Our objective was to assess the U.S. Postal Inspection Service’s oversight of the Confidential Funds Program (CFP) during fiscal years (FY) 2018 and 2019.
The Postal Inspection Service established the CFP as an investigative tool to assist postal inspectors and spent about $495,000 on the CFP in FYs 2018 and 2019. These confidential funds were used to pay:
- For the purchase of controlled substances as part of an investigation.
- Confidential informants who worked under the direction of a postal inspector and provided useful and credible information regarding criminal activities.
- Sources of information who offered leads or evidence.
- Cooperating defendant informants who were either targets of an investigation or defendants in a case who agreed to cooperate with law enforcement.
During FYs 2018 and 2019, the Postal Inspection Service signed up 121 informants and sources nationwide. Inspectors-in-Charge oversee the CFP in their division and may designate the responsibility to the CFP coordinator. The CFP coordinator oversees team leaders’ functions related to the program, such as disbursement of confidential funds.
The Postal Inspection Service uses a CFP application within their case management system to record informant payments, controlled substance purchases, and associated arrests. Confidential Fund reports are produced from the CFP application which captures fund balances and arrests.
Of the 17 Postal Inspection Service divisions nationwide, we reviewed the [redacted] and [redacted] divisions, based on the number of informants and the amount of funds spent from the CFP during FYs 2018 and 2019. We selected the [redacted] division based on its proximity to the OIG audit team. We reviewed CFP policies and procedures and the three divisions’ confidential funds disbursements, training records, and CFP files for FYs 2018 and 2019.
We planned our fieldwork before the President of the United States issued the national emergency declaration concerning the novel coronavirus outbreak (COVID-19) on March 13, 2020. The results of this audit do not reflect operational changes and/or service impacts that may have occurred as a result of the pandemic.
We found that the Postal Inspection Service provided effective oversight of the CFP. However, opportunities exist to improve oversight of documentation requirements.
Postal Inspection Service team leaders and CFP coordinators did not accurately report CFP-related arrests in the [redacted], and [redacted] divisions. We found that five of eight postal inspectors we interviewed in these three divisions did not accurately report arrests attributable to informants or controlled substance purchases in the CFP application. Specifically, in FYs 2018 and 2019:
- Team leaders reported 28 arrests, CFP coordinators reported four arrests, and our review indicated that 13 arrests should have been reported.
- Postal inspectors could not enter controlled substance purchase arrests due to system limitations.
- The CFP application did not populate the correct number of arrests in the current reporting period for any of the Confidential Fund reports reviewed.
These issues occurred because CFP coordinators did not always verify team leaders’ information and the CFP application had a programming error that prevented it from capturing arrest entries. Per Postal Inspection Service policy, team leaders should report arrests and CFP coordinators should conduct quarterly reviews of their Confidential Fund reports. Inaccurate information may diminish the effectiveness of the CFP as an investigative tool because management is using unreliable data to make decisions.
In addition, postal inspectors did not conduct annual CFP reviews correctly. We evaluated two annual CFP reviews for each of the three divisions and determined:
- None had the correct case management selections or descriptions identifying them as “CI/CS Fund Program” annual reviews.
- Five did not have Confidential Fund reports attached.
- Three did not have the advance of funds request forms.
- Three did not have Confidential Fund reports with required signatures.
- One did not include accurate CFP application data such as team leader and confidential fund designations.
These issues occurred because postal inspectors did not follow CFP annual review guidance. Additionally, the CFP application reports did not capture historical data and only contained current information. Postal inspectors conducting the annual review could rely on incorrect and unreliable CFP data, resulting in management receiving inaccurate and incomplete information to evaluate the overall effectiveness of the CFP.
In addition, in the three divisions we reviewed, 26 postal inspectors who signed up 35 informants did not use the correct type of case to develop and maintain informants. Specifically, postal inspectors used investigative cases instead of area cases which did not require them to document work associated with developing informants. Per policy, area cases are established to conduct preliminary investigative activities and maintain informants. This occurred because postal inspectors were unaware of the requirement to use area cases. As a result of not using the correct type of case, management could not determine the time and effort needed to develop and maintain informants.
Lastly, CFP policies and manuals contain conflicting guidance. Specifically, the CFP Manual states that CFP files require the highest level of protection; however, the Inspection Service Manual (ISM) states they are to be provided with a lower protection level. Additionally, the pre-populated account number on the confidential funds request templates were incorrect in the ISM and CFP application.
These inconsistencies were due to insufficient processes for reconciling CFP guidance. Without reconciled policies and manuals, a postal inspector may incorrectly store CFP files or delay the process for receiving funds, impacting CFP security and efficiency.
We recommend management:
- Enforce CFP guidance and update the CFP application or reevaluate the requirement to capture arrests in the CFP application.
- Ensure that postal inspectors conducting annual CFP reviews follow CFP annual review guidelines.
- Update the CFP application to ensure reports contain accurate information.
- Enforce or update case management area case guidelines for developing and maintaining confidential informants.
- Reconcile guidance annually and update the ISM CFP policies with the CFP Manual to ensure consistency.
Source: USPS Office of Inspector General