Letter Report: Attestation Review of the Internal Revenue Service’s Fiscal Years 1999 and 2000 Office of National Drug Control Policy Accounting Submissions
Reference Number: 2001-10-044
This report has cleared the Treasury Inspector General for Tax Administration disclosure review process and information determined to be restricted from public release has been redacted from this document.
January 31, 2001
MEMORANDUM FOR LAWRENCE W. ROGERS
ACTING CHIEF FINANCIAL OFFICER
FROM: Pamela J. Gardiner /s/ Pamela J. Gardiner
Deputy Inspector General for Audit
SUBJECT: Letter Report – Attestation Review of the Internal Revenue Service’s Fiscal Years 1999 and 2000 Office of National Drug Control Policy Accounting Submissions
This Letter Report presents the results of our Attestation Review of the Internal Revenue Service’s Fiscal Years 1999 and 2000 Office of National Drug Control Policy (ONDCP) Detailed Accounting Submissions. In summary, except for one matter concerning fiscal year 1999 documentation, nothing came to our attention that caused us to believe that the assertions associated with the Submissions are not presented, in all material respects, in accordance with ONDCP-established criteria.
We have included your comments agreeing with our conclusions as Appendix III to this report.
Copies of this report are also being sent to Internal Revenue Service and Department of Treasury managers who are affected by the report conclusions. Please contact me at (202) 622-6510, or Maurice S. Moody, Associate Inspector General for Audit (Headquarters Operations and Exempt Organizations Programs), at (202) 622-8500 if you have questions.
Objective and Scope
Our objective was to perform an attestation review of the assertions presented in the Internal Revenue Service’s (IRS) Fiscal Years 1999 and 2000 Office of National Drug Control Policy (ONDCP) Detailed Accounting Submissions for the purpose of expressing a conclusion on whether the assertions are made in conformance with established criteria. This review was conducted as required by the National Drug Enforcement Policy (21 U.S.C. § 1704(d)) and the ONDCP Circular, Annual Accounting of Drug Control Funds, dated December 17, 1999.
We conducted our fieldwork in the IRS’ Headquarters offices of the Chief Financial Officer (CFO) and Chief, Criminal Investigation (CI) during the period of November 2000 through January 2001. Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on the ONDCP Detailed Accounting Submission assertions. Accordingly, we do not express such an opinion.
The IRS’ Fiscal Years 1999 and 2000 submissions included additional information concerning Interagency Crime Drug Enforcement obligations, which is not required by the ONDCP Circular. This information was not reviewed, and accordingly, we do not express any form of assurance on it.
Major contributors to this report are listed in Appendix I. Appendix II contains the Report Distribution List. Appendix III contains Management’s Response.
The Anti-Drug Abuse Act of 1988 establishes as a policy goal the creation of a drug-free America. A key provision of the Act is the establishment of the ONDCP to set priorities, implement a national strategy, and certify federal drug control budgets. The IRS’ Narcotics Program supports the National Drug Control Strategy through continued support of joint agency task forces including the Interagency Crime Drug Enforcement task force and High Intensity Drug Trafficking Area task force, through the use of asset forfeiture, assistance in developing money laundering and asset forfeiture legislation, and international training and assistance programs.
The Strategy established five goals and thirty-two supporting objectives as the basis for a coherent, long-term national effort. The IRS’ CI focuses on two goals, which are to reduce drug-related crime and to reduce sources of supplies.
The National Drug Control Program agencies are required by 21 U.S.C. § 1704(d) to submit to the Director of the ONDCP, not later than February 1 of each year, a detailed accounting of all funds expended (the ONDCP Circular requires amounts obligated) by the agencies for National Drug Control Program activities during the previous fiscal year. Further, it requires such accounting to be authenticated by the Inspector General of each agency prior to its submission.
We reviewed the accompanying IRS ONDCP Detailed Accounting Submissions and assertions for the Fiscal Years ended September 30, 1999, and September 30, 2000 (Appendix IV). These submissions, including the assertions made, were prepared pursuant to 21 U.S.C. § 1704(d) and the ONDCP Circular, Annual Accounting of Drug Control Funds, dated December 17, 1999, and they are the responsibility of the IRS.
The assertions required by Section 5.b. of the ONDCP Circular include that the methodology used is reasonable and accurate, the methodology disclosed was the actual methodology used, and the obligations presented are associated with a financial plan that properly reflects changes if made. ONDCP-established criteria include well-documented sources of data with demonstrated connection to drug control obligations, documented and explained estimations, complete reporting of data, fair presentation of data from financial systems, well- documented calculations, and association with a financial plan that, if revised, properly reflects those revisions, including ONDCP’s approval of reprogrammings in excess of $5 million.
Fiscal Year 1999 Office of National Drug Control Policy Detailed Accounting Submission Assertions Were Presented Fairly
The IRS could not provide original documentation supporting total CI obligations that are extracted, at year-end, from the Automated Financial System/Budget Formulation System. We were able, however, to obtain other documentation used in the methodology.
Based on our review, with the exception of the matter described in the preceding paragraph, nothing came to our attention that caused us to believe that the accompanying IRS Fiscal Year 1999 ONDCP Detailed Accounting Submission assertions are not presented, in all material respects, in accordance with ONDCP-established criteria.
Fiscal Year 2000 Office of National Drug Control Policy Detailed Accounting Submission Assertions Were Presented Fairly
Based on our review, nothing came to our attention that caused us to believe that the accompanying IRS Fiscal Year 2000 ONDCP Detailed Accounting Submission assertions are not presented, in all material respects, in accordance with ONDCP-established criteria.
Management’s Response: IRS management agreed with the results of our attestation review.
* * * * *
While this report is an unrestricted public document, the information it contains is intended solely for the use of the IRS, the United States Department of the Treasury, the ONDCP and the Congress. It is not intended to be, and should not be, used by anyone other than these specified parties.
Major Contributors to This Report
Maurice S. Moody, Associate Inspector General for Audit (Headquarters Operations and Exempt Organizations Programs)
John R. Wright, Director
Thomas Brunetto, Audit Manager
Terrey Haley, Senior Auditor
Melinda Pope, Senior Auditor
Richard Louden, Auditor
Report Distribution List
Deputy Commissioner N:DC
Chief Counsel CC
Chief, Criminal Investigation CI
National Taxpayer Advocate TA
Director, Office of Program Evaluation and Risk Analysis N:ADC:R:O
Director, Legislative Affairs CL:LA
Management Controls Coordinator A
Department of the Treasury, Deputy Chief Financial Officer MD
Chief Financial Officer N:CFO
Chief, Criminal Investigation CI
Management’s Response to the Draft Report
The response was removed due to its size. To see the complete response, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.
Internal Revenue Service Annual Accounting of Drug Control Funds
The Appendix for the Internal Revenue Service Annual Accounting of Drug Control Funds was removed due to its size. To see Appendix IV, please go to the Adobe PDF version of the report on the TIGTA Public Web Page.