Developing A Policy On Auctions - August 2000

If a law-enforcement agency holds auctions, then it must have a written directive which outlines how and when they are held, the procedures to be observed for selling items, and the handling of the proceeds. A directive on auctions ought to refer to other directives on property management, finance, and asset forfeitures.

Any law-enforcement agency acquires unclaimed property over time which must be disposed of through an auction. Excluded from auctions is contraband or evidence, both of which must be disposed of pursuant to a court order. Before considering specific guidance pertaining to auctions, an agency must have developed a reliable system of inventory control. Any item of evidence, contraband, or found property must be listed in a central log or other kind of record, perhaps in the form of a computer listing. Controls must be exercised to ensure that a proper chain of custody has been maintained for all evidence, and that found property has been thoroughly described on the master inventory. The agency is responsible for the safe storage of any property, too. A sworn or bonded property/evidence custodian retains an oversight responsibility for ensuring that all property coming into agency possession has been properly labeled and documented in reports or records, and does not represent a threat (such as flammable or incendiary materials) to life or property. A separate function such as an agency internal inspector must periodically audit department-held property, including evidence or contraband, to ensure that records are properly kept, agency procedures are being observed. Generally, the internal inspector audits the performance of employees to ascertain whether policy has been observed: field practices are compared with written directives to ensure that the two are in congruence.

The following is a checklist of components for a directive on conducting auctions. It is based on the presumption that the agency already has directives on property control and management, finance, and asset forfeitures, has appointed a property custodian, and has an internal inspector.

Definitions. The following terms are defined: unclaimed property, contraband. Describe what is not sold at auctions (e.g., real estate).

Procedures:

Statement of legal authority for disposing of property; statement of legal dispositions for unclaimed property (auction, conversion to local governmental use, donation to charity, destruction).

Under what circumstances property is identified for auction. Unclaimed, found property may be auctioned, junked, or destroyed after a specified period of time. Property deemed returnable to the owner will be held for a specified period of time before it will be auctioned, junked, or destroyed if unclaimed.

Who authorizes the auction; how is the auction authorized (court order; by directive of the sheriff/chief of police).

Who conducts the auction: Code of Virginia § 54.1-603 outlines the requirements for licensure of auctioneers. If the agency uses a professional auctioneer, he or she must be licensed. License requirements include payment of a surety bond, completion of an appropriate course of study, and passing the Virginia Licensed Auctioneer's Examination.

Location and frequency of auctions; how auctions are scheduled and by whom. (Note: Many agencies use the Internet to advertise auctions and list property to be sold.)

Auction rules: The property to be sold will be available for viewing at a specified time and place on auction day; the time scheduled for the auction to begin plus a statement that the auction ends when the last item is sold; prohibition on the sale or consumption of alcoholic beverages at the auction site; immediate payment in cash (or acceptable alternatives) required; sales tax to be added to auction prices; no property warranteed; exclusion of agency personnel from purchasing items at auction (define the limits of exclusion, such as siblings or parents of employees); for vehicle auctions, prohibition on performing major repairs on auctioned vehicles at the sales site; deadlines for removal of auctioned property from the sales site; the agency retains the right to reject bids or post "no sale" status for any property.

Any protocol for removing and transporting property from a storage area to the auction site.

Provisions for security at the auction site.

How monies will be collected at the auction site.

Procedures for recording auction sales.

Inspections or audits of auction proceeds.

A statement that contraband or evidence shall not be auctioned.

To comment on the Policy In Action topics or to request further information, send an e-mail to Tim Paul.

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