Office of the Inspector General Department of Justice

THE DRUG ENFORCEMENT ADMINISTRATION'S
DOMESTIC CANNABIS ERADICATION/SUPPRESSION PROGRAM

Audit Report 95-20, (4/95)

TABLE OF CONTENTS

EXECUTIVE DIGEST

INTRODUCTION

I. OBJECTIVES

II. SCOPE AND METHODOLOGY

III. BACKGROUND

A.Cannabis Usage

B.The Cannabis Program

C.Applicable Legislation

D.National Drug Strategy/Departmental Streamlining Strategy

E.Program Management

F.Program Participation

G.Bureau of Justice Assistance Funded Programs

H.Prior Reviews

FINDINGS AND RECOMMENDATIONS

I. COMMUNICATION OF PROGRAM REQUIREMENTS

A.Incorrect Program Statistics

B.Program Expenditures

Recommendations/Actions Taken

II.COMMUNICATION OF FUNDING DECISIONS

Recommendation/Action Taken

STATEMENT ON INTERNAL CONTROL STRUCTURE

STATEMENT ON COMPLIANCE WITH LAWS AND REGULATIONS

APPENDIX I -SCOPE AND METHODOLOGY

APPENDIX II -FEDERAL, STATE, AND LOCAL AGENCIES

REVIEWED/CONTACTED

APPENDIX III -DOMESTIC CANNABIS ERADICATION/SUPPRESSION

LETTERS OF AGREEMENT

APPENDIX IV -BUREAU OF JUSTICE ASSISTANCE

FORMULA GRANT PROGRAM AWARDS FOR

MARIJUANA ERADICATION

APPENDIX V -BUREAU OF JUSTICE ASSISTANCE'S COMMENTS

TO THE DRAFT REPORT

* * *

THE DRUG ENFORCEMENT ADMINISTRATION'S

DOMESTIC CANNABIS ERADICATION/SUPPRESSION PROGRAM

EXECUTIVE DIGEST

The Office of the Inspector General (OIG), Audit Division, has completed an audit of the Drug Enforcement Administration's Domestic Cannabis Eradication/Suppression Program. The audit was initiated at the request of the Drug Enforcement Administration (DEA) management. The Program has been successful; for a relatively modest investment of $10 million in FYs 1993 and 1994, DEA supported state and local law enforcement agencies' efforts to eradicate cannabis and suppress its use. Specifically, in 1993, four of the ten states audited reported the following: 72,635,036 plants eradicated, $16,417,232 assets seized, 1,409 weapons seized, and 2,679 offenders arrested. The remaining six states included the activities of non-participating agencies in their reports to DEA, resulting in data being overstated. In addition, DEA realized the indirect benefit of developing and nurturing excellent relationships with state and local law enforcement agencies throughout the country. DEA operational personnel in Headquarters and in the field, as well as state and local officials in the ten states audited, strongly supported the Program.

This report presents the audit results and provides recommendations for: (1) identifying areas where DEA can more effectively monitor the Program and communicate Program requirements to state and local participants; and (2) increasing coordination between the DEA Program and the cannabis eradication efforts funded through the Office of Justice Programs (OJP), Bureau of Justice Assistance (BJA) grant program.

Overall, we found that DEA funds were expended by state and local agencies for allowable purposes in accordance with established guidelines. Our review did not reveal weaknesses with the internal controls involving the destruction of cannabis.

Prior to preparing the audit report, the OIG consulted with both DEA and BJA management about the audit findings and jointly developed appropriate recommendations. In some cases, corrective action has been undertaken. This cooperative effort maximized the positive impact of the audit, and will facilitate the implementation of the recommendations to achieve the desired results.

Both DEA and BJA reviewed and commented on the draft report, which was revised accordingly. However, BJA management asked that the full text of their comments be appended to the final report (see Appendix V).

INTRODUCTION

The Office of the Inspector General (OIG), Audit Division, has completed an audit of the Drug Enforcement Administration's (DEA) Domestic Cannabis Eradication/Suppression Program (the Program). The audit was initiated at the request of DEA management.

I. OBJECTIVES

The objectives of the audit were to determine:

Whether DEA funds were expended by state and local agencies for allowable purposes in accordance with established guidelines,

The adequacy and accuracy of program measurements,

Whether DEA has established adequate internal controls over the destruction of cannabis,

The extent of DEA's oversight of the Program at the Headquarters and field levels, and

The extent of coordination between DEA's Domestic Cannabis Eradication/Suppression Program and the Office of Justice Programs (OJP), Bureau of Justice Assistance's (BJA) funded efforts in this area.

II. SCOPE AND METHODOLOGY

The audit was performed in accordance with generally accepted government auditing standards and included tests and procedures necessary to accomplish the audit objectives. Applicable Federal laws and regulations, as well as DEA policies, procedures, and planning documents, were reviewed.

The audit concentrated on the period September 1, 1992 through August 31, 1994, and focused primarily on the Program administered by the DEA Office of Investigative Support, Special Investigative Support Section. In addition, weperformed a limited review of the cannabis eradication efforts funded by BJA. Further details on the scope and methodology can be found in Appendix I.

As the audit progressed, the audit team verbally provided DEA Program management with detailed results of the audit. DEA used the information to train Program Coordinators at a conference held in December 1994.

Prior to issuing the report, we consulted with DEA and BJA management to reach agreement on our findings and recommendations. As a result, DEA managers have begun the necessary improvements to the Program.

III. BACKGROUND

A. Cannabis Usage

According to DEA, cannabis, commonly known as marijuana, is the most widely used illegal drug in the United States. Domestically grown cannabis accounted for 10 percent of all marijuana consumed in 1980, and increased to about 25 percent in 1992, despite the efforts of the Program. The potency of cultivated marijuana has also increased significantly as a result of modern agricultural methods and techniques. DEA indicated that the average strength of the main hallucinogen in cannabis (Delta-9 tetrahydrocannabinol) had increased from about 6 percent in 1982 to about 15 percent in 1992, with a record high of almost 30 percent.

The production and marketing of marijuana can be very lucrative. On average, the usable yield from one marijuana plant is approximately one pound. DEA statistics indicated that the retail price of high quality domestic marijuana had risen from $4,800 per pound in 1988 to $7,200 per pound in 1991 (the most recent data available from DEA). As a result, there may be increased potential for cultivating marijuana as a cash producing crop.

The use of marijuana by young people continues to be a national problem. As highlighted by the national media, a recently issued study by the National Parents' Resource Institution for Drug Education revealed that teenage use of marijuana increased significantly during the 1993-1994 academic year. More specifically, the number of high school students using marijuana at least once a month increased from approximately 11 percent to 16 percent.

B.The Cannabis Program

DEA's primary mission is to enforce the Nation's drug laws. Under that umbrella, DEA established the Program to deter the cultivation of marijuana in the United States. The main thrust of the Program was to provide direct support to state and local cannabis eradication efforts and to integrate the various activities into a comprehensive national campaign. DEA formalized the Program in the early 1980's by initiating support to 7 states. In FY 1994, all 50 states were involved in the Program.

C.Applicable Legislation

The Controlled Substances Act of the Comprehensive Drug Abuse Prevention and Control Act of 1970 directs the Attorney General to cooperate with Federal, state, and local agencies concerning the trafficking of controlled substances. This Act further authorized the Attorney General to conduct programs of eradication aimed at destroying wild or illicit growth of plant species from which controlled substances may be extracted.

D.National Drug Control Strategy/Departmental Streamlining Strategy

The White House issued a National Drug Control Strategy in February 1994. This document stated the need to better define the size and scope of the drug problem and work aggressively to suppress domestic marijuana production and trafficking.

However, in the Department of Justice's (DOJ) Streamlining Strategy of October 1994, DEA identified potential streamlining actions to be implemented from 1996 through 1999. These actions include: "eliminating duplicate functions or organizational elements that are not central to DEA's mission, such as the marijuana eradication and demand reduction programs." DEA officials were unable to provide us with a clear perspective on the future of the Program. However, they informed us that the Program was funded for FY 1995.

E.Program Management

At the Headquarters level, the Program was administered by the DEA's Special Investigative Support Section. The Program was staffed with one section chief, two special agents serving as staff coordinators, one program assistant who was primarily responsible for maintaining financial and programmatic data, one program analyst, and a National Guard representative.

In each state, DEA designated a special agent to serve as program coordinator. DEA Coordinators' duties included: (1) coordinating statewide Program efforts, (2) maintaining and reporting Program statistics, and (3) keeping Division management informed as appropriate. Oversight of the Program at the state level varied depending on whether DEA Coordinators were on a full-time or collateral basis.

Each state also had a state Coordinator who was designated by the primary agency receiving funding. State Coordinators' responsibilities included monitoring the Program's financial aspects and tracking the Program's results.

F. Program Participation

According to DOJ budget staff, DEA reprogrammed $843,340 within its appropriation to establish the Program in 1982. This amount increased to $3.8 million annually and remained unchanged until 1991, when Congress appropriated an additional $10 million for the Program. However, for the period 1992 through 1994, the Program was funded exclusively by Congress at $10 million, annually.

DEA utilized Letters of Agreement with state and local agencies to provide funding to help defray the cost of state marijuana eradication efforts. In FY 1993, DEA entered into 64 Letters of Agreement throughout the 50 states (See Appendix III).

To receive funding, each state had to prepare an annual Operation Plan in coordination with the designated DEA Coordinator for that state. These plans delineate the strategy the states propose to use for the Program. Specifically, an Operation Plan should outline: (1) the cannabis cultivation situation in the state; (2) DEA Resident Office and state and local resources available; (3) the nature of the state's cannabis eradication/suppression activities; and (4) a quantitative request for funding, training, and other resource support needed from DEA Headquarters.

Operation Plans were to be submitted to DEA Headquarters for approval. Upon approval, individual Letters of Agreement were entered into with the state agency receiving funding. This agency was responsible for the overall execution of the Program and could, in coordination with other state or local agencies, distribute Program funds further within the state. When multiple agencies within a state received money, the state agency receiving the funding from DEA would remain responsible for the general oversight of the Program.

G. Bureau of Justice Assistance Funded Programs

The states' cannabis eradication efforts were not limited to participation in DEA's Program. States may undertake their own operations or create cannabis eradication groups, independent of DEA, using grant funds provided by BJA. These grants were a part of a broad program of criminal justice system improvements. These grants focused particularly on state and local anti-drug system and anti-violence initiatives, and were supported in part with Federal funding. The states could use grant funds for 26 statutory purposes.

Specifically, the BJA Director was authorized, under Section 3751(b)(3) of Title 42 USC, Grants to State and units of local government (The Edward Byrne Memorial State and Local Law Enforcement Assistance Programs), to make drug enforcement grants, for use by the states and local governments within the state, for:

"programs designed to target the domestic sources of controlled and illegal substances, such as precursor chemicals, diverted pharmaceutical, clandestine laboratories, and cannabis cultivations."

These BJA funded efforts were not a part of the DEA Program nor any other established program. In FY 1993, the states elected to spend approximately $3.3 million of BJA funds for cannabis eradication activities. (See Appendix IV).

H.Prior Reviews

In November 1985, the Audit Staff of the Justice Management Division, a predecessor of the OIG, Audit Division, conducted a review of DEA's Program in the Western United States. The report disclosed that the Program had achieved progress in assisting law enforcement agencies to eradicate domestically grown marijuana with a limited budget. The report made several recommendations for improvement concerning operational procedures and priority. At the time of our audit, the report was formally resolved and closed because of efforts taken by DEA.

The Program was subject to review under Office of Management and Budget Circular A-128, which established requirements for states pursuant to the Single Audit Act of 1984. Review of these audit reports for the states audited generally showed that the Program did not meet the minimum funding threshold required for review.

We also examined DEA Inspections Reports in which no deficiencies were identified. Finally, we reviewed state generated reports, when available and found one report which identified potential deficiencies and is referred to in Finding I.

FINDINGS AND RECOMMENDATIONS

I.COMMUNICATION OF PROGRAM REQUIREMENTS

The DEA Domestic Cannabis Eradication/Suppression Program was primarily implemented through state and local agencies. Thus far, with limited Federal funds, DEA successfully assisted in the suppression of marijuana through eradication, asset and weapon seizures, and arrests. Specifically, in 1993, four of the ten states audited reported: 72,635,036 plants eradicated, $16,417,232 assets seized, 1,409 weapons seized, and 2,679 offenders arrested. The remaining six states' reports included the activities of non-participating agencies, resulting in inflated and therefore unusable data. Through this Program, DEA also pushed marijuana growers indoors, making it more difficult and costly for the offenders.

We reviewed internal controls over the destruction of cannabis in 10 states and localities within each state. We also participated in a multi-agency cannabis eradication effort during which we observed the destruction of thousands of cannabis plants. Our testing revealed no discrepancies or weaknesses in the destruction of cannabis. Participating agencies stored and destroyed eradicated marijuana according to each jurisdiction's procedures concerning evidence in criminal cases.

However, we did find that Program requirements had not been adequately communicated to participating agencies and DEA officials did not request Program-specific information available from participants. As a result, DEA had to rely on inadequate information to measure Program success and track related expenditures. In addition, DEA could not accurately assess the impact of the Program, and could not ensure that the Program was being executed as efficiently as possible.

DEA developed and distributed a "Coordinators Handbook" to DEA Coordinators, providing them with background and guidance on the Program. This handbook provides a synopsis of DEA Coordinators responsibilities, samples and explanations of various documents, and funding requirements and procedures. It also contains applicable legislation governing the Program, as well as contact points of Federal agencies which have agreed to assist in the Program.

State level participants were not provided with similar reference material. Although DEA conducted annual conferences to discuss operational and administrative aspects of the Program with participants, information distributed at these conferences was informal. Therefore, participants were not always aware of all Programguidelines. State officials could administer the Program in a more effective and efficient manner if they were better informed of DEA's requirements. A written manual would provide these officials a reference point to research issues and questions that arise during the operation of the Program. The OIG discussed this issue with DEA Program managers who have agreed that such a manual would be beneficial to the state Coordinators and have begun compiling a handbook.

We identified areas which should be addressed by the manual including instructions on how to report on Program statistics and the disbursement and use of funds.

A.Incorrect Program Statistics

Program accomplishments reported by DEA did not accurately represent the results of the participants' activities. This occurred because DEA requested the states to report Program accomplishments on a statewide basis. As a result, DEA did not have accurate information to adequately assess the impact of the Program.

Participation in DEA's marijuana eradication program required the DEA Coordinator in each state to prepare and submit Monthly Statistical Reports with input from the appropriate state agency. According to the DEA Coordinator's Handbook, "it is essential that eradication efforts in each state be reported in a timely and accurate manner..." and that the reports contain the required information. However, the Handbook did not convey that each state was to separately report activity resulting from agencies funded through this Program.

The Monthly Statistical Reports measure Program results using several categories. The participating agencies report eradicated marijuana in the following categories:

Processed Marijuana - Actual dry smokeable marijuana in the drying process, loose, or packaged.

Outdoor Cultivated Plants - Hand tended, watered, individually pruned, grafted, or cloned marijuana plants.

Indoor Cultivated Plants - Marijuana plants grown indoors.

Ditchweed Plants - Scattered marijuana plants which are naturally wild growing and are not normally tended to by any individuals.

According to Program officials in six of the ten states audited, statistics reported to DEA Headquarters included the eradication efforts of non-participating agencies. As a result, the data used by DEA Headquarters to report on the Program was inflated. Testing in four of these states was inconclusive, because we could not trace supporting documentation used by these states in compiling the statistics. Therefore, we could not determine the extent of the error in these locations. The results of the review in the remaining two states appear below:

The DEA and state Coordinators in this state requested and reported to DEA eradication statistics from agencies which did not receive Program funds, but had expressed interest in participating in the Program. In addition, the data included several reporting and mathematical errors. The following table demonstrates the extent of the overstatement for this state for a 2 month period in 1993.

Program officials in the second state reported eradication statistics for the entire state, although much of the activity was not funded by the Program. Overstatements for this state, during calendar year 1993, are shown in the following table.

DEA's national statistics on Program results were compiled using statistical reports submitted by the states. These statistics were published in an annual report for the Program, as well as in other DEA promotion material. In its 1992 Domestic Cannabis Eradication/Suppression Program Report (the latest report available from DEA), DEA published the final 1992 statistics for all 50 states. The report specifically stated: "these data do not include non Domestic Cannabis Eradication/Suppression Program information..." However, as stated above, participating agencies in 6 of the 10 states tested reported non-program activity to DEA.

Specific information on the DEA funded Program was particularly important, because, as DEA officials advised us, the number of eradicated plants, asset and weapon seizures, and arrests were used as a way to judge the effectiveness of the individual Programs in the 50 states. The officials also told us that this information could affect the amount of funds that a state receives.

DEA did not receive the necessary information to accurately measure Program success, because, as previously stated, DEA requested the states to report Program accomplishments on a statewide basis. As a result, national statistics may beoverstated. According to state officials, they were not aware that DEA required that statistics for the Program be separated from total state statistics. Therefore, the distribution of clear Program guidance to state officials would help provide DEA with more useful statistical information.

B.Program Expenditures

DEA utilized Letters of Agreement with state and local agencies to provide funding to help defray the cost of marijuana eradication efforts. The Letters of Agreement provided the states with general guidelines concerning Program expenditures. DEA allowed the states discretion over how eradication funds were spent, because the cannabis situation in each state varied. Although DEA did not systematically monitor the use of all Program funds, it retained approval rights for certain types of expenditures. The audit revealed that improved communication of DEA requirements would have enhanced the process of approving expenditures and funding local agencies.

To determine whether state and local agencies expended DEA funds for allowable purposes and in accordance with guidelines for FYs 1993 and 1994, we tested a total of $1,907,331 (39 percent) of the $4,871,912 expended in ten states. In general, we found that expenditures were supported and within Program guidelines. However, a review of $452,088 (78 percent) of $579,677 expended by the ten states for the purchase of equipment, during the test period, revealed the following minor weaknesses which have been related to DEA. DEA officials informed us that this information was very important to them, as it identified issues which they feel could affect the efficient operation of the Program.

Equipment Usage - In some cases, although purchases of equipment were properly approved, the equipment was not primarily utilized for marijuana eradication. While information detailing probable equipment usage was not required by DEA, funds could be more effectively utilized if DEA officials were fully aware of the use of the equipment.

For example, review of expenditures in one state included the purchase of a computer and printer costing approximately $3,000. State officials told us that computer equipment was used less than 50 percent of the time for cannabis eradication. In cases such as this, Program funds would be more effectively used if only a prorated portion of the cost was paid by DEA. We discussed this idea with DEA officials who agreed that it would result in a more efficient use of Federal funds.

Approval Process - Program policy required states to obtain DEA approval for the purchase of non-expendable equipment, which was defined as having a useful life of more than 1 year, and a cost of $300 or more per unit. Examples of these purchases included the acquisition of surveillance equipment, computers and printers. Our review indicated that state authorities generally requested approval from DEA for these purchases.

Once DEA officials approved an expenditure, they did not require notification of significant differences from the approved amount. As a result, the approval of an expenditure could be very ineffective. To illustrate, in one location, state officials received approval for the purchase of two helicopter cable cutter kits for $8,600. The actual purchase price of these kits totaled $46,968, resulting in a $38,368 difference. This total isolates the cost of the kits only and does not include costs incurred for other related equipment nor the cost of installation. At the time of the audit, Program guidelines did not require state officials to notify DEA of such variances. DEA officials agreed that more specific guidelines requiring the state to immediately report this information would permit them to make more informed decisions.

At the time of the audit, participants were able to expend Program funds on inexpensive non-expendable items without notifying DEA. There was no limit on the aggregate purchase amount; the limit was only on unit cost. Thus, at any given time, an agency could spend thousands of dollars on small items without DEA being aware of the purchases. To illustrate, a state audit report identified the following purchases, which were made without DEA's knowledge:

The state was not required to receive DEA's approval for these purchases, as all of the items had a unit cost under $300 and approval applied only to unit cost. However, when informed of the above by the audit team, DEA officials expressed concern over the type and extent of items being purchased and agreed that an aggregate purchase limit should be established. The audit further revealed that in one state DEA funds were used to pay for the use of helicopters, accruing daily rental costs whether or not they were used. We tested the use of the helicopters in two locations within the state for approximately a 2-month period. The helicopters were retained at a cost of $500 and $600 per day, and were not utilized for at least 29 days in each location. As a result, $31,900 ($14,500 + $17,400) could have been used more efficiently.

In addition, seven of the ten state agencies audited had distributed some of their DEA Program funds to other agencies within the states. However, the Letters of Agreement were not specific to how this distribution should be executed. In five of these states, funds were distributed on a reimbursable basis and were subject to review.

In contrast, the two remaining state agencies were not utilizing a reimbursable basis which would have allowed them to review individual local expenditures. As a result, DEA funds were susceptible to potential misuse by local agencies. When advised of this situation, DEA officials expressed their desire to have all states who plan to distribute funds to do so on a reimbursable basis.

DEA did not receive all necessary information to ensure that funds were used as efficiently as possible. This occurred because Program guidance was not effectively communicated to participants. State agencies involved in the Program had few written guidelines concerning Program execution and administration and some indicated that more formal guidance would be beneficial. More detailed instructions would assist state participants in effective execution of financial aspects of the Program.

The following details the recommendations which were developed jointly by the OIG and DEA.

RECOMMENDATIONS/ACTIONS TAKEN

We recommend the DEA Administrator:

1.Issue a Handbook to state and local Coordinators describing the execution of the Program.

Resolved. DEA is in the process of revising and updating the current Handbook. They anticipate issuing the Handbook to DEA and state and local Coordinators by August 30, 1995.

2.Instruct state and local Coordinators to report statistics that clearly delineate the results of this Program from the overall state results.

Resolved. DEA officials told us that they held a conference with state and local Coordinators in March of 1995 during which the Coordinators were instructed to separate out statistics that directly result from Program funding effective April 1, 1995. In addition, this requirement will be addressed in the revised Handbook.

3.Require state and local Coordinators to obtain approval from DEA when expending Program funds for non-expendable items that exceed $300 per unit or $1,000 in aggregate.

Resolved. DEA officials told us that, at the conference held in March of 1995, they informed state and local Coordinators of the requirement to obtain approval. In addition, the revised Handbook will clearly address this requirement.

4.Advise state and local Coordinators to develop an allocation plan estimating the percentage of use for eradication efforts, when requesting approval for the purchase of non-expendable equipment.

Resolved. DEA officials told us that, at the conference held in March of 1995, they informed state and local Coordinators of the requirement to develop an allocation plan. In addition, the revised Handbook will clearly address this requirement.

5.Require state and local Coordinators to notify DEA prior to spending funds, when actual expenditures will exceed approved costs by 10 percent or $300 whichever is less.

Resolved. DEA officials told us that, at the March 1995 conference, they re-emphasized to state and local Coordinators the necessity to notify DEA when actual expenditures exceed approved costs by 10 percent or $300 both and that they will re-emphasize this point in the Handbook. 6.Advise state and local Coordinators to enter into reimbursable agreements, when funding secondary agencies, to allow them to review expenditures.

Resolved. DEA officials told us that, at the conference held in March of 1995, they informed state and local Coordinators of the requirement to enter into reimbursable agreements and that they will include this requirement in the Handbook to be distributed by August 30, 1995.

To close recommendations 1 through 6, please provide a copy of the Handbook when it becomes available.

II. COMMUNICATION OF FUNDING DECISIONS

The DOJ funded cannabis eradication efforts directly through DEA and indirectly through BJA grants. Although the Department is involved in funding both cannabis eradication efforts, financial information was not exchanged at the Headquarter's level. DEA officials advised us that knowledge of which state agencies were allocating BJA funds for cannabis eradication could have influenced how they distribute their resources and thereby maximized the use of the $13.3 million in Federal funds.

The BJA staff used a database to help monitor their grant programs. This database listed the name of the state and local agencies receiving cannabis eradication funds, along with the contact name and telephone number of the coordinating agency official. Although DEA designated a Special Agent as a liaison with BJA, information as to which states elected to fund cannabis eradication was not communicated. The DEA information may not be as important to BJA because as a grantor agency, the Bureau of Justice Administration's role differs significantly from DEA's direct role in funding cannabis eradication efforts. However, the BJA's information could be critical to DEA officials who have discretion as to how funds are distributed among state agencies.

The audit team obtained the necessary information from BJA and presented it to DEA Program officials who indicated the information was important and could have impacted their funding decisions. For example, in FY 1993, the same agency within one state elected to spend $530,813 of BJA grant funds for cannabis eradication and additionally received $185,000 from DEA. DEA management informed us that they may have re-directed some of their limited funds, if they were aware of the other Federal funding.

Prior to the conclusion of the audit, DEA obtained some funding information from BJA which they have found helpful. DEA and BJA officials should continue to coordinate their efforts and decide on a mutually agreeable time when financial grant information can be shared in the future.

The following details the recommendation developed jointly by the OIG, DEA, and BJA and action taken by these agencies.

RECOMMENDATION/ACTION TAKEN

We recommend the DEA Administrator:

7.Continue to obtain from BJA, at a mutually agreeable time, a listing of cannabis eradication efforts which are funded through grants by that agency.

Resolved: DEA officials have obtained funding information from BJA and have begun to utilize it to help determine the distribution of their funds.

To close this recommendation, please provide documentation of a mutual agreement to continue to furnish this information in the future.

STATEMENT ON INTERNAL CONTROL STRUCTURE

In planning and performing the audit of DEA's Domestic Cannabis Eradication/Suppression Program, we considered the internal control structure for the Program. At the participating agencies, we focused on the internal controls related to the counting and destruction of cannabis and reviewed accounting and inventory practices, as well as the management of funds.

We did not review internal controls in order to express an opinion on DEA's internal control structure, nor that of the individual states participating in the Program. However, there are certain matters involving the internal control structure that we consider to be reportable conditions under generally accepted government auditing standards. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control structure that, in our judgment, could adversely affect the ability of DEA to use funds more efficiently and effectively. We found there was a lack of communication among Federal, state, and local agencies, which had an effect on the use of funds and DEA's oversight of the Program (Findings I and II). However, in our opinion, these conditions did not have a material effect on the Program.

We are not expressing an opinion on DEA's internal control structure. This statement is intended solely for the information and use of DEA management in monitoring the Program. This restriction is not intended to limit the distribution of this report, which is a matter of public record.

STATEMENT ON COMPLIANCE WITH LAWS AND REGULATIONS

The OIG, Audit Division, has audited the operation of DEA's Domestic Cannabis Eradication/Suppression Program. The review covered the period September 1, 1992 through August 31, 1994 and included a review of selected activities and transactions as deemed necessary. The audit was conducted in accordance with generally accepted Government auditing standards.

In connection with the audit, and as required by the standards, we tested transactions and records to obtain reasonable assurance concerning the agency's compliance with laws and regulations that, if not complied with, we believe would have a material effect on Program operations. Compliance with laws and regulations applicable to this Program is the responsibility of DEA management.

An audit includes examining, on a test basis, evidence about laws and regulations. The specific laws and regulations for which we conducted tests are contained in:

Controlled Substance Act of the Comprehensive Drug Abuse Prevention and Control Act of 1970; and 3751(b)(3) of Title 42 USC, Grants to State and units of local government; purposes of grants, also known as the Edward Byrne Memorial State and Local Law Enforcement Assistance Programs.

Test results indicated that, for the items tested, we identified no material instances of noncompliance with the above laws and regulations.

With respect to those transactions not tested, nothing came to our attention that caused us to believe that DEA management was not in compliance with the laws and regulations cited above.

APPENDIX I

SCOPE AND METHODOLOGY

The audit was conducted at DEA Headquarters and at several state and local agencies dealing with cannabis eradication. We interviewed DEA, BJA, and Departmental officials. These discussions included the monitoring of and accounting for cannabis eradication funds. In each state, we interviewed DEA personnel, along with state and local officials participating in the Program, and reviewed state audit reports on this Program. When applicable, state and local officials involved with BJA funded cannabis eradication efforts were also interviewed. Overall, we interviewed about 120 individuals.

The audit included reviews of selected Program activities in ten states (see Appendix II). These states were among those receiving the largest amount of Program funds, with the agencies reviewed accounting for approximately 41 percent of the amount disbursed to participants in 1993.

Pursuant to DEA's request, at the state level the review focused on whether states were spending Program funds for allowable purposes and in accordance with DEA guidelines. To that end, the audit team tested selected financial transactions in each state for FY 1993, and when documentation was available, FY 1994. This testing primarily focused on whether state and local expenditures were: (1) incurred in support of the DEA Program; (2) traceable to supporting documentation; and (3) approved by DEA officials, if required. The audit team also determined whether Program statistics reported to DEA by the state agencies were supportable. In addition, the audit team observed a DEA organized multi-agency cannabis eradication effort. This experience gave the audit staff an operational perspective of the extensive planning and execution requirements of large eradication operations.

DEA officials indicated they spent approximately 7 percent of the Program funds to support their own activities in the Program. Specifically, in FY 1993, DEA expended approximately $722,000; these expenditures were excluded from the scope of this audit.

APPENDIX II - FEDERAL, STATE AND LOCAL AGENCIES REVIEWED/CONTACTED

APPENDIX III - DOMESTIC CANNABIS ERADICATION/SUPPRESSION LETTERS OF AGREEMENT

APPENDIX IV - BUREAU OF JUSTICE ASSISTANCE

FORMULA GRANT PROGRAM AWARDS FOR MARIJUANA ERADICATION

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