Report on the Inspection of the Board's Law Enforcement Unit (Internal Report)

The USA PATRIOT Act of 2001, Public Law 107-56, granted the Board certain federal law enforcement authorities, and the Board's implementing regulations, the Uniform Regulations for Federal Reserve Law Enforcement Officers (Uniform Regulations), S-2609, June 18, 2002, designated the OIG to perform the External Oversight Function (EOF).  We conducted this inspection of the Board's Law Enforcement Unit (LEU) to fulfill our EOF responsibility for reviewing and evaluating the Board's law enforcement programs and operations.

The objective of this inspection was to (1) assess the LEU's compliance with Board and LEU internal policies and procedures, and (2) test selected operational controls.  To accomplish our objectives, we performed a comprehensive inventory of all LEU weapons and ammunition.  We reviewed personnel records and the results of sixteen background investigations for LEU management and staff, and verified that recently hired Law Enforcement Officers obtained required qualifications.  In addition, we tested the functionality of surveillance cameras and physical controls over entry into Board buildings and leased space.  We reviewed the controls over the LEU's credentials and badges, access to the National Crime Information Center/Washington Area Law Enforcement System, and process for testing and certifying canines and their handlers.  We also reviewed arrest incident reports and the drug testing program administered by the Board's Health Unit. 

Overall, we found that the LEU generally complied with the Board and LEU internal policies, procedures, and controls that were reviewed during our inspection.  We made two recommendations to enhance the LEU's internal control environment by disposing of obsolete ammunition, and establishing standard forms for custody transfers involving weapons or ammunition to be destroyed.  Our report will not be made available to the public because it contains security-related information.