Accounting Error Blamed For SDPD’s Missing $1M
Friday, July 11, 2014
Credit: Nathan Rupert / Flickr
San Diego City Auditor Eduardo Luna issued a report that confirmed it was a clerical mistake that made it appear $1 million had gone missing from a special San Diego Police Department fund.
Last month, Comptroller Rolando Charvel told members of the City Council's Audit Committee that a discrepancy discovered in May in an account for assets seized from criminals was the result of the SDPD not including complete data from the city's financial reporting system.
Investigation of Federal Seized Assets Funds and Certifications
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A media review of police documents found that a report to the federal government in 2010 showed a closing balance of $1,153,426 in seized assets and a closing balance of $153,426 a year later, with no explanation as to how $1 million was spent. The funds were passed on to the SDPD by U.S. Treasury agencies under a program that redirects assets from illegal activities to local law enforcement agencies.
"When you talk about why the error happened, it was a report being prepared by the police department for submittal to the federal government without any involvement from our office," Charvel told the Audit Committee last month.
Luna and his office conducted an independent investigation, and in a report released on Thursday, Luna confirmed Charvel's findings that the $1 million dollars was not lost but rather misreported due to a typographical error. The error was made by an associate management analyst from the SDPD while the person was manually entering financial data into an electronic version of the federal report known as the Equitable Sharing Agreement Certification report.
Luna's report said that an independent review by the comptroller would most likely have caught the error prior to submission.
Luna reported that $1.8 million of under-reported expenditures was due a transfer by the comptroller's office that the SDPD was not aware of, but that the money was accounted for, and that $12,500 in omitted revenue from the 2011 report was a product of misclassification.
The report recommended that the comptroller should audit the seized assets funds yearly and revise internal controls process for the funds to ensure that federal reports are completed correctly.
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