CITY OF SIMI VALLEY
MEMORANDUM
April 15, 2024
TO: City Council
FROM: Department of Administrative Services
SUBJECT: APPROVAL OF FORFEITED ASSETS INTER -FUND TRANSFER
REQUEST
STAFF RECOMMENDATION
It is recommended the City Council approve retroactive (effective July 1, 2023) inter-fund transfers totaling $134,310.42 from the Forfeited Assets DOJ Fund 280 to the newly created Forfeited Assets “Other” Fund 281 ($132,226.91) and Forfeited Assets Treasury Fund 282 ($2,083.51).
BACKGROUND AND OVERVIEW
The City’s Police Department is involved in several asset forfeiture programs. These programs allow governments to reclaim assets used in the commission of a crime and proceeds from criminal activities . The City has historically utilized the Forfeited Assets Fund (Fund 280) to manage the financial transactions associated with the use of claimed assets and proceeds.
The main sources of monies in this fund come from federal government programs, primarily the Department of Justice (DOJ) Equitable Sharing Program and the Treasury Department program. Federal programs have stringent compliance requirements that dictate the City’s record-keeping, reporting, and eligible uses of program funds. The fund also includes smaller asset forfeiture programs at the state and local level, which do not have the same compli ance requirements as the federal programs. These smaller programs were also historically recorded in Fund 280.
In November 2022, the Simi Valley Police Department was selected for a routine four - year compliance review of the activities related to the DOJ Equitable Sharing Program.
In February 2024, all compliance requirements were met, and the DOJ officially closed the review , leaving the City in a positive standing with the Program. During the compliance review, internal book keeping practices were reviewed and areas of improvement were identified, including the past practice of co-mingling of forfeited assets fund.
AGENDA ITEM NO.
Consent (2)
2 Since the City has historically held all forfeited asset s program funds in a single fund within the City’s fina ncial system, at the end of each fiscal year staff manually allocates the various sources of forfeited assets to the related expenditures that occurred throughout the year. This process provides the City with the ability to tra ck, report, and maintain visibility over the different programs and their respective balances . While this has been an effective process historically, it requires a manual process outside of the City’s financial system , which is not an efficient way to trac k the funds , and not a best practice from a compliance perspective.
Due to the strict compliance requirements that govern the federal programs specifically, staff is requesting approval to transfer all non-DOJ funds out of Fund 280 and into newly created Funds 281 (Forfeited Assets “Other”) and 282 (Forfeited Assets Treasury) , as summarized in the table below. By maintaining a separate ledger for the federal programs, the City’s compliance efforts will be improved and streamlined, ensuring the City maintains a positive standing and continues to be able to participate in both the DOJ and Treasury programs.
Reported and Audited Balances as of 06/30/2023
Fund 280 Fund 281 Fund 282
DOJ Equitable Sharing 829,120.36 - -
Treasury 2,083.51 - -
State 131,470.12 - -
Local 756.79 - -
Fund Balance $ 963,430.78 - -
Proposed Transfer Retroactive to 07/01/2023
Fund 280 Fund 281 Fund 282
DOJ Equitable Sharing 829,120.36 - -
Treasury - - 2,083.51
State - 131,470.12 -
Local - 756.79 -
7/1/23 Fund Balance (after transfer) $ 829,120.36 $ 132,226.91 $ 2,083.51
Appropriation requests for the use of the funds transferred to Fund 281 and 282 are not part of this report and all future uses of the funds will be presented to City Council at a later date.
FINDINGS AND ALTERNATIVES
To improve the City’s record keeping and maintain program compliance related to forfeited assets, it is requested that retroactive inter -fund transfers totaling $134,310.42 from the Forfeited Assets DOJ Fund 280 to the newly created Forfeited Assets Other Fund 281 ($132,226.91) and Forfeited Assets Treasury Fund 282 ($2,083 .51), be 3 approved. The retroactive change is requested to the beginning of the current fiscal year and all subsequent accounting will be accomplished utilizing the three funds.
The following alternatives are available to the City Council:
1. Approved the retroactive inter-fund transfers totaling $134,310.42 from the Forfeited Assets DOJ Fund 280 to the newly created Forfeited Assets “Other” Fund 281 ($132,226.91) and Forfeited Assets Treasury Fund 282 ($2,083.51);
2. Provide staff with further direction.
Staff recommends Alternative No. 1.
SUGGESTED CITY COUNCIL MOTION
I move to approve retroactive (effective July 1, 2023) inter -fund transfers totaling $134,310.42 from the Forfeited Assets DOJ Fund 280 to the newly created Forfeited Assets “Other” Fund 281 ($132,226.91) and Forfeited Assets Treasury Fund 282 ($2,083.51).
SUMMARY
The City participates in various forfeited assets programs, all of which have been historically recorded in the Forfeited Assets Fund 280. To improve and streamline the City’s program compliance efforts and ensure we maint ain a positive standing and continue to be able to participate in both the DOJ and Treasury programs, staff has created two new forfeited assets funds, Forfeited Assets “Other” Fund 281 and Forfeited Assets Treasury Fund 282, and request approval to transfer the respective balances of these programs into the newly created funds.
_____________________________________
Carolyn Johnson, Deputy City Treasurer
Administrative Services Director
Prepared by: Marvin Lopez, Deputy Administrative Services Director, Fiscal Services