MANAGING THE DRUG FUND

1
MANAGING THE DRUG FUND

• Municipal Technical Advisory Service
• County Technical Assistance Service
• Rex Barton Ralph Cross
• Terry Hazard Steve Walker

2
Housekeeping

• Registration forms AND sign-in forms
• Introduce yourself
• Fire exits?
• Breaks
• Ask Questions
• Questions now?
• Pre-test

3
Pre-test

1. All revenues from drug fines are deposited in the
   drug fund. T/F
2. Revenues from the sale of vehicles forfeited to
   the city as a result of being used to transport
   or sell drugs go to the drug fund. T/F
3. Revenues from the sale of vehicles seized for
   second or subsequent offense DUI go to the drug
   fund. T/F

4
Pre-test

1. Revenues from the sale of vehicles seized for
   Driving on a Revoked Drivers License go to the
   drug fund. T/F
2. The drug fund is under the control of the city
   recorder/trustee. T/F
3. Funds from the drug fund may be appropriated to
   local drug treatment programs. T/F

5
Pre-test

1. The drug fund can be used to buy dog food and
   veterinary services for the drug dog. T/F
2. The drug fund can be used to purchase handguns
   for patrol officers. T/F
3. A drug agent (officer) must create a written
   receipt for every transaction with an informant.
   T/F
4. The drug fund budget must be approved by the
   District Attorney General. T/F

6
The Drug Fund

• The drug fund is a special revenue account.
• Similar to solid waste fund account or
  street aid fund account.
• It is under the control of the city
  recorder/trustee !!
• Confidential expenditures are made from a
  separate account (confidential account).

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Sources of Revenue

• Fines from drug offenses
• 50 of the fine goes to the drug fund (special
  revenue account).
• 50 of the fine goes to the General Fund.
• Forfeited cash and the proceeds from the sale of
  forfeited property.
• Donations.
• Appropriations from governing body.

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FORFEITED CASH AND THE PROCEEDS FROM THE SALE
OF FORFEITED PROPERTY
FINES
DONATIONS
APPROPRIATIONS
SPECIAL REVENUE ACCOUNT (City Recorder/Trustee)
50
50
GENERAL FUND
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LEGITIMATE EXPENDITURES

• Local Drug Treatment Programs
• Drug Education Programs
• Drug Enforcement
• Operational expenses
• Confidential expenses
• Non-recurring General Law Enforcement
  Expenditures
• Automated Fingerprint Machines

10
DRUG ENFORCEMENT

• Operational
• Automobiles for Drug Investigators
• Maintenance and Operational Expenditures for drug
  officers automobile
• Telephone Charges, including cellular charges
• Office Supplies and Office Equipment for Drug
  Investigation Officers
• Drug Identification Kits For Drug Investigators
  and Patrol officers

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DRUG ENFORCEMENT (cont)

• Operational (cont)
• Drug Enforcement Training
• Drug Dogs and Their Maintenance, Including Feed
  and Veterinary Service
• General Drug Enforcement Expenditures Are Not
  Confidential
• Must follow city/county purchasing guidelines

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NON-RECURRING GENERAL LAW ENFORCEMENT

• Not Drug Investigation related
• Expenditures
• Patrol or administrative vehicles
• Blue lights, sirens, radios, and radar units
• Video cameras
• Handguns, but not ammunition
• Fax machine or copier

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NON-RECURRING GENERAL LAW ENFORCEMENT (cont)

• Expenditures (cont)
• Cellular telephones for general law enforcement
  or administrative personnel
• Patrol Dogs (non-drug dogs), but not feed or
  veterinary services

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AUTOMATED FINGERPRINT MACHINES

• Must set aside 20 of drug fund revenues until
  machine is purchased or have an agreement with
  another agency (having a machine)
• After purchase or agreement, may use 20 of
  revenues to pay for line charges and maintenance

15
DONATIONS

• Any charitable donation must follow state law
• Cities
• TCA 6-54-111
• Counties
• TCA 5-9-109

16
DONATIONS,Generally speaking

• Must be a 501(c)(4) or (6) organizations
• Must provide financial reports, including audit,
  to government
• Funds for non-profits other than charitable
  organizations may be made once notices have been
  published in a newspaper of general circulation,
  specifying amount and purpose

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PROCEDURES
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SPECIAL REVENUE ACCOUNT

• Under the control of the Recorder/Trustee
• Budget for drug fund approved annually
• Except confidential expenditures, MUST follow
  city/county purchasing guidelines
• Confidential Expenditures MUST follow
  Comptrollers guidelines

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FORFEITED CASH AND THE PROCEEDS FROM THE SALE
OF FORFEITED PROPERTY
FINES
DONATIONS
APPROPRIATIONS
SPECIAL REVENUE ACCOUNT (City Recorder/Trustee)
50
50
CONFIDENTIAL ACCOUNT
GENERAL FUND
20
SPECIAL REVENUE ACCOUNT (City Recorder/Trustee)
Expenditures
Must Follow Purchasing Guidelines
CONFIDENTIAL ACCOUNT
Expenditures
Must Follow Comptrollers Guidelines
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AND NOW..

• My friend, Ralph

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Separate Checking Account??

• Purchasing Guidelines??

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General Fund
State Street Aid Spec Rev Fund
Gas Fund
How many checking accounts do we actually need?
Drug Fund
Solid Waste Fund
Water Fund
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A Fund is defined as

• A self balancing set of accounts
• A record of all cash, revenue, and other
  financial resources
• A record of all disbursements, expenditures,
  liabilities, and reserves or balances.

25

• Given that definition, is a fund required to have
  its own checking account?
• No.
• Is it probably a good idea?
• Yes.
• Why?

26

• Using one checking account for all funds is
  certainly authorized
• - - however - -
• by definition, the account groups must be kept
  separately
• - - including - -
• cash balances in each fund.
• Reconciling one checking account for all funds
  will be more difficult.

27

• Why is the discussion of checking accounts
  important in the context of this class?
• To emphasize the point that a fund and a checking
  account have distinct functions and the terms are
  not to be used interchangeably.

28

• The municipal Drug Fund, by statute, is under
  the control of the City Recorder whether it has a
  separate checking account or not.

29

• The Confidential Checking Account, authorized
  by the Comptroller in the Procedures for Handling
  Cash Transactions Related to Undercover
  Investigative Operations of County and Municipal
  Drug Enforcement Programs, is under the control
  of the Police Chief or Sheriff.

30
Purchasing Procedures

• The Drug Fund, like any other fund of the
  municipality or county, is required to comply
  with municipal or county purchasing procedures.

31
Purchasing Procedures

• Purchasing procedures may be found in
• Municipal Charter
• Purchasing Ordinances
• If those are silent on the issue, you fall under
  the 1983 Municipal Purchasing Law.

32
Purchasing Procedures

• Purchasing limits prescribed by the 1983
  Municipal Purchasing Law
• 0 to 1,000 Direct Purchase
• 1,000 to 2,500 3 Competitive Quotes
• 2,500 and above Competitive Bidding
• Municipalities are authorized to lower the amount
  for competitive bidding below 2,500 or increase
  it up to 10,000.

33
Purchasing Procedures
Purchases,leases or lease-purchases of less than
2,500 dont have to be advertised. Unless
specifically exempt, all purchases, leases, or
lease-purchases of like or related items bought
during the fiscal year totaling more than 2500
must be publicly advertised.
Allowable exemptions, when bought in the open
market, include fuel and fuel products and
perishable goods.
34
Purchasing Procedures

• The 1983 Municipal Purchasing Law exempts
  municipalities from competitive bidding
  requirements when
• Purchasing real property
• Purchasing from a sole source
• Emergency purchases are required.

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Purchasing Procedures

• Other General Laws on Purchasing include
• Authorization to make purchases from the State
  contract without bidding
• Purchasing from other governments without bidding
  as long as the selling entity met its purchasing
  requirements
• Purchase at public auctions.

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Purchasing Procedures

• Purchasing requirements are complicated.
• If you dont know what to do, ask for help.

37
And now, the county side of accounting and
purchasing.
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CONFIDENTIAL ACCOUNT
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CONFIDENTIAL EXPENDITURES

• Confidential Expenditures
• Payments made to an informant
• Payments made to an undercover agent
• Money spent to actually purchase drugs as part of
  an investigation
• Gasoline or maintenance for undercover vehicle or
  informants vehicle
• Must follow Comptrollers Guidelines

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DOCUMENTATION

• Documentation for every exchange of funds
• Custodian
• Exchanges from or to Recorder/Trustee
• Exchanges to or from agents
• Agents
• Every exchange of funds, and
• Receipt from informant, witnessed

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Audit Logs(Balance Ledger)

• Custodian
• Custodians Activity Log for Confidential
  Transactions Balance sheet
• Agent
• Agents Activity Log for all Confidential Funds
  Balance Sheet
• Summary Informant Log, for each informant

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SPECIAL REVENUE FUND City Recorder/Trustee
R-1
CONFIDENTIAL ACCOUNT Chief/Sheriff/Custodian
A-2
CASH Agent
A-4 A-5
A-4
Informant
Transaction
43
SPECIAL REVENUE FUND City Recorder/Trustee
R-1
CONFIDENTIAL ACCOUNT Chief/Sheriff/Custodian
A-2
A-1
R-2 R-3
A-7
CASH Agent
A-4 A-5
A-4
Informant
Transaction
44
SPECIAL REVENUE FUND City Recorder/Trustee
R-1
CONFIDENTIAL ACCOUNT Chief/Sheriff/Custodian
A-2
A-3 A-6
A-1
R-2 R-3
A-7
CASH Agent
A-4 A-5
A-4
Informant
Transaction
45
SPECIAL REVENUE FUND City Recorder/Trustee
R-1
CONFIDENTIAL ACCOUNT Chief/Sheriff/Custodian
A-7
R-2 R-3
A-1
Custodians Activity Log for Confidential Funds
Confidential Fund Monthly Reconciliation Report
Quarterly Report
46
CONFIDENTIAL ACCOUNT Police Chief/Custodian
A-2
A-3 Agents Activity Log for Confidential
Funds A-6 Summary Informant Payment Log
A-3 A-6
CASH Agent
A-4 A-5
A-4
Informant
Transaction
47
SPECIAL REVENUE FUND City Recorder/Trustee
R-1
CONFIDENTIAL ACCOUNT Chief/Sheriff/Custodian
A-2
A-3 A-6
A-1
R-2 R-3
A-7
CASH Agent
A-4 A-5
A-4
Informant
Transaction
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CONFIDENTIAL FUNDS EXERCISE
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SPECIAL REVENUE FUND City Recorder/Trustee
R-1
CONFIDENTIAL ACCOUNT Chief/Sheriff/Custodian
A-2
A-3 A-6
A-1
R-2 R-3
A-7
CASH Agent
A-4 A-5
A-4
Informant
Transaction
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Managing informants?

• Best Practices

51
Managing Informants

• Criminal history for all informants? Update?
• Command approval?
• Documentation of informant activity history?
• Correlate informant activity to arrests and
  convictions?

52
Post-test
53
Post-test

1. All revenues from drug fines are deposited in the
   drug fund. T/F
2. Revenues from the sale of vehicles forfeited to
   the city as a result of being used to transport
   or sell drugs go to the drug fund. T/F
3. Revenues from the sale of vehicles seized for
   second or subsequent offense DUI go to the drug
   fund. T/F

54
Post-test

1. Revenues from the sale of vehicles seized for
   Driving on a Revoked Drivers License go to the
   drug fund. T/F
2. The drug fund is under the control of the city
   recorder. T/F
3. Funds from the drug fund may be appropriated to
   local drug treatment programs. T/F

55
Post-test

1. The drug fund can be used to buy dog food and
   veterinary services for the drug dog. T/F
2. The drug fund can be used to purchase handguns
   for patrol officers. T/F
3. A drug agent (officer) must create a written
   receipt for every transaction with an informant.
   T/F
4. The drug fund budget must be approved by the
   District Attorney General. T/F

56
RESOURCES
Municipal Technical Advisory Service www.mtas.tenn
essee.edu
Rex Barton [phone]
rex.barton_at_tennessee.edu Ralph Cross
[phone] ralph.cross_at_tennessee.edu
Division of Municipal Audit (615)
401-7871
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RESOURCES
County Technical Assistance Service www.ctas.tenne
ssee.edu
Terry Hazard [phone]
thazard_at_tennessee.edu Steve Walker (615)
532-3555 shwalker_at_tennessee.edu
Division of County Audit [phone]
58
COUNTY STUDENTS
Be sure and get your COCTP information and forms
before you leave