The Department of Justice (DOJ) should improve its data collection on the usefulness of suspicious financial transaction reports, according to a recent Government Accountability Office (GAO) report.
The Financial Crimes Enforcement Network (FinCEN) is responsible for administering the Bank Secrecy Act (BSA), which requires financial institutions to file reports about suspicious financial transactions. FinCEN provides BSA report access to law enforcement agencies, which use those reports to support investigations.
However, “law enforcement agencies usually don’t track data on the usefulness of these reports, so FinCEN can’t provide feedback to banks about the reports’ effectiveness,” the GAO report says.
Because law enforcement agencies largely do not collect such data, FinCEN receives limited information from law enforcement agencies on their use of BSA reports, and on the reports’ impact on case outcomes. That means FinCEN cannot provide comprehensive feedback to financial institutions on the usefulness of the BSA reports they file.
DoJ is required to provide information about the usefulness of these reports under the 2021 National Defense Authorization Act (NDAA). The law directs DoJ to provide “annual statistics, metrics, and other information to the Secretary of the Treasury on law enforcement agencies use of BSA reports, including how often reports contributed to arrests and convictions,” the report says.
GAO found, however, that none of the agencies that DoJ contacted – including Justice Department component agencies – provided the statistics described in the NDAA. In addition, DoJ officials told GAO that agencies faced challenges collecting data that connect their use of BSA reports to case outcomes using current data systems.
GAO recommends that DoJ include data on the use of BSA reports in its ongoing agency-wide efforts to improve data collection, and involve its chief information officer and statistical official in the design of its annual BSA statistical report.
DoJ neither agreed nor disagreed with the recommendations.