* * * 

LIMITED OFFICIAL USE - PROPRIETARY INFORMATION 

Audit of the Office of Justice Programs Regional 

Information Sharing Systems Grants Awarded to 

the Middle Atlantic – Great Lakes Organized Crime 

Law Enforcement Network, 

Newtown, Pennsylvania

AUDIT DIVISION 

20-090 

AUGUST 2020 
 - 

Executive Summary 

Audit of the Office of Justice Programs Regional Information Sharing 

Systems Grant Awarded to the Middle Atlantic – Great Lakes Organized 

Crime Law Enforcement Network, Newtown, Pennsylvania 

Objectives 

The Office of Justice Programs (OJP) awarded the Middle 

Atlantic - Great Lakes Organized Crime Law Enforcement 

Network (MAGLOCLEN) a grant, and its supplement, 

totaling $10,090,177 for the Regional Information 

Sharing Systems program. The objectives of this audit 

were to determine whether costs claimed under the 

grant were allowable, supported, and in accordance with 

applicable laws, regulations, guidelines, and terms and 

conditions of the award; and whether MAGLOCLEN 

demonstrated adequate progress towards achieving 

program goals and objectives. 

Results in Brief 

As a result of our audit, we concluded that MAGLOCLEN 

demonstrated adequate progress towards achieving the 

award’s stated goals and objectives and that required 

performance reports were generally accurate. In 

addition, we found that MAGLOCLEN complied with grant 

requirements related to budget management, 

drawdowns, federal financial reports, and program 

income. However, we determined that MAGLOCLEN 

charged unallowable expenditures totaling $6,196, 

which included $2,000 that was unsupported. We also 

noted that MAGLOCLEN needs to update its confidential 

funds policy with regards to allowable charges and 

confidential fund file documentation. In addition, 

MAGLOCLEN needs to update its procurement policy for 

contracting. 

Recommendations 

Our report contains six recommendations to improve 

MAGLOCLEN’s grant management. We requested a 

response to our draft audit report from MAGLOCLEN and 

OJP, which can be found in Appendix 3 and 4, 

respectively. Our analysis of those responses is included 

in Appendix 5. 

Audit Results 

The purposes of the OJP grant we reviewed were to 

“support the Regional Information Sharing Systems 

program to enhance the capabilities of local, state, 

federal, and tribal law enforcement, and other criminal 

justice agencies through MAGLOCLEN support services 

and resources that facilitate communication, cooperation 

and coordination necessary to identify, target, and 

remove criminal conspiracies and activities spanning 

multi-jurisdictional, multistate, and, sometimes, 

international boundaries.” The project period for the 

grant was from August 2018 through July 2020. As of 

February 12, 2020, MAGLOCLEN drew down a 

cumulative amount of $6,911,585 for the grant. 

Program Goals and Accomplishments – Based on 

our review, there were no indications that MAGLOCLEN 

was not adequately achieving the stated goals and 

objectives of the grant. We also found that, based on 

our progress report testing, the accomplishments 

described in the progress reports generally matched the 

supporting documentation and were submitted to OJP 

timely. 

Confidential Fund Expenditures – We identified 

$4,196 in unallowable costs charged to the grant for 

confidential funds paid for ineligible services and 

recommend that OJP remedy these expenditures. 

Contractual Expenditures – We determined that 

MAGLOCLEN’s process of procurement lacked five 

essential components of criteria listed within its own 

policies and procedures, the DOJ Financial Guide, and 

the Code of Federal Regulations. Therefore, we 

recommend that OJP ensure that MAGLOCLEN update 

and implement procurement policies and procedures in 

accordance with the DOJ Grants Financial Guide and 2 

C.F.R. §200.320.

Other Direct Costs – Finally, we found association fees 

that were not in the approved budget and not 

appropriately supported. We recommend that OJP 

remedy the $2,000 of unallowable costs for the dues 

paid to the association, which we also found to be 

unsupported because MAGLOCLEN could not provide 

evidence of the services provided. 

i 
AUDIT OF THE OFFICE OF JUSTICE PROGRAMS 

REGIONAL INFORMATION SHARING SYSTEMS GRANT 

AWARDED TO THE MIDDLE ATLANTIC - GREAT LAKES 

ORGANIZED CRIME LAW ENFORCEMENT NETWORK 

NEWTOWN, PENNSYLVANIA 

TABLE OF CONTENTS 

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

The Grantee - MAGLOCLEN ................................................................... 1 

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

AUDIT RESULTS ........................................................................................... 3 

Program Performance and Accomplishments ............................................ 3 

Program Goals and Objectives ...................................................... 3 

Required Performance Reports ...................................................... 4 

Compliance with Special Conditions ............................................... 4 

Grant Financial Management ................................................................. 4 

Single Audit ............................................................................... 5 

Grant Expenditures .............................................................................. 5 

Confidential Funds Costs.............................................................. 5 

Contractual Costs ....................................................................... 6 

Other Direct Costs ...................................................................... 8 

Budget Management and Control ........................................................... 9 

Drawdowns ......................................................................................... 9 

Federal Financial Reports ...................................................................... 9 

Program Income.................................................................................. 9 

CONCLUSION AND RECOMMENDATIONS ........................................................ 11 

APPENDIX 1: OBJECTIVES, SCOPE, AND METHODOLOGY ................................. 12 

APPENDIX 2: SCHEDULE OF DOLLAR-RELATED FINDINGS ............................... 14 

APPENDIX 3: MIDDLE ATLANTIC – GREAT LAKES ORGANIZED CRIME LAW 
ENFORCEMENT NETWORK’S RESPONSE TO THE DRAFT AUDIT REPORT ..... 15 

APPENDIX 4: OFFICE OF JUSTICE PROGRAMS’ RESPONSE TO THE DRAFT AUDIT 

REPORT............................................................................................ 19 

APPENDIX 5: OFFICE OF THE INSPECTOR GENERAL ANALYSIS AND SUMMARY OF 

ACTIONS NECESSARY TO CLOSE THE REPORT ....................................... 23 
 

 

AUDIT OF THE OFFICE OF JUSTICE PROGRAMS 

REGIONAL INFORMATION SHARING SYSTEMS GRANT 

AWARDED TO THE MIDDLE ATLANTIC - GREAT LAKES 

ORGANIZED CRIME LAW ENFORCEMENT NETWORK 

NEWTOWN, PENNSYLVANIA 

INTRODUCTION 

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

completed an audit of one grant, and its supplement, awarded by the Office of 

Justice Programs (OJP) under the Regional Information Sharing Systems (RISS) 

program to the Middle Atlantic - Great Lakes Organized Crime Law Enforcement 

Network (MAGLOCLEN) in Newtown, Pennsylvania. MAGLOCLEN was awarded a 

total of $10,090,177, as shown in Table 1. 

Table 1 

Grants Awarded to MAGLOCLEN 

Award Number Program 

Office 

Award Date Project 

Period Start 

Date 

Project 

Period End 

Date 

Award 

Amount 

2018-RS-CX-0006 OJP 07/27/2018 08/01/2018 07/31/2019 $5,010,424 

2018-RS-CX-0006 

Supplement 1 OJP 07/18/2019 08/01/2018 07/31/2020 $5,079,753 

Total: $10,090,177 

a MAGLOCLEN was awarded a supplement to the 2018 grant with the same Grant Award Number, 

2018-RS-CX-0006, and we treated that award as a part of the same grant award program for our 

audit. 

Source: OJP’s Grants Management System 

Funding through OJP’s RISS program offers a variety of services and support 

to law enforcement agencies including secure information sharing and a 

communications system for regional information sharing between local, state, 

federal, and tribal law enforcement and other criminal justice agencies, critical 

analytical and investigative support services, and event de-confliction to enhance 

officer safety. RISS supports efforts against organized and violent crime, gang 

activity, drug activity, terrorism, human trafficking, identity theft, and other 

regional priorities. RISS supports thousands of local, state, federal, tribal law 

enforcement and other criminal justice agencies in their efforts to successfully 

resolve criminal investigations and ensure officer safety. 

The Grantee - MAGLOCLEN 

MAGLOCLEN was founded in 1981 and is one of six RISS centers. The Middle 

Atlantic-Great Lakes region consists of Delaware, District of Columbia, Indiana, 

Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, and the Canadian 

Provinces of Ontario and Quebec. Within this region, over 1,500 law enforcement 

and criminal justice agencies are members of MAGLOCLEN and benefit from a 

1 
 

 

 

 

variety of services and resources provided by the center. MAGLOCLEN's goal is to 

“enhance the capabilities of local, state, federal, and tribal law enforcement and 

other criminal justice agencies through its support services and resources that 

facilitate communication, cooperation and coordination necessary to identify, 

target, and remove criminal conspiracies and activities spanning multijurisdictional, multistate and, sometimes, international boundaries.” 

MAGLOCLEN was performing the services related to RISS grants for the grant 

awardee, The Pennsylvania Office of Attorney General (PA OAG), until February 

2017, when MAGLOCLEN became a non-profit corporation. MAGLOCLEN completed 

the then current grant awarded to PA OAG under an agreement between the two 

parties and became the sole grantee of any subsequent RISS grant awards as of 

July 1, 2017. MAGLOCLEN is funded exclusively by Congress through the U.S. 

Department of Justice, Office of Justice Programs, Bureau of Justice Assistance. 

During the time of our audit, MAGLOCLEN employed 40 personnel that 

performed services in 4 units, including the: (1) Equipment Unit, which provides 

audio, video, and photographic enhancement services for member agencies; 

(2) Analytical Unit, which coordinates interagency communication and criminal 

information exchange among member law enforcement and criminal justice 

agencies; (3) Field Operations and Training Unit, which assists member law 

enforcement and criminal justice agencies with requests for services; and (4) Fiscal 

Operations, Human Resources, and Administrative employees that perform day-today operations. 

OIG Audit Approach 

The objectives of this audit were to determine whether costs claimed under 

the grant were allowable, supported, and in accordance with applicable laws, 

regulations, guidelines, and terms and conditions of the grant; and to determine 

whether MAGLOCLEN demonstrated adequate progress towards achieving program 

goals and objectives. To accomplish these objectives, we assessed performance in 

the following areas of grant management: program performance, financial 

management, expenditures, budget management and control, drawdowns, and 

federal financial reports. 

We tested compliance with what we consider to be the most important 

conditions of the grant. The DOJ Grants Financial Guide and the award documents 

contain the primary criteria we applied during the audit. 

The results of our analysis are discussed in detail later in this report. 

Appendix 1 contains additional information on this audit’s objectives, scope, and 

methodology. The Schedule of Dollar-Related Findings appears in Appendix 2. 

2 
 

AUDIT RESULTS 

Program Performance and Accomplishments 

We reviewed required performance reports, award documentation, and 

interviewed officials to determine whether MAGLOCLEN demonstrated adequate 

progress towards achieving the program goals and objectives. We also reviewed 

progress reports to determine if the required reports were timely and accurate. 

Finally, we reviewed MAGLOCLEN’s compliance with special conditions identified in 

the award documentation. 

Program Goals and Objectives 

The goals for the award included enhancing the capabilities of local, state, 

federal, and tribal law enforcement and criminal justice agencies. This was to be 

accomplished through support services and resources that facilitated 

communication, cooperation, and coordination necessary to identify, target, and 

remove criminal conspiracies and activities spanning multi-jurisdictional, multistate 

and, sometimes, international boundaries. MAGLOCLEN planned on achieving this 

goal by increasing the number of members, services, or dollars in each of its eight 

objectives. Table 2 provides the amounts for each program objective for the 

quarters audited. 

Table 2 

Members/Services/Dollars per Program Objective Provided 

Objective Jul – 

Sept 2018 

Oct – 

Dec 2018 

Jan – 

Mar 2019 

Apr – 

Jun 2019 

1. Member Agencies 1,550 1,550 1,543 1,543 

2. Intelligence Services 

Provided 660,080 709,545 796,928 764,808 

3. Tactical and Strategic 

Intelligence Provided 508 292 1,390 338 

4. Technical Support and 

Equipment Loans Provided 2,859 1,779 2,708 2,863 

5. Investigative Support 

Funding (Confidential Funds) 

None 

Requested $2,500 $3,625 $4,507 

6. Field Liaison/Law 

Enforcement Coordinator 

Services Provided 3,513 2,548 2,582 1,801 

7. Information Sharing and 

Training Events 48 30 48 74 

8. Officer Safety Deconfliction 

Services 2,969 2,714 2,896 3,069 

Source: MAGLOCLEN 

We reviewed performance documentation associated with each of the eight 

objectives and found that while the number of participating agencies remained 

about the same over the period, there were increases in services and funding 

3 
 

 

 

provided to member agencies in most of the objective areas. Based on our review, 

MAGLOCLEN was able to demonstrate adequate progress achieved towards the 

grant goal and objectives. 

Required Performance Reports 

According to the DOJ Grants Financial Guide, award recipients should ensure 

that documentation is available to support all data collected for each performance 

measure specified in the program solicitation. We tested 10 performance measures 

from 2 of the 4 most recent progress reports submitted for each quarter to verify 

the information in the reports, including field service activities, available database 

records, and equipment loans. We determined that MAGLOCLEN was able to 

adequately support each product or service from our sample. In addition, we 

determined that MAGLOCLEN submitted accurate and timely progress reports. 

Compliance with Special Conditions 

Special conditions are the terms and conditions that are included with the 

grant award. We evaluated the special conditions for the grant and selected a 

judgmental sample of the requirements that are significant to performance under 

the grant and are not addressed in another section of this report. We evaluated 6 

of the 48 special conditions for the award: (1) Completion of OJP financial 

management and grant administration training, (2) Audits - effects of failure to 

address audit issues, (3) Use of federal funds - No lobbying, (4) Confidential Funds 

Certificate, (5) Web Site Notice of Federal Funding and Disclaimer, and (6) Limit on 

use of grant funds for grantees' employees' salaries. Based on our sample, we did 

not identify any instances of MAGLOCLEN violating the special conditions reviewed. 

Grant Financial Management 

According to the DOJ Grants Financial Guide, all grant recipients are required 

to establish and maintain adequate accounting systems and financial records and 

accurately account for funds awarded to them. We conducted interviews with 

financial staff, examined policy and procedures, and inspected grant documents to 

determine whether MAGLOCLEN adequately safeguarded the grant funds we 

audited. We also reviewed MAGLOCLEN’s FY 2018 Single Audit Report to identify 

internal control weaknesses and significant non-compliance issues related to federal 

awards. Finally, we performed testing in the areas that were relevant for the 

management of this grant, as discussed throughout this report. 

Based on our review, we found that MAGLOCLEN’s FY 2018 Single Audit 

Report identified one issue that related to the award in our audit. We also 

determined that MAGLOCLEN charged unallowable and unsupported costs to the 

award, and that it could improve its policies and procedures related to Confidential 

Funds and Contractual Cost Expenditures. These deficiencies are discussed in more 

detail in the Single Audit, Confidential Funds, Contracts, and Other Direct Costs 

Expenditures sections, respectively. 

4 
 

 

Single Audit 

Non-federal entities that receive federal financial assistance are required to 

comply with the Single Audit Act of 1984, as amended. 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 

2 C.F.R. §200, Uniform Administrative Requirements, Cost Principles, and Audit 

Requirements for Federal Awards (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.1 

MAGLOCLEN’s 2018 Single Audit Report identified one finding that there was 

no segregation of duties, as it relates to cash disbursements. The same individual 

who approved the purchase order and/or supporting invoice for cash disbursements, 

signed the check in 20 out of the 45 selections sampled. MAGLOCLEN agreed with 

the finding in its response and stated that it would implement policies and 

procedures prohibiting this practice in the future. During our audit, we noted that 

MAGLOCLEN had updated its written policies to address this matter. We requested 

a listing of all equipment purchase orders from August 2019 through December 

2019 and sampled all three that were provided. Based on our testing, we 

determined that MAGLOCLEN has addressed the aforementioned issue in its policies 

and procedures and is adhering to them. 

Grant Expenditures 

MAGLOCLEN’s approved budget included personnel, fringe benefits, travel, 

equipment, contracts, supplies, other direct costs, and confidential funds. To 

determine whether costs charged to the awards were allowable, supported, and 

properly allocated in compliance with award requirements, we tested a sample of 

54 transactions totaling $344,027. We reviewed documentation, accounting 

records, and performed verification testing related to grant expenditures. As 

discussed in the following sections, we identified $6,196 in unallowable questioned 

costs, $2,000 in unsupported questioned costs, and made three management 

improvement recommendations. We did not identify issues related to the following 

costs: (1) personnel, (2) fringe benefits, (3) travel, (4) equipment, and (5) supply 

expenditures. 

Confidential Funds Costs 

As part of our sample, we reviewed four confidential funds transactions 

totaling $10,196 of the $15,632 charged to this category to ensure that these 

expenditures were used in accordance with internal policy and applicable criteria, 

and that the expenditures were allocable, allowable, reasonable, necessary, and 

supported. According to the DOJ Grants Financial Guide, confidential funds can be 

used for the purchase of services, equipment, or specific information. MAGLOCLEN’s 

1 On December 26, 2014, the Uniform Guidance superseded OMB Circular A-133, Audits of 

States, Local Governments, and Non-Profit Organization. Under OMB Circular A-133, which affected 

all audits of fiscal years beginning before December 26, 2014, the audit threshold was $500,000. 

5 
 

internal policy, developed by the Policy Board, does not allow the use of confidential 

informants, so the guidance regarding the purchase of specific information was not 

applicable. 

Two of the confidential fund expenditures in the amount of $4,196 were 

unallowable because they did not meet the definitions in the DOJ Grants Financial 

Guide for purchase of services or purchase of evidence.2 These were the only two 

transactions that we identified for this purpose and MAGLOCLEN officials stated that 

it discontinued the use of confidential funds for this purpose in May of 2019. These 

two transactions were for services provided by an outside organization to analyze 

evidence (cell phones) that were obtained by member law enforcement 

organizations in the course of an ongoing investigation. MAGLOCLEN officials 

approved the transactions as a purchase of services, but later stated that the wrong 

selection was made to describe the request and that it should have been for 

evidence. We determined that these transactions were not a purchase of service 

because they did not include the need for travel or transportation, leases, business 

fronts, automobiles, aircrafts, boats, or similar items to create an appearance of 

affluence and/or meals, beverages, entertainment, or similar expenses for 

undercover purposes. Likewise, we determined that these transactions were not 

purchases of evidence because there was no actual purchase of evidence, since the 

evidence was already in the custody of the member agency. 

As a result, we identified $4,196 in unallowable expenses. Therefore, we 

recommend that OJP remedy the $4,196 in unallowable expenses related to 

confidential funds paid for ineligible services. In addition, we recommend that OJP 

ensures MAGLOCLEN updates its policies and procedures to ensure the appropriate 

types of expenditures for confidential funds are clearly defined. 

In addition, we found that MAGLOCLEN did not follow its internal policies 

regarding the appropriate support for confidential fund expenditures in its files. 

Specifically, we found there was missing documentation that we requested during 

our audit, including two Receipt for Inter-Agency Disbursement Payee documents 

that demonstrate that the funds were received by the member agency, and two 

Receipts for Evidence/Contraband Forms that describe the evidence purchased. 

Due to the monetary nature of this type of cost category, we recommend OJP 

ensures MAGLOCLEN update and implement policies and procedures to include all 

required documentation in the confidential funds disbursement files. 

Contractual Costs 

We reviewed 10 contractual transactions totaling $23,779 of the $258,412 

2 The DOJ Grants Financial Guide states, “Purchase of Services (P/S). This category includes 

travel or transportation of a non-Federal officer or an informant; the lease of an apartment, business 

front, luxury-type automobile, aircraft or boat, or similar effects to create or establish the appearance 

of affluence; and/or meals, beverages, entertainment, and similar expenses (including buy money, 

flash rolls, etc.) for undercover purposes, within reasonable limits.” It also states that, “Purchase of 

Evidence (P/E). This category is for purchase of evidence and/or contraband, such as narcotics and 

dangerous drugs, firearms, stolen property, counterfeit tax stamps, and so forth, required to 

determine the existence of a crime or to establish the identity of a participant in a crime.” 

6 
 

 

expended in this category, to ensure these expenditures were awarded and 

accounted for in accordance with internal policy and applicable criteria, and that the 

expenditures were allocable, allowable, reasonable, necessary, and supported. 

MAGLOCLEN retained three of the contracts for information resources, copiers, and 

one with an aerial image company from its time as an organization within the PA 

OAG. We identified seven additional contracts that included payroll services, 

vehicle leases, fleet fuel, fleet repair, fleet insurance, accounting services, and legal 

services. 

The DOJ Grants Financial Guide states that grant recipients should have 

internal controls over grant activities, including the use of grant funds in contracting 

for services. We determined that MAGLOCLEN accounted for its contractual 

expenditures in accordance with most of its internal policy and criteria, and all 

expenditures sampled were allocable, allowable, reasonable, necessary, and 

supported. However, MAGLOCLEN has a policy that the Business Manager prepare 

cost or price analysis when more than one vendor is identified that can meet the 

terms of the contract. Despite this, during our testing we found no evidence in the 

contract files of this occurring. Therefore, we conducted our own analysis to 

determine if the expenditures were reasonable by obtaining quotes for similar 

providers of services or products and concluded that they were. 

We determined that MAGLOCLEN’s procurement process lacked the following 

four essential components of criteria listed within the DOJ Grants Financial Guide 

and the Code of Federal Regulations (C.F.R.): 

 maintaining detailed records for its procurement files,3 

 properly vetting potential contractors,4 

 demonstrating evidence of compliance with the four circumstances that allow 

sole source contracts to be awarded.5 

 MAGLOCLEN is awarding contracts by applying small purchase procedures 

3 The DOJ Grants Financial Guide requires recipients or subrecipients of awards to have 

records that detail the history of all procurements that must be maintained and should include but not 

limited to: 1) Rationale for the method of procurement; 2) Selection of contract type; 3) Contractor 

selection and/or rejection process; and 4) Basis for contract prices. 

4 The DOJ Grants Financial Guide states as an award recipient or subrecipient you must: 

1) Have a documented process to check for organizational conflict of interest with potential 

contractors; 2) Have a process in place to ensure that contracts are not awarded to contractors or 

individuals on the List of Parties Excluded from Federal Procurement and Non-procurement Programs; 

and 3) Perform a System for Award Management (SAM) review of potential contractors or individuals. 

5 The DOJ Grants Financial Guide states that Non-Federal entities may conduct 

noncompetitive proposals (or, sole source procurement) by procurement through solicitation from only 

one source when one or more of the following circumstances apply: (1) The item or service is 

available only from a single source; (2) The public exigency or emergency for the requirement will not 

permit a delay resulting from competitive solicitation; (3) DOJ or the pass-through entity expressly 

authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or 

(4) After solicitation of a number of sources, competition is determined to be inadequate. 

7 
 

 

and is not obtaining price or rate quotes from a number of sources.6 

These issues may lead to either non-advantageous pricing and unnecessary 

spending of federal funding, unfair procurement practices for awarding contracts, or 

entering into contracts with conflicts of interest or with those contractors who may 

be barred from performing on contracts with the U.S. Government. MAGLOCLEN 

officials stated that under the PA OAG, the state had a formal competitive bidding 

processes, but since MAGLOCLEN transitioned to a non-profit organization, it has 

not provided price or cost data as noted above. MAGLOCLEN officials also agreed to 

update its processes to address the non-compliance issues we identified. 

Therefore, we recommend that OJP ensures MAGLOCLEN updates and implements 

the procurement policies and procedures to be in compliance with the DOJ Grants 

Financial Guide and 2 C.F.R. §200.320. 

Other Direct Costs 

In 2019 and 2020, the OIG performed work related to OJP’s RISS grants 

awarded to Rocky Mountain Information Network in Phoenix, Arizona. As a result of 

that work we questioned as unallowable and unsupported the grant funds that were 

used to pay professional dues to the RISS Director’s Association (RDA).7 In 

addition to the audit report, the OIG issued a Management Advisory Memorandum 

recommending that OJP examine the total amount of RISS funding provided to the 

RDA by the six RISS Centers, since its inception, to include a determination on how 

the RISS funds provided to the RDA were used. The OIG also recommended that 

OJP consider requiring the RISS Centers to stop funding the RDA.8 

This prior audit experience provided a basis upon which we reviewed 10 of 

MAGLOCLEN’s other direct cost transactions, totaling $47,686 of the $545,913 

expended in this category, to ensure that these expenditures were purchased and 

accounted for in accordance with internal policy and applicable criteria; and that the 

expenditures were allocable, allowable, reasonable, necessary, and supported. 

These transactions included membership fees, registration fees, generator 

maintenance, building lease, and telecommunications. 

We determined that the majority of other direct cost expenditures we 

reviewed were used and accounted for in accordance with MAGLOCLEN’s internal 

policy and applicable criteria. However, we did identify two RDA membership fees 

in the amount of $2,000. We consider the $2,000 paid to the RDA during the scope 

of our audit unallowable questioned costs because the expenditures were not in the 

approved budget. We received a memo from the RDA to OJP dated November 6, 

6 2 C.F.R. §200.320 (b) states that if small purchase procedures are used, price or rate 

quotations must be obtained from an adequate number of qualified sources. 

7 Audit Report GR-60-19-014, Audit of the Office of Justice Programs Regional Information 

Sharing Systems Grants Awarded to Rocky Mountain Information Network, Phoenix, Arizona issued in 

September 2019 can be located at https://www.oversight.gov/sites/default/files/oigreports/g6019014.pdf. 

8 Management Advisory Memorandum 20-006, Concerns Identified in the Office of Justice 

Programs Regional Information Sharing Systems Grants issued in November 2019 can be located at 

https://oig.justice.gov/reports/2019/a20006.pdf 

8 
 

 

 

 

2019, which stated that, “No funds from federally awarded grants or program 

income will be accepted from the RISS Centers for the corporation’s operations or 

its membership dues.” We recommend that OJP remedy the $2,000 in unallowable 

other direct costs for dues paid to the RISS Directors Association. Further, we 

determined that the funds were commingled, and therefore also consider the 

$2,000 as unsupported questioned costs. Therefore, we recommend that OJP 

remedy the $2,000 in unsupported questioned costs for dues paid to the RISS 

Directors Association. 

Budget Management and Control 

According to the DOJ Grants Financial Guide, the recipient is responsible for 

establishing and maintaining an adequate accounting system, which includes the 

ability to compare actual expenditures or outlays with budgeted amounts for each 

award. Additionally, the grant recipient must initiate a Grant Adjustment Notice 

(GAN) for a budget modification that reallocates funds among budget categories if 

the proposed cumulative change is greater than 10 percent of the total award 

amount. 

We found that MAGLOCLEN adhered to requirements governing grant budget 

management and controls, as MAGLOCLEN tracked actual expenditures by budget 

category and did not transfer funds between categories in excess of 10 percent. 

Drawdowns 

According to the DOJ Grants Financial Guide, an adequate accounting system 

should be established to maintain documentation to support all receipts of federal 

funds. If, at the end of the grant award, recipients have drawn down funds in 

excess of federal expenditures, unused funds must be returned to the awarding 

agency. As of February 12, 2020, MAGLOCLEN had drawn down a total of 

$6,911,585 from Grant Number 2018-RS-CX-0006. To assess whether 

MAGLOCLEN managed grant receipts in accordance with federal requirements, we 

compared the total amount reimbursed to the total expenditures in the accounting 

records. We did not identify significant deficiencies related to the recipient’s 

process for developing drawdown requests. 

Federal Financial Reports 

According to the DOJ Grants Financial Guide, recipients shall report the 

actual expenditures and unliquidated obligations incurred for the reporting period 

on each financial report as well as cumulative expenditures. To determine whether 

MAGLOCLEN submitted timely and accurate Federal Financial Reports, we compared 

the four most recent reports to MAGLOCLEN’s accounting records for the grant. We 

determined that quarterly and cumulative expenditures for the reports reviewed 

were filed timely and accurate. 

Program Income 

According to the DOJ Grants Financial Guide, all income generated as a direct 

result of an agency-funded project shall be deemed program income. This income 

9 
may be used to further the program objectives or refunded to the Federal 

Government. Additionally, program income may only be used for allowable 

program costs and must be expended prior to additional OJP drawdowns. We 

determined that MAGLOCLEN charged member organizations dues for participating 

in and receiving services from the network. We reviewed how the dues were 

accounted for and used and found that program income was expended before any 

drawdowns were taken. We determined that program income was included in 

Grant Number 2018-RS-CX-0006’s approved budget and was used to further the 

program objectives. 

10 
CONCLUSION AND RECOMMENDATIONS 

As a result of our audit testing, we concluded that MAGLOCLEN did not 

adhere to all of the grant requirements we tested but demonstrated adequate 

progress towards achieving the grants’ stated goals and objectives. We did not 

identify significant issues regarding MAGLOCLEN’s performance reports, 

management of the award budget, drawdowns, Federal Financial Reports, or 

program income. However, we found that improvements should be made with 

regard to MAGLOCLEN’s supervision of confidential funds, contract procurement, 

and use of funds in certain cost categories. We provide six recommendations for 

OJP to address these deficiencies. 

We recommend that OJP: 

1. Remedy the $4,196 in unallowable expenses related to confidential funds 

paid for ineligible services. 

2. Ensure that MAGLOCLEN updates its policies and procedures to ensure the 

appropriate types of expenditures for confidential funds are clearly defined. 

3. Ensure that MAGLOCLEN updates and implements policies and procedures to 

include all required confidential funds documentation in the disbursement 

files. 

4. Ensure that MAGLOCLEN updates and implements the procurement policies 

and procedures to be in compliance with the DOJ Grants Financial Guide and 

2 C.F.R. §200.320. 

5. Remedy the $2,000 unallowable other direct costs for dues paid to the RISS 

Directors Association. 

6. Remedy the $2,000 in unsupported questioned costs for dues paid to the 

RISS Directors Association. 

11 
 

 

 

APPENDIX 1 

OBJECTIVES, SCOPE, AND METHODOLOGY 

Objectives 

The objectives of this audit were to determine whether costs claimed under 

the grants were allowable, supported, and in accordance with applicable laws, 

regulations, guidelines, and terms and conditions of the grant; and to determine 

whether the grantee demonstrated adequate progress towards achieving the 

program goals and objectives. To accomplish these objectives, we assessed 

performance in the following areas of grant management: program performance, 

financial management, expenditures, budget management and control, drawdowns, 

and federal financial reports. 

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, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

This was an audit of Office of Justice Programs (OJP) grants awarded to the 

Middle Atlantic - Great Lakes Organized Crime Law Enforcement Network 

(MAGLOCLEN) under the Regional Information Sharing Systems program. 

MAGLOCLEN was awarded $10,090,177 under Grant Number 2018-RS-CX-0006 

and its supplement, and as of February 12, 2020, had drawn down $6,911,586 of 

the total grant funds awarded. Our audit concentrated on, but was not limited to 

July 27, 2018, the award date for Grant Number 2018-RS-CX-0006, through 

February 2020. The project period for Grant Number 2018-RS-CX-0006 ended on 

July 31, 2019, prior to the start of our audit. 

To accomplish our objectives, we tested compliance with what we consider to 

be the most important conditions of MAGLOCLEN’s activities related to the audited 

grants. We performed sample-based audit testing for grant expenditures including 

payroll and fringe benefit charges, financial reports, and progress reports. In this 

effort, we employed a judgmental sampling design to obtain broad exposure to 

numerous facets of the grant and its supplement. This non-statistical sample 

design did not allow projection of the test results to the universe from which the 

samples were selected. The DOJ Grants Financial Guide, 2 C.F.R. §200.320, and 

the award documents contain the primary criteria we applied during the audit. 

During our audit, we obtained information from OJP’s Grants Management 

System, as well as MAGLOCLEN’s accounting system specific to the management of 

DOJ funds during the audit period. We did not test the reliability of those systems 

as a whole, therefore any findings identified involving information from those 

systems were verified with documentation from other sources. 

12 
 

 

 

 

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 

MAGLOCLEN to provide assurance on its internal control structure as a whole. 

MAGLOCLEN’s management is responsible for the establishment and maintenance 

of internal controls in accordance with the DOJ Grants Financial Guide, 2 C.F.R. 

§200.320, and the award documents. Because we do not express an opinion on 

the MAGLOCLEN’s internal control structure as a whole, we offer this statement 

solely for the information and use of MAGLOCLEN and OJP. 

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

control components and underlying internal control principles as significant to the 

audit objectives: 

Internal Control Components & Principles Significant to the Audit Objectives 

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 design the entity’s information system and related control activities to 

achieve objectives and respond to risks. 

Management should implement control activities through policies. 

Information & Communication Principles 

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

We assessed the design, implementation, and operational effectiveness of 

these internal controls at the time of our audit and identified deficiencies that we 

believe could affect MAGLOCLEN’s ability to effectively and efficiently operate, to 

facilitate reporting of accurate state financial performance information, and to 

ensure compliance with laws and regulations. The internal control deficiencies we 

found are discussed in the Audit Results section of this report. However, because 

our review was limited to aspects of these internal control components and 

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

may have existed at the time of this audit. 

13 
 

 

 

APPENDIX 2 

SCHEDULE OF DOLLAR-RELATED FINDINGS 

Description 

Questioned Costs:9 

Confidential Funds Costs 

Other Direct Costs 

Unallowable Costs 

Amount 

$4,196 

2,000 

$6,196 

Page 

6 

8 

Other Direct Costs 

Unsupported Costs 

$2,000 

$2,000 

9 

Gross Question Costs 

Less Duplicate Questioned Costs 

Net Questioned Costs 

$8,196 

(2,000) 

$6,196 

9 Questioned Costs are expenditures that do not comply with legal, regulatory, or 

contractual requirements; are not supported by adequate documentation at the time of the audit; or 

are unnecessary or unreasonable. Questioned costs may be remedied by offset, waiver, recovery of 

funds, or the provision of supporting documentation, or contract ratification, where appropriate. 

14 
8 

APPENDIX 3 

MIDDLE ATLANTIC – GREAT LAKES ORGANIZED 

CRIME LAW ENFORCEMENT NETWORK’S 

RESPONSE TO THE DRAFT AUDIT REPORT10 

MAGLOCLEN 

Middle Atlantic Great Lakes Organized Crime Law Enforcement Network

140 Terry Drive, Suite 100 Voice: 1-800·34> 1322

Newtown, PA 18940 Fax: 1-215-504-4926

Thomas 0 . Puerzer 

Regional Audit Manager 

Philadelphia Regional Audit Office 

Office of the Inspector General 

U.S Department of Justice, 

701 East Market Street Suite 2300 

Philadelphia, PA 19106 

Dear Mr. Puerzer, 

The Middle Atlantic - Great Lakes Organized Crime Law Enforcement Network (MAGLOCLEN) 

appreciates the opportunity to respond to the draft audit report your office prepared regarding the 

Office of Justice Programs Grant Number 2018-RS-CX-006 and 2018-RS-CX-006 Supplement 1. The 

fol lowing represents MAGLOCLEN's official response to the audit findings including our concurrence or 

nonconcurrence with the conclusions and the proposed actions or actions taken to address each of the 

recommendations contained herein. 

1) Unallowable Expenses Related to Confidential Funds Paid for Ineligible Services -Amount. 

$4,196. 

Duri ng the course of two separate criminal investigations conducted by law enforcement agencies, 

MAGLOCLEN was requested to provide funding to an outside organization for the purposes of extracting 

and ana lyzing evidence from cellular telephones. MAGLOCLEN management approved the use of 

confidential funds for two expenditures tota ling $4,196. Although the agencies were already in 

possession of the evidence as noted by the auditor, the evidence was inaccessible because the 

investigators lacked the technology and technical expertise to access it. In retrospect, confidential funds 

should not have been used for this purpose since the expenditures did not meet the strict definition of 

either a purchase of evi dence or purchase of services as outlined in the DOJ Grants Financial Guide. 

10 Attachments to this response were not attached in this final report. 

15 
MAGLOCLEN concurs with the OIG find ings that the expenditure of $4,196 in confidential funds was an 

unallowable expense for ineligible services. 

Proposed Action: Work closely with OJP and the RISS Program Manager to remedy these expenditures. 

MAGLOCLEN agrees to adhere to its own internal policies and the DOJ Grants Financial Guide policies 

pertaining to the use of confidential funds for all future expenditures. 

2) MAGLOCLEN Must Update its Policies and Procedures to Ensure the Appropriate Types of 

Expenditures for Confidential Funds are Clearly Defined. 

MAGLOCLEN concurs with the OIG finding that its policies and procedures shou ld be updated to ensure 

the appropriate types of confidential fund expenditures are clearly defined. 

Actions Taken: MAGLOCLEN management modified its internal policy related to the expenditure of 

confidential funds on June 111 2020 to include revised definitions of the allowable expenditure types 

that reflect the language used in the DOJ Grants Financial Guide to eliminate ambiguity (Attachment 1). 

Supervisory personnel directly responsible for the management of MAGLOCLEN's confidential funds 

program have reviewed the revised policy and wi ll adhere to it for all future expenditures. 

3) MAGLOCLEN Must Update and Implement Policies and Procedures to Include All Required 

Confidential Funds Documentation in the Disbursement Files. 

MAGLOCLEN concurs with the OIG findings that its internal policies and procedures should be updated 

to include specific requirements for confidential funds documentation be retained in the disbursement 

fi les. 

Actions Taken: MAGLOCLEN's Confidential Funds Policy was modified and subsequently implemented 

on June 11, 2020 to include a specific requirement for all supporting documentation related to the 

expenditures be kept in the disbursement file (Attachment 1). Additional ly, MAGLOCLEN management 

agrees to adhere to its existing pol icy requiring monthly audits of open confidential funds disbursement 

fi les to ensure receipts and other required documentation are properly archived. 

16 
4) MAGLOCLEN Must Update and Implement Procurement Policies and Procedures to be in 

Compliance with the DOJ Grants Financial Guide and C.F.R. 200.320. 

MAGLOCLEN concurs with the OIG findings that it must update and implement procurement policies 

and procedures to ensure compliance with the DOJ Grants Financial Guide and appl icable federa l 

regulations. 

Actions Taken: MAGLOCLEN's Accounting Policies and Procedures were updated and subsequently 

implemented on June 15, 2020 to comply with the DOJ Grants Financial Guide and C.F.R. 200.230. 

Specifically, changes were made to the applicable procurement guidelines including: additiona l 

requirements to maintain detailed records in the procurement files; new procedures to ensure the 

proper vetting of potential contractors; and additional requirements for awarding sole source contracts. 

In addition to these modifications, MAGLOCLEN agrees to adhere to its existing policy requiring the 

Business Manager to prepare and document cost or price analysis when more than one vendor is 

available to meet the terms of a contract (Attachment 2). 

5) Remedy the $2,000 Unallowable Other Direct Costs for Dues Paid to the RISS Directors 

Association. 

6) Remedy the $2,000 in Unsupported Questioned Costs for Dues Paid to the RISS Directors 

Association. 

MAGLOCLEN does not concur with the OIG findings of $2,000 in unsupported questioned costs and 

unal lowable other direct costs for dues paid to the RDA. 

The RISS Directors Association (RDA) is a critical mechanism used to collectively represent the interests 

of the RISS Program as a whole. The first 11Guiding Principle", identified in the RISS Adaptive Strategy is 

(/Nationwide Name- Regional Focus". The RDA allows for six regionally focused geographical ly separate 

RISS Centers to collectively unite and conduct RISS Program-wide goals, objectives, policies, and 

direction. There are situations, relationships and agreement that require united RISS Program 

17 
leadership and direction to demonstrate support of RISS as a federally funded "Program," rather than six 

individual centers. The RDA achieves this necessary function. 

The RDA serves as a critica l element that has established national name recognition for the RISS 

Program, especially during the last decade. The results of this success include stronger federal law 

enforcement partnerships, a new FBI MOU (2017), and requests for RISS to participate on national 

forums i.e.; Global/CICC, OHS HSIN-lntel Governance Board, ODNI Advisory Board, etc. and special multiregional information sharing initiatives specific to the law enforcement community. The nomina l dues 

paid by each RISS center to sustain the RDA have helped create a national visibility for RISS' proven 

success and effectiveness. 

Prior to the grant awards that are the subject of this audit, MAGLOCEN submitted a budget for approval 

which included a category entitled "Membership Dues", which was subsequently approved. After the 

award, numerous professional membership dues were paid for MAGLOCLEN staff members incl uding 

the dues for the RDA in the amount of $2,000. It is for these reasons MAGLOCLEN does not concur with 

the OIG findings of $2,000 in unallowable costs for dues paid to the RDA. MAGLOCLEN acknowledges 

there was not a separate line item in the approved budget specifically for RDA dues. 

As noted by the OIG in the audit report, the RDA changed their bylaws to prohibit the practice of 

accepting funds from federally awarded grant programs or program income from RISS Centers for RDA 

operations or membership dues. 

Actions Taken: The RDA changed their bylaws to prohibit the practice of accepting funds from federally 

awarded grant programs or program income from RISS Centers for RDA operations or membership 

dues. Therefore, MAGLOCLEN will not pay future dues to the RISS Directors Association from grant or 

program income funds. 

In closing, MAGLOCLEN will make necessary adjustments and comply with all required directives to 

successfully resolve the findings associated with this audit. 

Respectfully, 

Douglas J. Burig 

Executive Director 

MAGLOCLEN 

Attachment 1 

Attachment 2 

18 
APPENDIX 4 

OFFICE OF JUSTICE PROGRAMS’ 

RESPONSE TO THE DRAFT AUDIT REPORT 

19 

U.S. Department of Justice 

Office of Justice Programs 

Office of Audit, Assessme11t, and Manageme11t 

Washington, D.C. 20531 

e 25, 2020 

MEMORANDUM TO: Thomas 0. Puerzer 

Regional Audit Manager 

Philadelphia Regional Audit Office 

Office of the Inspector General 

FROM: R~lph E. Maiiin ,/J/J Jd. ~M ... • -1-::~ D1rector ,,.,,v L • ,,u.vU,U'/,,' 

SUBJECT: Response to the Draft Audit Repo1i, Audit of the Office of Justice 

Programs, Regional Infor111ation Sharing Systems Grant Awarded 

to the Middle Atlantic - Great Lakes Organi:ed Crime Law 

Enforcement Network, Newtown, Pennsylvania 

This memorandum is in reference to your conespondence, dated June 2, 2020, transmitting the 

above-referenced draft audit rep01i for the Middle Atlantic - Great Lakes Organized Crime Law 

Enforcement Network (MAGLOCLEN). We consider the subject repo1i resolved and request 

written acceptance of this action from your office. 

The draft report contains six recommendations and $6,196 1 in net questioned costs. The 

following is the Office of Justice Programs' (OJP) analysis of the draft audit rep011 

recommendations. For ease of review, the recommendations are restated in bold and are 

followed by our response. 
1. We recommend that OJP remedy the $4,196 in unallowable expenses related to 

confidential funds paid for ineligible services. 

OJP agrees with the recommendation. We will review the $4,196 in questioned costs, 

charged to Grant umber 2018-RS-CX-0006 and will work with MAGLOCLE to 

remedy as appropriate. 

1 Some costs were questioned for more than one reason. et questioned costs exclude the duplicate costs. 

2. We recommend that OJP ensure that MAGLOCLEN updates its policies and 

procedures to ensure the appropriate types of expenditures for confidential funds 

are clearly defined. 

OJP agrees with the recommendation. In its response to the Draft Audit Repo1t 

MAGLOCLE provided a copy of written policies and procedures, developed and 

implemented to ensure that the appropriate types of expenditures for confidential funds 

are clearly defined (see Attachment 1). In addition, MAGLOCLE provided 

documentation to suppoit that the procedures were distributed to staff responsible for 

managing Federal funds (see Attachment 2). We believe these procedures adequately 

adch-ess this recoilllllendation. Accordingly the Office of Justice Programs requests 

closure of this recommendation. 

3. \\ e recommend that OJP ensure that lAGLOCLEN updates and implements 

policies and procedures to include all required confidential funds documentation in 

the disbursement files. 

OJP agrees with the recommendation. In its response to the Draft Audit Repo1t, 

MAGLOCLEN provided a copy of written policies and procedures, developed and 

implemented to ensure that all required confidential fllllds documentation is included in 

the disbursement files (see Attachment 1). In addition, MAGLOCLE provided 

documentation to suppoli that the procedures were distributed to staff responsible for 

managing Federal funds (see Attachment 2). We believe these procedures adequately 

address this recommendation. Accordingly the Office of Justice Programs requests 

closure of this recolllllendation. 

20 
4. "\\ e recommend that OJP ensure that MAGLOCLEN updates and implements the 

procurement policies and procedures to be in compliance with the DOJ Grants 

Financial Guide and C.F.R. 200.320. 

OJP agrees with the recommendation. In its response to the Draft Audit Report 

MAGLOCLEN provided a copy of its revised procmement policies and procedures, to 

ensure compliance with the Depaiiment of Justice (DOJ) Grants Financial Guide and 

C.F.R. 9 200.320 (see Attachment 3). In addition MAGLOCLE provided 

documentation to supp01i that the procedures were distributed to staff responsible for 

managing Federal funds (see Attachment 3). We believe these procedmes adequately 

adch'ess this recommendation. Accordingly, the Office of Justice Programs requests 

closure of this recommendation. 

5. "\\ e recommend that OJP remedy the $2,000 unallowable other direct costs for clues 

paid to the RISS Directors Association. 

6. We recommend that OJP remedy the $2,000 in unsupported questioned costs for 

dues paid to the RISS Directors Association. 

OJP agrees with each of these recommendations. During its examination of open awards 

under the Regional Infonuation Sharing Systems (RISS) Program OJP s Bureau of 

Justice Assistance (BJA) detennined that the grant funds that the six RISS Centers paid to 

the RISS Directors Association (RDA) including the $2 000 in funds from Grant 

umber 2018-RS-CX-0006, were expended on a number ofunallowable items; and that 

the RDA did not properly track the funds by award m1mber as required by the DOJ 

Grants Financial Guide. As a result, BJA is working with the six RISS Centers to recover 

grant funds associated with the RISS Program. 

In addition, in a ovember 6, 2019 letter to BJA the RDA stated that the RISS Directors 

convened in October 2019 and agreed to discontinue using grant funds for RDA 

dues. Accordingly the RDA bylaws were amended on November 14 2019 to prohibit 

the use of Federal grant funds or associated program income, from the RISS Centers, for 

RDA operations or membership dues (see Attachment 4). 

21 
e appreciate the opportunity to review and comment on the draft audit repmi. If you have any 

questions or require additional info1mation please contact Jeffe1y A. Haley, Deputy Director 

Audit and Review Division on (202) 616-2936. 

cc: Katharine T. Sullivan 

Principal Deputy Assistant Attorney General 

Maureen A. Helllleberg 

Deputy Assistant Attorney General 

for Operations and Management 

LeToya A. Johnson 

Senior Advisor 

Office of the Assistant Attorney General 

Jeffe1y A. Haley 

Deputy Director Audit and Review Division 

Office of Audit Assessment and Management 

Michael Costigan 

Acting '-· Director 

Bureau of Justice Assistance 

Tracey Trautman 

Principal Deputy Director 

Bureau of Justice Assistance 

22 
APPENDIX 5 

OFFICE OF THE INSPECTOR GENERAL ANALYSIS AND 

SUMMARY OF ACTIONS NECESSARY TO CLOSE THE REPORT 

The OIG provided a draft of this audit report to OJP and MAGLOCLEN. 

MAGLOCLEN’s response is incorporated in Appendix 3 and OJP’s response is 

incorporated in Appendix 4 of this final report. In response to our draft audit 

report, OJP agreed with our recommendations, and as a result, the status of the 

audit report is resolved. MAGLOCLEN concurred with recommendations 1 through 4 

but did not concur with recommendations 5 and 6. The following provides the OIG 

analysis of the responses and summary of actions necessary to close the report. 

Recommendation for OJP: 

1. Remedy the $4,196 in unallowable expenses related to confidential 

funds paid for ineligible services. 

Resolved. OJP agreed with our recommendation and stated in its response 

that it will review the $4,196 in questioned costs related to confidential funds 

paid for ineligible services and will work with MAGLOCLEN to remedy, as 

appropriate. 

MAGLOCLEN concurred with our finding related to $4,196 in questioned costs 

related to confidential funds paid for ineligible services. In its response, 

MAGLOCLEN stated that in retrospect, confidential funds should not have 

been used for extracting and analyzing evidence from cellular telephones as 

the expenditures did not meet the strict definition of either a purchase of 

evidence or purchase of service as outlined in the DOJ Grants Financial 

Guide. 

This recommendation can be closed when we receive documentation that OJP 

has remedied the $4,196 in unallowable questioned costs. 

2. Ensure that MAGLOCLEN updates its policies and procedures to 

ensure the appropriate types of expenditures for confidential funds 

are clearly defined. 

Closed. OJP agreed with the recommendation and stated in its response 

that MAGLOCLEN provided a copy of written policies and procedures, 

developed and implemented, to ensure that the types of expenditures for 

confidential funds are clearly defined. In addition, MAGLOCLEN provided 

documentation to support the procedures were distributed to staff 

responsible for managing federal funds. OJP requested closure of this 

recommendation because it believes the procedures adequately address this 

recommendation. 

MAGLOCLEN concurred with our finding and stated in its response that its 

management modified its internal policy related to the expenditure of 

23 
 

confidential funds on June 11, 2020, to include revised definitions of the 

allowable expenditure types that reflect the language used in the DOJ Grants 

Financial Guide to eliminate ambiguity. It also provided documentation 

reflecting the requirement that supervisory personnel, directly responsible for 

the management of MAGLOCLEN’s confidential funds program, review the 

revised policy and adhere to it in all future expenditures. 

We reviewed the documentation provided and determined that the associated 

actions adequately address our recommendation. As a result, this 

recommendation is closed. 

3. Ensure that MAGLOCLEN updates and implements policies and 

procedures to include all required confidential funds documentation 

in the disbursement files. 

Closed. OJP agreed with our recommendation and stated in its response 

that MAGLOCLEN provided a copy of written policies and procedures, 

developed and implemented, to ensure that all required confidential fund 

documentation is included in the disbursement files. In addition, 

MAGLOCLEN provided documentation to support that the procedures were 

distributed to staff responsible for managing federal funds. OJP requested 

closure of this recommendation because it believes the procedures 

adequately address this recommendation. 

MAGLOCLEN concurred with our finding and stated in its response that its 

Confidential Funds Policy was modified and implemented on June 11, 2020, 

to include a specific requirement that all supporting documentation, related 

to expenditures, be kept in the disbursement file. Additionally, its 

management agrees to adhere to its existing policy requiring monthly audits 

of open confidential fund disbursement files to ensure receipts and other 

required documentation are properly archived. 

We reviewed the documentation and determined that these actions 

adequately address our recommendation. As a result, this recommendation 

is closed. 

4. Ensure that MAGLOCLEN updates and implements the procurement 

policies and procedures to be in compliance with the DOJ Grants 

Financial Guide and 2 C.F.R. §200.320. 

Closed. OJP agreed with our recommendation and stated in its response 

that MAGLOCLEN provided a copy of revised procurement policies and 

procedures that ensure compliance with the DOJ Grants Financial Guide and 

2 C.F.R. §200.320. In addition, MAGLOCLEN provided documentation 

demonstrating that the procedures were distributed to staff responsible for 

managing federal funds. OJP requested closure of this recommendation 

because it believes that MAGLOCLEN has demonstrated that the procedures 

adequately address this recommendation. 

24 
 

MAGLOCLEN concurred with our finding and stated in its response that its 

updated and implemented accounting policies and procedures comply with 

the DOJ Grants Financial Guide and 2 C.F.R. §200.320. Specifically, changes 

were made to the applicable procurement guidelines including: (1) additional 

requirements to maintain detailed records in the procurement files; (2) new 

procedures to ensure proper vetting of potential contractors; and (3) 

additional requirements for awarding sole source contracts. In addition to 

these modifications, MAGLOCLEN agreed to adhere to its existing policy 

requiring the Business Manager to prepare and document cost price analysis 

when more than one vendor is available to meet the terms of a contract. 

We reviewed the documentation provided and determined that the before 

stated actions adequately address our recommendation. As a result, this 

recommendation is closed. 

5. Remedy the $2,000 unallowable other direct costs for dues paid to 

the RISS Directors Association. 

Resolved. OJP agreed with our recommendation and stated in its response 

that, during its examination of open awards under the Regional Information 

Sharing Systems (RISS) Program, OJP’s Bureau of Justice Assistance (BJA) 

determined that the grant funds that the six RISS Centers paid to the RISS 

Directors Association (RDA), including the $2,000 mentioned above, were 

expended on a number of unallowable items. BJA is working with the six 

RISS Centers to recover grant funds associated with these expenditures. In 

addition, in a November 6, 2019, letter to BJA, the RDA stated that the RISS 

Directors convened in October 2019 and agreed to discontinue using grant 

funds for RDA dues. The RDA by-laws were amended on 

November 14, 2019, to prohibit the use of Federal grant funds, or associated 

program income from the RISS Centers, for RDA operations or membership 

dues. 

MAGLOCLEN did not concur with our finding and stated in its response that 

prior to the grant awards that are the subject of this audit, MAGLOCLEN 

submitted a budget for approval that included a category entitled 

“Membership Dues,” which was subsequently approved. After the award, 

numerous professional membership dues were paid for MAGLOCLEN staff 

members, including the dues for the RDA in the amount of $2,000. However, 

MAGLOCLEN acknowledged there was not a separate line item in the 

approved budget specifically for the RDA dues. 

We disagree with MAGLOCLEN’s position because the payments to the RDA 

were neither included in the grant budget in the appropriate category, nor 

adequately disclosed. We consider the payments to the RDA, in effect, 

payments to a subrecipient that require MAGLOCLEN to maintain close 

oversight of RDA spending of grant funding. As OJP indicated in its response, 

the RDA did not adequately track funding by grant award number and 

expended grant funding for unallowable items. 

25 
This recommendation can be closed when we receive documentation that OJP 

has remedied the $2,000 in unallowable questioned costs. 

6. Remedy the $2,000 in unsupported questioned costs for dues paid to 

the RISS Directors Association. 

Resolved. OJP agreed with our recommendation and stated in its response 

that, during its examination of open awards under the RISS Program, BJA 

determined that the grant funds that the six RISS Centers paid to the RISS 

Directors Association (RDA), including the $2,000 mentioned above, were not 

properly tracked by award number. BJA is working with the six RISS Centers 

to recover grant funds associated with these expenditures. In addition, in a 

November 6, 2019, letter to BJA, RDA stated that RISS Directors convened in 

October 2019 and agreed to discontinue the use of grant funds for RDA dues. 

The RDA by-laws were amended on November 14, 2019, to prohibit the use 

of Federal grant funds, or associated program income, from the RISS Centers 

for RDA operations or membership dues. 

MAGLOCLEN indicated that it did not concur with this recommendation but 

did not support its disagreement in its response to the draft audit report. 

However, it also stated that it will not pay dues to the RDA in the future and 

will make necessary adjustments and comply with all required directives to 

successfully resolve the findings associated with this audit. 

This recommendation can be closed when we receive documentation that the 

OJP has remedied the $2,000 in unsupported questioned costs. 

26