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Treasury Forfeiture Fund

ACCOUNTABILITY REPORT 

Fiscal Year 2018

DEPARTMENT OF THE TREASURY 

WASHINGTON, D.C. 

 Member of the American Institute of Certified Public Accountants

 

Certified Public Accountants 

& Consultants 

 
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Message from the Director

I am pleased to present the fiscal year (FY) 2018 Accountability Report for the Treasury Forfeiture Fund (the 

Fund). While highlighting the Fund’s financial and operational performance over the past year, this report also 

focuses on some of the significant investigative achievements of our participating law enforcement agencies this 

year. FY 2018 was another challenging year with a permanent rescission of $1.1 billion as part of the 

Consolidated Appropriations Act of 2018 (P.L. 115-141). Additionally, $150 million was sequestered as part of 

the government-wide sequestration order. In terms of overall revenue, FY 2018 was another highly successful 

year for the law enforcement bureaus participating in the Treasury Forfeiture Fund, with earned revenue of $1.3 

billion deposited to the Fund. 

The continued high-impact performance of the Fund reflects the ongoing hard work of our law enforcement 

bureaus as well as Fund management’s emphasis on major case initiatives, asset forfeiture program training, and 

a focused approach regarding our performance measure, which gauges revenue from high-impact cases. The 

mission of the Fund is to affirmatively influence the consistent and strategic use of asset forfeiture by our law 

enforcement bureaus to disrupt and dismantle criminal enterprises. It is our view that the greatest damage to 

criminal enterprises can be achieved through large forfeitures; hence we have set a target level of 80 percent of 

our forfeitures to be high-impact, i.e., cash forfeitures equal to or greater than $100,000. This target level is up 

from 75 percent set for FY 2010 and prior years. For FY 2018, our member bureaus exceeded the target with a 

performance level of 94 percent. 

In FY 2018, we continued prioritizing the strategic use of forfeited funds to enhance our participating agencies’ 

infrastructure and capabilities while supporting high-impact financial investigations. These capabilities are 

particularly critical for highly complex Third Party Money laundering (3PML) investigations aimed at 

dismantling the financial networks of major criminal enterprises. In union with the 3PML initiative, the Fund 

hosted a multi-agency seminar on 3PML issues in Charlotte, NC. The seminar specifically highlighted the 

importance of the partnership between law enforcement agencies and financial institutions in combating money 

laundering, and it featured a number of speakers representing major banks’ Anti-Money laundering units. The 

topics also included investigations targeting non-compliant financial institutions, TFF-funded resources 

available to support our member agencies’ 3PML cases, and recent investigative and prosecutorial successes in 

this investigative area. 

This fiscal year, the Fund was able to provide $47.1 million in Strategic Support (SS) funding to its member 

agencies for their priority initiatives. This funding enabled Treasury Forfeiture Fund agencies to advance their 

operational capabilities to include new cutting edge technology, IT systems, and big data analysis tools in order 

to respond in real time to emerging criminal threats. 

The Treasury Forfeiture Fund continues in its capacity as a successful multi-Departmental Fund representing 

the interests of law enforcement components of the Departments of the Treasury and Homeland Security. 

Member bureaus include the Internal Revenue Service’s Criminal Investigation (IRS-CI), the U.S. Secret Service 

(USSS), Immigration and Customs Enforcement (ICE), and Customs and Border Protection (CBP). The U.S. 

Coast Guard (USCG) continues its close working relationship with the legacy Customs bureaus. We look 

forward to another successful year in FY 2019. 

 

 

John Farley, Director 

 Treasury Executive Office for Asset Forfeiture 

 U.S. Department of the Treasury
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Table of Contents 

Section I: Overview 

Profile of the Treasury Forfeiture Fund ...............................................................................1 

Strategic Mission and Vision ...............................................................................................1 

Case Highlights ....................................................................................................................2 

Program and Fund Highlights ..............................................................................................9 

Program Performance ........................................................................................................10

Financial Statement Highlights ..........................................................................................12

Section II: Independent Auditor’s Reports

Independent Auditor’s Report on Financial Statements ....................................................16 

Independent Auditor’s Report on Internal Control over Financial Reporting ...................19

Independent Auditor’s Report on Compliance and Other Matters ....................................21

Section III: Financial Statements and Notes 

Financial Statements: 

Balance Sheets .............................................................................................................23

Statements of Net Cost.................................................................................................24

Statements of Changes in Net Position ........................................................................25

Statements of Budgetary Resources.............................................................................26

Notes to Financial Statements ......................................................................................27

Section IV: 

Required Supplemental Information ........................................................................................45

Section V: 

Other Accompanying Information ...........................................................................................47
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SECTION I - OVERVIEW 1 

Treasury Forfeiture Fund 

FY 2018 Management Overview 

Profile of the Treasury Forfeiture Fund 

The Treasury Forfeiture Fund (the Fund) is the receipt account for the deposit of non-tax forfeitures made 

pursuant to laws enforced or administered by law enforcement bureaus that participate in the Treasury 

Forfeiture Fund. The Fund was established in October of 1992 as the successor to the Forfeiture Fund of 

the United States Customs Service. The Fund is a “special receipt account.” This means the Fund can 

provide money to other federal entities toward the accomplishment of a specific objective for which the 

recipient bureaus are authorized to spend money and toward other authorized expenses. The use of Fund 

resources is governed by law, policy and precedent as interpreted and implemented by the Department of 

the Treasury, which manages the Fund. A key objective for management is the long-term viability of the 

Fund to ensure that there are ongoing resources to support member-bureau seizure and forfeiture activities 

well into the future. The emphasis of Fund management is on high impact cases that can do the most 

damage to criminal infrastructure. 

The Treasury Forfeiture Fund continues in its capacity as a multi-Departmental Fund, representing the 

interests of law enforcement components of the Departments of Treasury and Homeland Security. Our 

member bureaus include the Internal Revenue Service’s Criminal Investigation (IRS- CI), the U.S. Secret 

Service, Immigration and Customs Enforcement (ICE), and Customs and Border Protection (CBP). The 

U.S. Coast Guard continues its close working relationship with the legacy Customs bureaus and functions 

in a member-bureau capacity. 

The Treasury Executive Office for Asset Forfeiture (TEOAF), which provides management oversight of 

the Fund, falls under the auspices of the Under Secretary for Terrorism and Financial Intelligence. 

TEOAF’s organizational structure includes a Director, Deputy Director, Legal Counsel, and three Assistant 

Directors for; Financial Management, Policy & Administration, and Strategic Planning. Functional 

responsibilities are delegated to various team leaders. TEOAF is located in Washington, D.C., and currently 

has 28 authorized full time equivalent positions. 

Strategic Mission 

The mission of the Treasury Forfeiture Fund is to affirmatively influence the consistent and strategic use of 

asset forfeiture by law enforcement bureaus that participate in the Treasury Forfeiture Fund to disrupt and 

dismantle criminal enterprises. 

Strategic Vision 

Fund management works to focus the asset forfeiture program on strategic cases and investigations that 

result in high-impact forfeitures. Management believes this approach incurs the greatest damage to criminal 

organizations while accomplishing the ultimate objective – to disrupt and dismantle criminal enterprises. 
2 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Case Highlights 

The following case highlights are intended to give the reader an idea of the types of investigative cases 

worked by the Fund’s law enforcement bureaus during FY 2018 that resulted in the seizure and forfeiture 

of assets. Such cases as those profiled below are consistent with the Strategic Mission and Vision of the 

Treasury Forfeiture Program, which is to use high-impact asset forfeiture in investigative cases to disrupt 

and dismantle criminal enterprises. 

Immigration and Customs Enforcement (ICE) 

Department of Homeland Security 

and 

Internal Revenue Service, Criminal Investigation (IRS-CI) 

Department of the Treasury 

Rabobank Forfeits $318,701,259 as Part of Guilty Plea 

Information included in the following forfeiture article is attributed to: Information provided by the HSI-ICE and IRS-CI Liaisons 

to TEOAF; U.S. Attorney’s February 7, 2018 press release entitled, “Rabobank NA Pleads Guilty, Agrees to Pay Over $360 

Million”; TEOAF internal records. 

On February 7, 2018, Rabobank National Association (Rabobank) pleaded guilty to a felony conspiracy 

charge for impairing, impeding and obstructing its primary regulator, the Department of the Treasury’s 

Office of the Comptroller of the Currency (the OCC) by concealing deficiencies in its anti-money 

laundering (AML) program and for obstructing the OCC’s examination of Rabobank. Rabobank agreed to 

forfeit $368,701,259 as a result of allowing illicit funds to be processed through the bank without adequate 

Bank Secrecy Act (BSA) or AML review. Of that sum, $318,701,259 was forfeited to the Treasury 

Forfeiture Fund. The OCC imposed a $50,000,000 civil money penalty, which was credited towards the 

forfeiture agreement. 

Rabobank pleaded guilty to conspiracy to defraud the United States and to obstruct an examination of a 

financial institution. In pleading guilty, Rabobank admitted to conspiring with several former executives to 

defraud the United States by unlawfully impeding the OCC’s ability to regulate the bank, and to obstruct 

an examination by the OCC of its operations throughout California, including its Calexico and Tecate bank 

branches. Rabobank admitted that its deficient AML program allowed hundreds of millions of dollars in 

untraceable cash, sourced from Mexico and elsewhere, to be deposited into its rural bank branches in 

Imperial County, and transferred via wire transfers, checks, and cash transactions, without proper 

notification to federal regulators as required by law. Knowing these failures, during the OCC’s 2012 

examination of Rabobank’s BSA/AML compliance program, Rabobank executives actively sought to hide 

and minimize the deficiencies in its AML program in an effort to deceive the regulators as to its true state 

in hopes of avoiding regulatory sanctions that had previously been imposed on Rabobank in 2006 and 2008 

for nearly identical failures. 
SECTION I - OVERVIEW 3 

According to court documents, Rabobank received regular alerts of transactions by “High-Risk” customers, 

or through accounts deemed to be “High-Risk,” and that had been the subject of prior SARs filed by 

Rabobank. These High-Risk customers and accounts included those controlled and managed by Mexican 

businesses, nonresident aliens, and U.S.-based accountholders who transacted hundreds of millions of 

dollars in untraceable cash, sourced from Mexico and elsewhere, into and through Rabobank accounts. 

According to court documents, Rabobank also created and implemented policies and procedures to prevent 

adequate investigations into these suspicious transactions, customers, and accounts. Among those policies 

and procedures was Rabobank’s “Verified List” – a policy that effectively resulted in Rabobank executing 

an end-run around the BSA/AML and SAR requirements. In particular, Rabobank instructed its employees 

that if a customer was on the “Verified List,” no further review of that customer’s transactions was necessary 

-- even if the transactions generated an internal alert, or the customer’s activity had changed dramatically 

from when it was “verified.” Rabobank’s BSA/AML staff were further instructed to aggressively increase 

the number of bank accounts on the Verified List, as evidenced by the fact that in 2009, Rabobank had less 

than 10 “verified” customers, but by 2012, as a result of its defective BSA/AML policies and procedures, 

it had more than 1,000 “verified” customers.

Additionally, Rabobank admitted failing to monitor and conduct adequate investigations into these 

transactions and submit SARs to the Financial Crimes Enforcement Network (FinCEN), as required by the 

BSA. Rabobank’s border branches, including those located in Calexico and Tecate in Imperial County, 

California, were heavily dependent on cash deposits from Mexico. Rabobank knew that millions of dollars 

in cash deposits at these branches were likely tied to illicit conduct. In particular, the Calexico branch, 

located about two blocks from the U.S.-Mexico border, was the “highest performing” branch in the Imperial 

Valley region due to the cash deposits from Mexico. Throughout the relevant time period, Rabobank 

continued this practice of soliciting cash-intensive customers from Mexico and elsewhere, all the while 

employing the foregoing inadequate BSA/AML policies and procedures to address the obvious, known 

“High Risks” associated with these accounts, transactions, and transactors.

When the OCC began conducting its periodic examination of Rabobank in 2012, Rabobank, acting through 

three of its executives, agreed to, among other things, knowingly obstruct the OCC’s examination. 

Rabobank responded to the OCC’s February 2013 initial report of examination with false and misleading 

information about the state of Rabobank’s BSA/AML program. Rabobank also made false and misleading 

statements to the OCC regarding the existence of reports developed by a third-party consultant, which 

detailed the deficiencies and resulting ineffectiveness of Rabobank’s BSA/AML program. 

To further conceal the inadequate nature of its BSA/AML program and to avoid “others contradicting our 

findings” and statements to the OCC, Rabobank demoted or terminated two RNA employees who were 

raising questions about the adequacy of Rabobank’s BSA/AML program.

The investigation was conducted by HSI, IRS-CI, and the Financial Investigations and Border Crimes Task 

Force (FIBC), a multiagency Task Force based in San Diego and Imperial County. The investigation was 

funded by the Treasury Executive Office of Asset Forfeiture (TEOAF) and occurred parallel to regulatory 

investigations by the OCC, Office of General Counsel, and FinCEN’s Enforcement Division. 
4 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Internal Revenue Service, Criminal Investigation (IRS-CI) 

Department of the Treasury 

New York Man Sentenced to 87 Months and Forfeits $1,624,172 for Multi-State Biodiesel Fraud 

Scheme 

Information included in the following article is attributed to US Attorney’s February 6, 2018 press release entitled, “New York 

Man Sentenced to 87 Months for Multi-State Biodiesel Fraud Scheme,” TEOAF records, and from information provided by the 

IRS-CI Liaison to TEOAF.

Andre Bernard, of Mount Kisco, New York, pleaded guilty for his participation in a multi-state scheme to 

defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel credits and fraudulently 

claiming tax credits. 

According to his plea, Bernard conspired with Thomas Davanzo, of Estero, Florida, Robert Fedyna, of 

Naples, Florida, and Scott Johnson of Pasco, Washington in a scheme to defraud biodiesel credit (known 

as “RIN” credits) buyers and U.S. taxpayers. The conspiracy involved having Gen-X Energy Group (GenX and its subsidiary, Southern Resources and Commodities (SRC), generate fraudulent RINs and tax credits 

multiple times on the same material. 

Bernard and his co-conspirators operated several shell companies that claimed to purchase and sell the 

renewable fuel. The co-conspirators also cycled the funds through these shell companies’ bank accounts to 

perpetuate the fraud scheme and conceal its proceeds. 

From March 2013 to March 2014, the co-conspirators generated at least 60 million RINs that were based 

on fuel that was either never produced or was merely re-processed at the Gen-X or SRC facilities. The coconspirators received at least $42 million from the sale of these fraudulent RINs to third parties. In addition, 

Gen-X received approximately $4,360,724.50 in false tax credits for this fuel. 

U.S. District Judge Sherri Polster Chappell sentenced Andre Bernard to seven years and three months in 

federal prison for his role in a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers by 

fraudulently selling biodiesel credits and fraudulently claiming tax credits. As part of his sentence, the Court 

also entered a money judgment in the amount of $10,500,497.92, the proceeds Bernard personally received 

as a result of the charged criminal conduct. 

On November 29, 2017, a Default Judgment was issued for bank accounts previously seized worth 

$1,624,172.53. Those funds were received and processed by the TFF on January 10, 2018. 

Internal Revenue Service Criminal Investigations (IRS-CI) was joined in this case by the U.S. Secret 

Service and the Environmental Protection Agency, Criminal Investigation Division. 
SECTION I - OVERVIEW 5 

United States Secret Service (USSS) 

Department of Homeland Security

Man who defrauded Hmong Community is Sentenced to 87 Months in Prison, Forfeits $1,612,451 

Information included in the following forfeiture article is attributed to: October 11, 2017 DOJ press release entitled, “Seng Xiong 

Sentenced To 87 Months In Prison For Defrauding Members Of The Hmong Community”; information provided by the USSS 

Liaison to TEOAF; TEOAF internal records. 

In September 2015, the St. Paul Police Department contacted the U.S. Secret Service Minneapolis Field 

Office requesting assistance regarding the investigation of a large scale nationwide wire fraud scheme 

targeting an elderly Southeast Asia ethnic group known as the Hmong people living in approximately 18 

known states in the U.S. The primary criminal schemes date back to at least October 2014 and involved 

Seng Xiong purporting to be leaders of an organization called the “Hmong Tebchaws Organization” or 

“International Fund for Hmong Development.” 

Through a series of YouTube videos and nationwide conference calls, Xiong promoted his scheme in the 

Hmong language to solicit elderly members of the Hmong community to invest money in the range of 

$3,000 - $5,000 or more in monthly payments to bank accounts in the name of Seng Xiong. The suspects 

promised victims that they would use the money to issue land rights of up to 10 acres in a future proposed 

Hmong Country they claim to be developing with the assistance of the United Nations (UN) and the 

approval of the White House. Additional promises for the initial investment of $3,000 - $5,000 included 

receiving a house, healthcare, free education, as well as possible positions in the future cabinet of the 

government and other benefits. 

The case went to trial, and Seng Xiong was convicted of wire fraud and mail fraud, and was sentenced to 

87 months in prison. On December 20, 2017, a final order of forfeiture was signed in the District of 

Minnesota for $1,612,451.84. 

Coast Guard 

Department of Homeland Security 

Coast Guard Cutter Offloads Over 18 Tons of Cocaine 

Information included in the following forfeiture article is attributed to: United States Coast Guard (USCG) news release dated 

March 20, 2018 entitled: “Coast Guard offloads 36,000 lbs of cocaine seized from Eastern Pacific Ocean,” and from information 

provided by the Coast Guard Liaison to TEOAF.

On March 20, 2018, the U.S. Coast Guard offloaded approximately 36,000 pounds of cocaine, with an 

estimated value of $500 million. The seized narcotics were the result of 17 interdictions of suspected 

smuggling vessels off the coasts of Central and South America between early February and early March of 

2018.

As part of its Western Hemisphere Strategy, the Coast Guard has increased its presence in the Eastern 

Pacific Ocean and Caribbean Basin. During interdictions in international waters, a suspect vessel is initially 

located and tracked by U.S. and allied, military or law enforcement personnel. Coast Guard members 

conduct the interdictions, including the actual boarding.
6 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

In addition to Coast Guard crews, numerous U.S. agencies from the Departments of Homeland Security, 

Defense and Justice along with allied and international partner agencies are involved in the effort to combat 

transnational organized crime. 

The bulk offload consisted of seized drugs from 17 interdictions by crews aboard the following Coast Guard 

cutters: 

• Coast Guard Cutter Venturous, one case, estimated 2,877 pounds seized. 

• Coast Guard Cutter Bear, three cases, estimated 9,016 pounds seized. 

• Coast Guard Cutter Diligence, three cases, estimated 3902 pounds seized. 

• Coast Guard Cutter Bertholf, four cases, estimated 5,103 pounds seized. 

• Coast Guard Cutter Harriet Lane, six cases, estimated 15,434 pounds seized. 

“This offload by the Bertholf represents the great work being conducted in the Eastern Pacific combating 

the transnational organized crime groups, behind the drug trade which spreads instability, fear and harm to 

people, communities and entire nations,” said Rear Adm. Todd Sokalzuk, the 11th Coast Guard District 

commander, who oversees the law enforcement phase of counter-smuggling operations in the Eastern 

Pacific region. “Thanks in part to the hard work and dedication of the brave crew men and women of the 

Bertholf, and other ships on patrol, we’re seizing record amounts of cocaine for the third year in a row.”

Figure 1: Pallets containing approximately 18 tons of seized cocaine.
SECTION I - OVERVIEW 7 

Coast Guard unloads $721 million in cocaine seized since November in San Diego 

Information included in the following forfeiture article is attributed to: United States Coast Guard (USCG) news release dated 

January 25, 2018 entitled: “Coast Guard offloads $721 million worth of cocaine in San Diego,” and from information provided 

by the Coast Guard Liaison to TEOAF. 

In San Diego on January 25, 2018, the U.S. Coast Guard Cutter Stratton offloaded more than 47,000 pounds 

of cocaine worth over $721 million. U.S. and Canadian forces operating in international waters off the coast 

of Central and South America seized the cocaine in 23 separate interdictions in the eastern Pacific Ocean. 

Senior U.S. and Canadian officials discussed new tactics used by transnational organized crime groups and 

to highlight international cooperation in combating the threat posed by these dangerous groups. U.S. Coast 

Guard personnel currently assigned to Cutter Stratton turned the narcotics over to federal agents for 

investigation, prosecution and, ultimately, destruction. 

“The threat of transnational organized crime is a danger no one ship, agency, country or person can address 

alone,” said Vice Adm. Fred Midgette, commander, U.S. Coast Guard Pacific Area. “We stand alongside 

our interagency and international partners resolved in a shared purpose to protect those harmed by these 

dangerous drugs and bring the criminals who smuggle them to justice.”

In a three-day period, the crew of Cutter Stratton stopped two low profile go-fast boats and seized more 

than 5,800 pounds of cocaine worth almost $78 million. In a period of less than five months, the Coast 

Guard stopped five suspected drug smuggling boats and seized a total of over 12,000 pounds of cocaine 

worth $165 million. 

Other interdiction seizures from the offload included: 

• Coast Guard Cutter Steadfast, five cases, 12,000 pounds 

• Coast Guard Cutter Mohawk, five cases, 6,700 pounds 

• Coast Guard Cutter Northland, five cases, 10,300 pounds 

• Coast Guard Cutter Thetis, two cases, 3,100 pounds 

• Coast Guard Cutter Stratton, five cases, 12,000 pounds 

• HMCS Nanaimo, one case, 3,300 pounds 

Fifteen of the seizures represented in the offload were taken from go-fast boats, and an additional four were 

from “low-profile go-fast boats.” Low-profile go-fast boats, a variant design from traditional go-fast boats, 

ride low in the water to reduce their radar signature, have multiple outboard engines to allow them to travel 

at high speeds and are painted to blend in with the water to avoid detection from military and law 

enforcement authorities operating in the region. 
8 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Figure 2: Seized pallets of cocaine on board the Stratton.

The Stratton was equipped with at least one unmanned aerial vehicle known as a ScanEagle that can be 

used on long patrol flights and fitted with infrared and telescope cameras to scan the ocean for vessels. 

"The drones are a game changer for us because they can stay up so long and they have a very wide swath 

of the water they can look at," Midgette said. "When you are trying to find one of these pangas or lowprofile vessels, it is hard to spot them on the water. The radars don't pick them up well if they are painted 

correctly....They absolutely have increased our effectiveness." 
SECTION I - OVERVIEW 9 

Program and Fund Highlights 

The Treasury Forfeiture Fund is a “special receipt account.” Such accounts represent federal fund 

collections earmarked by law for a specific purpose. The enabling legislation for the Treasury Forfeiture 

Fund (31 U.S.C. § 9705, Public Law 114-22) defines those purposes for which Treasury forfeiture revenue 

may be used. Once property or cash is seized, there is a forfeiture process. Upon forfeiture, seized currency, 

initially deposited into a suspense account, or holding account, is transferred to the Fund as forfeited 

revenue. Once forfeited, physical properties are sold and the proceeds are deposited into the Fund as 

forfeited revenue. It is this forfeiture revenue that comprises the budget authority for meeting expenses of 

running Treasury’s forfeiture program.

Expenses of the Fund are set in a relative priority so that unavoidable or “mandatory” costs are met first as 

a matter of policy. Expenses may not exceed revenue in the Fund. The Fund has several different spending 

authorities. Each of them is described below. 

Mandatory Authority 

The mandatory authority items are generally used to meet “business expenses” of the Fund, including 

expenses of storing and maintaining seized and forfeited assets, valid liens and mortgages, investigative 

expenses incurred in pursuing a seizure, information and inventory systems, and certain costs of local police 

agencies incurred in joint law enforcement operations. Following forfeiture, equitable shares are paid to 

state and local law enforcement agencies that contributed to the seizure activity at a level proportionate to 

their involvement. 

It is a strategic goal of the Fund to emphasize and monitor high impact forfeitures. To make significant 

forfeitures requires longer, more in-depth investigations. To this end, Fund management emphasizes the 

use of mandatory funding authorities that fuel large case initiatives. These authorities include the Purchase 

of Evidence and Information, expenses associated with Joint Operations, Investigative Expenses Leading 

to Seizure, and Asset Identification and Removal Groups. In recent years, funding provided to computer 

forensic investigative tools has yielded high impact results. 

Secretary’s Enforcement Fund

The Secretary’s Enforcement Fund (SEF) is derived from equitable shares received from the Justice 

Department’s Forfeiture Fund for work done by law enforcement bureaus participating in the Treasury 

Forfeiture Fund leading to Justice forfeitures. SEF revenue is available for federal law enforcement 

purposes of any Treasury law enforcement organization or law enforcement bureau that participates in the 

Treasury Forfeiture Fund. In FY 2018, the Fund expensed just over $37 million in SEF authority as 

compared to $5.9 million in FY 2017, an increase of $31.1 million. 

Strategic Support 

Strategic Support (formerly Super Surplus) represents the remaining unobligated balance after an amount 

is reserved for Fund operations in the next fiscal year. Strategic Support can be used for any federal law 

enforcement purpose. In FY 2018, the fund expensed 47.1 million in Strategic Support authority as 

compared to $39.5 million in FY 2017. 
10 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Program Performance 

Strategic View 

Fund management continues to focus on strategic cases and investigations that result in high-impact 

forfeitures. We believe this approach affects the greatest damage to criminal organizations while 

accomplishing the ultimate objective – to disrupt and dismantle criminal activity. Generally, significant 

forfeitures require longer, more in-depth investigations. To this end, Fund management emphasizes the use 

of mandatory funding authorities that fuel large case initiatives including Purchase of Evidence and 

Information, expenses associated with Joint Operations, Investigative Expenses Leading to Seizure, Asset 

Identification and Removal teams and state-of-the-art Computer Forensics capability. 

FY 2018 was a successful revenue year by our member bureaus and was another successful year in equitable 

share deposits received from the Department of Justice (DOJ) forfeiture fund for forfeitures in which one 

or more of our member bureaus played a role. Equitable shares received totaled $49.6 million in FY 2018 

as compared to $14.2 million in FY 2017. In addition, the Fund continues to support record levels of sharing 

of federal forfeitures with the state and local and foreign governments that contributed to the successful 

seizure and forfeiture activity of the Fund. The Fund expensed $138.5 million for state and local and foreign 

equitable sharing expenses in FY 2018 as compared to $67.3 million in FY 2017. These are important 

resources afforded by policy of the Treasury Forfeiture Fund to protect and preserve the valuable working 

relationships between our federal law enforcement bureaus and the critically important state, local and 

foreign law enforcement agencies that work with them in an investigative capacity day-in and day-out. 

Strategic Mission and Goal 

The mission of the Treasury Forfeiture Fund is to affirmatively influence the consistent and strategic use of 

asset forfeiture by law enforcement bureaus to disrupt and dismantle criminal enterprises. The goal of the 

Treasury Forfeiture Fund is to support the Department of the Treasury’s national asset forfeiture program 

in a manner that results in federal law enforcement’s continued and effective use of asset forfeiture as a 

high-impact law enforcement sanction to disrupt and dismantle criminal activity. To achieve our mission 

and goal, the program must be administered in a fiscally responsible manner that seeks to minimize the 

administrative costs incurred, thereby maximizing the benefits for law enforcement and the society it 

protects. 

Multi-Departmental Fund 

The Treasury Forfeiture Fund continued in its capacity as a multi-Departmental Fund in FY 2018, 

representing the interests of law enforcement components of the Departments of the Treasury and 

Homeland Security. FY 2018 posed continued management challenges including oversight of significant 

general property contract expenses associated with an increasingly complex forfeiture program. In 

addition, commensurate with the successful revenue year, there were significant expenses incurred by the 

bureaus to run their programs. In the midst of this period of growth and change, the Fund’s family of law 

enforcement bureaus continued their hard work of federal law enforcement and the application of asset 

forfeiture as a sanction to bring criminals to justice. 
SECTION I - OVERVIEW 11

FY 2018 was another robust year with regular revenue of $1.3 billion from all sources, as compared with 

FY 2017 revenue of $507.7 million. As we enter fiscal year 2019, the Fund remains focused on support for 

strategic investigative initiatives that will have the greatest impact on national and international criminal 

enterprise including valuable training and investigative expense funding which emphasizes high-impact 

cases. 

Performance Measure 

In FY 2018, the Fund measured performance through the use of the following performance measure: 

Percent of forfeited cash proceeds resulting from high-impact cases. This measures the percentage of 

forfeited cash proceeds resulting from high-impact cases (those with currency seizures in excess of 

$100,000). Focusing on strategic cases and investigations which result in high-impact seizures will affect 

the greatest damage to criminal organizations while accomplishing the ultimate objective – to disrupt and 

dismantle criminal activity. 

Results 

The Fund performance measure and result for FY 2018 is as follows: 

0BPerformance Measure 

1BFY 2017 

Actual 

2BFY 2018 

Target 

3BFY 2018 

Actual

4BPercent of forfeited cash proceeds resulting from 

high-impact cases 

5B8982% 6B80% 7B994%

A target of 75 percent high-impact cases was set for FY 2010 and prior years since inception of the 

performance measure in FY 2002. However, for FY 2011, the target was increased to 80 percent, reflecting 

member bureaus’ prior success in meeting the previous target. This is a fixed target for the Fund designed 

to afford our law enforcement bureaus the opportunity to undertake smaller seizure activity that is important 

to the overall federal law enforcement mission. The final percentage for FY 2018 was 94 percent, exceeding 

the new target set in 2011. This compares with our FY 2016 and FY 2017 performance of 89 percent and 

82 percent, respectively. 

The performance of our member bureaus is excellent and reflects Fund management’s longstanding 

emphasis on high-impact forfeiture strategies as well as the use of Fund authorities to assist member bureaus 

with larger cases that may take longer or require additional resources not otherwise available. This measure 

was put into effect beginning with FY 2002, and in all but 3 years, member bureaus met the target for highimpact forfeitures. 

This measure is calculated by dividing the total amount of forfeited cash proceeds from cases greater than 

$100,000 by the total amount of forfeited cash proceeds for all cases. 
12 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Financial Statement Highlights 

The following provides a brief explanation for each major section of the audited financial statements 

accompanying this report for the fiscal year ended September 30, 2018. 

These statements have been prepared to disclose the financial position of the Fund, its net costs, changes in 

net position, and budgetary resources, pursuant to the requirements of the Chief Financial Officers Act of 

1990 and the Government Management Reform Act of 1994 (GMRA). While the financial statements have 

been prepared from the books and records of the Fund in accordance with the formats prescribed by the 

Office of Management and Budget, the statements are different from the financial reports used to monitor 

and control budgetary resources that are prepared from the same books and records and are subsequently 

presented in federal budget documents. Further, the notes to the financial statements and the independent 

auditor’s opinion and reports on internal control over financial reporting, and compliance and other matters 

are also integral components to understanding fully the financial highlights of Fund operations described in 

this chapter. 

Statements: Changes in Net Position 

Follows are brief highlights from the Statements of Changes in Net Position for FY 2018 and 2017. 

Net Position – End of Year. For FY 2018, the Net Position for the Fund at the end of the year, an indicator 

of the future capability to support ongoing operations of the Fund, totaled $1.4 billion versus $2.2 billion 

at the end of FY 2017. Both years closed with a strong and viable net position with which to commence 

the next fiscal year’s operations.

Total Gross Non-Exchange Revenues. This line item on the Statements of Changes in Net Position is the 

best indicator of regular “business-type” income of the account on an annual basis. For FY 2018, the Fund 

closed with $1.3 billion in Gross Non-Exchange Revenues and a total of $507.7 million for FY 2017, 

reflecting two, highly successful revenue years for the Treasury Forfeiture Fund. 

Proceeds from Participating with other Federal Agencies. This line item on the Statements of Changes 

in Net Position indicates revenue earned from the participation of Treasury Forfeiture Fund law 

enforcement bureaus in the seizures leading to forfeiture of bureaus that participate in the Department of 

Justice Assets Forfeiture Fund or with the forfeiture fund of the U.S. Postal Service (Postal Service). 

As of the close of FY 2018, Treasury Forfeiture Fund bureaus earned a total of $49.6 million in revenue 

from participation in the seizures leading to forfeiture of the Justice and Postal Service forfeiture funds as 

compared to a total of $14.2 million during FY 2017. Fund management continues to work with the 

Department of Justice to identify delays and/or explain downward adjustments to percentages associated 

with equitable sharing payments owed to the Treasury Forfeiture Fund. This revenue affords Treasury 

management significant funding flexibilities for our participating agencies as the authority is broad and not 

confined to funding program costs; it can be used for any law enforcement purpose of our participating 

bureaus. The allocation of this type of revenue for FY 2017 and FY 2018 was restricted by the need to 

meet enacted budget rescissions, sequestrations, and permanent reductions. 

Net Cost of Operations. For FY 2018, the Net Cost of Operations totaled $239.4 million, up from $221.5 

million in FY 2017. 
SECTION I - OVERVIEW 13

Investment Interest Income. The Fund is authorized to invest cash balances in Treasury securities. As of 

September 30, 2018, investments totaled $2.6 billion as compared with $3.1 billion invested as of 

September 30, 2017. During FY 2018 investment income totaled $47.8 million, as compared to $19.1 

million in FY 2017. 

Equitable Sharing with Federal, State and Local Governments, and Foreign Countries. Each year, 

the Fund pays tens of millions of dollars to state and local law enforcement agencies, and foreign 

governments, for their participation in seizures that lead to forfeitures of the Treasury Forfeiture Fund. State 

and local law enforcement agencies can use these resources to augment their law enforcement budgets to 

fight crime in their jurisdictions. Without these funds, budgets of the local municipalities would be taxed 

to provide these important resources or the need would go unmet. During FY 2018, the Fund shared a total 

of $156.7 million with other federal, state and local law enforcement agencies, and another $627 thousand 

with foreign countries. This compares with $188.9 million shared with other federal, state and local law 

enforcement agencies during FY 2017 and $2.9 million and with foreign countries. 

Victim Restitution. During FY 2018, the Fund paid $524.8 million in restitution to victims as compared 

to $77.2 million in FY 2017.

Summary of Statements of Changes in Net Position. The Fund closed with a strong net position in FY 

2018. Management will continue to emphasize high-impact cases by participating law enforcement bureaus. 

The FY 2018 performance with forfeiture revenue earnings of $1.3 billion from all sources, while exceeding 

the new higher performance measure target rate of high-impact cases, is truly a credit to the dedicated law 

enforcement personnel of our participating law enforcement bureaus. 

Statements: Net Cost 

Costs of the Forfeiture Program – Intra-governmental. After revenue is applied toward policy mandates 

such as equitable sharing, shown in the Statements of Changes in Net Position as negative revenue or 

applied non-exchange revenue, the remaining financing supports the law enforcement activities of the Fund 

and pays for the storage of seized and forfeited property and sales associated with the disposition of forfeited 

property. 

On the Statements of Net Cost, the Net Cost of Operations totaled $239.4 million in FY 2018, up from 

$221.5 million in FY 2017. 

Intra-governmental. This cost category totaled $166.9 million in FY 2018, up from $154.8 million in FY 

2017. The amounts represent costs incurred by participating bureaus in running their respective forfeiture 

programs. 

National Seized Property Contracts and Other. One of the largest program costs of the Fund is the 

storage, maintenance and disposal of real and personal property. During FY 2018, general property was 

maintained by AECOM/URS. Real property was maintained by the CWS Asset Management & Sales 

Group, both contracts of the Department of the Treasury. In FY 2018, expenses of these contracts, which 

comprised over 99% of the total expenses for this line, including other contracts, totaled $57.0 million, up 

from $51.0 million expensed in FY 2017. 
14 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Statements: Budgetary Resources 

As of the end of FY 2018, the Fund has estimated future expenditures and commitments of $434.6 million 

(reductions) which may need to be paid in future years. These reductions relate to remissions, victim 

restitution and equitable sharing. These future obligations will be funded from the unobligated balance of 

$825.2 million as reported on the SF-133” Report on Budget Execution” for FY 2018. The unobligated 

balance less reductions would result in $390.6 million remaining at the end of FY 2018. 

Balance Sheet 

Assets, Liabilities and Net Position 

Total assets of the Fund decreased in FY 2018 to $3.4 billion, down from $4.0 billion in FY 2017, a decrease 

in asset value of 15 percent. If seized currency and other monetary assets, which are assets in the custody 

of the government but not yet owned by the government, are backed out of both figures, the adjusted total 

assets of the Fund decreased to $1.7 billion in FY 2018, down from $2.4 billion in FY 2017. During FY 

2018, total liabilities of the Fund were $2.0 billion, comparable to the $1.7 billion in FY 2017. If seized 

currency and other monetary assets, which are also shown as a liability because they are not yet owned by 

the government, are backed out of both figures, the adjusted total liabilities of the Fund increases to $260.1 

million in FY 2018, up from $190.8 million in FY 2017.

With decreasing asset amounts and increasing liabilities, the Cumulative Results of Operations, i.e., retained 

earnings, decreased at the end of FY 2018 to a total of $1.4 billion, down from $2.2 billion at the end of FY 

2017. 

Financial and Program Performance - What is needed and planned. OMB Circular A-136, Financial 

Reporting Requirements, requires that agencies include an explanation of what needs to be done and what 

is being planned to improve financial or program performance. In this regard, Fund management continues 

to work closely with member bureaus, through the financial planning process, to review revenue and 

expense projections during the operating year. 

Auditor’s Findings 

FY 2018 Audit. The Fund’s independent auditors have given the FY 2018 financial statements an 

Unmodified Opinion with no material weaknesses or significant deficiencies in internal control over 

financial reporting identified. The auditor’s report on compliance and other matters disclosed no instances 

of noncompliance or other matters that are required to be reported under Government Auditing Standards

or OMB Bulletin No. 19-01, Audit Requirements for Federal Financial Statements. 

Summary of Financial Statement Highlights 

Net Position. To summarize, Fund management concluded a highly productive FY 2018 “in the black,” 

with the necessary resources to commence the business of the asset forfeiture program for FY 2019. Even 

though there was a rescission of $1.1 billion and a sequestration of $150 million, Fund management was 

able to declare Strategic Support funding from FY 2018 operations, and will work to recognize the hard 

work of our participating agencies in the allocation of these resources. 
SECTION I - OVERVIEW 15

A Look Forward 

Fund management will continue to work with our large and diverse array of federal law enforcement 

bureaus as they undertake increasingly sophisticated methods and global efforts to secure the financial and 

commercial markets of the nation and the world given the interdependence of financial systems. Our 

bureaus support immigration enforcement that is designed to identify illegal smuggling to deter its impact 

on the nation’s financial infrastructure and to ensure that human smugglers do not harm unsuspecting 

victims keen on seeking a new if illegal start in the United States. Investigative initiatives intended to 

interrupt the financial support for terrorism remains a critical part of the work of federal law enforcement. 

Emphasis will continue to be placed on ever-evolving state-of-the-art investigative techniques, high-impact 

major case initiatives, and training to support these areas of emphasis. This has and will continue to be the 

key to the growing success and law enforcement reach of the Treasury Forfeiture Fund. 

Improper Payments Elimination and Recovery Act (IPERA) and Improper Payments Elimination 

and Recovery Improvement Act (IPERIA) Reporting Detail 

The Improper Payments Elimination and Recovery Act of 2010 (IPERA) requires agencies to review their 

programs and activities increasing efforts to recapture improper payments by intensifying and expanding 

payment recapture audits. All agencies are required to develop a method of reviewing all programs to 

identify those that are susceptible to significant erroneous payments. “Significant” means that an estimated 

error rate and a dollar amount exceed the threshold of 1.5 percent of program outlays and $10 million of 

total program or activity payments made during the fiscal year reported or $100 million regardless of the 

improper payment percentage of total program outlays. 

Currently the Fund conducts an internal review and analysis for its major contracts. The contract activity is 

high dollar value for each payment with limited volume. This activity has low risk, but based on the high 

dollar value requiring minimal resources, the Fund will continue to conduct these internal contract audits. 

Based on this analysis, the Fund has determined that recapture audits are not necessary and will not be 

implementing them at this time. 

The Improper Payments Elimination and Recovery Improvement Act of 2012 requires agencies to 

incorporate the Do Not Pay Initiative (DNP) to further reduce improper payments. The Fund uses the Death 

Master File and the System of Award Management as part of a continuous monitoring process and post 

payment review. During FY 2018 and 2017, the Fund reviewed 13,580 and 15,038 payments totaling 

$1.036 billion and $649.5 million respectively, and reports less than .01% of IPERA or DNP reportable 

improper payments.

Limitations of the Financial Statements. As required by OMB Circular A-136, Fund management makes 

the following statements regarding the limitations of the financial statements: 

• The financial statements have been prepared to report the financial position and results of operations of 

the entity, pursuant to the requirements of 31 USC § 3515(b). 

• While the statements have been prepared from the books and records of the entity in accordance with 

the formats prescribed by OMB, the statements are in addition to the financial reports used to monitor 

and control budgetary resources which are prepared from the same books and records. 

• The statements should be read with the realization that they are for a component of the U.S. 

government, a sovereign entity. One implication of this is that liabilities cannot be liquidated without 

legislation that provides resources to do so. 
THIS PAGE INTENTIONALLY LEFT BLANK 
SECTION II 

INDEPENDENT AUDITOR’S REPORTS
THIS PAGE INTENTIONALLY LEFT BLANK 

 Member of the American Institute of Certified Public Accountants

Independent Auditor's Report on Financial Statements

Inspector General 

U.S. Department of the Treasury 

Washington, D.C. 

Report on the Financial Statements 

We have audited the accompanying financial statements of the Department of 

the Treasury Forfeiture Fund (the Fund), which comprise the balance sheets as 

of September 30, 2018 and 2017, and the related statements of net cost, changes 

in net position, and budgetary resources for the years then ended, and the related 

notes to the financial statements. 

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these 

financial statements in accordance with accounting principles generally 

accepted in the United States of America; this includes the design, 

implementation, and maintenance of internal control relevant to the preparation 

and fair presentation of financial statements that are free from material 

misstatement, whether due to fraud or error. 

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based 

on our audits. We conducted our audits in accordance with auditing standards 

generally accepted in the United States of America; the standards applicable to 

financial audits contained in Government Auditing Standards issued by the 

Comptroller General of the United States; and applicable provisions of Office 

of Management and Budget (OMB) Bulletin No. 19-01, Audit Requirements for 

Federal Financial Statements. Those standards and OMB Bulletin No. 19-01 

require that we plan and perform the audit to obtain reasonable assurance about 

whether the financial statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the 

amounts and disclosures in the financial statements. The procedures selected 

depend on the auditor’s judgment, including the assessment of the risks of 

material misstatement of the financial statements, whether due to fraud or error.

www.gkacpa.com 

 

1920 L Street, NW 

Suite 425

Washington, DC 20036

Tel: 202-857-1777 

Certified Public Accountants 

& Consultants 
 SECTION II –INDEPENDENT AUDITOR’S REPORT 17

In making those risk assessments, the auditor considers internal control relevant to the Fund’s 

preparation and fair presentation of the financial statements in order to design audit procedures that are 

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 

of the Fund’s internal control. Accordingly, we express no such opinion. An audit also includes 

evaluating the appropriateness of accounting policies used and the reasonableness of significant 

accounting estimates made by management, as well as evaluating the overall presentation of the 

financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for 

our audit opinion. 

Opinion 

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of the Department of the Treasury Forfeiture Fund as of September 30, 2018 and 

2017, and its net costs, changes in net position, and budgetary resources for the years then ended in 

accordance with accounting principles generally accepted in the United States of America. 

Other Matters 

Required Supplementary Information 

Accounting principles generally accepted in the United States of America require that the information 

in Section I: Overview, and Section IV: Required Supplemental Information be presented to 

supplement the basic financial statements referred to in the first paragraph of this report. Such 

information, although not a part of the basic financial statements, is required by the Federal Accounting 

Standards Advisory Board who considers it to be an essential part of financial reporting for placing the 

basic financial statements in an appropriate operational, economic, or historical context. We have 

applied certain limited procedures to the required supplementary information in accordance with 

auditing standards generally accepted in the United States of America, which consisted of inquiries of 

management about the methods of preparing the information and comparing the information for 

consistency with management’s responses to our inquiries, the basic financial statements, and other 

knowledge we obtained during our audits of the basic financial statements. We do not express an 

opinion or provide any assurance on the information because the limited procedures do not provide us 

with sufficient evidence to express an opinion or provide any assurance. 

Other Information 

Our audits were conducted for the purpose of forming an opinion on the basic financial statements 

taken as a whole. The information in the Message from the Director, and Section V: Other 

Accompanying Information is presented for the purposes of additional analysis and is not a required 

part of the basic financial statements. Such information has not been subjected to the auditing 

procedures applied in the audits of the basic financial statements, and accordingly, we do not express 

an opinion or provide any assurance on it. 
18 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our reports dated October 30, 

2018, on our consideration of the Fund’s internal control over financial reporting and on our tests of its 

compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other 

matters. The purpose of these reports is to describe the scope of our testing of internal control over 

financial reporting and compliance and the results of that testing, and not to provide an opinion on 

internal control over financial reporting or on compliance. Those reports are an integral part of an audit 

performed in accordance with Government Auditing Standards in considering the Fund’s internal 

control over financial reporting and compliance. 

Washington, DC 

October 30, 2018 

 Member of the American Institute of Certified Public Accountants

Independent Auditor's Report on Internal Control over Financial 

Reporting

Inspector General 

U.S. Department of the Treasury 

Washington, D.C. 

We have audited, in accordance with auditing standards generally accepted in 

the United States of America; the standards applicable to financial audits 

contained in Government Auditing Standards, issued by the Comptroller 

General of the United States; and applicable provisions of Office of 

Management and Budget (OMB) Bulletin No. 19-01, Audit Requirements for 

Federal Financial Statements, the financial statements of the Department of the 

Treasury Forfeiture Fund (the Fund), which comprise the balance sheets as of 

September 30, 2018 and 2017, and the related statements of net cost, changes in 

net position, and budgetary resources for the years then ended, and the related 

notes to the financial statements, and have issued our report thereon dated 

October 30, 2018. 

In planning and performing our audit of the financial statements as of and for 

the year ended September 30, 2018, we considered the Fund’s internal control 

over financial reporting (internal control) to determine the audit procedures that 

are appropriate in the circumstances for the purpose of expressing our opinion 

on the financial statements, but not for the purpose of expressing an opinion on 

the effectiveness of the Fund’s internal control. Accordingly, we do not express 

an opinion on the effectiveness of the Fund’s internal control. We did not test 

all internal controls relevant to operating objectives as broadly defined by the 

Federal Managers’ Financial Integrity Act of 1982.

A deficiency in internal control exists when the design or operation of a control 

does not allow management or employees, in the normal course of performing 

their assigned functions, to prevent, or detect and correct, misstatements on a 

timely basis. A material weakness is a deficiency, or a combination of 

deficiencies, in internal control, such that there is a reasonable possibility that a 

material misstatement of the entity’s financial statements will not be prevented, 

or detected and corrected on a timely basis. 

Our consideration of internal control was for the limited purpose described in 

the second paragraph and was not designed to identify all deficiencies in internal 

control that might be material weaknesses. 

www.gkacpa.com

 

1920 L Street, NW 

Suite 425

Washington, DC 20036

Tel: 202-857-1777 

Certified Public Accountants 

& Consultants 

20 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Given these limitations, during our audit we did not identify any deficiencies in internal control that 

we consider to be material weaknesses. However, material weaknesses may exist that have not been 

identified. 

Purpose of this Report 

The purpose of this report is solely to describe the scope of our testing of internal control and the result 

of that testing, and not to provide an opinion on the effectiveness of the Fund’s internal control. This 

report is an integral part of an audit performed in accordance with Government Auditing Standards in 

considering the Fund’s internal control. Accordingly, this communication is not suitable for any other 

purpose. 

Washington, DC 

October 30, 2018 

 Member of the American Institute of Certified Public Accountants

Independent Auditor's Report on Compliance and Other Matters

Inspector General 

U.S. Department of the Treasury 

Washington, D.C. 

We have audited, in accordance with auditing standards generally accepted in 

the United States of America; the standards applicable to financial audits 

contained in Government Auditing Standards, issued by the Comptroller 

General of the United States; and applicable provisions of Office of 

Management and Budget (OMB) Bulletin No. 19-01, Audit Requirements for 

Federal Financial Statements, the financial statements of the Department of the 

Treasury Forfeiture Fund (the Fund), which comprise the balance sheets as of 

September 30, 2018 and 2017, and the related statements of net cost, changes in 

net position, and budgetary resources for the years then ended, and the related 

notes to the financial statements, and have issued our report thereon dated 

October 30, 2018. 

As part of obtaining reasonable assurance about whether the Fund’s financial 

statements are free from material misstatement, we performed tests of the Fund’s

compliance with certain provisions of laws, regulations, and contracts, 

noncompliance with which could have a direct and material effect on the 

determination of financial statement amounts, and certain provisions of other 

laws and regulations specified in OMB Bulletin No. 19-01. However, providing 

an opinion on compliance with those provisions was not an objective of our 

audit, and accordingly, we do not express such an opinion. 

The results of our tests disclosed no instances of noncompliance or other matters 

that are required to be reported under Government Auditing Standards or OMB 

Bulletin No. 19-01.

Purpose of this Report 

The purpose of this report is solely to describe the scope of our testing of 

compliance and the result of that testing, and not to provide an opinion on the 

Fund’s compliance.

www.gkacpa.com 

 

1920 L Street, NW 

Suite 425

Washington, DC 20036

Tel: 202-857-1777 

Certified Public Accountants 

& Consultants 

22 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018

This report is an integral part of an audit performed in accordance with Government Auditing Standards

in considering the Fund’s compliance. Accordingly, this communication is not suitable for any other 

purpose.

Washington, DC 

October 30, 2018 
THIS PAGE INTENTIONALLY LEFT BLANK 
SECTION III 

FINANCIAL STATEMENTS AND NOTES 
THIS PAGE INTENTIONALLY LEFT BLANK 

SECTION III - FINANCIAL STATEMENTS AND NOTES 23

Department of the Treasury Forfeiture Fund 

BALANCE SHEETS 

As of September 30, 2018 and 2017 

(Dollars in thousands) 

2018 2017

Assets: 

Intragovernmental:

 Fund balance with Treasury $ 32,425 $ 35,607 

 Investments and related interest receivable (Note 3) 2,574,872 3,124,344 

 Total Intragovernmental 2,607,297 3,159,951 

 Cash and other monetary assets (Note 5) 703,476 743,749 

 Accounts Receivable 815 1,478 

 704,291 745,227 

 Forfeited property (Note 6) 

 Held for sale, net of mortgages, liens and claims 74,699 62,678 

 To be shared with federal, state or local, or foreign governments 415 153 

 Total forfeited property, net of mortgages, liens and claims 75,114 62,831 

 

Total Assets $3,386,702 $3,968,009 

Liabilities: 

 Intragovernmental:

 Accounts payable $ 133,240 $ 87,782 

 Total Intragovernmental 133,240 87,782 

 Seized currency and other monetary instruments (Note 8) 1,690,876 1,529,034 

 Distributions payable (Note 10) 

 State and local agencies and foreign governments 43,127 32,755 

 Accounts payable 8,589 7,409 

 Deferred revenue from forfeited assets 75,114 62,831 

Total Liabilities 1,950,946 1,719,811 

Commitments and contingencies (Note 15) - - 

Net Position: 

 Cumulative results of operations (Note 11) 1,435,756, 2,248,198 

Total Liabilities and Net Position $3,386,702 $3,968,009 

The accompanying notes are an integral part of these financial statements. 
24 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Department of the Treasury Forfeiture Fund 

STATEMENTS OF NET COST 

For the years ended September 30, 2018 and 2017 

(Dollars in thousands) 

2018 2017

Program: 

ENFORCEMENT

 Intragovernmental: 

 Seizure investigative costs and asset management $ 112,193 $ 99,068 

 Other asset related contract services 6,634 8,581 

 Data systems, training and others 48,089 47,175 

 Total Intragovernmental 166,916 154,824 

 With the Public:

 National contract services seized property and other 56,964 51,048 

 Joint operations 15,551 15,660 

 Total with the Public 72,515 66,708 

Net Cost of Operations (Note 16) $ 239,431 $ 221,532 

The accompanying notes are an integral part of these financial statements. 
SECTION III - FINANCIAL STATEMENTS AND NOTES 25

Department of the Treasury Forfeiture Fund 

STATEMENTS OF CHANGES IN NET POSITION 

For the years ended September 30, 2018 and 2017 

(Dollars in thousands)

2018 2017

Net Position – Beginning of Year $ 2,248,198 $ 2,590,444 

Financing Sources (Non-Exchange Revenues): 

 Intragovernmental

 Investment interest income 

 Public

 47,840 19,085 

 Forfeited currency and monetary instruments 1,089,225 374,895 

 Sales of forfeited property net of mortgages and claims 99,240 83,711 

 Proceeds from participating with other federal agencies 49,553 14,175 

 Value of property transferred in equitable sharing 545 240 

 Payments in lieu of forfeiture, net of refunds (Note 19) 9,990 8,840 

 Reimbursed costs 3,708 3,330 

 Other (1,486) 3,466 

 Total Gross Non-Exchange Revenues 1,298,615 507,742 

Less: Equitable Sharing

 Intragovernmental

 Federal (18,799) (124,595) 

 Public 

 State and local agencies (137,873) (64,306) 

 Foreign countries (627) (2,953) 

 Victim restitution (524,763) (77,195) 

 (663,263) (144,454) 

 Total Equitable Sharing (682,062) (269,049) 

Total Non-Exchange Revenues, Net 616,553 238,693 

Transfers –In (Out) 

 Intragovernmental

 Strategic support (Note 13) (47,125) (39,497) 

 Secretary’s enforcement fund (Note 14) (37,477) (5,910) 

 Transfer to the general fund (Note 9) (1,104,962) (314,000) 

Total Transfers Out (1,189,564) (359,407) 

Total Financing Sources - Net (573,011) (120,714) 

Net Cost of Operations (239,431) (221,532) 

Net Results of Operations (812,442) (342,246) 

Net Position – End of Year $ 1,435,756 $ 2,248,198 

The accompanying notes are an integral part of these financial statements.
26 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Department of the Treasury Forfeiture Fund 

STATEMENTS OF BUDGETARY RESOURCES 

For the years ended September 30, 2018 and 2017 

(Dollars in thousands) 

2018 2017

Budgetary Resources: 

 

 Unobligated balances- beginning of year $ 668,529 $ 1,034,832 

 Recoveries of prior year unpaid obligations 16,163 41,094 

 Other changes in unobligated balance 770 528 

 Unobligated balance from prior year budget authority, net 685,462 1,076,454 

 Budget authority 1,147,136 118,303 

 

Total Budgetary Resources

 

$ 1,832,598 $ 1,194,757 

Status of Budgetary Resources: 

 Obligations incurred $ 1,007,425 $ 526,228 

 Unobligated balances – apportioned 

 Unobligated balances – unapportioned 

$ 

466,136 

 359,037 

$ 557,363 

 111,166 

 Unobligated balances – end of year (Note 17) $ 825,173 $ 668,529 

Total Budgetary Resources $ 1,832,598 $ 1,194,757 

Outlays, net 

 

 Outlays, net $ 952,274 $ 578,067 

 

 Agency outlays, net $ 952,274 $ 578,067 

The accompanying notes are an integral part of these financial statements.
SECTION III - FINANCIAL STATEMENTS AND NOTES 27

Note 1: Reporting Entity 

The Department of the Treasury Forfeiture Fund (Treasury Forfeiture Fund or the Fund) was 

established by the Treasury Forfeiture Fund Act of 1992, Public Law 102-393 (the TFF Act), and is 

codified at 31 USC 9705. The Fund was created to consolidate all Treasury law enforcement bureaus 

under a single forfeiture fund program administered by the Department of the Treasury (Treasury). 

Treasury law enforcement bureaus fully participating in the Fund upon enactment of this legislation 

were the U.S. Customs Service (Customs); the Internal Revenue Service – Criminal Investigation (IRSCI); the United States Secret Service (Secret Service); the Bureau of Alcohol, Tobacco and Firearms 

(ATF); the Financial Crimes Enforcement Network (FinCEN); and the Federal Law Enforcement 

Training Center (FLETC). FinCEN and FLETC contribute no revenue to the Fund, however in FY 

2016, significant amounts of Strategic Support funds were allocated to FinCEN towards Bank Secrecy 

Act (BSA) Information Technology (IT) modernization, a tool used in the fight against money 

laundering and other criminal activity. The U.S. Coast Guard, formerly part of the Department of 

Transportation, now part of the Department of Homeland Security (DHS), also participates in the Fund. 

However, all Coast Guard seizures are treated as Customs seizures because the Coast Guard lacks 

forfeiture authority. 

With enactment of the Homeland Security Act of 2002 (Homeland Security Act), law enforcement 

bureaus currently participating in the Fund are: the Internal Revenue Service - Criminal Investigation 

(IRS-CI) of Treasury, Customs and Border Protection (CBP), Immigration and Customs Enforcement 

(ICE) and the U.S. Secret Service (USSS) of DHS. The U.S. Coast Guard of DHS joins these bureaus. 

The Fund continues in its capacity as a multi-departmental fund, representing the interests of law 

enforcement components of the Departments of Treasury and Homeland Security.

The Fund is a special fund that is accounted for under Treasury symbol number 20X5697. From this 

no-year account, expenses may be incurred consistent with 31 USC 9705, as amended. A portion of 

these expenses, referred to as discretionary expenses, are subject to annual appropriation limitations. 

Others, referred to as non-discretionary (mandatory) expenses, are limited only by the availability of 

resources in the Fund. Both expense categories are limited in total by the amount of revenue in the 

Fund. The Fund is managed by Treasury's Executive Office for Asset Forfeiture (TEOAF). 

The mission of the Treasury Forfeiture Fund is to affirmatively influence the consistent and strategic 

use of asset forfeiture by law enforcement bureaus to disrupt and dismantle criminal enterprises. The 

goal of the Treasury Forfeiture Fund is to support the Treasury’s national asset forfeiture program in a 

manner that results in federal law enforcement’s continued and effective use of asset forfeiture as a 

high-impact law enforcement sanction to disrupt and dismantle criminal activity. Under a 

Memorandum of Understanding (MOU) with Treasury, CBP acts as the executive agent for certain 

operations of the Fund. Pursuant to that executive agency role, CBP’s National Finance Center (NFC) 

is responsible for accounting and financial reporting for the Fund, including timely and accurate 

reporting and compliance with Treasury, the Comptroller General and the Office of Management and 

Budget (OMB) regulations and reporting requirements. 
28 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Note 2: Summary of Significant Accounting Policies 

Basis of Accounting and Presentation

The Fund began preparing audited financial statements in Fiscal Year 1993 as required by the Fund’s 

enabling legislation, 31 USC 9705(f)(2)(H), and the Chief Financial Officers Act of 1990. Beginning 

with the Fiscal Year 1996 report, the Government Management Reform Act of 1994 (GMRA) requires 

executive agencies, including the Treasury, to produce audited consolidated accountability reports and 

related footnotes for all activities and funds. 

The financial statements have been prepared from the accounting records of the Fund in conformity 

with accounting principles generally accepted in the United States of America (GAAP) and specified 

by OMB in OMB Circular A-136, Financial Reporting Requirements (OMB Circular A-136). GAAP 

for federal entities is prescribed by the Federal Accounting Standards Advisory Board (FASAB), which 

is designated the official accounting standards setting body of the Federal Government by the American 

Institute of Certified Public Accountants. 

The preparation of financial statements in accordance with accounting principles generally accepted in 

the Unites States of America requires management to make estimates and assumptions that affect the 

reported amounts of assets, liabilities, disclosures of contingent assets and liabilities at the date of the 

financial statements, and the reported amounts of revenues and expenses during the reporting period. 

Actual results could differ from those estimates. 

Certain fiscal year 2017 balances may have been reclassified, retitled, or combined with other financial 

statement line items for consistency with the current year presentation. 

Allowable Fund Expenses 

The majority of the revenue recorded by the Fund is utilized for operating expenses or distributed to 

state and local law enforcement agencies, other federal agencies, and foreign governments, in 

accordance with the various laws and policies governing the operations and activities of the Fund. 

Under the TFF Act, the Fund is authorized to pay certain expenses using discretionary or mandatory 

funding authorities of the Fund. 

Discretionary authorities include but may not be limited to: the payment of expenses for the purchase 

of awards for information or assistance leading to a civil or criminal forfeiture involving any law 

enforcement bureau participating in the Fund; purchase of evidence or information that meet the criteria 

set out in 31 USC 9705(a)(2)(B); payment for equipment for vessels, vehicles, or aircraft available for 

official use as described by 31 USC 9705(a)(2)(D) and (F); reimbursement of private persons for 

expenses incurred while cooperating with a Treasury law enforcement organization in investigations; 

publication of the availability of certain awards; and payment for training foreign law enforcement 

personnel with respect to seizure or forfeiture activities of the Fund. Discretionary expenses are subject 

to an annual, definite Congressional appropriation from revenue in the Fund. 

Expenses from the mandatory authorities of the Fund include but are not limited to: all proper expenses 

of the seizure, including investigative costs and purchases of evidence and information leading to 

seizure, holding costs, security costs, etc., awards of compensation to informers under section 619 of 

the Tariff Act (19 USC 1619); satisfaction of liens against the forfeited property, and claims of parties 
SECTION III - FINANCIAL STATEMENTS AND NOTES 29

with interest in forfeited property; expenses incurred by state and local law enforcement agencies in 

joint law enforcement operations with law enforcement agencies participating in the Fund; and 

equitable sharing payments made to state and local law enforcement agencies in recognition of their 

efforts in a Fund seizure leading to forfeiture. These mandatory expenses are paid pursuant to the 

permanent indefinite authorities of the Fund; are only limited by revenue in the Fund each year and do 

not require additional Congressional action for expenditure. 

The Fund's expenses are either paid on a reimbursement basis or paid directly on behalf of a 

participating bureau. Reimbursable expenses are incurred by the respective bureaus participating in 

the Fund against their appropriation and then submitted to the Fund for reimbursement. The bureaus 

are reimbursed through Inter-Agency Transfers (SF-1081) or Intra-governmental Payments and 

Collection (IPAC) System. Certain expenses such as equitable sharing, liens, claims and state and local 

joint operations costs are paid directly from the Fund. 

Further, the Fund is a component unit of the Treasury with participating bureaus in the DHS. As such, 

employees of both Departments may perform certain operational and administrative tasks related to the 

Fund. Payroll costs of employees directly involved in the security and maintenance of forfeited 

property are also recorded as expenses in the financial statements of the Fund (included in the line item 

“seizure investigative costs and asset management” in the statement of net cost.)

Revenue and Expense Recognition

Revenue from the forfeiture of property is deferred until the property is sold or transferred to a state, 

local or federal agency. Revenue is not recorded if the forfeited property is ultimately destroyed or 

cannot be legally sold. 

Revenue from currency is recognized upon forfeiture. Payments in lieu of forfeiture (mitigated 

seizures) are recognized as revenue when the payment is received. Revenue received from participating 

with certain other federal agencies is recognized when the payment is received. Operating costs are 

recorded as expenses and related liabilities when goods are received or services are performed. Certain 

probable equitable sharing liabilities existing at year end are accrued based on estimates. 

As provided for in the TFF Act, the Fund invests seized and forfeited currency that is not needed for 

current operations. Treasury’s Bureau of Fiscal Service invests the funds in obligations of, or 

guaranteed by, the United States Government. Interest is reported to the Fund and recorded monthly 

as revenue in the general ledger. 

Funds from Dedicated Collections 

Funds from dedicated collections are financed by specifically identified revenues, often supplemented 

by other financing sources, which remain available over time. These specifically identified revenues 

and other financing sources are required by statute to be used for designated activities, benefits, or 

purposes, and must be accounted for separately from the Government’s general revenues. In 

accordance with SFFAS 43, Funds from Dedicated Collections, all of the TFF’s revenue meets these 

criteria and constitutes funds from dedicated collections.

The Federal Government does not set aside assets to pay future benefits or other expenditures 

associated with funds from dedicated collections. The cash collected from funds from dedicated 

collections is deposited in the U.S. Treasury, which uses the cash for general government purposes. 

Treasury securities are issued to the TFF as evidence of its receipts. Treasury securities are an asset to 
30 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

the TFF and a liability to the U.S. Treasury. Because the TFF and U.S. Treasury are both parts of the 

government, these assets and liabilities offset each other from the standpoint of the government as a 

whole. For this reason, they do not represent an asset or a liability in the U.S. Government-wide 

financial statements. 

Treasury securities provide the TFF with authority to draw upon the U.S. Treasury to make future 

benefit payments or other expenditures. When the TFF requires redemption of these securities to make 

expenditures, the government finances those expenditures out of accumulated cash balances, by raising 

taxes or other receipts, by borrowing from the public or repaying less debt or by curtailing other 

expenditures. This is the same way that the government finances all other expenditures. 

Equitable Sharing (Assets Distributed)

Forfeited property, currency, or proceeds from the sales of forfeited property may be shared with 

federal, state and local law enforcement agencies or foreign governments, which provided direct or 

indirect assistance in the related seizure. In addition, the Fund may transfer forfeited property to other 

federal agencies, which would benefit from the use of the item. A class of asset distribution was 

established for victim restitution in 1995. These distributions include property and cash returned to 

victims of fraud and other illegal activity. Upon approval by Fund management to share or transfer the 

assets, both revenue from distributed forfeited assets and distributions are recognized for the net 

realizable value of the asset to be shared or transferred, thereby resulting in no gain or loss recognized. 

Revenue and /or expenses are recognized for property and currency, which are distributed to or shared 

with non-federal agencies, per SFFAS No. 7, Accounting for Revenue and Other Financing Sources.

Entity Assets

Entity assets are used to conduct the operations and activities of the Fund. Entity assets comprise 

intragovernmental and non-intragovernmental assets. Intragovernmental balances arise from 

transactions among federal agencies. These assets are claims of a federal entity against another federal 

entity. Entity assets consist of cash or other assets, which could be converted into cash to meet the 

Fund's current or future operational needs. Such other assets include investments of forfeited balances, 

accrued interest on seized balances, receivables, and forfeited property, which are held for sale or to be 

distributed. 

• Fund Balance with Treasury – This represents amounts on deposit with Treasury. 

• Investments and Related Interest Receivable – This includes forfeited cash held by the Fund and 

seized currency held in the Customs Suspense Account that had been invested in short term U.S. 

Government Securities. 

• Accounts Receivables – The values reported for other receivables are primarily funds due from 

the national seized property contractor for properties sold; the proceeds of which have not yet been 

deposited into the Fund. No allowance has been made for uncollectible amounts as the accounts 

recorded as a receivable at year end were considered to be fully collectible as of September 30, 

2018 and 2017. 

• Cash and Other Monetary Assets – This includes forfeited currency on hand not yet deposited 
SECTION III - FINANCIAL STATEMENTS AND NOTES 31

and forfeited currency held as evidence.

• Forfeited Property and Currency – Forfeited property and currency is recorded in the respective 

seized property and forfeited asset tracking systems at the estimated fair value at the time of seizure. 

However, based on historical sales experiences for the year, properties are adjusted to reflect the 

market value at the end of the fiscal year for financial statement reporting purposes. Direct and 

indirect holding costs are not capitalized for individual forfeited assets. Forfeited currency not 

deposited into the Fund is included as part of Entity Assets - Cash and Other Monetary Assets. 

Further, mortgages and claims on forfeited assets are recognized as a valuation allowance and a 

reduction of deferred revenue from forfeited assets when the asset is forfeited. The allowance includes 

mortgages and claims on forfeited property held for sale and a minimal amount of claims on forfeited 

property previously sold. Mortgages and claims expenses are recognized when the related asset is sold 

and is reflected as a reduction of sales of forfeited property. 

Additionally, SFFAS No. 3, Accounting for Inventory and Related Property, requires certain additional 

disclosures in the notes to the financial statements, including an analysis of changes in seized and 

forfeited property and currency, for both carrying value and quantities, from that on hand at the 

beginning of the year to that on hand at the end of the year. These analyses are disclosed in Notes 7 

and 8. 

Non-entity Assets

Non-entity assets held by the Fund are not available for use by the Fund. Non-entity assets comprise 

intragovernmental and other assets. Intragovernmental balances arise from transactions among federal 

agencies. These assets are claims of a federal entity against another federal entity. Non-entity assets 

are not considered as financing sources (revenue) available to offset operating expenses, therefore, a 

corresponding liability is recorded and presented as governmental liabilities in the balance sheet to 

reflect the custodial/fiduciary nature of these activities. 

• Seized Currency and Property – Seized Currency is defined as cash or monetary instruments that 

are readily convertible to cash on a dollar for dollar basis. SFFAS No. 3 requires that seized 

monetary instruments (cash and cash equivalents) be recognized as an asset in the financial 

statements and a liability be established in an amount equal to the seized asset value due to: (i) the 

fungible nature of monetary instruments, (ii) the high level of control that is necessary over these 

assets; and (iii) the possibility that these monies may be returned to their owner in lieu of forfeiture. 

Seized property is recorded at its appraised value at the time of seizure. The value is determined 

by the seizing entity and is usually based on a market analysis such as a third party appraisal, 

standard property value publications or bank statements. Seized property is not recognized as an 

asset in the financial statements, as transfer of ownership to the government has not occurred as of 

September 30. Accordingly, seized property other than monetary instruments is disclosed in the 

footnotes in accordance with SFFAS No. 3. 
32 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

• Investments and Related Interest Receivable – This balance includes seized cash on deposit in 

the Fund’s suspense account held by Treasury, which has been invested in short term U.S. 

Government Securities. 

• Cash and Other Monetary Assets – This balance represents the aggregate amount of the Fund’s 

seized currency on deposit in the Fund’s suspense account held by Treasury, seized cash on deposit 

held with other financial institutions and, cash on hand in vaults held at field office locations. 

Liabilities Covered by Budgetary Resources

Liabilities covered by budgetary resources represent liabilities incurred, which are covered by available 

budgetary resources. The components of such liabilities for the Fund are as follows: 

• Distributions Payable – Distributions payable to federal and non-federal agencies is primarily 

related to equitable sharing payments and payments to be made by the Fund to the victims of fraud. 

• Accounts Payable – Amounts reported in this category include accrued expenses authorized by 

the TFF Act (See "Allowable Fund Expenses") for which payment was pending at year end. 

• Seized Currency – Amounts reported in this category represent the value of seized currency that 

is held by the Fund which equals the amount of seized currency reported as an asset. 

• Deferred Revenue from Forfeited Assets – At year end, the Fund held forfeited assets, which had 

not yet been converted into cash through a sale. The amount reported here represents the value of 

these assets, net of mortgages and claims. 

Liabilities Not Covered by Budgetary Resources

The Fund does not currently have liabilities not covered by available budgetary resources. 

Net Position 

The components of net position are classified as follows: 

• Retained Capital – There is no cap on amounts that the Fund can carry forward into Fiscal Year 

2019. The cap was removed by the Fiscal Year 1997 Omnibus Appropriations Act (PL 104-208). 

• Unliquidated Obligations – This category represents the amount of undelivered purchase orders, 

contracts and equitable sharing requests which have been obligated with current budget resources 

or delivered purchase orders and contracts that have not been invoiced. An expense and liability 

are recognized and the corresponding obligations are reduced as goods are received or services are 

performed. A portion of the equitable sharing requests that were in final stages of approval are 

recognized as liabilities at year end. Prior experience with the nature of this account indicated that 

a substantial portion of these requests were certain liabilities at year end. (See also Distributions 

Payable at Note 10).

• Net Results of Operations – This category represents the net difference, for the activity during the 
SECTION III - FINANCIAL STATEMENTS AND NOTES 33

year, between: (i) financing sources including transfers, and revenues; and (ii) expenses. 

Note 3: Investments and Related Interest Receivable

All investments are intragovernmental short-term (35 days or less) non-marketable par value federal 

debt securities issued by, and purchased through Treasury's Bureau of the Fiscal Service, Federal 

Investments Branch. Investments are always purchased at a discount and are reported at acquisition 

cost, net of discount. The discount is amortized into interest income over the term of the investment. 

The investments are always held to maturity. They are made from cash in the Fund and from seized 

currency held in the Customs Suspense Account. The Customs Suspense Account became the 

depository for seized cash for the Fund following enactment of the TFF Act. 

The following schedule presents the investments on hand as of September 30, 2018 and 2017, 

respectively (dollars in thousands):

Entity Assets 

Description Cost Unamortized 

Discount 

Investment, 

Net 

September 30, 2018 

Treasury Forfeiture Fund - 

28 days 2.0650% U.S. Treasury Bills $1,542,772 ($2,478) $1,540,294

Interest Receivable 444

Total Investment, Net, and Interest Receivable $1,540,738

Fair Market Value $1,540,622

September 30, 2017 

Treasury Forfeiture Fund - 

28 days 0.09550% U.S. Treasury Bills $2,237,149 ($1,662) $2,235,487

Interest Receivable 162

Total Investment, Net, and Interest Receivable $2,235,649

Fair Market Value $2,235,747

Non-entity Assets 
34 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Description Cost Unamortized 

Discount 

Investment, 

Net 

September 30, 2018 

Treasury Forfeiture Fund –

Seized Currency Suspense Account 

28 days 2.0650% U.S. Treasury Bills $1,035,798 ($1,664) $1,034,134

Fair Market Value $1,034,354

September 30, 2017 

Treasury Forfeiture Fund –

Seized Currency Suspense Account 

28 days 0.09550% U.S. Treasury Bills $809,294 ($601) $ 808,693

Fair Market Value $ 808,787

Note 4: Analysis of Non-Entity Assets 

The following schedule presents the non-entity assets as of September 30, 2018 and 2017, respectively 

(dollars in thousands): 

2018 2017

Seized currency: 

 Intragovernmental Investments (Note 3) $ 1,034,134 $ 808,693

 Cash and other monetary assets (Note 5) 656,742 720,341

Total Non-Entity Assets 1,690,876 1,529,034

Total Entity Assets 1,695,826 2,438,975

Total Assets $ 3,386,702 $ 3,968,009
SECTION III - FINANCIAL STATEMENTS AND NOTES 35

Note 5: Cash and Other Monetary Assets

Entity Assets 

Cash and Other Monetary Assets held on hand included forfeited currency not yet deposited, as well 

as forfeited currency held as evidence, amounting to $46.7 million and $23.4 million as of September 

30, 2018 and 2017, respectively. 

Non-Entity Assets 

Cash and Other Monetary Assets included seized currency not yet deposited, as well as deposited seized 

currency which is not invested in order to pay remissions, amounted to $656.7 million and $720.3 

million as of September 30, 2018 and 2017, respectively. 

Note 6: Forfeited Property/Deferred Revenue

The following summarizes the components of forfeited property (net), as of September 30, 2018 and 

2017, respectively (dollars in thousands): 

2018 2017

Held for sale $ 78,263 $ 67,670

To be shared with federal, State or local, or foreign government 415 153

 Total forfeited property (Note 7) 78,678 67,823

Less: Allowance for liens and claims (3,564) (4,992) 

Total forfeited property, net $ 75,114 $ 62,831
36 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Note 7: Analysis of Changes in Forfeited Property and Currency 

The following schedule presents the changes in the forfeited property and currency balances from October 1, 2017 to September 30, 2018. 

(Dollar value is in thousands)

10/1/17 Financial 

Statement Balance Adjustments 

10/1/17 

Carrying Value Forfeitures Deposits/Sales Disposals/Transfers 

Value No. Value No. Value No. Value No. Value No. Value No.

Currency $12,329 - $- - $12,329 - $1,020,421 - $(1,065,906) - $ - - 

Other Monetary 

Instruments 11,079 - - - 11,079 - - - (3,786) - (45) - 

Subtotal 23,408 - - - 23,408 - 1,020,421 - (1,069,692) - (45) - 

Real Property 44,828 217 6,790 - 51,618 217 42,012 135 (41,036) (170) (1,690) (4) 

General Property 12,319 16,708 38,582 - 50,901 16,780 33,407 20,244 (13,669) (1,785) (1,290) (2,673) 

Vessels 1,306 119 171 - 1,477 119 792 106 (1,082) (58) (29) (3) 

Aircraft 813 8 279 - 1,092 8 1,840 8 (2,163) (11) - (1) 

Vehicles 8,557 2,610 9,563 - 18,120 2,610 27,047 7,691 (19,133) (4,394) (6,357) (768) 

Subtotal 67,823 19,734 55,385 - 123,208 19,734 105,098 28,184 (77,083) (6,418) (9,366) (3,449) 

Grand Total $91,231 19,734 $55,385 - $146,616 19,734 $1,125,519 28,184 $(1,146,775) (6,418) $(9,411) (3,449) 

Victim Restitution Destroyed 

Other 

Adjustments Value Change 2018 Carrying Value

Fair Market Value 

Adjustment 

9/30/18 Financial 

Statement Balance 

Value No. Value No. Value No. Value No. Value No. Value No. Value No.

Currency $- - $- - $72,878 - $(236) - $39,486 - $- - $39,486 - 

Other Monetary 

Instruments - 

- 

- 

- - - - 7,248 - - - 7,248 - 

Subtotal - - - - 72,878 - (236) - 46,734 - - - 46,734 - 

Real Property - - - - 9,219 7 330 - 60,453 185 (11,805) - 48,648 185

General Property - - (8,920) (17,369) (891) 845 (17,136) - 42,402 16,042 (22,433) - 19,969 16,042 

Vessels - - (96) (63) 547 12 77 - 1,686 113 (648) - 1,038 113 

Aircraft - - - - 1,300 3 (161) - 1,908 7 (1,056) - 852 7 

Vehicles - - (4,703) (2,993)) 1614 216 (1,065) - 15,523 2,362 (7,352) - 8,171 2,362 

Subtotal - - (13,719) (20,425) 11,789 1,083 (17,955) - 121,972 18,709 (43,294) - 78,678 18,709

Grand Total $- - $(13,719) (20,425) $84,667 1,083 $(18,191) - $168,706 18,709 $(43,294) - $125,412 18,709 
SECTION III - FINANCIAL STATEMENTS AND NOTES 37

Note 7: Analysis of Changes in Forfeited Property and Currency 

The following schedule presents the changes in the forfeited property and currency balances from October 1, 2016 to September 30, 2017. 

(Dollar value is in thousands)

10/1/16 Financial 

Statement Balance Adjustments 

10/1/16 

Carrying Value Forfeitures Deposits/Sales Disposals/Transfers 

Value No. Value No. Value No. Value No. Value No. Value No.

Currency $17,152 - $- - $17,152 - $353,185 - $(381,016) - $ - - 

Other Monetary 

Instruments 11,079 - - - 11,079 - 1,836 - (1,811) - (25) - 

Subtotal 28,231 - - - 28,231 - 355,021 - (382,827) - (25) - 

Real Property 36,698 255 17,679 - 54,377 255 34,376 132 (44,453) (194) - - 

General Property 46,946 20,636 51,400 - 98,346 20,636 14,352 21,574 (44,341) (3,467) (1,354) (1,308) 

Vessels 1,043 95 859 - 1,902 95 896 114 (452) (32) (73) (2) 

Aircraft 454 8 1,479 - 1,933 8 1,133 11 (3,215) (8) - - 

Vehicles 8,897 2,159 7,654 - 16,551 2,159 29,565 7,811 (20,880) (5,983) (6,079) (942) 

Subtotal 94,038 23,153 79,071 - 173,109 23,153 80,322 29,642 (113,341) (9,684) (7,506) (2,252) 

Grand Total $122,269 23,153 $79,071 - $201,340 23,153 $435,343 29,642 $(496,168) (9,684) $(7,531) (2,252) 

Victim Restitution Destroyed 

Other 

Adjustments 

 

Value Change 2017 Carrying Value

Fair Market Value 

Adjustment 

9/30/17 Financial 

Statement Balance 

Value No. Value No. Value No. Value No. Value No. Value No. Value No.

Currency $- - $- - $24,995 - $(1,987) - $12,329 - $- - $12,329 - 

Other Monetary 

Instruments - 

- 

- 

- - - - 11,079 - - - 11,079 - 

Subtotal - - - - 24,995 - (1,987) - 23,408 - - - 23,408 - 

Real Property - - - (1) 6,803 25 515 - 51,618 217 (6,790) - 44,828 217

General Property - - (378) (20,628) (6,274) (27) (9,450) - 50,901 16,780 (38,582) - 12,319 16,780 

Vessels - - - (53) (617) (3) (179) - 1,477 119 (171) - 1,306 119

Aircraft - - - (1) 1,292 (2) (51) - 1,092 8 (279) - 813 8 

Vehicles - - (35) (612) (681) 177 (321) - 18,120 2,610 (9,563) - 8,557 2,610 

Subtotal - - (413) (21,295) 523 170 (9,486) - 123,208 19,734 (55,385) - 67,823 19,734 

Grand Total $- - $(413) (21,295) $25,518 170 $(11,473) - $146,616 19,734 $(55,385) - $91,231 19,734 
38 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Note 8: Analysis of Changes in Seized Property and Currency 

Seized property and currency result primarily from enforcement activities. Seized property is not legally owned by the Fund until judicially or 

administratively forfeited. Because of the fungible nature of currency and the high level of control necessary over these assets and the possibility that 

these monies may be returned to their owners in lieu of forfeiture, seized currency is reported as a custodial asset upon seizure. Seized property other 

than currency is reported as a custodial asset upon forfeiture. The following schedule presents the changes in the seized property and currency balances 

from October 1, 2017 to September 30, 2018. (Dollar value is in thousands) 

9/30/17 Financial 

Statement Balance Seizures 

 

Remissions Forfeitures Adjustments Value Changes 

9/30/18 Financial 

Statement Balance 

Value No. Value No. Value No. Value No. Value No. Value No

.

Value No.

Currency $1,516,467 - $1,288,943 - $(70,784) - $(1,020,421) - $(35,908) - $12 - $1,678,309 - 

Other 

Monetary 

Instruments 12,567 - 4 - (4) - - - - - - - 12,567 

- 

Subtotal 1,529,034 - 1,288,947 - (70,788) - (1,020,421) - (35,908) - 12 - 1,690,876 - 

Real Property 212,913 534 92,272 136 (10,161) (51) (42,012) (135) 13,687 4 (9,091) - 257,608 488

General 

Property 

436,381 33,979 119,182 27,966 (28,575) (4,162) (33,407) (20,244) (61,956) (7,108) (16,002) - 415,623 30,431 

Vessels 6,412 117 2,799 155 (269) (12) (792) (106) (1,712) (24) (52) - 6,386 130

Aircraft 15,130 26 6,518 29 (2,301) (4) (1,840) (8) (3,327) (8) (449) - 13,731 35

Vehicles 44,342 4,227 89,091 12,571 (54,020) (3,978) (27,047) (7,691) (2,763) (180) (2,479) - 47,124 4,949 

Subtotal 715,178 38,883 309,862 40,857 (95,326) (8,207) (105,098) (28,184) (56,071) (7,316) (28,073) - 740,472 36,033 

Grand Total $2,244,212 38,883 $1,598,809 40,857 $(166,114) (8,207) $(1,125,519) (28,184) $(91,979) (7,316) (28,061) - $2,431,348 36,033 
SECTION III - FINANCIAL STATEMENTS AND NOTES 39

Note 8: Analysis of Changes in Seized Property and Currency 

Seized property and currency result primarily from enforcement activities. Seized property is not legally owned by the Fund until judicially or 

administratively forfeited. Because of the fungible nature of currency and the high level of control necessary over these assets and the possibility that 

these monies may be returned to their owners in lieu of forfeiture, seized currency is reported as a custodial asset upon seizure. Seized property other 

than currency is reported as a custodial asset upon forfeiture. The following schedule presents the changes in the seized property and currency balances 

from October 1, 2016 to September 30, 2017. (Dollar value is in thousands) 

9/30/16 Financial 

Statement Balance Seizures 

 

Remissions 

 

Forfeitures Adjustments Value Changes 

9/30/17 Financial 

Statement Balance 

Value No. Value No. Value No. Value No. Value No. Value No

.

Value No.

Currency $1,518,587 - $459,036 - $(165,398) - $(353,185) - $57,727 - $(300) - $1,516,467 - 

Other 

Monetary 

Instruments 14,203 - 82 - (7) - (1,836) - 125 - - - 12,567 

- 

Subtotal 1,532,790 - 459,118 - (165,405) - (355,021) - 57,852 - (300) - 1,529,034 - 

Real Property 222,587 572 41,186 115 (14,271) (41) (34,376) (132) 6,247 20 (8,460) - 212,913 534

General 

Property 

272,833 29,455 210,312 30,103 (26,081) (3,738) (14,352) (21,574) 3,985 (267) (10,316) - 436,381 33,979 

Vessels 5,350 112 2,600 148 (426) (15) (896) (114) (121) (14) (95) - 6,412 117

Aircraft 18,909 30 3,998 20 (781) (6) (1,133) (11) (3,702) (7) (2,161) - 15,130 26

Vehicles 47,053 4,710 87,682 12,106 (56,680) (4,389) (29,565) (7,811) (3,257) (389) (891) - 44,342 4,227 

Subtotal 566,732 34,879 345,778 42,492 (98,239) (8,189) (80,322) (29,642) 3,152 (657) (21,923) - 715,178 38,883 

Grand Total $2,099,522 34,879 $804,896 42,492 $(263,644) (8,189) $(435,343) (29,642) $61,004 (657) (22,223) - $2,244,212 38,883 
40 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Note 9: Permanent Reduction/Transfer to the General Fund 

The unobligated balance is usually available to cover costs related to seizures and forfeitures and certain 

other law enforcement activities. The Consolidated Appropriations Act of 2018 permanently cancelled 

$1.1 billion. This permanent reduction or cancellation means that the amount will never be used for its 

intended purposes. The cancelled funds were transferred to the General Fund on June 1, 2018. In fiscal 

year 2017, the Consolidated Appropriations Act of 2017 permanently cancelled $314 million. The 

cancelled funds were transferred to the General Fund on May 25, 2017.

Note 10: Distributions Payable 

Distributions Payable (state and local agencies and foreign governments) amounted to $43.1 million 

and $32.8 million as of September 30, 2018 and 2017, respectively. Fund management recognizes as 

a liability a portion (based on the average of historical pay-out percentage) of the equitable sharing 

requests, that were approved or in final stages of approval on September 30, 2018 and 2017, 

respectively. Prior experience with the nature of this account indicated that a substantial portion of 

these requests were certain to be paid out by the Fund during the following fiscal year. 

Note 11: Net Position 

Cumulative Results of Operations

The following summarizes components of cumulative results of operations as of September 30, 2018 

and 2017, respectively (dollars in thousands): 

2018 2017 

Retained Capital $ 1,835,220 $ 2,158,651

Unliquidated Obligations 412,978 431,793

Net Results of Operations (812,442) (342,246) 

$ 1,435,756 $ 2,248,198

Unliquidated Obligations 

The following summarizes the components of unliquidated obligations as of September 30, 2018 and 

2017 respectively (dollars in thousands): 

2018 2017

Equitable Sharing $ 259,984 $ 210,405

Mandatory 152,994 221,388

 $ 412,978 $ 431,793

Note 12: Related Party Transactions 

The Fund reimbursed agencies for the purchase of certain capital assets. These assets are reported by 

the participating agencies in their financial statements. 
SECTION III - FINANCIAL STATEMENTS AND NOTES 41

Note 13: Strategic Support 

31 USC 9705 (g)(4)(B) allows for the expenditure, without fiscal year limitation, after the reservation 

of amounts needed to continue operations of the Fund. This “Strategic Support” balance may be used 

for law enforcement activities of any federal agency. 

Amounts distributed to other federal agencies for law enforcement activities under “Strategic Support” 

requirements amounts to $47.1 million and $39.5 million in fiscal years 2018 and 2017, respectively. 

The following summarizes Strategic Support payments, net of Transfers-In as of September 30, 2018 

and 2017, respectively, (dollars in thousands): 

 2018 2017

Transfers - Out $ (49,500) $ (39,537) 

Transfers - In 2,375 40

Total $ (47,125) $ (39,497) 

Note 14: Secretary’s Enforcement Fund

31 USC 9705(b)(5) is another category of permanent indefinite authority. These funds are available to 

the Secretary, without further action by Congress and without fiscal year limitation, for federal law 

enforcement purposes of Treasury law enforcement organizations. The source of Section 9705(b)(5) 

funds is equitable sharing payments received from the Department of Justice and the U.S. Postal 

Service (USPS) representing Treasury's share of forfeiture proceeds from Justice and USPS cases. 

Amounts distributed for federal law enforcement purposes of Treasury law enforcement organizations 

amounted to $37.5 million and $5.9 million in fiscal years 2018 and 2017, respectively. 

The following summarizes Secretary’s Enforcement Fund payments, net of Transfers-In as of 

September 30, 2018 and 2017, respectively, (dollars in thousands): 

 2018 2017

Transfers - Out $ (38,564) $ (7,015) 

Transfers - In 1,087 1,105

Total $ (37,477) $ (5,910) 

Note 15: Commitments and Contingencies

COMMITMENTS 

The Fund is subject to equitable sharing claims from participating state and local law enforcement 

agencies. A portion of these claims that were in final stages of approval have been recognized as 

liabilities as of September 30 (See Note 10). 

In addition to the amounts estimated above, there are other amounts, which may ultimately be shared, 

that are not identified at this time. 
42 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

CONTINGENCIES 

As of September 30, 2018, the Fund had future expenditures of $434.6 million (see Note 17) for refunds 

and equitable sharing matters, which are reasonably estimable. The future expenditures are based upon 

the best estimate of costs to be incurred for refunds in light of the progress made by seizing agencies 

and the relevant United States Attorney’s Offices in achieving a resolution to forfeitures. Additionally, 

part of the amount will soon be equitably shared with the Department of Justice pursuant to a longstanding memorandum of agreement. 

In the opinion of the Fund management and legal counsel, there are no pending or threatened litigation 

claims for which the amount of potential loss, individually, or in aggregate, will have a material adverse 

effect on the Fund’s financial statements.

Note 16: Disclosures Related to the Statements of Net Cost

Gross costs and earned revenue related to Law Enforcement Programs administered by the Fund are 

presented in Treasury’s budget functional classification (in thousands) as set out below:

 

2018 2017

Gross Costs $ 239,431 $ 221,532

Earned Revenues - - 

Net Costs $ 239,431 $ 221,532

The Fund falls under the Treasury’s budget functional classification related to Administration of 

Justice. 
SECTION III - FINANCIAL STATEMENTS AND NOTES 43

Note 17: Disclosures Related to the Statements of Budgetary Resources

The Fund’s budgetary obligations are fully covered by cash on hand in the Fund and Entity Investments. 

The Fund does not have borrowing or contract authority and, therefore, has no repayment requirements, 

financing sources for repayment, or other terms of borrowing authority. There are no legal 

arrangements, outside of normal government wide restrictions, specifically affecting the Fund’s use of 

unobligated balances of budget authority. 

Adjustments to budgetary resources available at the beginning of fiscal years 2018 and 2017 consist of 

the following (in thousands): 

 

2018 2017

Recoveries of Prior Year Unpaid Obligations $ 16,163 $ 41,094

Other Changes in Unobligated Balance 770 528

Total $ 16,933 $ 41,622

The Fund was required to change its methodology for recognizing remissions and equitable sharing 

obligations beginning in FY 2016. Under the newly adopted method, an obligation for refunds or 

remissions will be created only upon receipt of a Ruling Letter from the Department of Justice for 

judicial forfeiture cases or from Fund member agencies for administrative forfeitures. Additionally, 

obligations related to equitable sharing will be recognized upon TEOAF’s approval of Fund member 

agencies’ request for transfers and related distribution percentages and amounts on the Decision Form. 

Consequently, the Fund has future expenditures and commitments from remissions and equitable 

sharing that will be funded from the September 30, 2018 unobligated balance. 

The following shows anticipated reductions to the unobligated balances of budget authority resulting 

from these future expenditures and commitments for fiscal years 2018 and 2017.

The change in the methodology for recognizing remissions and equitable sharing obligations was 

accounted for as a change in accounting estimate on a prospective basis effective October 1, 2015 (See 

Note 15). 

2018 2017

Unobligated balance $ 825,173 $ 668,529

Future expenditures (Note 15): 

Refund and remissions (346,150) (344,498) 

Equitable sharing (88,409) (60,283) 

Total future expenditures (434,559) (404,781) 

Commitments (Note 15) - (13,633) 

Total reductions to unobligated balance (434,559) (418,414) 

Unobligated balance net of future expenditures, and 

commitments $ 390,614 $ 250,115

Note 18: Dedicated Collections 

The Fund is classified as a special fund. All its activities are reported as dedicated collections held for 

later use. 
44 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Note 19: Payments in Lieu of Forfeiture, Net of Refunds 

The following summarizes Payments in Lieu of Forfeiture, Net of Refunds as of September 30, 2018

and 2017, respectively (dollars in thousands): 

2018 2017

Payments in Lieu of Forfeiture $ 10,769 $ 11,104

Refunds (779) (2,264) 

Total $ 9,990 $ 8,840

Note 20: Reconciliation of Net Cost of Operations (Proprietary) to Budget 

The reconciliation of Net Cost of Operations to Budget demonstrates the relationship between the 

Fund’s proprietary (net cost of operations) and budgetary accounting (net obligations) information (in 

thousands).

2018 2017

Resources Used to Finance Activities: 

 Budgetary resources obligated 

Obligations incurred $ 1,007,425 $ 526,228

Less: Spending authority from offsetting 

 Collections and recoveries (16,933) (41,622) 

Net Obligations 990,492 484,606

 Other resources 

Transfers – out 

 

(1,189,564) (359,407) 

Total Resources Used to Finance Activities (199,072) 125,199

Resources Used to Finance Items not Part of the Net 

 Cost of Operations 

Change in budgetary resources obligated for goods, 

 services and benefits ordered but not yet provided 1,124,300 370,096

Other resources or adjustments to net obligated 

 resources that do not affect net cost of operations 

Mortgages and claims (2,956) (2,450) 

Refunds (779) (2,264) 

Equitable Sharing (federal, state/local and foreign) (157,299) (191,854) 

Victim restitution (524,763) (77,195) 

Total Resources Used to Finance Items not Part of the Net 

 Cost of Operations 438,503 96,333

Total Resources Used to Finance the Net Cost of Operations 239,431 221,532

Net Cost of Operations $ 239,431 $ 221,532
THIS PAGE INTENTIONALLY LEFT BLANK
 

SECTION IV 

REQUIRED SUPPLEMENTAL INFORMATION 

(UNAUDITED) 
THIS PAGE INTENTIONALLY LEFT BLANK 

SECTION IV – REQUIRED SUPPLEMENTAL INFORMATION (UNAUDITED) 45

Intragovernmental Amounts – Assets (Dollars in thousands) 

2018 2017 

Partner Agency 

Fund 

Balance 

with 

Treasury Investments 

Fund 

Balance 

with 

Treasury Investments 

Treasury $ 32,425 - $ - $ 35,607 $ - 

Bureau of the Fiscal 

Service - 2,574,872 - 3,124,344 

Totals _$ 32,425 $ 2,574,872 $ 35,607 $ 3,124,344 

Intragovernmental Amounts – Liabilities (Dollars in thousands) 

Partner Agency 

2018 

Accounts 

Payable 

2017 

Accounts 

Payable 

Department of Justice $ 10,820 $ 6,309 

Department of Homeland Security 92,754 59,921 

Departmental Offices 2,209 2,888 

Treasury Office of the Inspector 

General 135 131 

 

Tax and Trade 1,075 348 

Treasury Franchise Fund - 90 

Internal Revenue Service 26,247 18,095 

Totals $ 133,240 $ 87,782 

Intragovernmental Amounts – Revenues and Costs (Dollars in thousands) 

2018 2017 

Budget Functions 

Cost to Generate 

Exchange 

Intragovernmental 

Revenue 

Costs to Generate 

Non-Exchange 

Intragovernmental 

Revenue 

Cost to Generate 

Exchange 

Intragovernmental 

Revenue 

Costs to Generate 

Non-Exchange 

Intragovernmental 

Revenue 

 Administration of 

Justice $ - $ 166,916 $ - $ 154,824
46 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

Intragovernmental Amounts – Non-exchange Revenue (Dollars in thousands): 

Partner Agency 

2018 2017

Transfers 

In

Transfers 

Out 

Net 

Transfers 

In (Out) 

Transfers 

In

Transfers 

Out 

Net 

Transfers 

In (Out) 

 

 

Department of Homeland 

Security $ 2,091 $ (60,833) $ (58,742) $ 23 $ (29,816) $ (29,793) 

Internal Revenue Service 493 (26,231) (25,738) 1,121 (16,513) (15,392) 

Financial Crimes 

Enforcement Network 90 - 90 - - - 

Tax and Trade 18 (1,000) (982) - (200) (200) 

Central Intelligence Agency 770 - 770 - - - 

Department of Defense - - - - (22) (22) 

General Fund - (1,104,962) (1,104,962) - (314,000) (314,000) 

$ 3,462 ($1,193,026) 

 

($1,189,564) $ 1,144 ($360,551) ($359,407) 
SECTION V 

OTHER ACCOMPANYING INFORMATION 

(UNAUDITED) 
THIS PAGE INTENTIONALLY LEFT BLANK 
SECTION V –OTHER ACCOMPANYING INFORMATION (UNAUDITED) 47

TREASURY FORFEITURE FUND 

Equitable Sharing Summarized by State and U.S. Territories 

For the Year Ended September 30, 2018 

(Dollars in Thousands) 

(Unaudited) 

8B.S. 9BProperty Value 

State/U.S. Territories Currency Value Property Value 

Alabama $ 229 $ 24 

Alaska 37 - 

Arizona 215 407

Arkansas 76 51

California 53,304 62

Colorado 853 24

Connecticut 1060 53

D.C. Washington 8 - 

Delaware 0 - 

Florida 4,425 522

Georgia 2,657 - 

Guam 349 - 

Hawaii 30 - 

Idaho 81 - 

Illinois 6,864 - 

Indiana 1,931 - 

Iowa 17 - 

Kansas 39 13 

Kentucky 980 - 

Louisiana 4 4 

Maine 48 - 

Maryland 1,790 26

Massachusetts 307 34

Michigan 141 234

Minnesota 30 - 

Mississippi 730 - 

Missouri 267 1 

Montana 212 - 

Nebraska 1,699 - 

Nevada 402 1 

New Jersey 929 - 

New Hampshire 24 - 

New Mexico - -

New York 27,137 231

North Carolina 2,235 2 

North Dakota 113 - 

Ohio 2,859 180

Oklahoma 363 - 

Oregon 294 - 

Pennsylvania 1,430 26

Puerto Rico 13 32

Rhode Island 39 - 

South Carolina 259 124

South Dakota 14

Tennessee 945 57

Texas 7,101 2,041 

Utah 370 - 

Subtotal carried forward $ 122,896 $4,163 
48 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

TREASURY FORFEITURE FUND 

Equitable Sharing Summarized by State and U.S. Territories 

For the Year Ended September 30, 2018 

(Dollars in Thousands) 

(Unaudited) 

State/U.S. Territories Currency Value Property Value 

Subtotal brought forward 122,896 4,163 

Vermont - - 

Virgin Islands - - 

Virginia 183 123

Washington 445 - 

West Virginia 190 182

Wisconsin 21 1 

Wyoming 194 -

 Totals $123,929 $ 4,469 

Summarized above are the currency and property values of assets forfeited and shared with state and local 

agencies and U.S. Territories participating in the seizure. This supplemental schedule is not a required part of the 

financial statement of the Department of the Treasury Forfeiture Fund. Information presented on this schedule 

represents assets physically transferred during the year and, therefore, does not agree with total assets shared with 

state and local agencies in the financial statements. In addition, the above numbers do not include the adjustment 

to present property distributed at net realizable value. 
SECTION V –OTHER ACCOMPANYING INFORMATION (UNAUDITED) 49

TREASURY FORFEITURE FUND 

Uncontested Seizures of Currency and Monetary Instruments Valued Over 

$100 Thousand Taking More Than 120 Days from Seizure to Deposit in Fund 

For the Year Ended September 30, 2018 

(Dollars in Thousands) 

31 U.S.C. 9705(f)(2)(E) requires the Secretary of the Treasury to report annually to Congress uncontested 

seizures of currency or proceeds of monetary instruments over $100 thousand which were not deposited in 

the Department of the Treasury Forfeiture Fund within 120 days of the seizure date. There were 50 

administrative seizures over $100 thousand over 120 days old totaling $21,173 that had not been 

transferred from the Seized Currency Suspense Account to the Treasury Forfeiture Fund as of the end of 

FY 2018. 
50 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

TREASURY FORFEITURE FUND 

Analysis of Revenue and Expenses and Distributions 

For the Year Ended September 30, 2018

(Dollars in Thousands) 

Revenue, Expenses and Distributions by Asset Category: 

Revenue 

Expenses and 

Distributions 

Vehicles $ 20,734 $ 167,134

Vessels 5,759 212,946

Aircraft 5,759 68,603

General Property 18,430 675,902

Real Property 64,504 26,474

Currency and monetary instruments 1,187,164 151,291

1,302,350 1,302,350

Less: 

 Mortgages and claims (2,956) (2,956) 

 Refunds (779) (779) 

Add: 

 Excess of net revenues and financing sources over total program 

 expenses 

 - - 

Total $1,298,615 $ 1,298,615

Revenue, Transfers, Expenses and Distributions by Type of 

Disposition: 

Sales of property and forfeited currency and monetary instruments $ 616,580 $ 247,448

Reimbursed storage costs 3,708 130,235

Assets shared with state and local agencies 137,873 137,873

Assets shared with other federal agencies 18,799 18,799

Assets shared with foreign countries 627 627

Victim Restitution 524,763 524,763

Destructions - 156,282

Pending disposition - 86,323

1,302,350 1,302,350

Less: 

 Mortgages and claims (2,956) (2,956) 

 Refunds (779) (779) 

Add: 

 Excess of net revenues and financing sources over total program 

 expenses 

 - - 

Total $ 1,298,615 $ 1,298,615

The revenue amount of $1,298,615 is from the Statement of Changes in Net Position. This supplemental 

schedule “Analysis of Revenues, Expenses and Distributions” is required under the Treasury Forfeiture Fund 

Act of 1992. 
SECTION V –OTHER ACCOMPANYING INFORMATION (UNAUDITED) 51

TREASURY FORFEITURE FUND 

Information Required by 31 U.S.C. 9705(f)

For the Year Ended September 30, 2018 

(Dollars in Thousands) 

The Treasury Forfeiture Fund Act of 1992, 31 U.S.C. 9705(f), requires the Secretary of the Treasury to 

transmit to Congress, no later than February 1, of each year, certain information. The following 

summarizes the required information. 

(1) A report on: 

(A) The estimated total value of property forfeited with respect to which funds were not deposited in the 

Department of the Treasury Forfeiture Fund during the preceding fiscal year under any law enforced 

or administered by the Department of the Treasury law enforcement organizations or the United States 

Coast Guard, in the case of fiscal years beginning after 1993. 

As reported in the audited financial statements, at September 30, 2018, the Fund had forfeited 

property held for sale of $78,263. The realized proceeds will be deposited in the Fund when the 

property is sold. 

Upon seizure, currency and other monetary instruments not needed for evidence in judicial 

proceedings are deposited in a Customs and Border Protection (CBP) suspense account. Upon 

forfeiture, it is transferred to the Treasury Forfeiture Fund. At September 30, 2018, there was 

$46,734 of forfeited currency and other monetary instruments that had not yet been transferred 

to the Fund. This is reported as a part of “Cash and Other Monetary Assets” in the audited 

financial statements. 

(B) The estimated total value of all such property transferred to any state or local law enforcement agency. 

The estimated total value of all such property transferred to any state or local law enforcement 

bureau is summarized by state and U.S. territories. Total currency transferred was $123,929 

and total property transferred was $4,469 at appraised value. 

(2) A report on: 

(A) The balance of the Fund at the beginning of the preceding fiscal year. 

The total net position of the Treasury Forfeiture Fund on September 30, 2017 which became 

the beginning balance for the Fund on October 1, 2017, as reported in the audited financial 

statements is $2,248,198.
52 TREASURY FORFEITURE FUND ACCOUNTABILITY REPORT – FISCAL YEAR 2018 

TREASURY FORFEITURE FUND 

Information Required by 31 U.S.C. 9705(f)

For the Year Ended September 30, 2018 

(Dollars in Thousands) 

(B) Liens and mortgages paid and the amount of money shared with federal, state, local and foreign law 

enforcement bureaus during the preceding fiscal year. 

Mortgages and claims expense, as reported in the audited financial statements, was $2,956. The 

amount actually paid on a cash basis was not materially different.

The amount of forfeited currency and property shared with federal, and distributed to state, 

local and foreign law enforcement bureaus as reported in the audited financial statements was 

as follows: 

Amount 

State and local $137,873

Foreign countries 627

Other federal agencies 18,799

Victim restitution 524,763

(C) The net amount realized from the operations of the Fund during the preceding fiscal year, the amount 

of seized cash being held as evidence, and the amount of money that has been carried over into the 

current fiscal year. 

The net cost of operations of the Fund as shown in the audited financial statements is $239,431. 

The amount of seized currency not on deposit in the Fund’s suspense account at September 30, 

2018, was $656,742. This amount includes some funds in the process of being deposited at yearend, cash seized in August or September 2018 that is pending determination of its evidentiary 

value from the U.S. Attorney, and the currency seized for forfeiture being held as evidence. 

On a budgetary basis, unobligated balances as originally reported on the Office of Management 

and Budget Reports, SF-133, “Report on Budget Execution” was approximately $825,173 for 

fiscal year 2018. This excluded $149,613 in FY 2018 rescinded authority that was classified as 

“temporary”. If these figures are added to the unobligated balances at the end of FY 2018, the 

figure became $974,786. 

TREASURY FORFEITURE FUND 
SECTION V –OTHER ACCOMPANYING INFORMATION (UNAUDITED) 53

Information Required by 31 U.S.C. 9705(f) 

For the Year Ended September 30, 2018 

(Dollars in Thousands) 

(D) Any defendant’s property not forfeited at the end of the preceding fiscal year, if the equity in such 

property is valued at $1 million or more.

The total approximate value of such property for the Treasury Forfeiture Fund, at estimated 

values determined by bureau and contractor’s officials, and the number of seizures is as follows:

Bureau Amount Number 

CBP $ 206,754 65 seizures 

IRS 1,015,590 142 seizures 

U.S. Secret Service 40,393 15 seizures 

(E) The total dollar value of uncontested seizures of monetary instruments having a value of over $100 

thousand which, or the proceeds of which, have not been deposited into the Fund within 120 days 

after the seizure, as of the end of the preceding fiscal year. 

The total dollar value of such seizures is $21,173. This is also documented on page 49.

(F) The balance of the Fund at the end of the current fiscal year. 

The total net position of the Fund at September 30, 2018, as reported in the audited financial 

statements is $1,435,756.

(G) The net amount, if any, of the excess unobligated amounts remaining in the Fund at the end of the 

preceding fiscal year and available to the Secretary for Federal law enforcement related purposes. 

There is no cap on amounts that can be carried forward into Fiscal Year 2018 per the fiscal 

year 1997 Omnibus Appropriations Act (PL 104-208). 

(H) A complete set of audited financial statements prepared in a manner consistent with the requirements 

of the Chief Financial Officers Act of 1990. 

The audited financial statements, including the Independent Auditor’s Report, are found in 

Sections II and III. 

(I) An analysis of income and expense showing revenue received or lost: (i) by property category (such 

as general property, vehicles, vessels, aircraft, cash, and real property); and (ii) by type of disposition 

(such as sale, remission, cancellation, placement into official use, sharing with state and local 

agencies, and destruction). 

A separate schedule is presented on page 50.