A state audit shows that three Anderson police officers reported in 2015 that more than $7,200 was missing from funds used for confidential drug buys.
The report by the Indiana State Board of Accounts says the money was taken from three Drug Task Force officers.
The Board of Accounts noted that another officer failed to properly account for $9,000 in money that was also used for confidential purchases, The Herald Bulletin reported.
Undercover officers working in the Drug Task Force are required to submit receipts and a report accounting for funds they use to purchase drugs and pay confidential informants.
One officer made three outstanding draws of $3,000 each from August 2013 to June 2015. The report doesn't identify the officer but says he or she didn't follow proper protocol.
No officers have been charged in connection to the missing funds.
The audit says the department didn't have sufficient internal policies to ensure funds were secure from loss. The Anderson Police Department has implemented new rules addressing the deficiencies in recent months.
The report also found that Drug Task Force officers often stored confidential funds in unlocked desk drawers and kept the office door open. It also says it was commonplace for them to use confidential money assigned to other officers.
The state board of accounts was notified of the missing funds in September 2015.
Former Mayor Kevin Smith said when the theft became known, then-Chief Larry Crenshaw and Assistant Chief Jerry Miller asked the Indiana State Police to investigate.
"When the problem was discovered, it was not dismissed or swept under the rug," Smith said.