drug fund manual - ut county technical assistance servicefund+manual.pdf · · 2016-11-15drug...

A statewide agency ofThe University of TennesseeInstitute for Public Servicein cooperation with theTennessee Municipal League

Drug FundManual

Prepared byJ. Ralph Cross, Finance and Accounting ConsultantandRex Barton, Police Management Consultant

The University of Tennessee Municipal Technical Advisory Service n Drug Fund Manual

The Municipal Technical Advisory Service (MTAS) was created in 1949 by the state legislature to enhancethe quality of government in Tennessee municipalities. An agency of The University of TennesseeInstitute for Public Service, MTAS works in cooperation with the Tennessee Municipal League andaffiliated organizations to assist municipal officials.

By sharing information, responding to client requests, and anticipating the ever-changing municipalgovernment environment, MTAS promotes better local government and helps cities develop and sustaineffective management and leadership.

MTAS offers assistance in areas such as accounting and finance, administration and personnel, fire, publicworks, law, ordinance codification, communications, and wastewater management. MTAS houses acomprehensive library and publishes scores of documents annually.

MTAS provides one copy of each of its publications free of charge to every Tennessee municipality,county, and department of state and federal government. There is a $10 charge for additional copies of thismanual and those for the private sector.

Photocopying of this publication in small quantities for educational purposes is encouraged. Forpermission to copy and distribute large quantities, please contact the MTAS Knoxville office at(865) 974-0411.

The University of TennesseeMunicipal Technical Advisory ServiceConference Center Building, Suite 120

Knoxville, Tennessee 37996-4105Knoxville: (865) 974-0411

Nashville: (615) 532-MTAS (6827)Jackson: (731) 423-3710Martin: (731) 587-7057

Johnson City: (423) 854-9882

To learn more about MTAS,visit our Web site atwww.mtas.utk.edu

Drug Fund Manual n The University of Tennessee Municipal Technical Advisory Service

May 2003

Prepared byJ. Ralph Cross, Finance and Accounting ConsultantandRex Barton, Police Management Consultant

Drug FundManual


TABLE OF CONTENTS

i

The Drug Fund ................................................................................. 1Sources of Revenue .......................................................................... 1Legitimate Expenditures .................................................................... 2Procedures ....................................................................................... 4Confidential Funds Accounting ........................................................ 10

Appendix A: Forms ........................................................................ 12Appendix B: Sample Drug Fund Budget .......................................... 21

Drug Fund Manual n The University of Tennessee Municipal Technical Advisory Service 1

THE DRUG FUND

What we generally refer to as the Drug Fund isreally a special revenue account. A special revenueaccount exists outside the city’s General Fund, andfunds in the special revenue account do not revert tothe General Fund at the end of the fiscal year. TheDrug Fund special revenue account is similar to thespecial revenue accounts established for street aidfunds and solid waste accounts.

The Drug Fund special revenue account is nota clandestine checking account. It is a specialrevenue fund where revenues and expendituresmust be accounted for separately from the GeneralFund. There is no requirement that a city establish

another checking account for the Drug Fund;however, a separate confidential funds checkingaccount for expenditures for undercover operationsis recommended. Funds for the confidential fundschecking account come from the Drug Fund specialrevenue account. [Source: Tennessee CodeAnnotated (T.C.A.) 39-17-420.]

T.C.A. 39-17-420 establishes the Drug Fundspecial revenue account and places it under thecontrol of the city recorder. The same statute definesallowable expenditures from the Drug Fund specialrevenue account. These expenditures are discussedbeginning on page three.

SOURCES OF REVENUE

There are several sources of revenue for the DrugFund special revenue account.

Fines from Drug Offenses

All fines from drug offenses must be turned overto the local government of the arresting agency(T.C.A. 39-17-420). T.C.A. 39-17-428 requiresthat 50 percent of each fine go to the city’s GeneralFund and 50 percent to the city’s Drug Fund specialrevenue account.

Most state courts, including General Sessions andCriminal (Circuit) Courts, allow defendants to paytheir fines and court costs on the easy monthlypayment plan. The law does not specify whether thecourt clerk is to collect the fine or the court costsfirst. In most cases, the clerk will apply periodic

payments to court costs first and, after the courtcosts are satisfied, begin forwarding the paymentsto the city. The proper action for the city recorderis to put 50 percent of each payment in the GeneralFund and the remainder of each payment in theDrug Fund special revenue account. [Source:T.C.A. 39-17-420, T.C.A. 39-17-428.]

Forfeited Cash and Proceeds from theSale of Property Forfeited to the City

Any cash that is forfeited to the city as well as theproceeds from the sale of any forfeited property(usually vehicles) go into the Drug Fund specialrevenue account. These funds are NOT splitbetween the General Fund and the Drug Fundspecial revenue account.

The University of Tennessee Municipal Technical Advisory Service n Drug Fund Manual2

Donations

Funds can be donated to the Drug Fund from civicorganizations, or a defendant may be ordered todonate funds to the Drug Fund in addition to payingthe statutory minimum fine for a drug offense.

A defendant cannot be ordered or allowed todonate money to the Drug Fund without payingat least the minimum fine for the offense. In the past,some defendants were ordered, as a result of a pleabargain, to make a donation to the Drug Fund andpay something less than the minimum fine. In effect,

this circumvented the requirement to divide finerevenues between the General Fund and the DrugFund. This action is improper. [Source: Opinion ofthe Tennessee Attorney General.]

Appropriations

The local governing body may make appropriationsto the Drug Fund. In fact, some cities annuallyappropriate to the Drug Fund special revenueaccount the drug fine revenues that normally go tothe General Fund.

FINES DONATIONS APPROPRIATIONSFORFEITED CASHAND PROCEEDSFROM THE SALEOF FORFEITED

PROPERTY

GENERALFUND

SPECIALREVENUEACCOUNT

(City Recorder)

SOURCES OF DRUG FUND REVENUE

50%

50%

LEGITIMATE EXPENDITURES

Local Drug Treatment Programs

Cities may spend money from the Drug Fundspecial revenue account to assist local drugtreatment programs. There are no state standardsdefining what constitutes a qualifying localdrug treatment program.

Drug Education Programs

Funds may be spent on drug education programs,but there are no specific standards that define aqualifying drug education program. Many agenciesfund all or part of the D.A.R.E. or VICTORprograms with Drug Funds. Agencies also mayuse the funds to purchase anti-drug literature for


distribution in the community or local schools orto fund an anti-drug seminar for local residents,P.T.A., or school children.

Drug Enforcement Programs

For the purposes of this manual, drug enforcementexpenditures are divided into two categories: generaldrug enforcement and cash transactions relating toundercover operations (confidential expenditures).

General Drug Enforcement

General drug enforcement expenditures includeall drug enforcement expenditures that are notdirectly related to undercover operations. Generaldrug enforcement expenditures include:• Automobiles for drug investigators;• Maintenance and operational expenditures for a

drug officer’s automobile, including gasoline;• Telephone charges, including cellular

telephone charges;• Office supplies and office equipment for drug

enforcement officers;• Drug identification kits for drug investigators

and patrol;• Drug enforcement training;• Drug dogs and their maintenance, including food

and veterinary service.

General drug enforcement expenditures are notconfidential and must follow the city’s purchasingguidelines. If the city has not adopted purchasingguidelines, it must follow the state purchasingguidelines for local governments.[Source: T.C.A. 39-17-420.]

Confidential Expenditures

Cash transactions relating to undercover operationsare confidential expenditures. Examples of theseexpenditures include:

• Payments made to an informant for information;• Payments made to an independent

undercover agent;• Money spent to actually purchase drugs as part

of an undercover operation;• Gasoline or minor maintenance for an undercover

vehicle or an informant’s vehicle when used inundercover operations.

[Source: Office of the Comptroller Guide for CashTransactions relating to Undercover Operations.]

Nonrecurring General LawEnforcement Expenditures

Drug Fund money also can be spent for general lawenforcement purposes. Unlike drug enforcementexpenditures, general law enforcement expendituresmust be nonrecurring. Generally, nonrecurringexpenditures are capital expenditures, but not allqualifying expenditures will be capital expenditures.Basically, a city cannot spend Drug Fund money forongoing, operational items.

Some examples of allowable nonrecurring, generallaw enforcement expenditures include:• Patrol and administrative vehicles;• Blue lights, sirens, radios, and radar units for

the vehicles;• Video cameras, both for vehicle units

and camcorders;• Handguns but not ammunition (Ammunition for a

drug enforcement officer is allowable as a drugenforcement expenditure.);

• Fax machines and copiers;• Cellular telephones for general law enforcement

and administrative officers;• Non-drug patrol dogs but not food or

veterinary services.


Automated Fingerprint Machines

While the purchase of automated fingerprintmachines qualifies as a nonrecurring, general lawenforcement expenditure, there are special statutoryregulations pertaining to these purchases.

All agencies must set aside 20 percent of theirDrug Fund revenues each year toward the purchaseof an automated fingerprint machine until theyactually purchase the machine or until they enterinto an agreement with another agency that has amachine to do fingerprinting. These agreementsmost often occur between a city police departmentand a county sheriff’s department. The 20 percent

set aside can be accounted for in a separate reserveaccount, or it can be left in the Drug Fund specialrevenue account.

Once an automated fingerprint machine ispurchased, or the city has entered into anagreement with an agency that has one of themachines, the city may use up to 20 percent ofeach year’s Drug Fund revenues to pay for someoperational costs of the fingerprint machine,including telephone line charges, softwaremaintenance contracts and hardware maintenancecontracts. These operational costs should beincluded in any agreement the city has with anotheragency to perform its fingerprinting.

PROCEDURES

The Special Revenue Account

The actual Drug Fund is a special revenueaccount under the control of the city recorder. It isaccounted for in much the same way as street aidfunds and the solid waste special revenue account.All Drug Fund revenues are deposited in the DrugFund special revenue account, not the confidentialfunds account. All expenditures except cashtransactions relating to undercover operations aremade from the Drug Fund special revenue account.

The Budget

The police chief and the mayor, or the city managerin cities that have one, are to present a Drug Fundbudget to the local governing body annually forapproval. Funds cannot be expended beyondamounts approved in the budget as is possiblewith individual line items in the General Fundbudget. Additionally, funds not already in the

account cannot be spent, even if approved in theDrug Fund budget.

Appendix B contains a sample Drug Fund budget.[Source: T.C.A. 39-17-420.]

Purchasing Guidelines

All expenditures except qualifying confidentialexpenditures must follow the city’s purchasingguidelines. If the city has not adopted a purchasingpolicy, the state purchasing law for localgovernments must be followed. Purchasingguidelines generally specify minimum monetarylimits requiring bids or quotes. The guidelines alsomay specify purchasing processes, such aswritten requisitions and purchase orders.[Source: T.C.A. 39-17-420.]


Confidential Expenditures

T.C.A. 39-17-420 states that all cash transactionsrelating to undercover operations must followguidelines established by the state comptroller’soffice. The comptroller’s guidelines, Proceduresfor Handling Cash Transactions Related toUndercover Investigative Operations of Countyand Municipal Drug Enforcement Programs,have the authority of law.

The fund for confidential expenditures is actuallya separate account under the control of the policechief or his or her designee. Funds for theconfidential account are requested from the cityrecorder, then deposited in the confidential account.All Drug Fund revenues are deposited into theDrug Fund special revenue account, not into theconfidential funds account.

Confidential Funds Requirements

BackgroundIn January 1991, the Comptroller of the Treasuryfor the State of Tennessee issued required cash

handling procedures related to undercoverinvestigative operations for county and municipaldrug enforcement programs. The comptrollerworked with the Tennessee Bureau of Investigation,the Tennessee Sheriff’s Association, and theTennessee Association of Chiefs of Police todevelop routine cash handling procedures forundercover drug operations that would beapplicable to all local government jurisdictions.The establishment of these standards also enablesthe independent auditor of the local government toperform a thorough audit of the operations activitywithout compromising the undercover officers, theirinformants, or their investigations.

As previously mentioned, local Drug Funds areto have been established in accordance withT.C.A. 53-11-415. In order to comply with thisstatute, the city recorder or finance officer of themunicipality is to set up a separate fund to recordthe financial activity related to drug operations.Entitled “Drug Fund,” this special revenue fundwill be used to record all proceeds and expendituresrelated to drug enforcement for the local governmentin compliance with T.C.A. 39-17-420.

FINES

GENERALFUND

SOURCES OF CONFIDENTIAL ACCOUNT FUNDS

50%

DONATIONS APPROPRIATIONSFORFEITED CASHAND PROCEEDSFROM THE SALEOF FORFEITED

PROPERTY

SPECIALREVENUEACCOUNT

(City Recorder)

50%

CONFIDENTIALACCOUNT


In summary, these procedures require the fund toremain under the control of the city recorder orfinance officer. However, upon the demand of thechief executive of the arresting law enforcementagency, the finance officer will distribute funds topay for the drug enforcement program. The lawenforcement agency will provide an accountingof these Drug Fund expenditures to the municipalfinance officer.

General Applicability

Before we go any further in this discussion, it isimportant to emphasize that the following transactionguidelines are unique to confidential cashdisbursements related to undercover druginvestigations by the law enforcement agency.These guidelines do not pertain to normal,nonconfidential Drug Fund expenditures.Nonconfidential purchases and other disbursementsfrom the Drug Fund are to be handled in the samemanner as any other purchase or disbursement ofthe city in accordance with generally acceptedaccounting principals, the municipal charter, theMunicipal Budget Law, the Municipal PurchasingLaw of 1983, and any applicable municipalpurchasing ordinance(s).

Of course, the procedures that follow are theminimum guidelines for Drug Fund confidentialcash transactions. The chief law enforcementofficer may require additional local proceduresas deemed necessary.

Training

It is the responsibility of all chiefs of police andtheir agents involved in the handling of confidentialDrug Funds to be familiar with these guidelines.Documentation affirming this fact is to bemaintained in the law enforcement agency’s office.

Law enforcement officials are expected to befamiliar with the guidelines concerning confidentialDrug Fund cash transactions established by the stateand to operate in compliance with these guidelines.Noncompliance may be itemized in audit findings byyour internal auditor, which may initiate further actionby the Department of Municipal Audit.

Requesting Funds forConfidential Operations

There are two methods by which the chief ofpolice shall account for confidential funds inthe Drug Fund:1. A separate column in the cash journal;2. A separate bank account.

Depending on the size of the department, a separateconfidential bank account may be the easier of thetwo. A separate checking account for confidentialfunds maintained by a designee in the policedepartment provides the agency immediate accessto funds for law enforcement activities. This accountalso can be used to account for the money providedto agents.

To initiate available funds for confidential operations,an advance will be requested from the city recorderor finance director. These funds come from the DrugFund special revenue account maintained in theoffice of the city recorder. Although the initial amountused to establish the account is left to the discretionof the police chief, it is recommended that thisamount be limited to what will be needed in the next45 days.

Although these records are considered confidentialand enjoy a level of protection from the TennesseeOpen Records Law (T.C.A. 10-7-503), the policechief is required to account for this activity inaccordance with the city charter just as with all otherfunds of the city. In addition, purchases made with


confidential funds, except in specific circumstances,are to be in compliance with the MunicipalPurchasing Law of 1983 and any municipalpurchasing ordinances in effect.

Receipt and Deposit ofConfidential Funds

As with any municipal cash transaction,pre-numbered receipts should be issued to recordthe distribution and return of cash for undercoveroperations. If the city recorder makes a cashadvance to the police chief or designee for anundercover investigation activity (such as a drugbuy), a receipt shall be issued to record the amountof the advance. Once the investigation activity hasbeen completed and the cash is returned to the cityrecorder, another receipt shall be issued for thereturned amount.

The returned cash shall be deposited into the DrugFund checking account in a timely manner.

Disbursing Confidential Funds

As mentioned previously regarding confidentialfunds, the law enforcement agency may use asecond Drug Fund checking account as aconfidential funds account under the control ofthe police chief or his or her designee. TheMunicipal Technical Advisory Service (MTAS)recommends use of a separate checking accountas a “best practice.” Disbursements are to be madeeither to the police chief or other employee(s)through the use of pre-numbered checks. Aseparate checking account simplifies the recordingprocedure. All checks issued from this accountare to be signed by the chief of police or designeeand shall be made payable to the person receivingthe funds.

All employees who participate in cash transactions inany capacity shall have a fidelity bond to protect thelaw enforcement agency and the municipality. Theannual employee bond should be issued in an amountthat would equal at least the largest single cashtransaction in which the employee would normallyparticipate over the course of the year.

Before purchasing bonds on your employees, it isa good idea to check with your liability insurancecarrier. It’s possible that automatic coverage mayalready be in effect or may be available to insurethe activities of employees who handle cash.

Internal Auditing Forms

The comptroller has prepared a number of internalauditing forms to facilitate municipal and lawenforcement compliance with the guidelinesestablished for handling cash transactions forundercover operations. These forms include:

• FORM A-1: Custodian’s Activity Log forConfidential Funds

• FORM A-2: Transaction Record of EachAdvance and Return of Confidential Funds

• FORM A-3: Agent’s Activity Log forConfidential Funds

• FORM A-4: Accountability of Confidential Funds• FORM A-5: Receipt for Payment to Informant• FORM A-6: Summary Informant Payment Log• FORM A-7: Confidential Fund Monthly

Reconciliation Report• REPORT R-1: Report of Confidential Funds

Requested or Returned• REPORT R-2: Quarterly Report of

Confidential Funds

The use of these forms is discussed beginning onpage 10.


Quarterly Report to City Recorder

Although the police chief has control of theconfidential funds checking account, the comptrollerrequires the police chief to be accountable fordrug funds transferred into it. Quarterly reportsconcerning account activity are to be completed bythe police chief or designee and submitted routinelyto the city recorder. Report R-2 is provided bythe comptroller for this purpose. It requires thebeginning balance of confidential funds maintainedby the police department, the amount of fundsreceived, the amount of funds disbursed, and theending balance. The city recorder and the policechief shall keep copies of the reports on file.

Purchasing Equipment and Suppliesfrom Confidential Funds

As mentioned earlier, the Municipal PurchasingLaw and local municipal purchasing ordinancesapply also to normal purchases of supplies andmaterials from the Drug Fund special revenueaccount. However, if confidentiality is required fora purchase, these rules are suspended. Please notethat there are specific procedures to follow eventhough other purchasing rules are not in effect.Documentation, including invoices and price quotes,shall be filed in support of the disbursement of fundsto establish a paper trail of the use of cash. Careshould be exercised in following proper proceduresregarding these exceptional purchases.

It is popular opinion that the purchase of securityrecording devices is a confidential purchase. Thisview is incorrect. There is no reason the purchaseof a briefcase camera or clandestine recordingdevice would be confidential.

Maintaining Informant Files

Procedure requires the law enforcement agencyto establish and maintain a separate file for eachinformant. The Summary Informant Payment Log,Form A-6, shall be kept in the file and madeavailable for audit. Other information regarding theinformant file normally is confidential.

Use of Funds by a Secondary Agency

From time to time, one law enforcement agencymay seek the assistance of another agency whileperforming drug investigations. This may involvethe need to transfer Drug Fund resources from oneagency to another. This practice is acceptable whenthe agency providing confidential funds receivesa contract or other written document from thereceiving agency acknowledging receipt of thefunds and accepting responsibility for the proceeds.This written acknowledgment shall be signed by thepolice chief or designee of both the agency receivingthe funds and the agency providing the funds.Copies of all such agreements shall be retained foraudit by both agencies.

Annual Report of Drug RelatedInvestigations and Cases Developedfrom Use of Local Drug Funds

A former statutory requirement that the lawenforcement agency prepare an annual report tothe district attorney general has been repealed.However, the police chief is accountable to the locallegislative body for the proper disposition of theproceeds of goods seized and forfeited under theprovisions of T.C.A. 53-11-451 and for the finesimposed under T.C.A. 39-17-428. An annualaudited report of such funds shall be submittedby the chief of the municipal law enforcementdepartment to the local legislative body. In yearswhen the Office of the Comptroller of the Treasury


conducts an audit, if any, the audit satisfies thisrequirement. If no audit is conducted by the Officeof the Comptroller of the Treasury, then anaudit shall be performed by a certified publicaccountant to satisfy this requirement. Theannual city audit satisfies this requirement.

The governing body of the law enforcement agencyresponsible for the investigation and arrest thatresulted in the drug conviction shall submit to thecomptroller, by August 1 of each year, a report offunds collected and paid to the General Fund of thegoverning body pursuant to this section. This reportshall show the amount of money spent on drugeducation and drug treatment.

Availability of Records andReports for Audit

Activity of the confidential portion of the Drug Fundenjoys a certain amount of protection from the OpenRecords Law. However, this doesn’t mean that therecords are completely exempt from outside scrutinyduring the annual audit. By law, all of the books andrecords involving confidential funds shall be subjectto inspection and audit by the Comptroller of theTreasury or his authorized representative exceptfor informant files, tapes involving undercoveroperations and evidence. Of course, this right toinspection and audit extends to the independentpublic accountant performing an audit under acontract approved by the comptroller.

Unaccounted for Confidential Funds

Cash handling procedures for confidential fundsare designed to account for all Drug Fundresources used by agents during drug investigations.Unfortunately, situations arise in which confidentialfunds are left unaccounted. In this event, the policechief must immediately inform the district attorneygeneral of the missing funds. This notification mustbe in writing, and a copy should be filed with theDivision of Municipal Audit of the Comptrollerof the Treasury. Furthermore, it is the responsibilityof the police chief to initiate action to collect anyfunds that are unaccounted for.

Conclusion

Although the cash handling procedures discussedpreviously in this text may seem onerous at theoutset, they are designed to protect law enforcementofficials who use these resources in the pursuit oftheir mission.


CONFIDENTIAL FUNDS ACCOUNTING

Most municipal transactions produce stacks ofdocumentation. There may be requisitions, purchaseorders, invoices, receipts and cancelled checks.Confidential cash transactions do not produce anysuch normal documentation. The integrity of theentire confidential funds process is dependant ondocumentation prepared by the police officers.The comptroller’s office has developed severalforms to document the various types of confidentialcash transactions.

FORM A-1 — Custodian’s Activity Log forConfidential Funds:Maintained by the custodian, this form is used forevery transaction involving the custodian. This logrecords payments into and out of the confidentialaccount, the type of transaction, key details aboutthe transaction, and a running balance of theconfidential account. The log is cumulative andtracks multiple transactions over time.

FORM A-2 — Transaction Record of EachAdvance and Return of Confidential Funds:This form is completed each time funds aretransferred between an agent and the custodian,including both advances of cash to agents and returnof cash by agents. A separate form is completed foreach transaction. It also serves as a request for cashby an agent.

FORM A-3 — Agent’s Activity Log forConfidential Funds:Maintained by the agent, this form tracks everytransaction an agent makes in paying informants,buying drugs and incurring miscellaneous confidentialexpenses. It is cumulative and tracks multipletransactions over time. It also maintains a runningbalance of funds in the custody of the agent.

FORM A-4 — Accountability ofConfidential Funds:This form is completed by the agent for eachtransaction and provides documentation of theagent’s expenses.

FORM A-5 — Receipt for Paymentto Informant:This form should be completed by the agent eachtime he or she pays an informant for informationor for services performed, including the purchaseof drugs. It should be signed by the informant, usinga pre-assigned code name. The receipt also shouldbe witnessed by another officer.

FORM A-6 — Summary InformantPayment Log:This form, maintained by the agent, is a cumulativelog of all transactions with a single informant who isidentified by code name. The form should be placedon top of the informant file.

FORM A-7 — Confidential Fund MonthlyReconciliation Report:Completed by the custodian, this form serves thesame purpose as reconciling a checkbook with themonthly bank statement.

FORM R-1 — Report of Confidential FundsRequested or Returned:This form is used by the custodian to actuallyrequest funds from the special revenue account(Drug Fund) for the confidential account. It also isused to return excess funds back to the specialrevenue account.


FORM R-2 — Quarterly Reportof Confidential Funds:The police chief must submit a quarterly report tothe recorder by the 30th of the month following theclose of the quarter.

The flowchart below should serve as a “roadmap”for use of the various forms required by thecomptroller’s office when accounting for cashtransactions relating to undercover operations.Diamonds indicate the form to be completed foreach transaction. Circles indicate cumulative orperiodic reports.

INFORMANT

SPECIAL REVENUE FUND(City Recorder)

CONFIDENTIAL FUNDS ACCOUNTING

CONFIDENTIAL ACCOUNT(Police Chief/Custodian)

CASH(Agent)

TRANSACTION

R-1

A-2

A-4A-5

A-4

A-3A-6 A-1 A-7 R-2


Appendix A: FORMS

ForTransaction Receipts: Source, Check #

Date Type*/Number Payouts: Payee, Check # Received Paid Balance

Form A-1

CUSTODIAN’S ACTIVITY LOGFOR CONFIDENTIAL FUNDS

*TRANSACTION TYPES1. Initial: Initial advance from treasury.2. Advance: Advance to officer (agent).3. Advance/Repayment: Repayment of

advance in part or in full.4. Reimbursement: Reimbursement

payments to officer upon submission ofvoucher documenting expenses.

5. Receipt: Replenishment funds receivedfrom treasury or special revenue account.

6. Miscellaneous: Miscellaneous amounts —plus (+) or minus (-).

7. Audit notation by internal orexternal auditor.


Form A-2

TRANSACTION RECORD OF EACH ADVANCE AND RETURNOF CONFIDENTIAL FUNDS

ADVANCE Transaction Number

Agent’s name ID number

Unit

Amount of advance $ Case or reference #

Intended purpose: [ ] Investigative advance [ ] Use as a flash roll *

Advance approved by Signature of chief law enforcement official or designee Date

Advance received by Agent’s signature Date

Check # Date

* Flash rolls shall be returned within 72 hours unless extended for an additional 48-hour period.

RETURN Transaction Number


Unit

Amount returned $ Case or reference #

Advance returned by Agent’s signature Date

Advance returned to Signature of chief law enforcement official or designee Date

Receipt # Date

Original: Filed with Fund CustodianCopy: Retained by Agent


Form A-3

AGENT’S ACTIVITY LOG FOR CONFIDENTIAL FUNDS

MONTH Page of


Unit

Trans. # Date Case # Purpose Received (+) Paid Out (-) Balance

TOTAL

I do solemnly swear (or affirm) that the amounts reported above are just and true in all respects.

Submitted by Approved by Agent’s signature Supervisor’s signature

Original: Filed with Fund Custodian Copy: Retained by Agent


Form A-4

ACCOUNTABILITY OF CONFIDENTIAL FUNDSCase # _____________________________

FUNDS EXPENDED Transaction Number

EVIDENCE:

Type and quantity

Date Amount spent $

UNDERCOVER MOTOR VEHICLE:

Gasoline and Oil

Date Amount spent $

Station/store

Date Amount spent $

Station/store

Date Amount spent $

Station/store

INFORMANT EXPENSES:

Code name CI #

Date Receipt – Yes [ ] No [ ] Amount $

MISCELLANEOUS:

Explanation Date Amount $

Explanation Date Amount $

I certify that the above expenditures are true and correct.

Agent’s signature Date

Original: Filed with Fund Custodian Copy: Retained by Agent


A. Case or reference # Date

I hereby acknowledge receipt of $ ( ) numbers words

paid to me by: for consideration of

[ ] information and/or [ ] services

Described as follows:

Section B is to be filled out when funds are advanced to informant for futurepurchase(s).

B. It is understood and agreed that this money is to be expended by me only for the

purchase, as evidence, of controlled substances. If no such purchase is made, or if

such purchase is made for less than the total sum furnished to me before ,

I will forthwith refund the sum furnished or the balance thereof to the above-named

officer of the . In any event, upon

demand by the above-named officer at any time, I will forthwith refund to him/her the

total amount of any sum thus furnished to me that has not yet been expended by me for

the purchase, as evidence, of controlled substance(s). Furthermore, it is understood

that this money is the property of

and that misuse or conversion of the money to my personal use will render me liable

to prosecution.

C. Payee code name or number Date

Officer’s signature Date/Time

Witness’s signature Date

Original: Filed with fund custodian Copy: Retained by agent

Form A-5

RECEIPT FOR PAYMENT TO INFORMANT

(date/time)

(agency name)

(city)

16


Form A-6

SUMMARY INFORMANT PAYMENT LOG

Informant code name or number

Payment Date Case # or Reference # Amount Paid

This form should be filed in the applicable informant file and should reflect allpayments made to the informant.

Receipts for payments to informants should back up this file.

17


A. RECONCILIATION

Bank balance per statement $

Date of statement

Add: Deposits in transit (from section B).[Deposits recorded on Activity Log (A-1),but not appearing on the bank statement.] $

Subtract: Outstanding checks (from section C).[Checks written and recorded on ActivityLog (A-1) but not appearing on the bank statement.] $

Balance per Activity Log $

Date

B. DEPOSITS IN TRANSIT C. OUTSTANDING CHECKS

Date Amount Check # Amount_______ $_______________ _______ $______________________ $_______________ _______ $______________________ $_______________ _______ $______________________ $_______________ _______ $______________________ $_______________ _______ $______________________ $_______________ _______ $_______________

TOTAL $ TOTAL $

D. CONFIDENTIAL FUNDS WITH AGENTS

Name Amount________________________________ $______________________________________________ $______________________________________________ $______________________________________________ $______________________________________________ $______________

TOTAL $______________

* Parts A, B, and C are completed only if confidential funds are maintained in a separate bank account.

E. SUBMISSION AND APPROVAL

Prepared by Approved by

Form A-7

CONFIDENTIAL FUND MONTHLY RECONCILIATION REPORT

18


Form R-1

REPORT OF CONFIDENTIAL FUNDS REQUESTED OR RETURNED

To: City recorder/finance director

[ ] I am requesting funds in the amount of $ for use in thedrug enforcement program.

[ ] I am returning funds of $ that have accumulated in thedrug control (confidential funds) account.

LAW ENFORCEMENT AGENCY’S CERTIFICATION:

Submitted byChief law enforcement official

Title

Date

CITY RECORDER/FINANCE DIRECTOR CERTIFICATION OF RECEIPT OR PAYMENT

Amount Received $ Receipt #

Amount Paid $ Warrant or Check #

By

Title

Date

19


For the quarter ending , 20

TO: City Recorder/Finance Director

The following represents a true and accurate accounting of confidential funds held bythe office of for the quarter listed above.

Police chief or designee

Balance of confidential funds, first of quarter $

Add: Funds received from City Recorder/Finance Director $

Less: Expenditures from confidential funds $( )

Less: Funds returned to City Recorder/Finance Director $( )

Balance of confidential funds, end of quarter $

Submitted by Chief law enforcement official

Title Date

This report must be filed with the City Recorder/Finance Director within 30 daysof the end of the months of September, December, March and June each year.

Original: Filed with City Recorder/Finance DirectorCopy: Retained by the law enforcement agency

Form R-2

QUARTERLY REPORT OF CONFIDENTIAL FUNDS

20


Appendix B: Sample Drug Fund Budget

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City of Everywhere, Tennessee2002-2003 Fiscal Year BudgetFUND 127 — DRUG FUND

1999-2000 2001-2002 2002-2003Actual Year End Est. Proposed

127 DRUG FUND REVENUES

35140 Drug related fines $4,000 $6,000 $4,000

TOTAL REVENUES $4,000 $6,000 $4,000

BEGINNING FUND BALANCE $2,000 0 0

TOTAL AVAILABLE FUNDS $6,000 $6,000 $4,000

127 DRUG FUND EXPENDITURES

42129 DRUG INVESTIGATION AND CONTROL

148 Employee education and training $3,000 $2,500 $3,000299 Sundry $2,000 $2,000 $500

$5,000 $4,500 $3,500

900 Capital outlay (nonrecurring) $1,000 $1,500 0

TOTAL EXPENDITURES $6,000 $6,000 $3,500

The University of Tennessee does not discriminate on the basis of race, sex, color, religion, nationalorigin, age, disability, or veteran status in provision of educational programs and services or employmentopportunities and benefits. This policy extends to both employment by and admission to The University. The University does not discriminate on the basis of race, sex, or disability in its education programsand activities pursuant to the requirements of Title VI of the Civil Rights Act of 1964, Title IX of theEducation Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, and the Americans withDisabilities Act (ADA) of 1990. Inquiries and charges of violation concerning Title VI, Title IX, Section 504, ADA, or the AgeDiscrimination in Employment Act (ADEA) or any of the other above referenced policies should bedirected to the Office of Diversity Resources (DRES), 2110 Terrace Avenue, Knoxville, Tennessee 37996-3560, telephone (865) 974-2498 (V/TTY available) or (865) 974-2440. Requests for accommodation of adisability should be directed to the ADA Coordinator at the Office of Human Resources, 600 Henley Street,Knoxville, Tennessee 37996-4125.

E14-1050-000-088-03

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