filing. Because ALEA’s FY 2018 and FY 2019 reports were 

timely and the late FY 2017 was a result of omissions related to the FY 2015 and FY 

2016 reports, we make no recommendation regarding the late FY 2017 report. 

Accuracy of ESAC Reports 

To test the accuracy of ALEA’s ESAC reports, we compared the equitable 

sharing receipts recorded on ALEA’s FY 2018 and FY 2019 ESAC reports to eShare 

6 The eShare portal enables a participating agency to view the status of its pending equitable 

sharing requests and run reports on disbursed equitable sharing. The portal is also used to process 

electronic payments. 

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disbursement amounts for the same years. We determined that ALEA’s reporting 

matched the disbursements listed on the eShare report. 

To verify the total expenditures listed on ALEA’s two most recent ESAC 

reports, we compared expenditures listed on the ESAC reports to ALEA’s accounting 

records for each period. Our analysis showed that the total expenditures reported 

in ALEA’s two most recent ESAC reports were $0 and $47,878 in FYs 2018 and 

2019, respectively, which matched the expenditures in the accounting records. 

In addition, we reviewed the section of the FY 2019 ESAC report that 

summarizes the shared monies spent by specific category, such as law enforcement 

operations and investigations, travel and training, and law enforcement equipment, 

for accuracy. To do so, we used ALEA’s accounting records to identify the 

expenditures. We determined that ALEA only had equipment purchases. Using the 

accounting records, we computed the total equipment expenditures for FY 2019 and 

compared the results to the amount reflected on the ESAC report. We found that 

the equipment category reflected on the ESAC report matched the accounting 

records ALEA provided. 

Accounting for Equitable Sharing Resources 

The Equitable Sharing Guide requires that law enforcement agencies use 

standard accounting procedures and internal controls to track DOJ Equitable 

Sharing Program receipts. This includes establishing a separate revenue account or 

accounting code through the agency’s finance department for DOJ equitable sharing 

program proceeds. In addition, agencies must deposit any interest income earned 

on equitable sharing funds in the same revenue account or under the accounting 

code established solely for the shared funds. Law enforcement agencies 

participating in the Equitable Sharing Program are required to use the eShare 

portal. 

Testing of Equitable Sharing Revenues and Receipts 

We interviewed ALEA’s Senior Accountant regarding the agency’s equitable 

sharing accounting procedures and obtained ALEA’s accounting records for 

FYs 2017 through 2019. ALEA uses an accounting code specifically designed for 

equitable sharing funds. The Senior Accountant is responsible for reconciling 

ALEA’s receipts to eShare. Once ALEA’s equitable sharing funds are available, the 

Accounts Receivable Supervisor certifies the receipts on a daily basis, if applicable, 

and the funds are then approved and deposited into a segregated bank account by 

the Alabama State Treasurer. 

We determined that during FYs 2018 and 2019 ALEA received 115 DOJ 

equitable sharing disbursements totaling $2,587,445 to support law enforcement 

operations. ALEA did not receive any equitable sharing funds in FY 2017. We 

reviewed the receipts for these revenues to determine if the funds were properly 

accounted for. We reconciled the receipts with ALEA’s eShare report and found that 

the receipts matched. Based on our testing, we concluded that ALEA accurately 

accounted for the revenues received. 

5 
As shown in Table 1, we selected a sample of 10 of the highest-valued 

receipts, which all happened to be from FY 2018 and totaled $2,161,143 or 

84 percent of the $2,587,445 in equitable sharing disbursement s ALEA received in 

FYs 2018 and 2019 . We test ed these disbursements to ensure that t he m onies 

were properly deposited and recorded by ALEA in a t imely manner. 

Table 1 

ALEA's Sampled Receipts 

Date Received 

According to 

eShare 

Amount 

Date Received 

According to ALEA 

Records 

Amount 

Number of 

Days between 

receipt and 

recording of 

funds 

09/ 17/ 2018 $504,660 09/ 18/ 2018 $504,660 1 

09/ 17/ 2018 $252.180 09/ 19/ 2018 $252.180 2 

09/ 17/ 2018 $88,730 09/ 19/ 2018 $88,730 2 

09/ 17/ 2018 $37,114 09/ 19/ 2018 $37,114 2 

09/ 17/ 2018 $89,036 09/ 19/ 2018 $89,036 2 

09/ 17/ 2018 $31,826 09/ 19/ 2018 $31,826 2 

09/ 17/ 2018 $26,749 09/ 19/ 2018 $26,749 2 

09/ 17/ 2018 $25.342 09/ 18/ 2018 $25.342 1 

09/ 21/ 2018 $1,008,477 09/ 21/ 2018 $1,008,477 0 

09/ 26/ 2018 $97,029 09/ 26/ 2018 $97,029 0 

Total $2.161 143 Total $2.161 143 

Source: OIG analysis of ALEA and eShare records 

Our t esting det ermined that ALEA accurately and timely recorded the 

10 sampled asset forfeiture receipts in its accounting records. Additionally, we 

determ ined t hat ALEA did not earn interest on its equitable sharing funds. 

Testing ofEquitable Sharing Requests 

The Equitable Sharing guide requires sharing requests to be subm itted at any 

t ime following a seizure, but no later than 45 days after forfeiture. A waiver 

request must be included with any sharing request s submitted after 45 days 

following the forfeitu re. The request m ust also include bot h t he work hou rs 

contribut ed and a detailed narrative of t he agency's contribution that led to t he 

seizure. 

To determine if ALEA submitted its equitable sharing request s within 45 days, 

we test ed each of the 115 requests upon which ALEA received disbursements in 

FYs 2018 and 2019 by com paring the request forfeitu re dat e to t he submission 

date. We determined t hat t he request s were submitted t im ely . 

We also sought to determ ine whether ALEA's equ itable sharing requests 

recorded the work hours it contributed to t he seizure and a seizure narrative. We 

j udgmentally select ed for test ing the reports of 39 equitable sharing request s ALEA 

recorded in eShare. We found t hat ALEA's request s contained the required 

information. 

6 
Equitable Sharing Resources 

The Equitable Sharing Guide and I nterim Policy Guidance require that 

equitable sharing funds or tangible property received by state and local agencies be 

used for law enforcement purposes t hat directly supplement t he appropriated 

resources of the recipient law enforcement agency. Table 2 reflects examples of 

allowable and unallowable uses under t hese guidelines. 

Table 2 

Summary of Allowable and Unallowable Uses 

of Equitable Sharing Funds 

Allowable Uses 

Matchina funds 

Contracting services 

Law enforcement eauipment 

Law enforcement travel and per diem 

SuPoort of community-based programs 

Law enforcement awards and memorials 

Law enforcement training and education 

Joint law enforcement/public safetv operations 

Law enforcement ooerations and investiaations 

Law enforcement public safety and detention facilities 

Drua and aana education and other awareness oroarams 

Unallowable Uses 

Loans 

Suoolanting 

Costs related to lawsuits 

Extravaaant exoenditures 

Money launderino operations 

Purchase of food and beveraaes 

Creation of endowments or scholarships 

Personal or political use of shared assets 

Transfers to other law enforcement aoencies 

Pettv cash accounts and stored value cardsa 

Purchase of items for other law enforcement aoencies 

Uses contrarv to the laws of the state or local iurisdiction 

Use of forfeited property by non-law enforcement personnel 

With some exceotions, salaries and benefits of sworn or non-sworn law enforcement personnel. 

a Prepaid credit cards may be purchased for use as a form of payment for buy-back programs. 

Source: Guide to Equitable Sharing for State, Local, and Tribal Law Enforcement Agencies. 

Use of Equitable Sharing Funds 

According to its accounting records, ALEA did not expend any funds in 

FYs 2017 and 2018 and only $47,878 in FY 2019 to purchase two sport utility 

vehicles. We selected these two vehicle purchases for testing to determine if the 

expenditures of DOJ equitable sharing funds were allowable and supported by 

adequate documentation. We determined that the purchase of these vehicles was 

adequately supported and used for appropriate purposes as outlined in the Guide to 

Equitable Sharing for State, Local and Tribal Law Enforcement Agencies. 

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Supplanting 

The equitable sharing guidance requires that shared resources be used to 

increase or supplement the resources of the recipient agency and prohibits the use 

of shared resources to replace or supplant the appropriated resources of the 

recipient. In other words, the recipient agency must benefit directly from the 

equitable sharing funds. To test whether equitable sharing funds were used to 

supplement rather than supplant local funding, we interviewed ALEA officials and 

reviewed the State of Alabama and ALEA budgets for FYs 2017 to 2019. 

There was an increase in Alabama’s budget for FYs 2017 to 2019. There did 

not appear to be a significant decrease in ALEA’s operational budget that coincided 

with a proportional increase in equitable sharing revenue. Alabama’s budget 

increased by 4.9 percent from FY 2017 to FY 2018 and 3.5 percent from FY 2018 to 

FY 2019. ALEA’s budget decreased 3.5 percent from FY 2017 to FY 2018 and 

increased .7 percent from FY 2018 to FY 2019. Equitable sharing funds made up 

less than 2 percent of ALEA’s budget for FYs 2017 to 2019, and the agency 

expended 1.8 percent of those funds in FY 2019. Therefore, we determined that 

there was a low risk that ALEA supplanted its budget with equitable sharing funds 

during our period of review. We tested ALEA’s equitable sharing transactions that 

were made during our audit scope to assess whether there were indications of 

supplanting. Our testing of the expenditures did not reveal any evidence of 

supplanting. Based on our review of ALEA’s budget documents and transaction 

testing, we found no indication that ALEA used DOJ equitable sharing funds to 

supplant its budget. 

Compliance with Audit Requirements 

The equitable sharing guidance requires that state and local law enforcement 

agencies that receive equitable sharing cash, proceeds, or tangible property comply 

with the Single Audit Act Amendments of 1996 and 2 C.F.R. 200, Uniform 

Administrative Requirements, Cost Principles, and Audit Requirements for Federal 

Awards (Uniform Guidance). The Single Audit Act provides for recipients of federal 

funding above a certain threshold to receive an annual audit of their financial 

statements and federal expenditures. Under the Uniform Guidance, such entities 

that expend $750,000 or more in federal funds within the entity’s fiscal year must 

have a “single audit” performed annually covering all federal funds expended that 

year. The Single Audit Report is required to include a Schedule of Expenditures of 

Federal Awards for the period covered by the auditee’s financial statements. In 

addition, an entity must submit its Single Audit Report no later than 9 months after 

the end of the fiscal year covered by the audit. 

We obtained and reviewed Alabama’s Single Audit Reports for FYs 2017 and 

2018. To determine if the state’s Single Audit accurately reported ALEA’s DOJ 

equitable sharing fund receipts and expenditures on its Schedule of Expenditures of 

Federal Awards, we compared the schedule to ALEA’s FYs 2017 and 2018 ESAC 

reports. We found that ALEA’s equitable sharing expenditures were correctly 

reported in the Single Audit Reports for both years. However, the state’s equitable 

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sharing receipts for FY 2018 were underreported by $4,320.7 ALEA’s Senior 

Accountant provided documentation that showed the difference in receipts occurred 

because a check that was disbursed by USMS at the end of FY 2018 was not 

deposited by ALEA until the beginning of FY 2019. Because this timing issue led to 

the state’s inaccurate reporting, we make no recommendation for the inaccurate 

Single Audit Reports. 

We also determined that the state’s Single Audit Reports for FYs 2017 and 

2018 reported no deficiencies or weaknesses related to the use of DOJ equitable 

sharing funds. 

MLARS Compliance Review 

As previously discussed, MLARS’ July 2018 compliance report required ALEA 

to address four equitable sharing program weaknesses and deficiencies. We 

requested and obtained documentation from ALEA officials about the corrective 

actions the agency implemented to address the MLARS findings. 

First, MLARS found that ALEA commingled its DOJ equitable sharing funds 

with non-DOJ equitable sharing funds. To address this finding, MLARS required 

ALEA to include various processes in its DOJ Equitable Sharing Program Policy and 

Procedures (policy and procedures) and to update and implement existing equitable 

sharing accounting procedures. ALEA’s Senior Accountant provided us 

documentation showing the agency established separate accounting codes for DOJ 

equitable sharing funds. 

Second, MLARS found that ALEA did not consistently document the approval 

of 17 equitable sharing expenditures totaling $34,165. To address this finding, 

MLARS required ALEA to update and implement procedures to ensure that all 

expenditures are permissible and follow its jurisdiction’s approval and procurement 

policies. We found that ALEA properly documented approvals for the expenditure 

transactions we tested during our audit period. We also found that ALEA had 

updated or implemented its procedures to ensure that expenditures were 

permissible. 

Third, MLARS found that ALEA could not sufficiently support 16 equitable 

sharing expenditures totaling $372,531. To address this finding, MLARS required 

ALEA to update and implement procedures to ensure that all expenditures are 

permissible and that all documentation pertaining to the equitable sharing program 

is retained for 5 years. As evidence that this requirement was met, we determined 

that ALEA provided its updated procedures and that the procedures were 

implemented, as required by MLARS. In addition, we determined that ALEA’s 

equitable sharing expenditures were fully supportable and proper approvals were 

performed for the two vehicles purchased in 2019. 

7 The state’s FY 2018 Single Audit report reported ALEA’s equitable sharing receipts in the 

amount of $2,505,916, while according to ALEA’s accounting records, its equitable sharing receipts 

were $2,510,236 for FY 2018. 

9 
 

Fourth, MLARS found errors within ALEA’s FY 2013 and FY 2014 ESAC reports 

and required ALEA to update and implement procedures to address the deficiencies. 

We found that ALEA adequately addressed the finding by updating its policies and 

procedures to require ALEA staff to ensure equitable sharing purchases are 

categorized correctly on the ESAC reports. 

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CONCLUSION 

We concluded that ALEA properly accounted for its equitable sharing funds 

and used the funds for allowable purposes. We also found that ALEA submitted 

complete and accurate ESAC reports. One of the three ESAC reports we tested was 

submitted late, however we determined that this could be attributed to a technical 

issue with DOJ’s online system. ALEA properly accounted for its equitable sharing 

receipts and its equitable sharing expenditures were properly authorized, allowable, 

and fully supported. We also found that ALEA’s equitable sharing requests were 

submitted timely and contained all required information. 

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APPENDIX 1 

OBJECTIVE, SCOPE, AND METHODOLOGY 

Objective 

The objective of the audit was to assess whether the Alabama Law 

Enforcement Agency (ALEA) accounted for Department of Justice (DOJ) equitable 

sharing funds and used such assets for allowable purposes defined by applicable 

guidelines. 

Scope and Methodology 

We conducted this performance audit in accordance with Generally 

Accepted Government Auditing Standards. Those standards require that we plan 

and perform the audit to obtain sufficient and appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit objective. 

We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objective. 

Our audit concentrated on, but was not limited to, equitable sharing receipts 

ALEA received between October 1, 2016, and September 30, 2019. Our audit was 

limited to equitable sharing revenues received through the DOJ Equitable Sharing 

Program. We tested compliance with what we considered to be the most important 

conditions of the DOJ Equitable Sharing Program. We reviewed laws, regulations, 

and guidelines governing the accounting for and use of DOJ equitable sharing 

receipts, including the Guide to Equitable Sharing for State and Local Law 

Enforcement Agencies, dated April 2009, as well as the Interim Policy Guidance 

Regarding the Use of Equitable Sharing Funds, issued July 2014, and the Guide to 

Equitable Sharing for State, Local, and Tribal Law Enforcement Agencies, issued in 

July 2018. Unless, otherwise stated in our report, the criteria we audited against 

are contained in these documents. 

ALEA is located in Montgomery, Alabama. We interviewed ALEA officials and 

examined records, related revenues, and expenditures of DOJ equitable sharing 

funds. In addition, we relied on computer-generated data contained in eShare to 

identify equitably shared revenues awarded to ALEA during the audit period. We 

did not establish the reliability of the data contained in eShare as a whole. 

However, when viewed in context with other available evidence, we believe the 

opinions, conclusions, and recommendations included in this report are valid. 

Our audit specifically evaluated ALEA’s compliance with three essential 

equitable sharing guidelines: (1) Equitable Sharing Agreement and Certification 

reports, (2) accounting for equitable sharing receipts, and (3) the use of equitable 

sharing funds. In planning and performing our audit, we considered internal 

controls over DOJ equitable sharing receipts established and used by ALEA. 

However, we did not assess the reliability of ALEA’s financial management system, 

or the extent to which the financial management system complied with internal 

controls, laws, and regulations overall. 

12 
 

 

 

 

In the scope of this audit, ALEA had 115 cash receipts totaling $2,587,445. 

In the same period, ALEA had two expenditures totaling $47,878. We judgmentally 

selected and tested a sample of 10 receipts totaling $2,161,143 and both 

expenditures totaling $47,878. A judgmental sampling design was applied to 

capture numerous aspects of the disbursements reviewed, such as dollar amounts. 

This non-statistical sample design does not allow projection of the test results to all 

disbursements. 

Our audit included an evaluation of Alabama’s most recent annual audit. The 

results of this audit were reported in the Single Audit Report that accompanied 

Alabama’s basic financial statements for the year ended September 30, 2018. The 

Single Audit Report was prepared under the provisions of the Uniform Guidance. 

We reviewed the independent auditor’s assessment, which disclosed no control 

weaknesses or significant noncompliance issues related to the use of DOJ equitable 

sharing funds. In July 2018, the DOJ’s Criminal Division, Money Laundering and 

Asset Recovery Section issued a report on ALEA’s compliance with DOJ Equitable 

Sharing Program requirements and found four weaknesses and deficiencies related 

to ALEA’s accounting and reporting of equitable sharing program activity. 

We discussed the results of our review with ALEA officials throughout the 

audit and at a formal exit conference. As appropriate, their input has been included 

in the relevant sections of the report. 

Internal Controls 

In this audit, we performed testing of internal controls significant within the 

context of our audit objectives. We did not evaluate the internal controls of ALEA 

to provide assurance on its internal control structure as a whole. ALEA’s 

management is responsible for the establishment and maintenance of internal 

controls in accordance with the Equitable Sharing Guide and 2 C.F.R. §200.303. 

Because we do not express an opinion on ALEA’s internal control structure as a 

whole, we offer this statement solely for the information and use of ALEA and the 

DOJ Criminal Division.8 

8 This restriction is not intended to limit the distribution of this report, which is a matter of 

public record. 

13 
In planning and performing our audit, we identified the following internal 

control components and underlying internal control principles as significant to the 

audit objective: 

Control Environment Principles 

Management should establish an organizational structure, assign responsibility, and delegate 

authority to achieve the entity's objectives. 

Control Activity Principles 

Management should design control activities to achieve objectives and respond to risks. 

Management should implement control activities through policies. 

I nformation & Communication Principles 

Management should use quality information to achieve the entity's objectives. 

Management should externally communicate the necessary quality information to achieve the 

entity's objectives. 

We assessed ALEA's implementation of t hese internal controls and did not 

identify any deficiencies t hat we believe could affect ALEA's ability to ensure 

compliance with DOJ Equitable Sharing Program laws and regulat ions. However, 

because our review was limited to these internal control components and 

underlying principles, it may not have disclosed all internal control deficiencies t hat 

may have existed at the time of t his audit. 

14 
APPENDIX 2 

CRIMINAL DIVISION 

RESPONSE TO THE DRAFT AUDIT REPORT 

15 

.S. Department of Justice 

Criminal Division 

Washing1on, D.C. 20530 

June 17, 2020 

Money la101dering and Assel Recovery Section 

MEMORANDUM 

TO: Ferris B. Polk, Regional Audit Manager 

Atlanta Regional Audit Office 

Office of the Inspector General 

FROM: Jetmifer Bickford, Deputy Chief 

Program Management and Training Unit 

Money Laundering and Asset 

Recovery Section 

SUBJECT: DRAFT AUDIT REPORT for the Alabama Law Enforcement Agency's 

Equitable Sharing Program Activities 

In a memorandum dated May 20, 2020, your office provided a draft audit report for the 

Alabama Law Enforcement Agency (ALEA), which included no recommendations and no 

nece;:ssary actions fur closure;: of the;: audit re;:porl. 

The Money Laundering and Asset Recovery Section (MLARS) concurs with the 

preliminary res ults of the draft audit report. 

Upon receipt of the final audit report, MLARS will close out the report. 

cc: Denise Turcotte, Audit Liaison 

U.S. Department of Justice 

Criminal Division 

Louise Duhamel 

Acting Assistant Director, Audit Liaison Group 

Internal Revenue and Evaluation Office 

Justice Management Division 

Jessica Schmaus, Audit Liaison 

Audit Liaison 

Criminal Division 
 

 

 

-

The Department of Justice Office of the Inspector General (DOJ OIG) is a 

statutorily created independent entity whose mission is to detect and deter 

waste, fraud, abuse, and misconduct in the Department of Justice, and to

promote economy and efficiency in the Department’s operations.

To report allegations of waste, fraud, abuse, or misconduct regarding DOJ 

programs, employees, contractors, grants, or contracts please visit or call the

DOJ OIG Hotline at oig.justice.gov/hotline or (800) 869-4499.

U.S. DEPARTMENT OF JUSTICE OFFICE OF THE INSPECTOR GENERAL

950 Pennsylvania Avenue, NW

Washington, DC 20530 0001

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oig.justice.gov @JusticeOIG JusticeOIG

Also at Oversight.gov