Fines and Restitution: Improvement Needed in How Offenders' Payment
Schedules Are Determined (Letter Report, 06/29/98, GAO/GGD-98-89).
Pursuant to a congressional request, GAO reviewed court orders of fines
and restitution imposed on federal criminal offenders, focusing on: (1)
identifying guidance available to probation officers on how to determine
payment schedules for offenders who received orders to pay fines to the
government and restitution to their victims; and (2) assessing, in two
judicial districts, how offenders' payment schedules were actually
determined while under court supervision.
GAO noted that: (1) in the Central District of California and the
Northern District of Texas, probation officers who supervised offenders
lacked clear, specific policy guidance for determining how much
offenders should pay each month towards their court-ordered fines and
restitution; (2) in the absence of such clear policy guidance, the
officers in the two districts GAO reviewed developed their own methods
for determining how much offenders could pay monthly; (3) these methods
were often based on subjective decisions not associated with financial
criteria; (4) GAO identified issues of inconsistency and apparent
inequity in 62 percent of the Central District of California
installment-payment cases GAO reviewed; (5) the Administrative Office of
the U.S. Courts (AOUSC) has provided guidance to probation officers on
how to determine payment schedules; (6) however, the guidance, which is
focused on what information to collect and how to collect it, does not
specify how probation officers are to analyze financial information
provided by offenders to determine how much, or if all, of the fine or
restitution can be paid each month; (7) the Federal Judicial Center
(FJC) offered financial investigation training to probation officers
that provided more specific guidance on determining repayment schedules
than that contained in the AOUSC manuals and publications; (8) although
AOUSC viewed the training as reflecting its policies, it did not make
this clear to probation officers; (9) moreover, the FJC training is
voluntary, and not all officers took it; (10) the inconsistent methods
used by probation officers for determining an offender's monthly payment
schedule resulted in apparently inequitable treatment of offenders and
reduced or slowed payments to the Crime Victims Fund and to crime
victims; and (11) although GAO's detailed reviews were limited to two
judicial districts and cannot be generalized beyond those districts, the
fact that probation officers in other judicial districts are working
with the same limited guidance and lack of financial standards as the
districts GAO visited creates the risk that the types of inconsistencies
and apparent inequities GAO found could occur nationwide.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-98-89
TITLE: Fines and Restitution: Improvement Needed in How Offenders'
Payment Schedules Are Determined
DATE: 06/29/98
SUBJECT: Collection procedures
Fines (penalties)
Law enforcement
Crimes or offenses
Restitution
Installment payments
Financial statements
Probation officers
IDENTIFIER: Crime Victims Fund
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Cover
================================================================ COVER
Report to the Chairman, Senate Committee on the Judiciary, and the
Chairman, Subcommittee on Crime, House Committee on the Judiciary
June 1998
FINES AND RESTITUTION -
IMPROVEMENT NEEDED IN HOW
OFFENDERS' PAYMENT SCHEDULES ARE
DETERMINED
GAO/GGD-98-89
Fines and Restitution Payment Schedules
(182832)
Abbreviations
=============================================================== ABBREV
AOUSC - Administrative Office of the U.S. Courts
DOJ - Department of Justice
FJC - Federal Judicial Center
IRS - Internal Revenue Service
MVRA - Mandatory Victims Restitution Act
PACTS - Probation and Pretrial Services Automated Case-Tracking
System
Letter
=============================================================== LETTER
B-276684
June 29, 1998
The Honorable Orrin Hatch
Chairman, Committee on the Judiciary
United States Senate
The Honorable Bill McCollum
Chairman, Subcommittee on Crime
Committee on the Judiciary
House of Representatives
This is the first of two reports responding to your joint request
that we study orders of fines and restitution imposed on federal
criminal offenders. The objectives of this report are to (1)
identify guidance available to probation officers on how to determine
payment schedules for offenders who received orders to pay fines to
the government and restitution to their victims and (2) assess, in
two judicial districts, how offenders' payment schedules were
actually determined while under court supervision. The second report
will include information on the types of offenders who are ordered to
pay fines and restitution and those who are not ordered to pay.
Individuals convicted of a federal crime can be ordered by the court
to pay a fine or restitution at sentencing. Criminal fines, which
are punitive, are to be paid in most cases to the Department of
Justice's (DOJ) Crime Victims Fund; restitution is to be paid in
certain federal criminal cases where there is an identifiable victim.
In 1996, according to U.S. Sentencing Commission data, over 42,000
federal offenders were sentenced; nearly 15,000 of them (36 percent)
were ordered to pay fines, restitution, or both. Approximately 16
percent of all federal offenders were ordered to pay fines only;
approximately another 17 percent were ordered to pay restitution
only; and approximately another 3 percent of offenders were ordered
to pay both. Overall, in 1996, the federal courts imposed
approximately $102 million in fines and $1.5 billion in restitution.
Under the U.S. Sentencing Guidelines and relevant provisions of the
law, offenders should pay their court-ordered fines and restitution
as a lump-sum payment. If the court determines that a lump-sum
payment cannot be made, installment payments are to be made. These
are either established by the judge, generally based on information
provided by the probation officer, or established by the probation
officer under the judge's order. If these installment payment
schedules are not properly established, the punitive and restorative
aspects of fines and restitution might not be fully realized.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
In the Central District of California and the Northern District of
Texas, probation officers who supervised offenders lacked clear,
specific policy guidance for determining how much offenders should
pay each month towards their court-ordered fines and restitution. In
the absence of such clear policy guidance, the officers in the two
districts we reviewed developed their own methods for determining how
much offenders could pay monthly. These methods were often based on
subjective decisions not associated with financial criteria. We
identified issues of inconsistency and apparent inequity in 62
percent of the Central District of California installment-payment
cases and 42 percent of the Northern District of Texas
installment-payment cases we reviewed. Some examples follow.
-- Some offenders paid their fines or restitution orders
immediately from available assets while other offenders kept,
without explanation, either the proceeds from the sale of assets
or the assets themselves, such as second homes, securities, bank
accounts, and paintings, that might have been made available to
pay their fines and restitution.
-- Probation officers created their own arbitrary methods for
developing installment payment schedules, including negotiated
amounts, good-faith payments, and choosing round numbers. These
arbitrary methods for setting installment payment schedules were
not based on financial criteria, such as an analysis of an
offender's income and expenses. As a result, some offenders
with lower incomes were directed to make higher payments than
offenders with higher incomes who owed more in fines or
restitution.
-- While offenders were required to report their necessary monthly
expenses on a personal financial statement, there were no
criteria on the types or amount of expenses that were to be
considered necessary. Some offenders identified expenses such
as a European cruise, servant salaries, entertainment expenses,
and recreational boat payments as necessary, thus limiting their
ability to pay fines to the government or restitution to
victims. Others increased their personal monthly spending while
claiming financial difficulties that limited their ability to
pay fines or restitution.
-- Personal financial statements were often 18 months old or older
for offenders who were on installment payments, so probation
officers were not in a good position to tell whether payment
amounts should be changed. Guidance and training suggested, but
did not require, that a financial statement be obtained every 6
months from an offender who was on a payment schedule.
The Administrative Office of the U.S. Courts (AOUSC) has provided
guidance to probation officers on how to determine payment schedules.
However, the guidance, which is focused on what information to
collect and how to collect it, does not specify how probation
officers are to analyze financial information provided by offenders
to determine how much, or if all, of the fine or restitution can be
paid each month. The Federal Judicial Center (FJC) offered financial
investigation training to probation officers that provided more
specific guidance on determining repayment schedules than that
contained in the AOUSC manuals and publications. Although AOUSC
viewed the training as reflecting its policies, it did not make this
clear to probation officers. Moreover, the FJC training is
voluntary, and not all officers took it. The probation officers in
the two districts we visited were either unfamiliar with the FJC
training or saw the training as an optional tool and not a reflection
of policy.
The inconsistent methods used by probation officers for determining
an offender's monthly payment schedule resulted in apparently
inequitable treatment of offenders and reduced or slowed payments to
the Crime Victims Fund and to crime victims. Although our detailed
reviews were limited to two judicial districts and cannot be
generalized beyond those districts, the fact that probation officers
in the other judicial districts are working with the same limited
guidance and lack of financial standards as the districts we visited
creates the risk that the types of inconsistencies and apparent
inequities we found could occur nationwide. Therefore, we are
recommending that the AOUSC establish as policy improved guidance to
help probation officers who monitor offenders under court supervision
make more consistent and equitable payment schedule determinations
for offenders who owe criminal fines and victim restitution.
In commenting on a draft of this report, AOUSC cited several steps
that it was taking, or planned to take, to address some of the
findings in this report, including considering specific guidance on
financial standards. It is unclear how these steps will be
implemented or the extent to which they will resolve the matters
discussed in this report.
BACKGROUND
------------------------------------------------------------ Letter :2
Criminal fines, which are designed to be punitive in nature, are to
be imposed by the courts in all cases except where an offender has
established that he is unable to pay and unlikely to become able to
pay the fine. According to the Sentencing Guidelines, if an offender
establishes that the payment of the fine in a lump sum would have an
unduly severe impact on the offender or any dependents of the
offender, the court should establish an installment schedule for
payment of the fine. The guidelines also provide that the length of
the installment schedule generally should not exceed 12 months. Most
fines are to be paid to DOJ's Crime Victims Fund, which is to provide
grants for victim assistance programs and compensation to victims.
The courts are also to consider the need to provide restitution to an
identifiable victim of an offense. According to the Mandatory
Victims Restitution Act (MVRA) of 1996 (title II of P.L. 104-132),
which was effective April 24, 1996, restitution must be ordered as
part of a sentence for certain offenses in cases with an identifiable
victim. Under the MVRA, restitution to the victim of the crime must
be ordered regardless of the offender's economic circumstances.\1 If
an offender cannot pay restitution immediately, the court is to
determine the length of time over which scheduled payments would be
made, and the law requires that it be the shortest time in which full
payment could reasonably be made. Generally, a probation officer
provides information that the judge may use to set a payment schedule
based on a determination of the offender's ability to pay.
Probation officers are responsible for monitoring offenders'
compliance with court orders--including orders to pay fines or
restitution--while the offenders are under a period of court
supervision. Probation officers are to report any violations to the
courts. An offender can receive either probation or, to follow
imprisonment, a period of supervised release. Probation or
supervised release can be imposed by a judge for up to 5 years;
although for some cases, the limit is 3 years.
In the two districts in our sample, presentence probation officers
develop the presentence report, which includes a financial
investigation of the offender and the total amount of the fine or
restitution required by law or by sentencing guidelines. Other uses
of the presentence report include information on the sentencing
options under the guidelines and criminal history.
In the two districts in our sample, supervision probation officers'
responsibilities begin after the offender is sentenced. The
supervision probation officer monitors the offender's compliance with
court orders while the offender is under court supervision. These
responsibilities include establishing a payment schedule if one has
not been established by the judge or, when the payment plan has been
established by the judge, monitoring and recommending changes to the
payment schedule to the judge. Court supervision includes probation
after sentencing or supervised release after imprisonment.
The judge may establish the method of payment the offender is to
follow at the time of sentencing, or, in some jurisdictions, the
judge may delegate that responsibility to the probation officer. A
decision of the U.S. Court of Appeals for the Fifth Circuit, which
includes the Northern District of Texas, requires the judge to
establish the payment plan. However, judges frequently stipulate
that the monthly payment plan should be "not less than" a certain
amount. According to a senior probation official in the district,
this allows the supervision probation officer to increase the payment
if the offender's economic circumstances change. The method of
payment can also be affected by the result of a civil court action or
be delegated to an agency owed restitution, such as the Small
Business Administration.
--------------------
\1 In determining the method of payment for the restitution amount,
the court is to determine the financial circumstances of the
defendant. Prior to the MVRA, judges were to consider the financial
conditions and earning abilities of the defendant, among other
factors, in determining whether or not to order restitution.
ROLES OF DIFFERENT AGENCIES
REGARDING FINES AND
RESTITUTION
---------------------------------------------------------- Letter :2.1
The Judicial Conference of the United States\2 is the courts'
principal policymaking body. The Conference's statutory
responsibilities include making recommendations to the various courts
to promote uniformity of management procedures.
AOUSC is the administrative body for the federal court system and
performs many support functions for the courts. Among its
responsibilities, AOUSC provides national standards and policies as
well as administrative and management guidance to probation offices.
A primary focus has been the development of policies and procedures
to help probation officers carry out their responsibilities of
probation officers more efficiently and effectively. AOUSC also
monitors and reviews program performance and resource use.\3
FJC is the judicial branch agency that, among other things, conducts
orientation and provides continuing education and training programs
for federal judges, probation officers, and other court employees.
FJC's programs and projects involve coordination and consultation
with AOUSC.
Each of the 94 district courts is granted by statute and practice
considerable discretion in managing its own affairs. This includes
the authority to appoint, supervise, and train its employees, and to
establish local practices and rules of operation.
The U.S. Sentencing Commission also has responsibility for
establishing sentencing policies and practices. The Commission does
this through its Sentencing Guidelines which, with respect to fines,
for example, state that the length of the installment schedule
generally should not exceed 12 months.
DOJ also has a role in obtaining fines or restitution from offenders.
Financial Litigation Units within the U.S. Attorney's Offices can
place liens on offenders' assets and pursue other collection efforts.
In the two districts in our study, the Financial Litigation Units did
not become involved while the offender was under court supervision,
except at the request of the probation officer. The Financial
Litigation Unit is also responsible for pursuing any remaining fines
or restitution owed by the offender once the offender leaves court
supervision.
--------------------
\2 The Judicial Conference consists of 26 judges plus the Chief
Justice of the United States, who presides over the conference.
\3 Activities of the Administrative Office of the United States
Courts, Annual Report of the Director, Leonidas Ralph Mecham, 1997.
OBJECTIVES, SCOPE, AND
METHODOLOGY
------------------------------------------------------------ Letter :3
Our objectives were to (1) identify guidance available to probation
officers on how to determine payment schedules for offenders who
received orders to pay fines or restitution and (2) assess, in two
judicial districts, how offenders' payment schedules were actually
determined while under court supervision. We did not review the
basis for the presentence report, the original court decision that
imposed a fine or restitution order, or the total amount of fine or
restitution ordered by the court. Our evaluation focused on how
payment schedules were determined for offenders who owed fines or
restitution and the guidance available to the supervision probation
officers in the two districts studied.
To determine what guidance existed on how offenders should pay their
obligations, we held discussions with officials from AOUSC, FJC, the
U.S. Sentencing Commission, and the Executive Office of the U.S.
Attorney within DOJ. Within the two districts we reviewed, we held
discussions with the Chief Probation Officer, probation officers,
judges, and representatives of the U.S. Attorney's Financial
Litigation Unit. From the officials interviewed, we requested any
available documentation relating to how payment schedules should be
determined for offenders owing fines or restitution. We reviewed the
documentation provided by these officials to determine what guidance
existed, including any financial standards for establishing the
method of payment.
To examine how fine and restitution payment schedules were
determined, we selected statistical samples of offender case files in
two judicial districts: 242 cases in the Central District of
California, which included Los Angeles, and 253 cases in the Northern
District of Texas, which included Dallas. We selected these
districts for review because they (1) are large districts in terms of
number of cases and (2) had probation offices geographically
dispersed within the districts. Our samples were drawn from an
automated list of offenders on probation or supervised release who
(1) were ordered to pay fines or restitution, (2) were sentenced
after January 1, 1990, and (3) would not be off probation or
supervised release prior to June 30, 1997. We stratified our sample
in each district by those who received orders to pay fines only,
those who received orders to pay restitution only, and those who
received orders to pay both fines and restitution. Because our file
review was limited to these two districts, our results cannot be
generalized to how offenders are required to pay their fines or
restitution in other districts. A demographic profile of the
offenders in the two districts we reviewed is included in appendix
II.
We considered a case to contain issues of inconsistency and apparent
inequity in how payment schedules were determined when the following
conditions were met:
-- First, documents supplied by the offenders indicated that income
or assets might exist to pay toward fines or restitution on a
more complete or timely basis.
-- Second, the offenders (1) would not pay off their fines or
restitution prior to the end of their court supervision or (2)
would pay off their fines or restitution prior to the end of
their court supervision but appeared to have resources to pay
more quickly.
-- Third, we identified one or more of the following issues during
our case review: (1) there was no evidence that consideration
was given to additional assets that might have been available to
pay toward the fine or restitution; (2) arbitrary methods were
used to establish the installment payment schedules that were
not linked to income, expenses, or other financial criteria; (3)
the types or amount of expenses that were reported as necessary
by the offender appeared high in relation to location and family
circumstances; and (4) financial information was not current and
had not been updated for 18 months or more.
To gain a better understanding of these cases, we discussed the case
with a probation officer or supervisor, if available, to resolve any
issues we identified.
For this review, we did not consider cases in which the offenders (1)
paid their fines or restitution orders as a lump sum, (2) had their
cases closed by the judge or transferred to another district, or (3)
were returned to court for a violation of a condition of probation.
A panel of our team members met, and each member reviewed and
discussed all cases to ensure consistency in how the issues were
identified. Cases with identified issues of inconsistency and
apparent inequity were given an additional review by another panel
with a different configuration of team members. Both teams had to
agree before we counted the case as inconsistent or apparently
inequitable.
Greater detail on our scope and methodology is included in appendix
I. We did our work from March 1997 through October 1997 in
accordance with generally accepted government auditing standards. We
obtained written comments from AOUSC, FJC, DOJ, and the U.S.
Sentencing Commission. These comments are summarized at the end of
this letter and are contained in appendixes III, IV, V, and VI.
GUIDANCE LACKED SPECIFICS ON
HOW PAYMENT SCHEDULES SHOULD BE
DETERMINED
------------------------------------------------------------ Letter :4
AOUSC provided general guidance for probation officers on how
offenders should be required to pay their court-ordered fines and
restitution, but the guidance lacked specific financial standards to
guide the probation officer in determining payment schedules. In
both district courts we visited, the AOUSC guidance was supplemented
with local guidance; but the local guidance was also very general,
lacking specific financial standards. For example, the AOUSC
guidance required probation officers to establish "realistic" payment
schedules but provided no standards on what was considered realistic.
FJC offered a financial investigation training course that included
suggested standards on how payment schedules should be determined,
but only a few probation officers we interviewed were familiar with
it, and those who were saw it as an optional tool, not a reflection
of AOUSC policy.
GUIDANCE PROVIDED BY AOUSC
---------------------------------------------------------- Letter :4.1
AOUSC guidance to probation officers on determining an offender's
ability to pay fines and restitution advised establishing a payment
plan if the judge did not provide one at sentencing. However, the
guidance, which is focused on what information to collect and how to
collect it, does not specify how probation officers are to analyze
financial information provided by offenders to determine how much, or
if all, of the fine or restitution can be paid each month.
In its August 1993 guidance to probation officers (Monograph 109,
Supervision of Federal Offenders), AOUSC identified the need to
establish payment plans when offenders are not financially able to
make lump-sum payments and to verify an offender's ongoing financial
status through such methods as reviewing financial information on
monthly supervision reports. AOUSC later stressed\4 the importance
of (1) monitoring an offender's compliance with financial obligations
imposed by the courts, (2) establishing realistic payment schedules,
(3) taking appropriate steps to ensure timely payment, and (4)
involving the U.S. Attorney's Financial Litigation Unit when
offenders fail to meet financial obligations.\5
In its Probation Manual, AOUSC provides some general guidance to
probation officers on completing the financial investigation for the
presentence report. However, this guidance is directed toward
providing information that will assist the judge in determining the
total amount of the fine or restitution to be ordered. In the
districts we visited, these responsibilities were handled by
presentence probation officers.
The supervision probation officers who monitor offenders on probation
or supervised release after sentencing received only general guidance
on how an offender should be required to pay fines and restitution
that were not paid at the time of sentencing. For example, while the
guidance included instructions on forms to complete and data to
collect, it offered no specifics on how to interpret the information
collected, such as what constituted a realistic payment schedule,
when to consider assets available, or the specific types of expenses
that could be considered necessary. As a result, as shown in the
following sections, individual probation officers were left to create
their own arbitrary standards, thus producing inequitable results.
--------------------
\4 Update to Probation Officers on the Imposition and Collection of
Fines and Restitution, September 1995.
\5 Upon request by the probation officer, the U.S. Attorney's
Financial Litigation Unit can do financial background checks on
offenders and pursue garnishing an offender's wages or placing liens
on an offender's assets.
TRAINING PROVIDED BY FJC
---------------------------------------------------------- Letter :4.2
FJC provided in-district training programs on financial
investigations designed to, among other things, develop and enhance
probation officers' skills in determining an offender's ability to
pay fines and restitution. The training suggested tools to use in
making determinations of how an offender should be required to make
payments on fines and restitution ordered by the court. AOUSC
officials informed us that the training reflects their policies, and
FJC officials agreed that the more specific guidance in the training
is based on AOUSC's general policies.
FJC records show that between fiscal years 1995 and 1997, it provided
this training to 4,427 court personnel in 76 of 94 court districts,
including court personnel in the Central District of California and
the Northern District of Texas. According to the Chief of FJC's
Probation and Pretrial Programs, while the exact number of probation
officers who took the training is uncertain, the training was given
predominately to probation officers. FJC officials, however, stated
that the training provided was not mandatory, and, under the division
of responsibilities in the judicial branch, neither FJC nor AOUSC can
require that the training be taken. According to AOUSC officials,
the chief judge has the authority to require probation officers to
take the training. Thus, AOUSC policies, if reflected in the
training, were distributed in a manner that does not ensure that
officers were aware of it or subscribed to it.
FJC informed us that they provided financial investigation training
as part of their orientation programs for new probation and pretrial
services officers. FJC's training and guidance offered a detailed
approach to collecting and analyzing financial information to
determine an offender's ability to pay. This financial investigation
training included a formula that could be used to compute a monthly
installment payment schedule, a definition of necessary expenses,
general guidance on the amount of specific expenses to allow as
necessary, and steps to take in analyzing an offender's personal
financial statement. As part of the training program, FJC provided
the Financial Investigation Desk Reference for U.S. Probation and
Pretrial Officers to assist probation officers in determining an
offender's ability to pay. The desk reference included information
such as (1) the type and frequency of financial information that
should be obtained from offenders in determining their ability to
pay, (2) a general definition of necessary monthly expenses, (3) a
formula to use in setting installment payments, and (4) guidance on
how to verify assets or income reported by offenders. However, the
cover page of the Financial Investigation Desk Reference states:
"This Federal Judicial Center publication was undertaken in
furtherance of the Center's statutory mission to develop and
conduct education programs for judicial branch employees. The
views expressed are those of the authors and not necessarily
those of the Federal Judicial Center."
In determining ability to pay, the training recommended that
probation officers first look at cash or other assets that can be
made available for immediate payment by the offender. The training
suggested that if probation officers suspected that offenders'
lifestyles or spending habits exceeded their reported income, the
officers could search for unreported assets or income by requesting
credit checks or checks for unreported real estate. The training
also recommended verification of income through pay stubs or tax
information.
The FJC training advised that, in considering what assets are
available to pay fines and restitution, probation officers could
assume that most securities could be readily converted to cash and
that real estate could be sold. The training suggested that it would
be more desirable for offenders to borrow against an asset rather
than liquidate it, since the liquidation of an asset can be a lengthy
process.
The training recommended that if the offenders do not have the
ability to pay the fines or restitution immediately, probation
officers should set an installment payment schedule by deducting
necessary monthly expenses from monthly income to arrive at cash
flow. The monthly cash flow, less an unspecified amount for
emergencies and unforeseen expenditures, should be available to make
payments on restitution or fines.
The training advised that probation officers should use caution when
assessing the types and amounts of necessary expenses. It defined
necessary expenses as those necessary for the offender's continued
employment and for the basic health and welfare of the offender's
dependents.
The FJC financial investigation training portion of new officer
orientation also advised, but did not require, using the Consumer
Expenditure Tables published by the Bureau of Labor Statistics as a
reasonable estimate of current expenses. These tables provide
average annual household expenses by income level. The training
suggested using a percentage of expenses in relation to income as a
reasonable way to estimate expenses. For example, about 5 to 7
percent of gross income would be allowed for utilities by families
with incomes between $30,000 and $39,999, while another 23 to 30
percent of gross income would be allowed for housing. The training
cautioned, however, that the tables should be used only as a general
guide and that the information, which is dated, has limited
usefulness.
Starting in 1995, FJC reported that they also invited officers to
attend regional seminars, which included financial investigation
techniques. According to the FJC, participants were selected in part
because of their willingness and ability to carry the results of the
training to their home districts. FJC figures show that the training
reached officers in 76 districts, and 61 of those 76 districts
reported to FJC that they implemented financial investigation
projects after these seminars. In 1997 FJC reported on 10 of those
61 projects designed to address one or more aspects of fines and
restitution.\6 For example, FJC reported that
-- The Northern District of California improved its databases,
resulting in an increase in the number of offenders with payment
plans from 21 percent to 39 percent over a 4-month period.
-- The Eastern District of Virginia developed a project that
explored new techniques of more accurately assessing an
offender's ability to pay a fine or restitution.
-- The Middle District of Florida formed a financial investigation
committee to assist officers and to develop additional avenues
for locating hidden or criminal assets.
The FJC report provided examples of ongoing programs and projects in
the Eastern District of Pennsylvania, the Eastern District of New
York, the Eastern District of Wisconsin, the Western District of
Oklahoma, the Northern District of Indiana, the Southern District of
Illinois, and the Southern District of West Virginia. We did not
evaluate FJC's projects. Nor did we attempt to determine the extent
to which these projects disseminated the training to probation
officers in the districts or the extent to which probation officers
implemented this guidance.
Although AOUSC officials believed the training reflected their
policies, the training was not transmitted to all probation officers
as policy, as were other documents such as Monograph 109. Instead,
training was voluntary and was not taken by all probation officers.
Officials in the districts we visited did not consider the FJC
training as policy to be followed when establishing payment
schedules. Officials in the Northern District of Texas had recently
revised their local guidance on an offender's ability to pay fines
and restitution but acknowledged that the references did not include
FJC's Financial Investigation Desk Reference. In the Central
District of California, we interviewed 11 supervisors, only 1 of whom
mentioned a "handbook from the [Federal] judicial center" when
commenting on the guidance available from the AOUSC. This supervisor
also stated that he saw memorandums from the AOUSC, but the
memorandums were general, not specific. Two of the supervisors cited
AOUSC's Monograph 109: Supervision of Federal Offenders. One of
these supervisors cited Monograph 109 and "little else," adding that
Monograph 109 is "general, not specific." One cited "general
guidelines" and a "training program 5 or 6 years ago that included a
video," but no ongoing training. Other responses from supervisors
concerning AOUSC guidance included "can't think of any," "hasn't seen
anything," and "interpretation of statute only."
--------------------
\6 We did not verify the results reported from these programs and
projects.
LOCAL GUIDANCE PROVIDED BY
THE DISTRICTS
---------------------------------------------------------- Letter :4.3
In addition to the guidance provided by AOUSC, both districts we
reviewed provided local guidance to probation officers on determining
an offender's ability to pay fines and restitution. The Central
District of California provided both (1) a supervision handbook,
which included general instructions on the need to establish
installment payment schedules and (2) a training module on financial
investigation, which included the need for completion by the offender
of a personal financial statement and incorporated some of the FJC
training on financial investigation. However, as with the guidance
provided by the AOUSC, the local guidance lacked specifics, leaving
it up to the individual probation officer to decide how installment
payment schedules should be established.
In August 1997, the Northern District of Texas provided local
guidelines that advised probation officers, when determining payment
schedules, to "pay attention to" indicators such as luxury items,
excessive travel, and "unnecessary expenditures." The latter included
loan payments to family members, loans to family members, private
school tuition, unemployed spouses able to work, and funds paid out
for home and lawn maintenance. However, the guidance does not
specify how these items should be considered in setting a payment
schedule. Also, as previously cited, the local guidance did not
refer to the FJC training.
INCONSISTENCIES IN HOW PAYMENT
SCHEDULES WERE ESTABLISHED
CREATED APPARENT INEQUITIES
------------------------------------------------------------ Letter :5
To determine how payment schedules were established for offenders who
owed court-ordered fines or restitution, we reviewed 242 cases in the
Central District of California and 253 cases in the Northern District
of Texas. Of these cases, 24 of the California cases and 16 of the
Texas cases had been either closed by the judge, returned to court,
or transferred to another district. Because the complete file was
not available to us in these cases, we did not identify issues in
these cases for this review. Further, the offender paid the fine or
restitution as a lump sum in 36 of the California cases and 33 of the
Texas cases. Again, for this review, we identified no issues in
these cases because the fine or restitution was paid in full at or
near the time of sentencing. Table 1 shows the percentages of sample
cases where the fines and restitution were paid as a lump sum or by
installments.
Table 1
How Offenders in Sample Cases Were to
Pay Their Fines and Restitution
Central District of California Northern District of Texas
---------------------------------- ----------------------------------
Installment Installment
Lump-sum payment payment Lump-sum payment payment
---------------- ---------------- ---------------- ----------------
Type of
court-
ordered
payment Cases Percent Cases Percent Cases Percent Cases Percent
-------- ------- ------- ------- ------- ------- ------- ------- -------
Fine 22 25% 67 75% 21 23% 71 77%
Restitut 5 5 88 95 4 4 89 96
ion
Fine and 9 25 27 75 8 15 44 85
restitu
tion
================================================================================
Total 36 17 182 83 33 14 204 86
cases
--------------------------------------------------------------------------------
Note: These percentages exclude cases that were closed, transferred,
or returned to court.
Source: GAO analysis of offender case files.
In the remaining cases where offenders were expected to make
installment payments, we identified issues of inconsistency and
apparent inequity among either victims or offenders in 112 of the 182
cases (62 percent) in the Central District of California and 85 of
the 204 cases (42 percent) in the Northern District of Texas. We
also identified issues in those cases in which financial documents,
submitted by the offender, suggested that assets or income might have
been available to pay fines or restitution on a more complete or
timely basis. Issues identified by us during our review included
-- lack of consideration given to additional assets that might have
been available to pay toward the fine or restitution;
-- use of arbitrary methods to establish the installment payment
schedules that were not linked to income, expenses, or other
financial criteria;
-- reported "necessary" expenses that appeared high in relation to
location and family circumstances; and
-- financial information that was not current and had not been
updated for 18 months or more.
Table 2 summarizes the percent of installment-payment cases in our
sample where we identified these types of issues.
Table 2
Sample Cases With Issues About How
Payment Schedules Were Established
Central District of California Northern District of Texas
---------------------------------- ----------------------------------
Type of
court- Cases with Number Percent Cases with Number Percent
ordered payment with with payment with with
payment schedules issues issues schedules issues issues
-------- ---------- ---------- ---------- ---------- ---------- ----------
Fine 67 49 73% 71 30 42%
Restitut 88 49 56 89 34 38
ion
Fine and 27 14 52 44 21 48
restitu
tion
================================================================================
Total 182 112 62 204 85 42
cases
--------------------------------------------------------------------------------
Source: GAO analysis of offender case files.
Our case file reviews and discussions indicated that individual
probation officers, in the absence of guidance that included
financial standards, developed their own arbitrary methods for
determining offenders' payment schedules for court-ordered fines and
restitution. As described in the following sections, related issues
include what types of assets should be made available for lump-sum
payments and how installment payment schedules were established when
offenders did not make lump-sum payments.
GUIDANCE LACKED SPECIFICS ON
WHAT TYPES OF ASSETS SHOULD
BE MADE AVAILABLE FOR
PAYMENTS
---------------------------------------------------------- Letter :5.1
Offenders are to report their assets, such as bank accounts,
securities, and real estate on the personal financial statement.\7
However, there are no standards on what kinds of assets could be
considered available for payment. For example, there is no guidance
on what a probation officer should do if assets are jointly held with
another family member or held in a retirement account.
We identified issues of inconsistency and apparent inequity in cases
where offenders reported assets that might have been available for
payments but there was no indication in the file that probation
officers considered these assets as a means for payments. We
interviewed probation officers responsible for the cases in question,
and they could not always explain why the assets were not considered
available to apply toward the fines or restitution owed. Table 3
shows the percent of cases in which we identified these types of
issues.
Table 3
Installment Payment Cases Where
Additional Assets Might Have Been
Available but Were Not Considered for
Payments
Central District of California Northern District of Texas
---------------------------------- ----------------------------------
Type of
court- Cases with Percent Cases with Percent
ordered payment Cases with with payment Cases with with
payment schedules issues issues schedules issues issues
-------- ---------- ---------- ---------- ---------- ---------- ----------
Fine 67 21 31% 71 3 4%
Restitut 88 10 11 89 6 7
ion
Fine and 27 9 33 44 15 34
restitu
tion
================================================================================
Total 182 40 22 204 24 12
cases
--------------------------------------------------------------------------------
Source: GAO analysis of offender case files.
The following examples illustrate cases where assets might have been
available but were not considered for payments toward fines or
restitution owed by offenders.
-- An offender was convicted of a fraud scheme and sentenced to 12
months in prison and 36 months of supervised release. He was
also ordered to pay a fine of $15,000 and restitution of
$153,000. The offender reported a monthly income of $3,000 and
was required to make monthly installment payments of $100. The
offender reported a second home valued at $850,000 on one
personal financial statement; on his next statement, that it had
been sold. The probation officer supervising the case said he
did not know what the offender did with the proceeds from the
sale. After our case review, AOUSC followed up on the case and
provided further details that showed the offender actually sold
the second home for $680,000 around the time of sentencing and
did not apply the $52,000 proceeds in equity from the sale
toward his restitution. However, we did not find guidance that
would have advised the probation officer to notify the judge or
the U.S. Attorney to advise them when an offender is disposing
of assets that may be used toward payments.
-- An offender was convicted of racketeering and was sentenced to
72 months in prison and 36 months of supervised release. He was
also ordered to pay a fine of $32,000 and restitution of $8,000.
The offender reported a monthly income of $2,800 and expenses of
$1,700 and was required to make monthly installment payments of
$200. While under supervision, the offender sold $20,000 worth
of securities but did not report what he did with the proceeds.
The probation officer supervising the case did not know what the
offender did with the proceeds from the sale, and we did not
find guidance advising when an officer should ask that
securities be used toward payments or if the officer should
notify the judge when the offender disposes of assets that could
be applied toward payments.
-- An offender was convicted of posing as a stockbroker for a
national brokerage house, and selling counterfeit securities in
well-known legitimate companies by phone. He was sentenced to
36 months in prison and 36 months of supervised release. He was
ordered to pay over $100,000 in restitution. The offender was
required to make monthly payments of $400 to his victims. The
offender, who was single, reported a monthly income of $4,600
and necessary monthly expenses of $3,200, which included leases
on two vehicles of $875. The offender verbally claimed
ownership of a painting valued at $185,000, but later claimed
that the painting was jointly owned with his mother. The
offender also claimed his mother would be paying his restitution
since he was 4 months in arrears on his payments to his victims.
A letter in the case file from one of his victims inquired why
restitution was being received so slowly. He also claimed life
insurance with a cash surrender value of $25,000. We did not
find guidance on the documentation that the probation officer
should have obtained concerning ownership of jointly held
property, how jointly held property should be considered when
restitution is owed to victims, or how to handle promises of
future payments by relatives or others when the offender stops
making payments.
-- An offender convicted of bank robbery was sentenced to 46 months
in prison and 36 months of supervised release. He was also
ordered to pay $1,450 in restitution. The offender reported a
monthly income of $1,638 and expenses of $1,190. The offender
was received for supervision in October 1995, and the probation
officer set the initial payment at $50 per month. In January
1996, the offender requested and received approval from the
probation officer to travel to another city outside the district
to receive a legal settlement of $6,500, promising to use the
proceeds toward the restitution, and submitted supporting
documentation for the trip to the probation officer. However,
the offender applied none of the settlement toward the
restitution, and, at the time of our review in July 1997, had
made only one $25 payment in February 1997 toward the
restitution. Also, at the time of our review, no personal
financial statement had been obtained from this offender, who
had been under court supervision for almost 2 years. We found
no guidance advising the probation officer about how to handle a
case where an offender stops making payments based on promises
of large, future payments and then fails to pay. After we
discussed this case with district officials, the offender's
supervised release was revoked for several reasons according to
AOUSC, including nonpayment of restitution.
-- An offender convicted of wire fraud was sentenced to 36 months
of probation. The offender was fined $3,000 and ordered to pay
restitution of $1,995. The offender reported an average monthly
income of $8,200 and necessary monthly expenses of $8,100. The
probation officer set the payment at $90 per month. The
offender reported over $65,000 in a personal savings account.
The probation officer stated that as long as the offender made
the $90 monthly payment, he left him alone; and there was no
guidance that even large, cash amounts in bank accounts should
be applied toward fines or restitution.
In other cases, probation officers did not consider immediate payment
as necessary, even if the offender reported enough cash to make an
immediate payment toward fines or restitution. For example:
-- One offender, a doctor, was convicted of participating in a
fraudulent auto accident insurance scheme by certifying
nonexistent injuries as real. The offender was sentenced to 60
months of probation and 3,000 hours of community service. The
offender was also fined $10,000. The probation officer set the
installment payment at $200 per month. The offender reported
real estate worth over $1,000,000 with over $900,000 in equity
and over $500,000 in cash assets, including $20,000 in a
personal bank account. Despite a claim of changed
circumstances, the offender's necessary monthly expenses
included a pool maintenance man and a gardener for the
offender's home in Beverly Hills. The probation officer
supervising the case told us that it was not necessary for the
offender to pay off the fine any sooner than by the end of the
offender's 60-month probationary period, which, according to
AOUSC, was eventually paid. There was no guidance that would
clarify whether this offender should have made an immediate
payment instead of paying it off over 5 years. There is no
specific guidance on what assets, even $500,000 in cash assets,
should be used to pay a fine or restitution.
-- In another case, an offender convicted of bribery was sentenced
to 36 months of probation and ordered to pay a $1,500 fine. The
offender reported having over $25,000 in the bank. The
probation officer on this case also told us that immediate
payment was not expected of offenders and set a payment schedule
of $50 per month, and there was no guidance on whether large
cash sums in the bank should be used to pay off fines.
--------------------
\7 According to FJC's Financial Investigation Desk Reference for U.S.
Probation and Pretrial Services Officers, the Financial Investigation
Task Force was organized by AOUSC in response to our report, After
the Criminal Fine Enforcement Act of 1984--Some Issues Still Need to
Be Resolved (GAO/GGD-86-2; Oct. 10, 1985). The report recommended
the development of a standard report to assist probation officers in
compiling financial information in a complete and uniform manner.
The task force created the personal financial statement in 1987 and a
standard process to assist officers in conducting financial
investigations. FJC also developed a training program.
GUIDANCE LACKED SPECIFICS ON
HOW TO DETERMINE INSTALLMENT
PAYMENT SCHEDULES
---------------------------------------------------------- Letter :5.2
If an offender is unable to make an immediate lump-sum payment,
installment payment schedules may be used.\8 As shown earlier, most
offenders in our sample paid their fines or restitution by
installments. For these cases, installment payment schedules were
most often set by probation officers in the Central District of
California and by judges, generally using information provided by
probation officers, in the Northern District of Texas, as shown in
table 4.
Table 4
Person Who Set the Installment Payment
Schedule for the Sample Cases
Central District of California Northern District of Texas
---------------------------------------- --------------------------
Probation Probation
officers Judges Other\a officers\b Judges
------------ ------------ ------------ ------------ ------------
Type of
court-
ordered Perce Perce Perce Perce Perce
payment Cases nt Cases nt Cases nt Cases nt Cases nt
---------- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Fine 45 67% 12 18% 10 15% 32 45% 39 55%
Restitutio 75 85 6 7 7 8 38 43 51 57
n
Fine and 20 74 2 7 5 19 17 39 27 61
restituti
on
================================================================================
Total 140 77 20 11 22 12 87 43 117 57
cases
--------------------------------------------------------------------------------
\a Includes cases where payment schedules were set by other federal
agencies that were owed restitution, such as the Resolution Trust
Corporation, where we could not determine who set the payment
schedule, or where an installment payment schedule should have been
set but was not.
\b As we noted earlier in this report, the law in Texas currently
does not allow judges to delegate the setting of installment payment
schedules to probation officers. The cases in our sample where
probation officers set the schedules included cases that were
transferred from other districts and cases that predated the 1994
U.S. Court of Appeals decision that precluded judicial delegation of
this function.
Source: GAO analysis of offender case files.
When installment payment schedules were set by judges, probation
officers were responsible for monitoring installment payments made
while the offender was on probation or under supervised release. The
probation officer was also responsible for suggesting increases or
decreases in the payment amount based on changes in the offender's
ability to pay. In the Northern District of Texas, the four judges
we interviewed told us that when they set the installment payment
amount, they depended "very heavily," "exclusively," "99 percent of
the time," and "almost exclusively," respectively, on the
recommendations from the probation officer. In addition, the
installment payment amount could be identified by the judge as "not
less than" a given amount, and the probation officer could recommend
a higher payment.
We identified cases in which arbitrary methods not linked to income,
expenses, or other financial criteria were used to establish the
installment payment schedules. Table 5 shows the percent of sample
cases where we identified issues about the methods used by probation
officers to establish or recommend the installment payment schedules.
Table 5
Cases Where Arbitrary Methods Were Used
to Establish the Installment Payment
Schedule
Central District of California Northern District of Texas
---------------------------------- ----------------------------------
Type of
court- Cases with Percent Cases with Percent
ordered payment Cases with with payment Cases with with
payment schedules issues issues schedules issues issues
-------- ---------- ---------- ---------- ---------- ---------- ----------
Fine 67 29 43% 71 12 17%
Restitut 88 31 35 89 12 13
ion
Fine and 27 10 37 44 5 11
restitu
tion
================================================================================
Total 182 70 38 204 29 14
cases
--------------------------------------------------------------------------------
Source: GAO analysis of offender case files.
As shown in the following examples, the probation officers we
interviewed used arbitrary methods for developing installment payment
schedules, including negotiating amounts, accepting good-faith
payments, and choosing round numbers that were not linked with
income, expenses, or other financial criteria.
-- An offender was convicted of illegally selling explosives and
was sentenced to 33 months in prison and 36 months of supervised
release. He was also fined $3,000. The offender reported an
average monthly income of over $2,000. The probation officer
said she determined an installment payment schedule by
suggesting payment amounts until the offender heard an amount he
thought he could live with. She said the offender finally
agreed to pay $25 a month, although he thought this amount was
unreasonable.
-- An offender was convicted of attempting to manufacture
methamphetamine and was sentenced to 60 months in prison and 48
months of supervised release. He was also fined $6,000. The
offender reported a monthly income of $2,200 as a production
supervisor. The probation officer selected a monthly payment
amount of $100 because he said it was a nice round number.
-- An offender was convicted of leasing one of his ranches for the
manufacture of methamphetamine and sentenced to 18 months in
prison and 36 months of supervised release. He was also fined
$3,000. The offender reported a monthly income of $4,600. The
probation officer said that the offender's previous probation
officer had set a monthly payment of $50, and the current
probation officer said he did not know how it was set, except
that the payment appeared to be a good-faith payment.
-- An offender was convicted in a fraud scheme and sentenced to 24
months in prison and 36 months of supervised release. He was
ordered to pay $2.8 million in restitution. The offender
reported a monthly income of over $4,000. The probation officer
said that she arrived at a monthly payment of $50 through
"almost a negotiation process, what they're comfortable with,
almost like bartering."
-- An offender was convicted of conspiracy to commit bank fraud and
was sentenced to 36 months in prison and 60 months of supervised
release. He was also ordered to pay $1 million in restitution.
The offender reported a monthly income of $1,700. The probation
officer accepted $50 as an installment amount because, he said,
he didn't know how to handle this case.
--------------------
\8 For fines, the U.S. Sentencing Guidelines state that the length
of the installment payment schedule generally should not exceed 12
months. The sentencing guidelines further provide that the defendant
should be required to pay a substantial installment at the time of
sentencing. For fines and restitution, the law [18 U.S.C. 3572
(d)(2)] requires that if the order permits other than immediate
payment, the length of time over which scheduled payments will be
made shall be set by the court, but shall be the shortest time in
which full payment can be reasonably made.
ARBITRARY METHODS AFFECTED
LOWER-INCOME OFFENDERS
---------------------------------------------------------- Letter :5.3
Because installment payment schedules were set using arbitrary
methods, some offenders with lower incomes were expected to make
higher payments than offenders with higher incomes who owed more in
fines or restitution. For example, based on financial criteria such
as income and expenses, the following offenders appeared to be paying
a much higher percentage of income toward fines and restitution than
other offenders presented as examples in this report with higher
incomes who owed more in fines or restitution.
-- An offender was convicted of cashing counterfeit checks and
sentenced to 1 month in prison and 60 months of supervised
release. She was also ordered to pay about $8,000 in
restitution. The offender, who had four children, reported a
monthly income of $737 from welfare. The probation officer set
the monthly installment payment at $50.
-- An offender was convicted of filing false claims for state
disability insurance and sentenced to 24 months of probation.
He was ordered to pay $900 in restitution. The offender had a
wife and four children and reported a monthly income of $800.
The probation officer set the monthly payment at $50.
-- An offender, a single mother with one dependent child, was
convicted of filing a false home-loan application and was
sentenced to 1 day in prison and 36 months of supervised
release. She was ordered to pay $32,000 in restitution when she
defaulted on the loan. She reported a monthly income of $2,400.
The probation officer set the payment schedule at $1,000 per
month.
GUIDANCE LACKED SPECIFICS ON
THE TYPE OR AMOUNT OF
EXPENSES CONSIDERED
NECESSARY
---------------------------------------------------------- Letter :5.4
Offenders are to report their necessary monthly expenses on a
personal financial statement that identifies the types of expenses
that could be listed as necessary, including home rent or mortgage,
utilities, groceries and supplies, insurance, minimum installment
payments, transportation, medical, clothing, and other. The personal
financial statement also requires the offender to deduct necessary
monthly expenses from reported income to arrive at cash flow.
However, AOUSC has not developed standards to help probation officers
decide what type or amount of expenses should be considered
necessary.
As discussed earlier, FJC training defined necessary expenses as
those necessary for the offender's continued employment and for the
basic health and welfare of the offender's dependents. AOUSC
includes this definition in its Probation Manual in sections
concerning the presentence report used to assist the judge in
determining the total amount of fine or restitution to order in the
case. However, there is no specific guidance on actual types or
amounts of expenses that might be considered as necessary. As a
result, probation officers in cases where we identified issues often
just accepted the types or amounts of expenses listed as necessary by
the offender.
FJC training also advised, but did not require, using data published
in the Bureau of Labor Statistics' Consumer Expenditure Tables as a
general guide to reasonable expenses and recommended using cash flow
reported by the offender--income less necessary expenses--as the
basis for setting an installment payment schedule. While we did not
evaluate whether these tables are the best available for this
purpose, their application to these cases illustrates the impact of
using financial standards in determining an offender's ability to pay
a fine or restitution.
We identified issues of inconsistency and apparent inequity in those
cases where the types or amount of expenses reported as necessary
appeared high in relation to location or family circumstances. Table
6 shows the percent of cases in which we identified these types of
issues.
Table 6
Installment Payment Cases With Expenses
That Appeared High in Relation to Income
or Family Circumstances
Central District of California Northern District of Texas
---------------------------------- ----------------------------------
Type of
court- Cases with Percent Cases with Percent
ordered payment Cases with with payment Cases with with
payment schedules issues issues schedules issues issues
-------- ---------- ---------- ---------- ---------- ---------- ----------
Fine 67 18 27% 71 4 6%
Restitut 88 17 19 89 7 8
ion
Fine and 27 6 22 44 8 18
restitu
tion
================================================================================
Total 182 41 23 204 19 9
cases
--------------------------------------------------------------------------------
Source: GAO analysis of offender case files.
The following are examples of cases in which we identified issues
about the type or amount of expenses.
-- An offender was convicted of fraud and sentenced to 12 months in
prison and 36 months of supervised release. He was also ordered
to pay over $160,000 in restitution. The offender reported an
average monthly income of about $12,000 and over $14,000 in
necessary monthly expenses for himself, his spouse, and one
dependent child. The necessary monthly expenses included
mortgage payment expenses of about $6,000, entertainment
expenses of $350, clothing expenses of $400, and $5,000 of
unspecified miscellaneous expenses. Consumer Expenditure Tables
identified total monthly expenses of $4,700 for a household at
this income level, including $101 in miscellaneous expenses.
The offender was required to make monthly restitution payments
of $300. At that rate, it would take the offender over 40 years
to pay his restitution. AOUSC reported that there was a lien
against the offender's home. However, the offender's financial
statements showed the mortgage on the home was more than the
home was worth. We did not, however, find any specific guidance
from AOUSC on the amount of miscellaneous expenses that should
be considered necessary for a family of three, the total amount
of expenses that could be reasonably considered necessary, nor
how to set the installment payment schedule.
-- An offender was convicted of illegally ordering machine gun
parts and sentenced to 74 months of probation. He was also
fined $3,000. The offender reported a monthly income of $3,000
and expenses of $2,310, including a $440 payment on a
recreational boat. There was no guidance from AOUSC on whether
payments on recreational vehicles can be deducted from an
offender's income as necessary expenses. The offender's payment
was set at $150 a month.
-- An offender was convicted of environmental crimes related to
illegal dumping and was sentenced to 60 months of probation. He
was also fined $50,000. He reported a monthly income of $5,000
for himself and $10,000 for his spouse, who managed his
business. The offender reported over $12,000 in necessary
monthly expenses, including over $5,000 in monthly mortgage
expenses and $1,500 for groceries and supplies. The Consumer
Expenditure Tables identified monthly household expenses of
$4,700 for a household at this income level, including $1,411
for housing and $657 for groceries and supplies. The offender
also reported taking a $6,000 European cruise with his wife,
which he verbally claimed was nonrefundable and had been
purchased prior to sentencing, although the file showed that,
based on prior statements by the offender, it had been purchased
after sentencing. AOUSC followed up on this case and reported
that the offender eventually paid the fine prior to taking the
cruise, although neither the probation officer nor the probation
officer's supervisor was aware that the offender had made any
payments as of 10 months after sentencing and the case file
showed no payments had been made. However, there was no
guidance from AOUSC on what documentation should be obtained
from an offender regarding recreational travel, such as cruise
ship documents showing the purchase date and the extent to which
the cruise was purchased or whether or not the tickets were
refundable, when there is no evidence that the fine or
restitution has been paid, nor what would be necessary monthly
expenses for this offender and his wife, nor how to consider
spousal income when the spouse is employed by the offender.
-- An offender was convicted for possession and sale of stolen
goods and sentenced to 10 months in prison and 24 months of
supervised release. He was also fined $5,000. The offender
reported monthly income averaging $2,500 and expenses of $2,335.
His monthly payment was set at $210. He made two payments and
stopped because of a self-declared inability to pay because of
all his expenses. After he stopped making payments, the
offender, a salesman, moved from an $800 monthly rental home to
a $1,400 monthly rental home that the probation officer
described as a "huge home with horse property." AOUSC followed
up on this case and noted that the offender moved to an area
with a "substantially higher standard of living." The offender,
a salesman of technical equipment with a territory, did not,
however, change jobs. The Consumer Expenditure Tables
identified housing expenses of $631 at this income level.
However, we did not find any guidance about whether a voluntary
move to an area with a higher standard of living precluded an
offender from making payments on fines or restitution owed or
what necessary housing expenses should be.
-- An offender was convicted of misapplication of bank funds and
sentenced to 30 months in prison and 36 months of supervised
release. He was also ordered to pay $35,000 in restitution. He
reported a monthly income of about $7,600 and expenses of about
$7,500. His reported monthly expenses included $800 for car
payments and $960 for private school tuition. The Consumer
Expenditure Tables identified expenses of $347 for car payments
and $78 for education expenses at this income level. The
offender reported high medical expenses due to a disabled child
as necessary but did not offset those expenses with the medical
insurance payments that the file showed he received. The
probation officer originally set the monthly installment payment
at $100, then increased it to $200 at the time of our review.
However, we did not find AOUSC guidance on how to treat
necessary expenses in determining installment payment schedules
when those expenses are being reimbursed by a third party.
-- An offender was convicted of making false statements on a loan
application and sentenced to 6 months in prison and 48 months of
supervised release. The offender was ordered to pay about
$33,000 in restitution. The offender reported a monthly income
of over $7,500 and expenses of about $7,000. The Consumer
Expenditure Tables identified $4,700 of monthly household
expenses at this income level. Included in the expenses was a
monthly payment of $750 to the offender's sister. The probation
officer acknowledged that payments to the offender's sister
could be scaled back. However, there was no guidance from the
AOUSC on how to treat payments to relatives that are identified
by offenders as necessary expenses and used to reduce the amount
of the income available for monthly installment payments on
restitution owed. The probation officer set the monthly payment
at $100.
OFFENDERS' CASE FILES HAD
OUTDATED OR MISSING FINANCIAL
STATEMENTS
------------------------------------------------------------ Letter :6
In its guidance to probation officers, AOUSC advised that, in most
instances, offenders should be required to submit updated financial
statements every 6 months. However, AOUSC does not provide guidance
on when financial statements should be updated. According to the FJC
training, for cases where offenders could not pay their fines or
restitution in a lump sum, probation officers were advised to review
the status of net assets, net income, and necessary expenses on a
regular basis, at least once every 6 months. Local guidance issued
by the Northern District of Texas suggests initiating a financial
investigation if a significant increase or decrease in the offender's
earning ability is noticed. As a general rule in this district, any
case having a financial obligation should be investigated annually.
Offenders are also required by the local district offices to submit
monthly supervision reports. In the Central District of California,
the monthly supervision reports include monthly income and any
purchases over $500. In the Northern District of Texas, the monthly
supervision reports also include total amount of expenses. However,
the monthly supervision reports do not include the detailed financial
information included on the personal financial statement.
Despite the guidance and training, we found that financial statements
were not maintained on a current basis for many offenders in our
sample who paid their fines and restitution in installments.
Although the 6-month period was suggested for most offenders, to be
conservative we only classified financial statements as too old to be
useful if one had not been obtained for at least 18 months or more.
We also found cases that had been active for 18 months or more
without having a financial statement completed. Table 7 shows the
percent of cases where (1) the financial statements were 18 months
old or older or (2) no financial statement was in the file and the
case was active for 18 months or more. Because the financial
information was outdated for these cases, probation officers were not
in a position to determine whether the installment payment schedule
needed adjustment.
Table 7
Installment Payment Cases With Outdated
or Missing Financial Statements
Central District of California Northern District of Texas
---------------------------------- ----------------------------------
Type of
court- Cases with Percent Cases with Percent
ordered payment Cases with with payment Cases with with
payment schedules issues issues schedules issues issues
-------- ---------- ---------- ---------- ---------- ---------- ----------
Fine 67 18 27% 71 18 25%
Restitut 88 14 16 89 27 30
ion
Fine and 27 6 22 44 11 25
restitu
tion
================================================================================
Total 182 38 21 204 56 27
cases
--------------------------------------------------------------------------------
Source: GAO analysis of offender case files.
Following are some examples of cases where we found the financial
statement in the file to be at least 18 months old or missing.
-- An offender convicted of computer hacking to get into private
telephone systems was sentenced to 6 months in prison and 24
months of supervised release. He was also ordered to pay
$38,000 in restitution. The probation officer set the
installment payment at $200 a month, and this amount was not
changed. The offender's most current financial statement was
60-months old. Other information in his file showed his income
had almost doubled; there was no information on changes in
expenses, assets, or cash flow. However, there was no guidance
from AOUSC on whether this is the type of circumstance in which
an updated personal financial statement should generally be
obtained.
-- An offender was convicted of obtaining over 20 fraudulent lines
of credit and sentenced to 5 months in prison and 36 months of
supervised release. She was also ordered to pay $75,000 in
restitution. The probation officer set the installment payment
at $150 per month. Her latest financial statement was 36 months
old at the time of our review and showed monthly income of over
$4,000 and monthly expenses of $3,385. The offender requested a
reduction in payments, claiming financial hardship and a reduced
income. While her financial circumstances had changed, she did
not report the income of her husband, a college professor, which
was reported in documents used for the presentence report.
However, there was no guidance from AOUSC on whether this was a
circumstance in which a current financial statement should
generally be obtained or on how to treat spousal income.
-- An offender was convicted of mail fraud and sentenced to 2
months in prison and 36 months of supervised release. He was
also ordered to pay $11,000 in restitution. The judge set the
monthly installment payment at $250, and the amount was not
changed. Approximately 2 months before the payment was set, the
offender reported a monthly income of $1,600 and monthly
expenses of $1,350. The probation officer had not requested a
current financial statement in the last 24 months. During this
period, the files showed that the offender's income had
increased to over $3,000 per month, and there was no record of
his expenses. However, there was no guidance from AOUSC on
whether this is the type of circumstance in which a current
personal financial statement should generally be obtained.
CONCLUSIONS
------------------------------------------------------------ Letter :7
Probation officers did not have specific guidance and financial
standards clearly established by AOUSC as policy on how payment
schedules should be determined for offenders who owed fines or
restitution. In the absence of such guidance and standards,
probation officers often created their own arbitrary methods for
determining whether and to what extent offenders had the ability to
pay their court-ordered fines and restitution. In many cases,
probation officers also lacked the current financial information
necessary to monitor changes in offenders' ability to pay.
Inconsistencies on the part of probation officers in setting payment
amounts resulted in apparently inequitable treatment of some
offenders and victims and reduced and slowed payments to the Crime
Victims Fund and to crime victims. Although our detailed reviews
were limited to two judicial districts, the fact that probation
officers in the other judicial districts have the same limited
guidance and lack financial standards creates the risk that similar
inconsistencies and apparent inequities could occur nationwide.
FJC reported that other districts had initiatives under way to try to
improve training and guidance on fines and restitution. We did not
evaluate these initiatives, but even if they help improve
decisionmaking in those districts, they are local initiatives
designed to address local needs--not a coordinated national effort to
ensure consistency and equity within and among all judicial
districts.
AOUSC officials believe that the FJC training materials that were
more specific reflected their policies and that probation officers
should have considered them as such. However, these training
materials included a qualifier stating that they reflected the views
of the authors, not FJC. Also, the material and training were
offered on a voluntary basis and not all probation officers
participated. Thus, we believe it is reasonable for probation
officers who took the training to be uncertain about whether it
constituted AOUSC policy, which is usually transmitted under
signature to all chief probation officers as policy, and for other
probation officers not even to have seen the material.
We have not done sufficient work to conclude that a specific set of
standards is preferable, nor do we suggest anything that would limit
the judge's final discretion in reviewing a probation officer's
recommendation on how an offender should be required to pay.
However, our review showed that if specific financial standards had
been used to determine an offender's ability to pay fines and
restitution ordered by the courts and financial information had been
regularly updated, it would have helped reduce the inconsistencies
and apparent inequities we found in the sample cases in these two
court districts.
RECOMMENDATIONS
------------------------------------------------------------ Letter :8
We recommend that the AOUSC
-- establish, as policy, specific guidance on how probation
officers should determine how offenders should pay their fines
and restitution, including criteria establishing what types of
assets should be considered for immediate lump-sum payments or
substantial payments; how installment schedules should be
established; and the type and amount or range of expenses that
should ordinarily be considered necessary when determining the
amount of payments under installment schedules;
-- establish as policy that personal financial statements should be
obtained on a regular, timely basis, such as every 6 months or
when circumstances change, from offenders on installment payment
schedules; and
-- implement procedures to ensure that probation officers are aware
of and recognize the guidelines as AOUSC policy.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :9
AOUSC, FJC, DOJ, and the U.S. Sentencing Commission provided written
comments on a draft of this report (see apps. III, IV, V, and VI.)
AOUSC provided seven overall comments on the report, which are
discussed in detail in appendix III. Four enclosures were provided
to expand on these comments. Due to their length, we have not
reproduced the enclosures in this report but rather we summarize them
and comment on them in the text of the report and in appendix III.
We have summarized the seven overall comments as follows.
AOUSC's first two comments reflect its view that it has provided the
probation officers with sufficient guidance to make payment schedule
decisions, and any problems noted in this report result from the
failure of individual probation officers to follow that guidance.
AOUSC provided documentation with its comments to support its view
that specific guidance was available. We reviewed the documents and
found that, in reaching conclusions about the lack of specific
guidance available to probation officers, we had already considered
the most relevant documents and believe that none of the guidance
addresses the issues raised in this report.
The most relevant documentation was Publication 107: The Presentence
Investigation Report; Monograph 109: Supervision of Federal
Offenders; and the "Update to Probation Officers on the Imposition of
Fines and Restitution dated September 1, 1995." As we reported, these
documents only generally addressed fines and restitution and did not
specifically address how probation officers should establish payment
schedules for offenders under supervision who owed fines or
restitution. For example, the guidance lacked specifics about issues
that we noted in our case examples. The other documentation
furnished--a mixture of statutes, general guidance, and articles from
various publications--would not have resolved the issues raised in
this report because none of them were official policy statements on
how offenders should pay their fines and restitution.
AOUSC also commented that the FJC training reflects AOUSC's policies
on how to determine payment schedules, and probation officers in the
field should have been aware of this. However, as discussed in the
report, the training was voluntary and not all probation officers
took it. We question whether a voluntary training program is the
most appropriate way to communicate agency policy to all staff
affected by the policy.
Third, AOUSC commented that we should eliminate the impression that
it has statutory authority to mandate compliance with our
recommendations. However, it is AOUSC's responsibility to articulate
policies, guidance, and standards. In its annual report for 1997,
AOUSC stated that it provides national standards and policies as well
as administrative and management guidance to probation officers.
AOUSC can establish policies even if those policies cannot be
mandated without the support of the district judges.
Fourth, AOUSC commented that our report should clearly indicate that
the review was a study of conditions in two courts and that there
were different practices between the two courts. We emphasize this
point throughout the report.
Fifth, AOUSC commented that most of our sample cases predated MVRA,
and our report does not consider important differences in the laws in
effect then and now. MVRA mandates that restitution be ordered in
all cases where a victim can be identified, and that restitution
should be ordered without regard to the offender's economic
circumstances. We have added additional language concerning the law
to the report. However, MVRA does not have a major impact on the
subject of this report because probation officers are still to take
ability to pay into account when determining payment schedules.
Sixth, AOUSC commented that we should take greater note of the role
of DOJ in the execution of fines and restitution sentences. We agree
that DOJ's role is important and have added some additional language
on this subject. However, the focus of this report was on the
responsibilities of probation officers while offenders were under
court supervision. For example, in some cases, AOUSC reported to us
that a lien had been filed on an offender's property by the Financial
Litigation Unit of the U.S. Attorney's Office. In each of these
cases, however, there was no evidence in the file that a lien had
been filed at the time of our study, nor was the probation officer
aware of the lien when we discussed our analysis of the case.
Primary authority for the lien may rest with the U.S. Attorney's
Office. However, we believe that it may also be appropriate for a
probation officer who is determining an installment payment schedule
to know if the offender's assets, which come to the officer's
attention, have liens against them or not, and if not, make the U.S.
Attorney's Office aware of the assets. While AOUSC provided guidance
on how to contact the U.S. Attorney's Office, AOUSC did not provide
guidance informing the probation officer of when it should be done in
these cases.
Seventh, AOUSC commented that performance can be improved and that it
is considering steps to improve program implementation and officer
performance. These steps are included in full in appendix III. Some
of these steps include (1) strengthening AOUSC's program review and
financial audit functions in this area, (2) informing judges and
probation officers of the importance of these issues, (3)
redistributing the Financial Investigation Desk Reference, (4)
reviewing and consolidating all financial investigation guidance, and
(5) considering specific guidance regarding particular financial
standards. While these proposed steps appear promising, it is
unclear how effectively they will be implemented or the extent to
which they will resolve the matters discussed in this report.
Comments from the FJC, DOJ, and the U.S. Sentencing Commission
suggested that we provide additional information on areas outside the
scope of our evaluation, including (1) the roles of the Bureau of
Prisons and DOJ in debt collection; (2) the original decision by the
judge to order a fine or restitution, including the extent to which
the court is ordering restitution under MVRA; and (3) information
relating to the presentence investigation. This information would
not have added substantively to our discussion of how payment
schedules were established for offenders who owed fines or
restitution.
These agencies also raised questions about whether our report focused
on the presentence report, which includes a financial investigation
of the offender's ability to pay a fine or restitution. To better
identify the focus of our report, we changed the title of this
report. The presentence report is prepared to help the judge
determine the total amount of the fine or restitution to order. As
stated in this report, our scope focused on how payment schedules
were established for amounts already ordered. If the judge
established the payment plan in the original court order, we did not
raise an issue with how the judge established that plan. We only
raised an issue in those circumstances if (1) the offender's
financial circumstances changed while under probation or supervised
release and the probation officer did not notify the judge of the
change; (2) the judge ordered a payment of not less than a given
amount and the probation officer took no action when an offender's
financial circumstances changed while on probation or supervised
release; or (3) the probation officer did not obtain current
financial information for an offender on probation or supervised
release.
We have incorporated in the final report technical comments and
suggestions from the four agencies, as appropriate.
---------------------------------------------------------- Letter :9.1
As agreed with your offices, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 30 days from the date this letter. At that time, we will send
copies of this report to the Ranking Minority Members of your
committees, the Chairman and Ranking Minority Member of the
Subcommittee on Administrative Oversight and the Courts, Senate
Committee on the Judiciary; the Chairman and the Ranking Minority
Member of the House Committee on the Judiciary; the Director, AOUSC;
the Director, FJC; the Commissioner, U.S. Sentencing Commission; and
other interested parties. Copies will be made available to others
upon request.
Major contributors to this report are listed in appendix VII. If you
have any questions about this report, please call me on (202)
512-8777.
Richard M. Stana
Associate Director
Administration of Justice Issues
SCOPE AND METHODOLOGY
=========================================================== Appendix I
To assess how payment schedules were determined for offenders who
owed fines or restitution, we collected data from files of
stratified, random samples of cases involving offenders who (1) were
on probation or supervised release active status, (2) had been
sentenced on or after January 1, 1990, and (3) were not scheduled to
be released from probation or supervision until after June 30, 1997.
Using information from their Probation and Pretrial Services
Automated Case-Tracking System (PACTS) database, Administrative
Office of the U.S. Courts (AOUSC) provided us with lists of all
offenders in the Central District of California and the Northern
District of Texas who, as of January 1997, met the time-period
criteria. After eliminating duplicate entries for the same offenders
and offenders who were not on active probation or supervised release
status, we identified 1,257 offenders in the Central District of
California and 850 offenders in the Northern District of Texas.
We stratified the offenders on active status in each district into
three categories: (1) those required to pay a fine, (2) those
required to pay restitution, and (3) those required to pay both a
fine and restitution. We selected the case files of 242 offenders in
the Central District of California and 253 offenders in the Northern
District of Texas. From each district, we randomly selected 100
offenders who had received orders to pay a fine only and 100
offenders who had received orders to pay restitution only. We
randomly selected approximately half (42) of the 85 offenders in the
Central District of California and all 53 offenders in the Northern
District of Texas who had received both a fine and restitution. We
collected usable data from 218 (90 percent) of the 242 cases from the
Central District of California and 237 (94 percent) of the 253 cases
in the Northern District of Texas.
We identified issues of inconsistency and apparent inequity in how
offenders were required to pay fines or restitution in those cases on
installment payment schedules that met the following conditions.
-- First, documents supplied by the offenders indicated that income
or assets might exist to pay toward fines or restitution on a
more complete or timely basis. These documents included the
personal financial statement and the monthly supervision report.
-- Second, the offenders (1) would not pay off their fines or
restitution prior to the end of their court supervision or (2)
would pay off their fines or restitution prior to the end of
their court supervision but appeared to have resources to pay
them more quickly.
-- Third, we identified one or more of the following issues during
our case review: (1) lack of consideration given to additional
assets that might have been available to pay toward the fine or
restitution; (2) use of arbitrary methods to establish the
installment payment schedules that were not linked to income,
expenses, or other financial criteria; (3) reported "necessary"
expenses that appeared high in relation to location and family
circumstances; and (4) financial information that was not
current and had not been updated for 18 months or more.
To gain a better understanding of these cases, we discussed the case
with a probation officer or supervisor, if available, to resolve any
issues we identified.
A panel of our team members met, and each member reviewed and
discussed all cases to ensure consistency in how the issues were
identified. Cases with identified issues of inconsistency and
apparent inequity were given an additional review by another panel
with a different configuration of team members. Both teams had to
agree before we counted the case as inconsistent or apparently
inequitable.
DEMOGRAPHIC CHARACTERISTICS OF
OFFENDERS IN SAMPLE DISTRICTS AND
AVERAGE AND MEDIAN AMOUNTS OF
RESTITUTION AND FINES
========================================================== Appendix II
Table II.1
Selected Characteristics of Offenders in
the Central District of California
Case file review samples Populations of offenders\a
---------------------------------- ----------------------------------
Restitutio Restitutio Restitutio Restitutio
n n n n
only Fine only and fine only Fine only and fine
---------- ---------- ---------- ---------- ---------- ----------
Percent Percent Percent Percent Percent Percent
-------- ---------- ---------- ---------- ---------- ---------- ----------
Gender
--------------------------------------------------------------------------------
Male 77.0 84.0 92.9 75.8 83.0 90.6
Female 23.0 16.0 7.1 24.2 16.8 9.4
Unknown 0.0 0.0 0.0 0.0 0.2 0.0
================================================================================
Total 100 100 42 719 453 85
offende
rs
Race
--------------------------------------------------------------------------------
White 64.0 74.0 81.0 59.3 70.2 70.6
Black 18.0 15.0 11.9 24.6 15.0 15.3
Asian 17.0 11.0 7.1 15.6 14.3 14.1
Other 1.0 0.0 0.0 0.3 0.2 0.0
Unknown 0.0 0.0 0.0 0.3 0.2 0.0
================================================================================
Total 100 100 42 719 453 85
offende
rs
Hispanic
--------------------------------------------------------------------------------
Yes 14.0 19.0 9.5 11.5 18.3 8.2
No 86.0 81.0 90.5 88.3 81.7 91.8
Unknown 0.0 0.0 0.0 0.1 0.0 0.0
================================================================================
Total 100 100 42 719 453 85
offende
rs
Primary offense of conviction\b
--------------------------------------------------------------------------------
White 80.0 46.9 68.4 72.7 46.4 68.4
collar
Violent 1.1 0.0 0.0 8.0 0.7 1.3
Property 6.7 0.0 2.6 3.8 1.1 2.5
Drug 0.0 22.9 0.0 0.1 23.5 0.0
Immigrat 0.0 4.2 0.0 0.3 5.3 0.0
ion law
Other 12.2 26.0 28.9 15.1 23.0 27.9
================================================================================
Total 90 96 38 662 435 79\
offende
rs
--------------------------------------------------------------------------------
\a Offenders who (1) were on supervised release or probation active
status, (2) had been sentenced on or after January 1, 1990, and (3)
were not scheduled to be released from supervision until after June
30, 1997.
\b Data on the primary offense of conviction were not provided for
all offenders.
Source: GAO analysis of AOUSC PACTS data.
Table II.2
Average and Median Amounts of
Restitution and Fines for Offenders in
the Central District of California
Case file review samples Populations of offenders\a
---------------------------------- ----------------------------------
Restitutio Restitutio Restitutio Restitutio
n n n n
only Fine only and fine only Fine only and fine
---------- ---------- ---------- ---------- ---------- ----------
Amount Amount Amount Amount Amount Amount
-------- ---------- ---------- ---------- ---------- ---------- ----------
Average $315,067 N/A $82,733 $153,621 N/A $209,464
restitu
tion
Median $20,087 N/A $16,500 $15,000 N/A $13,000
restitu
tion
Average N/A $14,226 $16,320 N/A $14,363 $14,134
fine
Median N/A $3,500 $4,500 N/A $3,000 $4,000
fine
================================================================================
Total 100 100 42 719 453 85
offende
rs
--------------------------------------------------------------------------------
Note: N/A represents that data are "not applicable."
\a Offenders who (1) were on supervised release or probation active
status, (2) had been sentenced on or after January 1, 1990, and (3)
were not scheduled to be released from supervision until after June
30, 1997.
Source: GAO analysis of AOUSC PACTS data.
Table II.3
Selected Characteristics of the
Offenders in the Northern District of
Texas
Case file review samples Populations of offenders\a
---------------------------------- ----------------------------------
Restitutio Restitutio Restitutio Restitutio
n n n n
only Fine only and fine only Fine only and fine
---------- ---------- ---------- ---------- ---------- ----------
Percent Percent Percent Percent Percent Percent
-------- ---------- ---------- ---------- ---------- ---------- ----------
Gender
--------------------------------------------------------------------------------
Male 58.0 92.0 88.7 66.9 88.5 88.7
Female 41.0 8.0 11.3 32.7 11.5 11.3
Unknown 1.0 0.0 0.0 0.4 0.0 0.0
================================================================================
Total 100 100 53 553 244 53
offende
rs
Race
--------------------------------------------------------------------------------
White 62.0 78.0 73.6 64.9 79.5 73.6
Black 34.0 19.0 20.8 30.9 18.4 20.8
Asian 3.0 1.0 3.8 2.9 0.8 3.8
Other 0.0 0.0 1.9 0.4 0.0 1.9
Unknown 1.0 2.0 0.0 0.9 1.2 0.0
================================================================================
Total 100 100 53 553 244 53
offende
rs
Hispanic
--------------------------------------------------------------------------------
Yes 5.0 16.0 1.9 5.2 14.7 1.9
No 93.0 83.0 98.1 93.5 84.0 98.1
Unknown 2.0 1.0 0.0 1.3 1.2 0.0
================================================================================
Total 100 100 53 553 244 53
offende
rs
Primary offense of conviction\b
--------------------------------------------------------------------------------
White 72.1 37.4 65.2 69.9 34.3 65.2
collar
Violent 5.8 2.2 4.3 4.9 2.2 4.3
Property 8.1 1.1 13.0 14.7 2.6 13.0
Drug 0.0 35.2 4.3 0.6 31.3 4.3
Immigrat 1.2 8.8 0.0 0.2 7.0 0.0
ion law
Other 12.8 15.4 13.0 9.6 22.6 13.0
================================================================================
Total 86 91 46 488 230 46
offende
rs
--------------------------------------------------------------------------------
\a Offenders who (1) were on supervised release or probation active
status, (2) had been sentenced on or after January 1, 1990, and (3)
were not scheduled to be released from supervision until after June
30, 1997.
\b Data on the primary offense of conviction were not provided for
all offenders.
Source: GAO analysis of AOUSC PACTS data.
Table II.4
Average and Median Amounts of
Restitution and Fines for Offenders in
the Northern District of Texas
Case file review samples Populations of offenders\a
---------------------------------- ----------------------------------
Restitutio Restitutio Restitutio Restitutio
n n n n
only Fine only and fine only Fine only and fine
---------- ---------- ---------- ---------- ---------- ----------
Amount Amount Amount Amount Amount Amount
-------- ---------- ---------- ---------- ---------- ---------- ----------
Average $170,021 N/A $229,400 $112,499 N/A $229,488
restitu
tion
Median $10,000 N/A $10,000 $10,000 N/A $10,000
restitu
tion
Average N/A $5,680 $6,650 N/A $7,676 $6,650
fine
Median N/A $3,000 $3,000 N/A $3,000 $3,000
fine
================================================================================
Total 100 100 53 553 244 53
offende
rs
--------------------------------------------------------------------------------
Note: N/A represents that data are "not applicable."
\a Offenders who (1) were on supervised release or probation active
status, (2) had been sentenced on or after January 1, 1990, and (3)
were not scheduled to be released from supervision until after June
30, 1997.
Source: GAO analysis of AOUSC PACTS data.
(See figure in printed edition.)Appendix III
COMMENTS FROM THE ADMINISTRATIVE
OFFICE OF THE U.S. COURTS
========================================================== Appendix II
(See figure in printed edition.)
See comment 1.
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
See comment 3.
See comment 4.
GAO COMMENTS
1. In enclosure 2, List of Specific AO Guidance to Probation
Officers on Financial Investigations, AOUSC provided additional
documents which, while generally concerning the subject of fines or
restitution, would not have resolved the issues raised in this
report. These were, for offenders under supervision who owed fines
or restitution, (1) what assets should be available for payment
toward the fines or restitution, (2) how the installment payment
schedule should be set, (3) what type or amount of expenses should be
considered necessary, and (4) how frequently financial information
should be obtained from offenders who are making installment
payments. Although the documents mention fines or restitution or
some element of payment practice, they do not constitute statements
of policy concerning how fines or restitution should be paid.
2. AOUSC provided enclosure 3, Evolution of Criminal Debt Collection
Issues and AO Training Efforts, to provide historical background on
the roles of the various agencies, including the Department of
Justice (DOJ), in the evolution of criminal debt collection issues
and related training efforts. Although the roles of other agencies
are important to the overall process, the focus of this report was on
the responsibilities of probation officers while offenders were under
court supervision. In both districts in this study, the Financial
Litigation Units of the U.S. Attorney's Offices, unless already
involved at sentencing, did not become involved while the case was
under court supervision except at the request of the probation
officer. We also believe that the probation officer who receives
information about an offender's financial condition while the
offender is under supervision should take appropriate action even if
other agencies involved may have previously overlooked the
information.
3. AOUSC commented they would consider specific guidance, if
provided by us, regarding particular financial standards. For
example, AOUSC mentions that we may be suggesting standards such as
those used by Internal Revenue Service (IRS). We did not develop our
own standards for this report nor do we believe it would be
appropriate for us to do so. We provided the agency information on
the IRS standards as an example of how an agency responded to a
previous recommendation we made. The recommendation was based on a
similar, but not identical, situation to the one we identify in this
report.
In a 1994 report,\1 we reported on how IRS made ability- to-pay
determinations for offenders who owed delinquent taxes. We found
that, in about 16 percent of the cases, IRS was allowing what
appeared to be expenses that exceeded necessary and reasonable living
expenses. We recommended that the Commissioner of Internal Revenue
"establish specific guidelines for determining taxpayer's ability to
pay delinquent taxes, including criteria for determining dollar
ranges for reasonable and necessary expenses."
IRS developed specific guidance for employees to use in analyzing
financial information. It provided dollar guidelines of necessary
expenses by family size and thus helped identify an amount the
taxpayer can reasonably be expected to pay. Housing and
transportation expenses are specific by geographic area. The data
are derived from the Census Bureau, the Federal Reserve Board of
Governors, and the Bureau of Labor Statistics.\2 The IRS standards
are available through the Internet on the World-Wide Web and are
revised annually. We believe it may be useful for AOUSC to review
the IRS financial standards and the mechanism IRS used to promulgate
them to determine if there are aspects that could be useful to them.
4. AOUSC provided two enclosures that offered specific observations
about the examples in our report. We reviewed these observations and
modified the examples as appropriate to reflect additional
information relevant to our review and consistent with our standards
for evidence. In some cases, AOUSC provided additional information
about the ultimate resolution of the case (e.g., that probation was
revoked or the fine or restitution eventually paid) that occurred
after the period of the review. However, following a detailed review
of each case, we concluded that these later events did not affect our
observations about how payment determinations were initially made.
Accordingly, we did not include these details in the report.
(See figure in printed edition.)Appendix IV
--------------------
\1 Tax Administration: IRS Can Do More to Collect Taxes Labelled
"Currently Not Collectible" (GAO/GGD-94-2; Oct. 8, 1993).
\2 The Consumer Expenditure Tables from the Bureau of Labor
Statistics used by IRS in developing its standards were also
presented in FJC training to illustrate the type of data probation
officers might seek in their financial investigations.
COMMENTS FROM THE FEDERAL JUDICIAL
CENTER
========================================================== Appendix II
(See figure in printed edition.)
See comment 1.
GAO COMMENTS
1. FJC believes our report misunderstands FJC's training about how
necessary expenses are determined, including use of the Consumer
Expenditure Tables. Our report states on page 23 that we did not
evaluate whether the tables are the best available for this purpose
and applied them, when we did, only to illustrate the example of
financial standards. The information in table 6 where we identified
issues related to necessary expenses was not a comparison of the
amounts allowed under the Consumer Expenditure Tables. Rather, the
information evaluated those cases where an offender's reported
necessary expenses appeared high in relation to location and family
circumstances. The primary advice in the Financial Investigation
Desk Reference for individuals (organizations were not within our
scope) follows:
"Necessary expenses are those necessary for the offender's
continued employment and for the basic health and welfare of the
offender's dependents. Expenses should be reasonable for the
offender's income, size of family, and the geographical area
where the offender lives."
The Financial Investigation Desk Reference does not define
"necessary" or "reasonable," nor does it provide ranges for allowable
expenses or examples to help guide decisionmaking. It does contain a
description of how the amount of expenses should be verified, but
does not suggest how an officer would determine that the expenses are
excessive or unnecessary.
We also discussed the expenses with the probation officers, when
available, when we identified issues. As presented in our examples,
the types of expenses we questioned as necessary included multiple
car payments by single individuals, excessive housing costs for the
area and family size, undefined monthly miscellaneous expenses in the
thousands of dollars, high recreational expenses, and payments to
relatives. However, we have no basis to specify what the actual,
necessary expenses should be.
(See figure in printed edition.)Appendix V
COMMENTS FROM THE DEPARTMENT OF
JUSTICE
========================================================== Appendix II
(See figure in printed edition.)
(See figure in printed edition.)
See comment 1.
(See figure in printed edition.)
See comment 2.
See comment 3.
GAO COMMENTS
1. DOJ stated it was not aware of any statutory authority for a
probation officer to recommend a payment schedule to a judge.
According to the law, the manner of payment is to be established by
the court. However, in some jurisdictions, the judge, after ordering
the total amount of the fine or restitution, may delegate the
responsibility for the payment schedule to the probation officer, as
an officer of the court.
Our report was not limited to a description of statutory authority,
but also examined actual practice. FJC's Financial Investigation
Desk Reference cites that "Probation officers make recommendations to
the court to assist the court in ordering fines, restitution, and
payment schedules at sentencing." Based on our discussions with
judges, even when they set the payment, they are dependent on
information provided by the probation officer. Also, we found that
judgment and commitment orders can include language regarding an
installment payment schedule that is not a fixed amount, but instead
is expressed as "not less than" a given amount. In the Northern
District of Texas, a senior official who spoke to us on this matter
stated that this allows the probation officer to increase the
payment.
2. DOJ raised a concern about what GAO presents as inconsistencies
and cited one of the examples in the report. The example concerned a
defendant who was ordered to pay a fine of $15,000 and restitution of
$153,000 and required to make monthly installment payments of $100.
DOJ noted that the report does not state whether the payment schedule
was established by the court or the probation officer. DOJ stated
that in this example, and other examples in the report, if the court
imposed the installment schedules, and the defendant was current in
payment of that obligation, the offender could not have been forced
to sell any property to repay the fine or restitution. If the judge
established the payment plan in the original court order, we did not
raise an issue with how the judge established that plan. We only
raised an issue in those circumstances if (1) the offender's
financial circumstances changed substantially while under probation
or supervised release and the probation officer did not notify the
judge of the change; (2) the judge ordered a payment of not less than
a given amount and the probation officer took no action when an
offender's financial circumstances changed substantially while on
probation or supervised release; or (3) the probation officer did not
obtain current financial information on the offender while on
probation or supervised release.
In the example cited, the probation officer set the payment. Our
principal point in this example was that there were unresolved
questions suggesting possible ability to pay that it would be
reasonable for a probation officer to inquire further about.
In other cases, we believe that even if the payment has been ordered
by the judge, it may be appropriate for the probation officer to
notify the judge or the U.S. Attorney's Office of changes in the
offender's economic circumstances that occur while under the
probation officer's supervision.
3. DOJ notes that "Debt collection is not an exact science, and is
not readily available to specific standards or guidelines for
repayment to be applied nationally." We agree that debt collection is
not an exact science, but comprehensive guidance would help advise
probation officers on how to evaluate the facts and circumstances of
a case and arrive at an appropriate payment schedule. Within
guidance, there can be room for deviation, and the expectation that
deviation will occur where appropriate and for reasons given. We
believe guidelines that facilitate the objective of consistent and
equitable payment schedules are feasible without the need for
inflexible rules. As described in appendix III, IRS has promulgated
guidelines in a similar, but not identical, situation.
(See figure in printed edition.)Appendix VI
COMMENTS FROM THE UNITED STATES
SENTENCING COMMISSION
========================================================== Appendix II
(See figure in printed edition.)
See comment 1.
GAO COMMENT
1. The U.S. Sentencing Commission commented that it would be useful
for us to compare the consistency of officers who took the FJC
training and those who did not. However, FJC could not identify for
us the probation officers who had taken the training. We then
attempted, as part of a structured interview, to question probation
officers in the two districts about whether or not they had received
FJC's financial investigation training. Some officers insisted they
had taken FJC's financial investigation training, but further inquiry
revealed that they had confused it with a seminar provided by IRS.
In the Central District of California, only one probation officer who
was not a supervisor correctly identified for us FJC's Financial
Investigation Desk Reference, which is one of the key course
materials. Thus, we were not able to gather sufficient, reliable
data to provide a comparison.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix VII
GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C.
David Alexander, Senior Social Science Analyst
OFFICE OF THE GENERAL COUNSEL,
WASHINGTON, D.C.
Jan Montgomery, Assistant General Counsel
Geoff Hamilton, Senior Attorney
LOS ANGELES FIELD OFFICE
Darryl W. Dutton, Assistant Director
Richard R. Griswold, Evaluator-in-Charge
James R. Russell, Evaluator
DALLAS FIELD OFFICE
Ronald J. Salo, Senior Evaluator
Mary K. Muse, Senior Evaluator
*** End of document. ***