Defense Health
Management Weaknesses at Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury Require Attention Gao ID: GAO-11-219 February 28, 2011The Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury (DCOE) was established to lead DOD's effort to develop excellence in DOD prevention, outreach, and care for those with psychological health and traumatic brain injury conditions. GAO was asked to report on (1) challenges DCOE has faced in its development; (2) the extent to which DCOE's strategic plan aligns with key practices used by leading public-sector organizations; and (3) the extent to which internal controls provide reasonable assurance that DCOE information on financial obligations is reliable for management decision making. GAO reviewed documentation and interviewed DCOE officials about DCOE development challenges, evaluated DCOE's strategic plan against practices used by leading public-sector organizations, assessed the design of internal controls for recording obligations, and tested fiscal year 2009 DCOE obligations to supporting documentation to determine if the obligations were properly classified.
DCOE's development has been challenged by a mission that lacks clarity and by time-consuming hiring processes. GAO found that DCOE's strategic plan does not reflect a clear mission because it does not indicate whether statutory responsibilities--in the form of the plan's subgoals that support the mission--are designated a higher completion priority than other subgoals. Some DCOE officials told GAO that DCOE leadership has not focused or prioritized DCOE's mission, and told GAO that the lack of clarity in DCOE's mission hampered DCOE's ability to move forward. GAO has found that defining a clear mission that brings the organization into focus is a step commonly taken by organizations seeking to become more results-oriented. Further, DCOE officials cited administrative processes that slowed the hiring of DCOE personnel and resulted in DCOE's heavy reliance on contractors. DCOE has taken steps to shorten the hiring process, but is still hindered by DOD-managed hiring processes that took on average 119 days through July 2010. DCOE's strategic plan aligns with some key practices for strategic planning and results-oriented management used by leading public-sector organizations, but the plan has two areas of weakness in which it does not align with key practices. Specifically, the plan's management reviews, intended to align activities, resources, and goals, are insufficient to ensure that its daily activities are aligned with its mission and goals, and the plan does not fully describe how meeting its performance measures would help DCOE assess attainment of its goals. These gaps in DCOE's strategic planning may hinder DCOE's effort to execute its activities to meet its goals, measure its progress toward fulfilling its goals, and deliver results for its programs. TRICARE Management Activity (TMA), which obligates funds for DCOE, had not developed written policies and procedures to ensure proper recording of obligations, and GAO found that TMA had not properly classified most of DCOE's fiscal year 2009 contract obligations. Internal Control Standards require written documentation of internal control. GAO's tests of DCOE obligations showed that while TMA properly recorded the date and amount of the obligations, it did not properly classify $102.7 million (91 percent) of DCOE's advisory and assistance contract obligations. The Office of Management and Budget (OMB) provides guidance for properly classifying obligations to object class--a uniform system for identifying government transactions by the nature of the goods or services purchased. DOD's Financial Management Regulation requires compliance with OMB guidance. However, TMA relied on guidance issued by another DOD agency that was inconsistent with OMB guidance. Improper classification of obligations could have significant consequences, particularly in light of Defense Efficiency Initiatives, which are intended to cut $100 billion in DOD spending, including spending on advisory and assistance services contracts, over the next 5 years. While steps have been taken to align object classification procedures with OMB guidance for fiscal year 2011, TMA has not yet developed written procedures for reviewing obligation data, nor has it established formal responsibility for updating procedural guidance and system codes. GAO recommends that DCOE take steps to improve its strategic plan, and that TMA develop, implement, and maintain written procedures for proper classification and recording of DCOE obligations. While DOD said it concurred with GAO's five recommendations, GAO believes that its stated actions do not fully address the intent of two of the recommended actions.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Randall B. Williamson Team: Government Accountability Office: Health Care Phone: (206) 287-4860GAO-11-219, Defense Health: Management Weaknesses at Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury Require Attention
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United States Government Accountability Office:
GAO:
Report to Congressional Requesters:
February 2011:
Defense Health:
Management Weaknesses at Defense Centers of Excellence for
Psychological Health and Traumatic Brain Injury Require Attention:
GAO-11-219:
GAO Highlights:
Highlights of GAO-11-219, a report to congressional requesters.
Why GAO Did This Study:
The Defense Centers of Excellence for Psychological Health and
Traumatic Brain Injury (DCOE) was established to lead DOD‘s effort to
develop excellence in DOD prevention, outreach, and care for those
with psychological health and traumatic brain injury conditions. GAO
was asked to report on (1) challenges DCOE has faced in its
development; (2) the extent to which DCOE‘s strategic plan aligns with
key practices used by leading public-sector organizations; and (3) the
extent to which internal controls provide reasonable assurance that
DCOE information on financial obligations is reliable for management
decision making. GAO reviewed documentation and interviewed DCOE
officials about DCOE development challenges, evaluated DCOE‘s
strategic plan against practices used by leading public-sector
organizations, assessed the design of internal controls for recording
obligations, and tested fiscal year 2009 DCOE obligations to
supporting documentation to determine if the obligations were properly
classified.
What GAO Found:
DCOE‘s development has been challenged by a mission that lacks clarity
and by time-consuming hiring processes. GAO found that DCOE‘s
strategic plan does not reflect a clear mission because it does not
indicate whether statutory responsibilities”in the form of the plan‘s
subgoals that support the mission”are designated a higher completion
priority than other subgoals. Some DCOE officials told GAO that DCOE
leadership has not focused or prioritized DCOE‘s mission, and told GAO
that the lack of clarity in DCOE‘s mission hampered DCOE‘s ability to
move forward. GAO has found that defining a clear mission that brings
the organization into focus is a step commonly taken by organizations
seeking to become more results-oriented. Further, DCOE officials cited
administrative processes that slowed the hiring of DCOE personnel and
resulted in DCOE‘s heavy reliance on contractors. DCOE has taken steps
to shorten the hiring process, but is still hindered by DOD-managed
hiring processes that took on average 119 days through July 2010.
DCOE‘s strategic plan aligns with some key practices for strategic
planning and results-oriented management used by leading public-sector
organizations, but the plan has two areas of weakness in which it does
not align with key practices. Specifically, the plan‘s management
reviews, intended to align activities, resources, and goals, are
insufficient to ensure that its daily activities are aligned with its
mission and goals, and the plan does not fully describe how meeting
its performance measures would help DCOE assess attainment of its
goals. These gaps in DCOE‘s strategic planning may hinder DCOE‘s
effort to execute its activities to meet its goals, measure its
progress toward fulfilling its goals, and deliver results for its
programs.
TRICARE Management Activity (TMA), which obligates funds for DCOE, had
not developed written policies and procedures to ensure proper
recording of obligations, and GAO found that TMA had not properly
classified most of DCOE‘s fiscal year 2009 contract obligations.
Internal Control Standards require written documentation of internal
control. GAO‘s tests of DCOE obligations showed that while TMA
properly recorded the date and amount of the obligations, it did not
properly classify $102.7 million (91 percent) of DCOE‘s advisory and
assistance contract obligations. The Office of Management and Budget
(OMB) provides guidance for properly classifying obligations to object
class”-a uniform system for identifying government transactions by the
nature of the goods or services purchased. DOD‘s Financial Management
Regulation requires compliance with OMB guidance. However, TMA relied
on guidance issued by another DOD agency that was inconsistent with
OMB guidance. Improper classification of obligations could have
significant consequences, particularly in light of Defense Efficiency
Initiatives, which are intended to cut $100 billion in DOD spending,
including spending on advisory and assistance services contracts, over
the next 5 years. While steps have been taken to align object
classification procedures with OMB guidance for fiscal year 2011, TMA
has not yet developed written procedures for reviewing obligation
data, nor has it established formal responsibility for updating
procedural guidance and system codes.
What GAO Recommends:
GAO recommends that DCOE take steps to improve its strategic plan, and
that TMA develop, implement, and maintain written procedures for
proper classification and recording of DCOE obligations. While DOD
said it concurred with GAO‘s five recommendations, GAO believes that
its stated actions do not fully address the intent of two of the
recommended actions.
View [hyperlink, http://www.gao.gov/products/GAO-11-219] or key
components. For more information, contact Randall A. Williamson at
(202) 512-7114 or williamsonr@gao.gov or Asif A. Khan at (202) 512-
9869 or khana@gao.gov.
[End of section]
Contents:
Letter:
Background:
DCOE Development Challenged by Lack of Clarity in Mission and Time-
consuming Administrative Hiring Processes:
DCOE's Strategic Plan Aligns with Some Key Practices for Strategic
Planning, but Gaps Remain with Respect to Management Review and
Performance Measurement:
TMA Lacked Effective Controls for Assuring Compliance with OMB
Guidance for Classification of Financial Obligations to Support
Management Decision Making:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: List of Requesters:
Appendix II: Scope and Methodology:
Appendix III: Fiscal Year 2009 Defense Centers of Excellence Financial
Obligations:
Appendix IV: Comments from the Department of Defense:
Appendix V: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Example of Goal and Associated Subgoals in Defense Centers of
Excellence for Psychological Health and Traumatic Brain Injury's
Strategic Plan:
Table 2: Comparison of OMB and TMA Subobject Classifications for
Object Class 25, Other Contractual Services:
Table 3: GAO Analysis of TMA Classification of Fiscal Year 2009 DCOE
Obligations:
Table 4: GAO Analysis of Fiscal Year 2009 DCOE Obligations:
Table 5: Description of Fiscal Year 2009 Services Acquired and
Obligation Amounts of DCOE Obligations for Other Contractual Services:
Figures:
Figure 1: Organization of Defense Centers of Excellence for
Psychological Health and Traumatic Brain Injury:
Figure 2: TRICARE Management Activity Allocation of Psychological
Health and Traumatic Brain Injury Funding as of September 30, 2009:
Figure 3: OMB Classification Structure for Reporting Contract
Obligations, Including Advisory and Assistance Services Contract
Obligations:
Abbreviations:
ASD(HA): Assistant Secretary of Defense (Health Affairs):
DCOE: Defense Centers of Excellence for Psychological Health and
Traumatic Brain Injury:
DFAS: Defense Finance and Accounting Service:
DOD: Department of Defense:
FAR: Federal Acquisition Regulation:
FMR: Financial Management Regulation:
GPRA: Government Performance and Results Act of 1993:
NDAA: National Defense Authorization Act:
NSPS: National Security Personnel System:
OMB: Office of Management and Budget:
OUSD(C): Office of the Under Secretary of Defense (Comptroller):
PH: psychological health:
PTSD: post-traumatic stress disorder:
R&D: research and development:
SBIR: Small Business Innovation Research:
TBI: traumatic brain injury:
TMA: TRICARE Management Activity:
VA: Department of Veterans Affairs:
WHS: Washington Headquarters Services:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
February 28, 2011:
Congressional Requesters:
U.S. forces serving in Iraq and Afghanistan have engaged in intense
and prolonged conflict, which has resulted in psychological health
(PH) conditions for some servicemembers and veterans. Additionally,
traumatic brain injury (TBI) has emerged as a leading injury among
those serving in Iraq and Afghanistan, due in part to the increased
likelihood of exposure to blasts. Questions have been raised by
Congress and the media about whether the Department of Defense (DOD)
and the Department of Veterans Affairs (VA) are prepared to meet the
health care needs of the increasing number of servicemembers and
veterans. For example, media attention surfaced surrounding the
February 2007 disclosure of deficiencies in outpatient services at the
Walter Reed Army Medical Center, following an investigation by The
Washington Post.[Footnote 1]
In the aftermath of this disclosure of deficiencies, various review
groups, task forces, and commissions investigated the care and
benefits provided to servicemembers and veterans by DOD and
VA.[Footnote 2] These review groups made more than 400 recommendations
to DOD and VA, including those specifically aimed at improving care
for PH and TBI. Additionally, the National Defense Authorization Act
(NDAA) for Fiscal Year 2008 required DOD to create centers of
excellence on TBI and post-traumatic stress disorder (PTSD) and other
mental health conditions.[Footnote 3] Congress charged the centers of
excellence with numerous functions related to mental health conditions
and TBI--for example, to provide for the development, testing, and
dissemination of best practices within DOD for the treatment of PTSD
and TBI. To respond to the recommendations of these review groups and
in anticipation of the enactment of statutory provisions regarding
centers of excellence, in November 2007 DOD established the Defense
Centers of Excellence for PH and TBI (DCOE) to lead DOD's effort to
develop excellence in its prevention, outreach, and care for those
with these conditions. TRICARE Management Activity (TMA)[Footnote 4]
is responsible for administering funds allocated to DCOE and other PH
and TBI programs, which includes the proper recording of obligations
of those funds.[Footnote 5]
A congressional subcommittee hearing in April 2010 brought to light
serious management missteps that called into question DCOE's ability
to fulfill its functions,[Footnote 6] and concerns have been raised by
congressional committees that DCOE faces several challenges in its
development, including strategic planning and financial management.
Further, congressional committees have expressed interest in how DCOE
has used strategic planning to clearly define its mission. Finally,
DCOE has had three directors in 2010,[Footnote 7] resulting in a lack
of continuity in leadership.
We have reported that leading public-sector organizations become more
results-oriented by engaging in strategic planning consistent with
practices described in the Government Performance and Results Act of
1993, as amended (GPRA).[Footnote 8] GPRA specifies a set of
components that are required for federal agencies' plans. Although
DCOE is not an agency under GPRA, we have found in past work on
leading public-sector organizations that organizations like DCOE can
benefit from strategic planning consistent with GPRA.[Footnote 9] For
example, we have found that leading public-sector organizations
commonly (1) define clear missions and desired outcomes; (2) measure
performance to gauge progress; and (3) use performance information as
a basis for decision making, all steps consistent with GPRA
requirements.
Additionally, organizations may improve their ability to achieve
performance and financial management goals and minimize operational
problems by implementing appropriate internal controls. We have issued
standards for internal control in government[Footnote 10] to provide,
among other things, reasonable assurance that financial information is
reliably reported. Control activities, one of the five standards for
internal control, are the policies, procedures, techniques, and
mechanisms that enforce management's directives, such as the process
of adhering to requirements for budget execution. Control activities
are an integral part of an entity's accountability for government
resources and achieving effective results.
You asked us to examine DCOE's strategic planning and financial
management. In this report, we address the following questions:
1. What challenges has DCOE faced in its development?
2. To what extent does DCOE's strategic plan align with key practices
for strategic planning that are used by leading public-sector
organizations?
3. To what extent do internal controls provide reasonable assurance
that DCOE information on financial obligations is reliable for
management decision making?
To determine the challenges that DCOE has faced in its development, we
interviewed DCOE and other officials about DCOE's development. Because
DCOE is an operating entity within TMA and organizationally located in
the Office of the Assistant Secretary of Defense (Health Affairs)
(ASD(HA)), we also interviewed the Deputy Director of TMA and the
Acting Principal Deputy ASD(HA). From these interviews, we identified
a number of challenges faced by DCOE. To better understand the scope
and origin of these challenges as well as DCOE's responses, we
obtained documents related to the challenges, such as the evolution of
DCOE's mission, governance, and staffing. We grouped the challenges
into 13 categories and sent this list in a follow-up document to DCOE
and DOD officials. The document asked recipients to identify the three
challenges that have had the most significant effect on DCOE's
development. On the basis of these responses, we conducted a second
round of interviews asking DCOE and DOD officials about the effects of
challenges on DCOE, and obtained further information on DCOE's
response to the challenges. Following review of additional evidence to
gain a better understanding of these challenges, we framed DCOE's
responses for reporting purposes.
To evaluate the extent to which DCOE's strategic plan aligns with key
practices for strategic planning used by leading public-sector
organizations, we assessed DCOE's strategic plan using GPRA. Although
DCOE is not required to comply with GPRA, we have found in past work
that organizations like DCOE can benefit from strategic planning
consistent with GPRA.[Footnote 11] We reviewed documents constituting
DCOE's strategic plan, specifically the (1) Campaign Plan for DCOE
Operations and Activities: 2010-2016 (Campaign Plan); (2) the Defense
Centers of Excellence for Psychological Health and Traumatic Brain
Injury Concept of Operations (Concept of Operations); and (3) DCOE's
fact sheets.[Footnote 12] The Campaign Plan describes DCOE's mission,
goals, subgoals, and related performance measures for 2010 through
2016. DCOE's goals are aligned with specific subgoals. Each subgoal
has one or more performance measures to assess achievement of that
subgoal. The Concept of Operations describes DCOE's major functions.
DCOE's fact sheets describe its day-to-day activities, and staff and
funding required for those activities.[Footnote 13] Further, we
interviewed DCOE officials, including those involved in the early
planning efforts for DCOE.
To determine whether TMA had designed appropriate policies and
procedures to help ensure that DCOE information on financial
obligations is reliable for management decision making, we reviewed
internal control criteria related to reliable reporting of financial
data as defined in GAO's Standards for Internal Control in the Federal
Government and Internal Control Management and Evaluation Tool.
[Footnote 14] We performed walk-throughs[Footnote 15] of TMA processes
for recording financial obligations and interviewed TMA and DCOE
officials about their financial management processes and procedures
used to obligate DCOE funds. We identified criteria in Office of
Management and Budget (OMB) Circular No. A-11, Preparation,
Submission, and Execution of the Budget[Footnote 16] for classifying
obligations by object class--a uniform classification system for
identifying federal agency transactions based on the nature of goods
and services purchased. To determine whether DCOE program obligations
were properly classified and accurately recorded, we tested
approximately 95 percent of the total dollars of TMA-recorded DCOE
obligations for fiscal year 2009, including 100 percent of obligations
related to contracts, by comparing recorded obligations to OMB
Circular No. A-11 guidance for classifying obligations by object class
and testing contractual obligations to provisions in supporting
contract documents.[Footnote 17] Appendix II provides further details
on our scope and methodology.
We conducted this performance audit from January 2010 through February
2011 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Background:
DCOE was established in November 2007 as an operating entity within
TMA, which is organizationally located in the Office of the ASD (HA).
DCOE's mission is to assess, validate, oversee, identify, and
facilitate prevention, resilience, screening, treatment, outreach,
rehabilitation, and reintegration programs for PH and TBI to ensure
DOD meets the needs of the nation's warriors, families, and military
communities. DCOE does not have the authority to establish policies
governing DOD health and medical programs in the military services,
but may make recommendations to the ASD (HA), who does have the
authority to issue such policies.
DCOE's Organization:
DCOE comprises a headquarters office with eight directorates. These
directorates carry out a range of activities related to PH and TBI,
including operating a call center; disseminating information on DOD
training programs, and clinical practice guidelines related to PH and
TBI; and identifying areas in PH and TBI that require additional
research.
DCOE also collaborates with six DOD component centers that have
responsibilities related to PH and TBI. Four of these component
centers pre-existed DCOE's creation in November 2007.[Footnote 18] The
component centers' responsibilities include training professionals who
screen or treat those affected by PH, developing telehealth and
technology services for PH and TBI, treating those affected by PH and
TBI, and conducting research on PH and TBI. Figure 1 presents an
organizational chart that shows DCOE's alignment within DOD, as well
as the component centers.
Figure 1: Organization of Defense Centers of Excellence for
Psychological Health and Traumatic Brain Injury:
[Refer to PDF for image: illustration]
Office of the Secretary of Defense:
Under Secretary of Defense for Personnel and Readiness:
Assistant Secretary of Defense (Health Affairs) (ASD(HA)):
TRICARE Management Activity (TMA):
DCOE (headquarters office):
* Strategy, Plans and Programs Directorate;
* Strategic Communications Directorate;
* Clearinghouse, Outreach & Advocacy Directorate;
* Training and Education Directorate;
* Research, Quality Assurance, Program Evaluation, & Surveillance
Directorate;
* Psychological Health Clinical Standards of Care Directorate;
* Resilience and Prevention Directorate;
* Traumatic Brain Injury Clinical Standards of Care Directorate.
DCOE collaborates with the six component centers listed below:
* Defense and Veterans Brian Injury Center;
* National Intrepid Center of Excellence;
* Center for the Study of Traumatic Stress;
* Center for Deployment Psychology;
* Deployment Health Clinical Center;
* National Center for Telehealth and Technology.
Source: GAO analysis of DOD data.
[End of figure]
DCOE Funding and Obligations:
In fiscal year 2009, DOD allocated $770 million of funds it designated
for PH and TBI to TMA's Program Budget and Execution Office. As shown
in figure 2, TMA's Program Budget and Execution Office further
allocated $760 million of the PH and TBI funding among the Army, the
Navy, the Air Force, TMA's Financial Operations Division, and a
statutory DOD Small Business Innovation Research (SBIR) program.
[Footnote 19] Of the $770 million allocated by DOD, $10 million was
transferred to the Army for its suicide prevention and mitigation
program.
Figure 2: TRICARE Management Activity Allocation of Psychological
Health and Traumatic Brain Injury Funding as of September 30, 2009:
[Refer to PDF for image: pie-chart]
Army: $390.7 million;
TMA: $230.1 million;
Navy: $119.4 million;
Air Force: $17.9 million;
SBIR: $1.9 million.
Source: GAO analysis of TMA data.
Note: TMA in this figure refers to TMA's Financial Operations Division.
[End of figure]
The $230.1 million suballocation to TMA's Financial Operations
Division for fiscal year 2009 included funds for DCOE, the component
centers[Footnote 20], and other PH and TBI programs. From the $230.1
million, TMA recorded obligations--legal commitments for the payment
of goods and services ordered or received--for DCOE and the component
centers amounting to $119.2 million. The remaining $110.9 million was
either obligated by TMA's Financial Operations Division for other PH
and TBI programs or returned to TMA's Program Budget and Execution
Office for reallocation to the Army, the Navy, and the Air Force PH
and TBI programs or to be used in fiscal year 201[Footnote 21]0.:
Since DCOE's inception in November 2007, TMA's Financial Operations
Division has centrally managed DCOE obligations. To account for the
use of budgetary resources, TMA, like other federal agencies, uses
obligational accounting. Obligational accounting involves the
accounting systems, processes, and people involved in collecting
financial information necessary to control, monitor, and report on all
funds made available to federal entities by legislation. It is through
obligational accounting that agencies ensure compliance with fiscal
laws, including the Anti-Deficiency Act and statutes related to the
purpose and period of availability of appropriations.[Footnote 22] The
majority of DCOE obligations were classified as "other contractual
services." Figure 3 illustrates the classification of contract
obligations and more specifically, advisory and assistance services
obligations within OMB's budget structure. Object class is the uniform
classification system for identifying the federal government
transactions by the nature of the goods or services purchased.
[Footnote 23]
Figure 3: OMB Classification Structure for Reporting Contract
Obligations, Including Advisory and Assistance Services Contract
Obligations:
[Refer to PDF for image: illustration]
Major budget object class categories:
10 - Personnel compensation and benefits;
20 - Contractual services and supplies;
30 - Acquisition of assets;
40 - Grants and fixed charges;
90 - Other.
Major budget object classes cover purchases in detailed object classes
11 through 31.
Detailed object classes (2-digit level):
11 - Personnel compensation;
12 - Personnel benefits;
21 - Travel and transportation of persons;
22 - Transportation of things;
23 - Rent, communications, and utilities;
24 - Printing and reproduction;
25 - Other contractual services;
26 - Supplies and materials;
31 - Equipment.
Detailed object class 25, ’Other contractual services,“ covers
purchases in subobject classes 25.1 through 25.8.
Subobject classes (3-digit level):
25.1 - Advisory and assistance services: Services acquired by contract
from nonfederal sources (as well as from other units within the
federal government) to provide management and professional support;
studies, analyses, and evaluations; or engineering and technical
services.
25.2 - Other services: Includes contractual services with nonfederal
sources not otherwise classified as either advisory and assistance
services or any of the other service categories included under object
class 25.
25.3 - Other purchases of goods and services from government accounts:
Purchases from other federal government agencies or accounts not
otherwise classified. Includes rental payments to agencies other than
GSA and interagency agreements for contractual services for the
purchase of goods and services. Excludes, among other things, advisory
and assistance services.
25.4 - Operation and maintenance of facilities: Includes operation and
maintenance of facilities by contract with the private sector or
another federal government account.
25.5 - Research and development contracts: Includes contracts for
conducting basic and applied research and development (R&D), but
excludes R&D reported as advisory and assistance services or operation
and maintenance of R&D facilities.
25.6 - Medical care: Payments made to contractors for medical care.
25.7 - Operation and maintenance of equipment: Operation, maintenance,
repair, and storage of equipment done by contract with the private
sector or another federal government account. Includes storage and
care of vehicles, storage of household goods, and operation and
maintenance of information technology systems.
25.8 - Subsistence and support of persons: Contractual services with
the public or another federal government account for board, lodging,
and care of persons, including prisoners.
Source: GAO analysis of OMB Circular No. A-11 guidance.
[End of figure]
We previously reported that our review of $14 billion in fiscal year
2006 advisory and assistance services contract obligations reported by
five civilian agencies and five DOD agencies found that these
agencies' obligation data were inaccurate.[Footnote 24] To address the
long-standing problems agencies face in reporting advisory and
assistance services obligations, our 2008 report stated that Congress
should consider re-evaluating the need for agencies to report advisory
and assistance services funding separately to OMB, recognizing that
advisory and assistance services contracts are not managed any
differently than other professional management support contracts. We
also suggested that if specific insights into advisory and assistance
services contracts were desired, Congress should consider clarifying
the statutory definition of advisory and assistance services to more
explicitly address congressional concerns related to these types of
contracts and require the Administrator of the Office of Federal
Procurement Policy to reinstate data collection for advisory and
assistance services contracts in the Federal Procurement Data System-
Next Generation using the revised definition. As of the date of this
report, the object classification and reporting requirements in 10
U.S.C. § 2212, and guidance in the FAR have not been changed.[Footnote
25]
DCOE Development Challenged by Lack of Clarity in Mission and Time-
consuming Administrative Hiring Processes:
The lack of clarity in DCOE's mission and slowness in hiring staff
have been challenges in the entity's development. DCOE officials told
us that DCOE leadership has not focused or prioritized DCOE's mission,
and according to one official, it seemed like DCOE moved forward in
every direction simultaneously rather than focusing on certain clearly
defined responsibilities. We found that DCOE's mission, reflected in
its strategic plan in the form of subgoals that support the mission,
included responsibilities required by law, as well as additional
responsibilities. However, DCOE's strategic plan does not clarify
whether responsibilities required by law--in the form of the plan's
subgoals--assume a higher priority than other subgoals. As a result,
DCOE's strategic plan does not reflect a clear mission that focuses
the organization on its statutory responsibilities. Further, some
administrative processes slowed the hiring of DCOE personnel, which
some officials said resulted in DCOE's heavy reliance on contract
personnel. DCOE has taken steps to shorten the hiring process but is
reliant on other entities and DOD-level hiring reforms to make further
progress.
Lack of Clarity in Mission Has Been a Challenge in DCOE's Development:
The lack of clarity in DCOE's mission, according to DCOE officials,
has hampered the organization's ability to move forward. We found that
DCOE's mission, reflected in its strategic plan in the form of
subgoals that support the mission, included responsibilities required
by law, recommendations for DOD made by various review groups
investigating DOD and VA care, and several others created by DCOE
itself. For example, some of these subgoals created by DCOE include
deploying an automated screening and outcomes assessment product
throughout DOD and creating a PH database or tracking system, or both,
for patients who have experienced PH concerns. DCOE's strategic plan
does not clarify whether the plan's subgoals that reflect statutory
responsibilities are designated a higher completion priority than
other subgoals. As a result, DCOE's strategic plan does not reflect a
clear mission that focuses the organization on its statutory
responsibilities.
DOD and DCOE leaders did not sufficiently focus or prioritize DCOE's
mission, according to some DCOE officials. Defining a clear mission
that brings the organization into focus is a step commonly taken by
organizations seeking to become more results-oriented.[Footnote 26] In
four congressional subcommittee testimonies, DCOE's first director and
the ASD(HA) characterized DCOE as DOD's "open front door for all
concerns related to PH and TBI,"[Footnote 27] suggesting that DCOE's
mission was to address all issues related to PH and TBI across DOD.
These statements do not reflect a clear focus for DCOE. In keeping
with the "open front door" characterization of its mission, one
official told us that there was an initial lack of clarity about
DCOE's mission both internally and externally and that the military
services still grapple with understanding DCOE's mission. According to
this same official, it seemed like DCOE moved forward in every
direction simultaneously rather than focusing on clearly defined
responsibilities, creating a hindrance to DCOE's moving forward in a
goal-directed way. Another official noted that DCOE had trouble
setting priorities and that priorities were always shifting. A third
official thought that DCOE's efforts to be all things PH and TBI
resulted in people not having a clear sense of what DCOE did.
DCOE Officials Cited Slowness in Hiring as a Major Challenge in DCOE's
Development:
DCOE officials cited several administrative processes that slowed
hiring as a major challenge in DCOE's development. According to DCOE
officials, slowness in hiring was the reason for DCOE's heavy reliance
on contractors.[Footnote 28] DOD's fiscal year 2010 competitive
[Footnote 29] hiring cycle time through the third quarter was 119
days, according to DOD.[Footnote 30]
In an effort to shorten TMA's hiring cycle time, DCOE officials
recently took two actions.[Footnote 31] First, in May 2010, DCOE
received TMA authorization to negotiate on the salary of potential
hires. Now, DCOE has the latitude to negotiate directly with potential
hires, which, according to a DCOE official, eliminates as much as a
month of delay caused by having TMA involved in salary negotiation.
Second, DCOE recently began using its authority to establish a
reporting-for-duty date before candidates' drug test results are
received, with the final decision to hire contingent on the test
results. DCOE officials estimate that this step shortens the hiring
process by 1 week.
However, DCOE relies on other entities in four out of five steps in
the recruitment and hiring processes, hampering DCOE's ability to
shorten the process. Also, TMA and other DOD human capital personnel
are in the process of transitioning 226,000 DOD employees from the
National Security Personnel System back to the General Schedule
system.[Footnote 32] While this has resulted in some delays in DCOE's
hiring process, DOD simultaneously is taking other steps to reduce
hiring cycle time. For example, in response to hiring reform
initiatives directed by the Office of Personnel Management,[Footnote
33] DOD is changing procedures throughout the department's recruitment
and hiring processes. As a result of these changes, DOD hopes to
achieve an 80-day competitive hiring cycle time for all hires, which
would include DCOE hires, by the end of fiscal year 2012.
DCOE's Strategic Plan Aligns with Some Key Practices for Strategic
Planning, but Gaps Remain with Respect to Management Review and
Performance Measurement:
DCOE's strategic plan aligns with some key practices for strategic
planning used by leading public-sector organizations, but the plan has
two areas of weakness. Specifically, the plan's management reviews,
intended to better align its activities, resources, and goals, are
insufficient to ensure that its daily activities are aligned with its
mission and goals, and the plan does not fully describe how meeting
its performance measures would help DCOE assess attainment of its
goals. These gaps in DCOE's strategic planning may hinder DCOE's
effort to plan and execute its activities to fulfill its mission and
goals, measure its progress toward achieving its goals, and deliver
results for servicemembers and veterans with PH and TBI conditions.
DCOE's Strategic Plan Describes Management Reviews Intended to Align
Day-to-Day Activities with Mission and Goals, but These Reviews as
Conducted Are Insufficient:
DCOE's current strategic plan does not consistently describe how its
activities support its mission and goals, and the reviews intended to
better align activities with mission and goals are insufficient. The
plan describes management reviews intended to better align its
activities, resources, and goals. As described, these management
reviews are consistent with leading practice, which states that
strategic plans should contain an approach to align an organization's
activities and resources to support the organization's mission and
goals. However, the reviews have not been carried out as described in
the plan, and are insufficient because DCOE's directorates have not
fully demonstrated how their day-to-day activities support DCOE's goals.
DCOE's strategic plan contains goals, and each goal is aligned with
one or more subgoals. See table 1.
Table 1: Example of Goal and Associated Subgoals in Defense Centers of
Excellence for Psychological Health and Traumatic Brain Injury's
Strategic Plan:
Goal: Facilitate improved access to psychological health and traumatic
brain injury quality care for warriors, families and military
communities regardless of service, component, status or geographic
location.
Subgoal: Collaborate with the Department of Veterans Affairs for PH
screening measures and processes.
Subgoal: Collaborate with VA for TBI screening measures and processes.
Subgoal: Determine how distance learning technologies can be used to
address the needs of distributed audiences (e.g., National Guard and
Reserve servicemembers), transcending state and local resource
constraints.
Source: DCOE.
[End of table]
While DCOE's strategic plan describes the organization's day-to-day
activities, it does not consistently document how these activities
specifically support DCOE's goals and subgoals. For example, in more
than one instance, the plan describes a set of activities as
supporting the "mission, goals, objectives, and campaigns of DCOE and
its component centers," rather than specifying the particular subgoals
or goals the activities support.
To help DCOE better link its activities to its goals, DCOE's plan
describes a number of management reviews that are to be conducted. For
example, DCOE is to conduct a "review and analysis" process every 3
months to evaluate performance and reallocate resources used for
DCOE's daily activities to best meet DCOE's mission and goals. A
group, which includes representatives from the directorates and
component centers, is to conduct monthly reviews of progress made
toward achieving DCOE's subgoals and evaluate progress made in
achieving the performance measures. Finally, the Strategy, Plans, and
Programs directorate is to lead an annual review of DCOE's goals,
subgoals, and associated performance measures. The intent of these
reviews is in line with leading public-sector organizations we have
studied that focus on aligning their activities to support their
goals. These organizations assess the extent to which their activities
contribute to meeting their mission and, when necessary, alter
activities to more effectively and efficiently produce needed results.
DCOE's management reviews, as described in its strategic plan, are
consistent with these practices.
While the intent of DCOE's reviews is in accordance with practices we
have identified as used by leading public-sector organizations, these
management reviews as conducted are insufficient to ensure that DCOE's
day-to-day activities and goals are aligned. For example, DCOE
conducted a review-and-analysis session in July-August 2010. A DCOE
official told us that the DCOE Resource Manager advised directorates
to show how their activities supported DCOE's goals and subgoals.
However, in the July-August 2010 review, none of DCOE's eight
directorates fully explained how their activities supported DCOE's
goals and subgoals. One directorate, for example, described activities
related to TBI clinical standards of care guidelines. The directorate
stated that these activities supported "Individual, Family, Unit, and
Community Wellness." However, the directorate did not report on how
these activities linked to DCOE's goals or subgoals, such as those
related to collaborating with VA for TBI screening measures or
disseminating best practice guidelines for the treatment of TBI. One
DCOE official told us that DCOE did not want to burden the
directorates with too much work in the reviews. However, without fully
linking DCOE's day-to-day activities with its goals, DCOE may
undertake activities that do not support its goals, diverting time and
resources away from the organization's core goals.
DCOE's Strategic Plan Includes Tangible and Measurable Performance
Measures, but Does Not Fully Describe How Their Achievement Will
Support Attainment of DCOE's Goals:
DCOE's strategic plan contains performance measures, almost all of
which are tangible and measurable, for its subgoals. For example, one
performance measure related to stakeholder involvement is, "At least
75 percent of identified stakeholders agree that DCOE is meeting their
needs as determined by a DCOE administered stakeholder survey." This
performance measure is tangible (it uses a survey instrument), and
measurable (based on survey responses that can be counted). However,
DCOE's strategic plan does not describe how achievement of the
performance measures will support assessment of DCOE goals. Leading
organizations measure performance to track progress toward reaching
goals, using performance measures tied to their goals.
Though DCOE's plan contains performance measures, it does not fully
describe how the performance measures would help assess whether
subgoals were met. For example:
* One subgoal states that DCOE is to collaborate with VA, institutions
of higher education, research organizations, subject matter experts,
and other appropriate public and private entities. The performance
measure for that subgoal is tied to the results of a questionnaire,
administered following a DCOE-organized event. Specifically, based on
the performance measure, 75 percent of questionnaire responses must
agree that the event improved collaboration with DCOE on PH and TBI
issues. While postevent questionnaires, which are tangible and
measurable, might provide information on whether some attendees or
stakeholders viewed the event as collaborative, it is unclear how this
performance measure would demonstrate how DCOE collaborated with each
of the groups mentioned in the subgoal or how the collaboration would
help DCOE achieve its goals.
* Another subgoal calls for DCOE to determine how distance learning
technologies can be used to address the needs of audiences such as
National Guard and Reserve members, transcending state and local
resource constraints. The performance measure for this subgoal is to
attain an increased usage rate of 3 to 5 percent of recommended
courses by the last quarter of fiscal year 2011. While increased use
of recommended courses may demonstrate that DCOE has determined how
distance learning technologies can be used, the goal as written does
not specify what recommended courses are referred to, and does not
measure whether DCOE has assessed how the technologies can be used to
address the particular needs of Guard and Reserve members.
Further, DCOE's plan contains subgoals that are multifaceted; however,
the corresponding performance measures do not measure all facets of
the subgoals. For example, one DCOE subgoal is to conduct stakeholder
analysis to identify DCOE's target stakeholder groups, identify how
best to meet the needs of these groups, and establish a strategic
framework for forming global partnerships between DCOE and
stakeholders. Because this subgoal has several components, a complete
measurement of this subgoal would require performance measures related
to (1) conducting the analysis, (2) identifying how to best meet the
needs of targeted groups, and (3) establishing a framework for forming
partnerships. DCOE's performance measures for this subgoal include (1)
conducting an annual stakeholder needs assessment, and (2) a target
that at least 75 percent of identified stakeholders agree that DCOE is
meeting their needs as determined by the DCOE-administered stakeholder
survey. However, there is no measure of whether DCOE has created a
framework for establishing global partnerships. We have found that
leading results-oriented organizations use performance measurement to
give managers information on which to base decisions and influence
organizational behavior. It is unclear whether the stakeholder surveys
in this performance measure will provide DCOE with information about
the extent to which the needs of DCOE stakeholders are being met by
the established framework, rather than some other program or
activities. This could limit the ability of DCOE managers to gauge
progress and make decisions about its programs or activities designed
to meet stakeholder needs.
The inherent difficulty of creating performance measures, like those
used for some of DCOE's functions and goals, may contribute to the
weaknesses in some of DCOE's measures. For example, one of DCOE's
functions includes evaluating suicide prevention programs. Suicide
deaths and suicidal behaviors are relatively rare events, and there is
not consensus on what constitutes suicidal behavior, making it
difficult to evaluate the effectiveness of these programs, according
to the U.S. Department of Health and Human Services' National Strategy
for Suicide Prevention.[Footnote 34] In addition, one goal--to
collaborate within DOD, VA, and the community to provide visible
leadership for PH and TBI programs and initiatives and promote a
culture of support for warriors and families--is difficult to measure
because it is not clearly oriented toward a measurable outcome. This
goal relates to one of the purposes for DCOE set forth by Congress.
[Footnote 35] However, DCOE officials told us it has been a challenge
for DCOE to design performance measures to track progress toward
meeting this goal. Because the strategic plan does not fully describe
how many of its performance measures support attainment of DCOE's
goals, it is not clear how DCOE will track its progress toward meeting
its goals.
TMA Lacked Effective Controls for Assuring Compliance with OMB
Guidance for Classification of Financial Obligations to Support
Management Decision Making:
TMA has not established effective controls for ensuring proper
classification and recording of obligations, and it did not properly
classify most of DCOE's fiscal year 2009 contract obligations. We
observed TMA performance of certain internal control procedures over
financial obligations, such as verifying accounting codes, reconciling
data uploads between systems, and supervisory review. However, we
found that TMA did not always document the performance of these
control procedures to confirm that they were consistently implemented,
identify any weaknesses, and take appropriate corrective action.
Further, our tests of DCOE contract obligations showed that while TMA
properly recorded the date and amount of the obligations, it did not
properly classify $102.7 million (91 percent) of DCOE's fiscal year
2009 contract obligations because it had not developed its own
policies and procedures for properly recording obligations by
subobject class. Our Standards for Internal Control in the Federal
Government require written documentation of controls in management
directives, administrative policies, or operating manuals.[Footnote
36] Instead of developing its own procedures, TMA relied on guidance
in the Washington Headquarters Services[Footnote 37] (WHS) Budget and
Accounting Classification Manual.[Footnote 38] However, this guidance
was not consistent with 10 U.S.C. § 2212 and current OMB Circular No.
A-11 guidance, which DOD and other federal agencies are required to
follow.[Footnote 39] WHS officials stated that this guidance was not
intended to be used by DOD organizations that use different accounting
systems, such as TMA. In addition, we determined that object class
coding in the financial management systems that TMA uses did not meet
requirements in DOD's Financial Management Regulation[Footnote 40]
with regard to object class. Further, TMA did not ensure that its
system administrator updated object class tables in financial systems
used by TMA as required by OMB Circular No. A-127.[Footnote 41]
As shown in table 2, our analysis of fiscal year 2009 contract-related
subobject class codes used by TMA showed significant differences when
compared to OMB guidance. For example, TMA improperly classified
obligations for "advisory and assistance services" under the subobject
class for "other services." OMB guidance provides definitions for
subobject class codes within object class 25 that are indicated by a
third digit. Subobject class codes provide more specific information
for management decision making by distinguishing, for example, between
obligations for advisory services, medical care, equipment
maintenance, and various other subobject classifications.
Table 2: Comparison of OMB and TMA Subobject Classifications for
Object Class 25, Other Contractual Services:
OMB (3-digit) subobject class: 25.1;
OMB-designated object classifications: Advisory and assistance
services;
Object classifications used by TMA for DCOE obligations: Equipment
maintenance.
OMB (3-digit) subobject class: 25.2;
OMB-designated object classifications: Other services;
Object classifications used by TMA for DCOE obligations: Advisory and
assistance services.
OMB (3-digit) subobject class: 25.3;
OMB-designated object classifications: Other purchases of goods and
services from government accounts;
Object classifications used by TMA for DCOE obligations: Motion
picture, television, and radio services.
OMB (3-digit) subobject class: 25.4;
OMB-designated object classifications: Operation and maintenance of
facilities;
Object classifications used by TMA for DCOE obligations: Audiovisual
services.
OMB (3-digit) subobject class: 25.5;
OMB-designated object classifications: Research and development
contracts;
Object classifications used by TMA for DCOE obligations: Official
representation funds.
OMB (3-digit) subobject class: 25.6;
OMB-designated object classifications: Medical care;
Object classifications used by TMA for DCOE obligations: Support
services provided by federal government.
OMB (3-digit) subobject class: 25.7;
OMB-designated object classifications: Operation and maintenance of
equipment;
Object classifications used by TMA for DCOE obligations: Training.
OMB (3-digit) subobject class: 25.8;
OMB-designated object classifications: Subsistence and support of
persons;
Object classifications used by TMA for DCOE obligations: Waste
disposal, safety, and occupational health services.
OMB (3-digit) subobject class: 25.9[A];
OMB-designated object classifications: n.a.;
Object classifications used by TMA for DCOE obligations: Computer-
related services, military clothing, and miscellaneous[A].
Source: GAO analysis of OMB Circular No. A-11 and TMA data.
Notes: n.a. stands for not applicable.
[A] This is not a valid subobject class in OMB Circular No. A-11.
[End of table]
Accurate object classification data provide important governmentwide
information and, as such, are reported in the Budget of the U.S.
Government. DCOE obligations by object class are summarized in Budget
Appendix data[Footnote 42] for the Defense Health Program operation
and maintenance appropriation object class schedule as well as in the
DOD section of a separate budget supporting document titled the Object
Class Analysis.[Footnote 43] TMA officials told us that they use
object class data to develop the "Summary of Price and Program
Changes" (referred to by DOD as Exhibit OP-32) for annual Defense
Health Program budget submissions. In addition, the object class is a
required data element in DOD's Financial Management Regulation, which
requires detailed object class information to be incorporated into DOD
accounting systems, or derived from applicable expense and asset
accounts, to allow for reporting by object class.
As shown in table 3, our analysis of DCOE supporting documentation and
OMB Circular No. A-11 guidance showed that TMA misclassified $102.7
million of the nearly $112 million in DCOE fiscal year 2009
obligations recorded to object class 25, "Other contractual services."
Appendix III provides additional detail on our analysis of DCOE's
fiscal year 2009 obligations.
Table 3: GAO Analysis of TMA Classification of Fiscal Year 2009 DCOE
Obligations:
OMB (2-digit) object class: 11;
Object class title: Personnel compensation;
TMA-recorded amount: $1,553,597;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: $281,250;
GAO-determined amount: $1,834,847.
OMB (2-digit) object class: 12;
Object class title: Personnel benefits;
TMA-recorded amount: $417,905;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: v417,905.
OMB (2-digit) object class: 21;
Object class title: Travel and transportation of persons;
TMA-recorded amount: $1,107,095;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: $1,107,095.
OMB (2-digit) object class: 22;
Object class title: Transportation of things;
TMA-recorded amount: 0;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: $610;
GAO-determined amount: $610.
OMB (2-digit) object class: 23;
Object class title: Rent, communications, and utilities;
TMA-recorded amount: $2,066,309;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: $71,057;
GAO-determined amount: $2,137,366.
OMB (2-digit) object class: 24;
Object class title: Printing and reproduction;
TMA-recorded amount: $45,200;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: $45,200.
OMB (2-digit) object class: 25;
Object class title: Other contractual services, total;
TMA-recorded amount: $112,306,040;
GAO adjustments to remove TMA misclassified amounts: -$102,723,185;
GAO adjustments to reclassify previously recorded amounts:
$102,370,268;
GAO-determined amount: $111,953,123.
OMB (3-digit) subobject classes for "Other contractual services": 25.1;
Object class title: Advisory and assistance services;
TMA-recorded amount: 0;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: $91,026,081;
GAO-determined amount: $91,026,081.
OMB (3-digit) subobject classes for "Other contractual services": 25.2;
Object class title: Other services;
TMA-recorded amount: $100,605,208;
GAO adjustments to remove TMA misclassified amounts: -$91,022,353;
GAO adjustments to reclassify previously recorded amounts: $10,359,438;
GAO-determined amount: $19,942,293.
OMB (3-digit) subobject classes for "Other contractual services": 25.3;
Object class title: Other purchases of goods and services from
government accounts;
TMA-recorded amount: $3,767,389;
GAO adjustments to remove TMA misclassified amounts: -$3,767,389;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: 0.
OMB (3-digit) subobject classes for "Other contractual services": 25.4;
Object class title: Operation and maintenance of facilities;
TMA-recorded amount: $2,314,000;
GAO adjustments to remove TMA misclassified amounts: -$2,314,000;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: 0.
OMB (3-digit) subobject classes for "Other contractual services": 25.5;
Object class title: Research and development contracts;
TMA-recorded amount: 0;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: 0.
OMB (3-digit) subobject classes for "Other contractual services": 25.6;
Object class title: Medical care;
TMA-recorded amount: $5,242,190;
GAO adjustments to remove TMA misclassified amounts: -$5,242,190;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: 0.
OMB (3-digit) subobject classes for "Other contractual services": 25.7;
Object class title: Operation and maintenance of equipment;
TMA-recorded amount: $285,588;
GAO adjustments to remove TMA misclassified amounts: -$285,588;
GAO adjustments to reclassify previously recorded amounts: $984,749;
GAO-determined amount: $984,749.
OMB (3-digit) subobject classes for "Other contractual services": 25.8;
Object class title: Subsistence and support of persons;
TMA-recorded amount: 0;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: 0.
OMB (3-digit) subobject classes for "Other contractual services":
25.9[A];
Object class title: Computer-related services, military clothing and
miscellaneous[A];
TMA-recorded amount: $91,665;
GAO adjustments to remove TMA misclassified amounts: -$91,665;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: 0.
OMB (2-digit) object class: 26;
Object class title: Supplies and materials;
TMA-recorded amount: $1,046,248;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: v1,046,248.
OMB (2-digit) object class: 31;
Object class title: Equipment;
TMA-recorded amount: $616,124;
GAO adjustments to remove TMA misclassified amounts: 0;
GAO adjustments to reclassify previously recorded amounts: 0;
GAO-determined amount: $616,124.
Total obligations:
TMA-recorded amount: $119,158,518;
GAO adjustments to remove TMA misclassified amounts: -$102,723,185;
GAO adjustments to reclassify previously recorded amounts:
$102,723,185;
GAO-determined amount: $119,158,518.
Source: GAO analysis of OMB Circular No. A-11 and TMA data.
[A] This is not a valid subobject class in OMB Circular No. A-11.
[End of table]
We discussed the misclassifications with TMA officials. At that time,
TMA was compiling information to respond to the Defense Secretary's
Efficiency Initiative,[Footnote 44] which will be achieved, in part,
by cutting advisory and assistance contracts. The officials told us
they recognized the risk of inaccurate object class information, and
to reduce this risk, they used time-intensive, manual workarounds and
information requests to obtain accurate information for departmentwide
analyses. To avoid Efficiency Initiative budget cuts to critical DCOE
services contracts, TMA identified advisory and assistance services
contract obligations and separated these obligations into two
categories to distinguish contracts for critical specialty positions
(those for counselors, nurses, and doctors)[Footnote 45] from
contracts for program and management support. The officials also told
us they were concerned that cuts affecting program and management
support contracts could have an adverse effect on DCOE programs and
activities because DCOE has relied on service contracts for program
and management support to compensate for delays in staffing government
positions. However, manual processes are costly and error prone.
Recording obligations to the proper object classification within the
financial management systems would provide DOD with reliable data on
advisory and assistance services contracts in an efficient, more cost-
effective manner.
According to DOD officials, the object classification problems,
referred to above, extend beyond TMA. At least 12 other defense
organizations, including the DOD Inspector General and Army Test and
Evaluation Command, used either the same legacy accounting system or
WHS guidance as TMA, and would have improperly classified contract
obligations in fiscal year 2009. As a result of our work, DOD system
administrators updated the fiscal year 2011 object class tables in the
WHS accounting system that TMA uses to comply with current OMB
guidance. In addition, WHS updated the object class information in its
Budget and Accounting Classification Manual used by some other defense
agencies to comply with fiscal year 2011 OMB guidance; however, the
updated manual did not assign responsibility for updating the affected
financial management systems. While these are positive steps, TMA has
not yet developed written procedures that provide detailed
instructions on the steps to be performed in reviewing DCOE obligation
data to ensure proper classification and recording in TMA's financial
management systems or established formal responsibility for updating
procedural guidance and systems codes to assure the accuracy of object
classification information going forward.
Conclusions:
DCOE has faced several challenges since its inception in November
2007. Some of these challenges fall mainly outside the organization's
control, such as staffing and reliance on TMA for financial
management. However, DCOE officials contend that DCOE's unfocused
mission has been exacerbated by unfocused leadership. This lack of
focus is manifested in DCOE's strategic plan, specifically, in the
incomplete alignment of DCOE's daily activities and its mission and
goals, and in performance measures that do not allow DCOE to assess
whether it has attained its goals. Gaps in DCOE's strategic planning
efforts could hinder its ongoing development, as well as DOD's overall
effort to develop excellence in PH and TBI care for injured and
recovering servicemembers.
A sound strategic plan is necessary for DCOE to lead DOD's efforts to
develop excellence in prevention, outreach, and care for
servicemembers with PH and TBI conditions. As DCOE strives to achieve
its mission and goals and provide accountability for its operations,
sustained and focused leadership will be important for DCOE to
prioritize important activities, ensure all officials and stakeholders
understand DCOE's role, and carry out its important statutory mandate.
TMA lacks sufficient, written internal control procedures for proper
classification and recording of obligations and has not assigned
formal responsibility for assuring that systems codes for obligation
classifications are consistent with annual OMB guidance. Without
documented procedures, there is an increased risk that obligation
recording and monitoring activities will not be performed accurately
and consistently, which can lead to unreliable reporting of DCOE data.
Accurate and consistent classification of obligations is fundamental
to management decision making.
Recommendations for Executive Action:
To address weaknesses in DCOE's strategic plan we recommend that the
Secretary of Defense through the Director of TMA direct the DCOE
director to:
* revisit and revise as necessary the organization's goals for
completing statutorily required responsibilities,
* require the directorates to align their day-to-day activities to
support DCOE's mission and goals, and:
* improve the performance measures in the plan to enable DCOE to
determine if achievement of each measure fully supports attainment of
its associated goal.
To ensure that DCOE obligations are properly classified and recorded
in accordance with OMB guidance, we recommend that the Secretary of
Defense through the ASD(HA) direct TMA to:
* develop written procedures with detailed steps to be performed for
ensuring proper classification and recording of obligations in TMA's
financial management systems and:
* assign responsibility for updating and maintaining procedural
guidance and systems codes to assure consistency with annual OMB
guidance.
Agency Comments and Our Evaluation:
We provided a draft of this report to DOD for comment and received a
written response on February 2, 2011, which is reprinted in Appendix
IV. DOD also provided technical comments that were incorporated into
the report as appropriate. While DOD said it concurred with all five
of our recommendations, we believe that the agency's stated actions
for two of these--aligning DCOE's day-to-day activities to support its
mission and goals and developing written policies and procedures for
proper classification and recording of obligations--do not fully
address the intent of our recommended actions. The following
discussion summarizes DOD's response to our recommendations and our
evaluation of the department's response.
We believe that DOD's planned actions for three of our recommendations
would be sufficient, if effectively implemented. Specifically, DOD
stated that DCOE senior leadership is currently reviewing DCOE's
strategic plan to confirm and clarify DCOE's mission. In addition, DOD
noted that this review is also intended to better ensure that DCOE's
strategies are linked to particular performance measures that describe
desired changes. DOD stated that outcome-oriented performance measures
will be developed with input from primary stakeholders who may
directly influence or be impacted by the outcome. DOD stated that it
agreed in principle with our recommendation for TMA to assign
responsibility for updating and maintaining procedural guidance and
systems codes to assure consistency with annual OMB guidance. However,
DOD's response indicated that the department believed our
recommendation was calling for decentralization. This is not our
point. Our recommendation recognizes that sound internal control
requires a shared management responsibility for ensuring that the
guidance being followed is current. This shared responsibility is
consistent with DOD's statement that TMA relies heavily on service
providers, particularly the Defense Finance and Accounting Service
(DFAS), for both transaction processing and financial statement
preparation. DOD stated that TMA agrees that efficiency and
effectiveness are best served if the service provider gets it right in
the first place and that customers need to remain diligent in ensuring
that the service provider follows current procedures that are
consistent with annual OMB guidance. DOD noted that TMA will seek to
incorporate this practice into the future design and testing of
internal controls as it moves to a new systems environment.
With respect to our recommendation that DCOE require directorates to
align their day-to-day activities to support DCOE's mission and goals,
although DOD stated its concurrence, it is unclear whether DCOE's
planned actions fully address the recommendation. DOD's response notes
that DCOE implemented a quarterly review and analysis process in
fiscal year 2010 that required directorates to provide information on
activities and their impact on DCOE's goals and mission. However,
during our review of DCOE's implementation of its review and analysis
process, we found that none of DCOE's eight directorates fully aligned
their activities to DCOE's goals and subgoals. In its comments, DOD
said that to ensure DCOE is aligning resources and business unit
responsibilities to achieve results clearly linked to organizational
goals, DCOE is augmenting its review and analysis process by
incorporating leadership strategy reviews focused on evaluating
performance in achieving their strategic goals. These reviews will
improve DCOE's capabilities to make needed resource and strategy
adjustments and align and communicate DCOE's strategy to business
units, according to DOD. While these additional leadership strategy
reviews may help DCOE in its overall strategic planning efforts, DOD's
response does not describe how these leadership reviews will
complement DCOE's existing management reviews to better align DCOE's
activities and goals. Without knowing how the leadership reviews will
be conducted to better ensure that DCOE's review and analysis process
is effectively implemented, we have no assurance that it adequately
addresses our recommendation.
With regard to our recommendation that TMA develop and maintain
written procedures for proper classification and recording of
obligations, DOD indicated that TMA meets the documentation principle
through its compliance with the Office of the Secretary of Defense
(Comptroller) (OUSD(C)) annual internal control assessment
requirements under OMB Circular No. A-123, Appendix A, "Internal
Control over Financial Reporting Guidance." We disagree. OMB Circular
No. A-123 requires agency management to assess the internal controls
over financial reporting and document and report the results of this
assessment. However, the Circular first calls for agencies to develop
and implement appropriate, cost-effective internal controls for
results-oriented management, and then requires an assessment of the
controls, needed improvements, and corrective actions.[Footnote 46]
During the audit, we determined and TMA acknowledged that it did not
have written procedures that described control activities for properly
classifying and recording obligations. Because DOD did not
specifically state that TMA would develop and maintain policies and
procedures for proper classification and recording of obligations, we
are reiterating our recommendation that the Secretary of Defense
through the ASD(HA) direct TMA to do so. Without effective, written
policies and procedures, DCOE likely will continue to have unreliable
data for management decision making.
We are sending copies of this report to the Secretary of Defense and
appropriate congressional committees. In addition, the report is
available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staffs have any questions about this report, please
contact Randall B. Williamson at (202) 512-7114 or
williamsonr@gao.gov, or Asif A. Khan at (202) 512-9869 or
khana@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. GAO staff who made major contributions to this report are
listed in appendix V.
Signed by:
Randall B. Williamson:
Director, Health Care:
Signed by:
Asif A. Khan:
Director, Financial Management and Assurance:
[End of section]
Appendix I: List of Requesters:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable C. W. Bill Young:
Chairman:
The Honorable Norman D. Dicks:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendix II: Scope and Methodology:
To determine the challenges that the Defense Centers of Excellence for
Psychological Health and Traumatic Brain Injury (DCOE) has faced in
its development, we interviewed DCOE and other officials about DCOE's
development. Because DCOE is an operating entity within TRICARE
Management Activity (TMA) and organizationally located in the Office
of the Assistant Secretary of Defense (Health Affairs) (ASD(HA)), we
also interviewed the Deputy Director, TMA, and the Acting Principal
Deputy ASD(HA). From these interviews, we identified a number of
challenges faced by DCOE. To better understand the scope and origin of
these challenges, as well as DCOE's responses, we obtained documents
related to the challenges, such as the evolution of DCOE's mission,
governance, and staffing. We grouped the identified challenges into 13
categories, and sent this list in a follow-up document to DCOE's
senior executive staff, directorate directors, and component center
directors--a total of 18 recipients. The document asked recipients to
identify the three challenges that have had the most significant
effect on DCOE's development. The list included an option for
recipients to write in alternative challenges.
Seventeen recipients responded; of these, 13 provided identifying
information. We conducted follow-up interviews with available
officials (12 respondents).[Footnote 47] During this second round of
interviews, we asked DCOE and DOD officials about the effects of the
challenges on DCOE, and obtained more details about DCOE's responses
to the challenges. Following review of additional evidence to gain a
better understanding of the underlying challenges, we framed these
challenges for reporting purposes.
To evaluate the extent to which DCOE's strategic plan aligns with key
practices for strategic planning used by leading public-sector
organizations, we assessed DCOE's strategic plan using the Government
Performance and Results Act (GPRA). We have reported that GPRA has
established a solid foundation for results-oriented planning, and used
GPRA to analyze the strategic plans of various agencies.[Footnote 48]
DCOE is not an agency for the purposes of GPRA's strategic planning
requirement and is not required to comply with GPRA.[Footnote 49]
However, we have found that leading public-sector organizations
conduct strategic planning and develop strategic plans that are
consistent with GPRA, and that organizations like DCOE can benefit
from strategic planning consistent with GPRA.[Footnote 50] For
example, we have found that leading public-sector organizations
commonly (1) define clear missions and desired outcomes; (2) measure
performance to gauge progress; and (3) use performance information as
a basis for decision making. While these leading organizations were
not acting under GPRA, the steps they took were consistent with GPRA.
We confirmed with DCOE officials the documents that constitute DCOE's
strategic plan, and reviewed these documents. These documents are: (1)
Campaign Plan for DCOE Operations and Activities: 2010-2016 (June
2010); (2) Defense Centers of Excellence for Psychological Health and
Traumatic Brain Injury Concept of Operations (June 2010); and (3)
DCOE's fact sheets.[Footnote 51]
To assess DCOE's strategic plan, we used a data-collection instrument,
taken from Agencies' Strategic Plans Under GRPA: Key Questions to
Facilitate Congressional Review.[Footnote 52] We developed these
questions to provide members of Congress and agency officials with a
starting point for fruitful dialogue and to help Congress determine
how agencies' plans, developed in response to GPRA, could be improved.
We reviewed DCOE documents, including all of the documents
constituting DCOE's strategic plan. Further, we interviewed DCOE
officials, including those involved in the early planning efforts for
DCOE.
To determine to what extent internal controls provide reasonable
assurance that DCOE information on financial obligations is reliable
for management decision making, we reviewed internal control criteria
related to reliably reporting financial data as defined in GAO's
Standards for Internal Control in the Federal Government and Internal
Control Management and Evaluation Tool[Footnote 53] and compared these
criteria to observations during our walkthroughs and responses
received from TMA and DCOE officials about their financial management
operations, processes and procedures used to obligate DCOE funds, and
related internal controls. We interviewed TMA officials about how
object class data are collected and what policies and controls are
used to help ensure these data are accurate. We conducted preliminary
electronic tests of the obligation data for missing and out-of-range
data.
In addition, we performed detailed testing of approximately 95 percent
of the total $119.2 million in DCOE obligations for fiscal year 2009,
including 100 percent of DCOE contract obligations, to determine if
the amounts were properly recorded and classified.[Footnote 54]
Because the majority of DCOE obligations were recorded to object class
25, "other contractual services," we tested 100 percent of these
transactions for appropriate time period, accurate amount, and proper
classification by subobject class (3-digit level). We also tested five
psychological health-related obligation transactions with the highest
dollar value (amounting to $30.8 million out of the total $88.6
million) and the two traumatic brain injury-related obligation
transactions with the highest dollar value (amounting to $29.5 million
out of the total $30.1 million), and one procurement obligation for
equipment totaling $0.5 million. From the remaining population of TMA-
recorded DCOE obligations (amounting to $58.4 million), we selected a
random sample of 15 obligation transactions. We tested the date,
obligation amount, and classification of our sample items against
source documents. We compared the object classification codes in OMB
Circular No. A-11, Preparation, Submission, and Execution of the
Budget[Footnote 55] to TMA financial records for these transactions to
determine if DCOE obligations were properly classified for fiscal year
2009. In addition, we analyzed information from supporting contract
documents to determine the proper classification of each contract as
presented in table 5 in appendix III.
We conducted this performance audit from January 2010 through February
2011 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix III: Fiscal Year 2009 Defense Centers of Excellence Financial
Obligations:
This appendix presents the results of our assessment of the accuracy
of fiscal year 2009 obligations recorded for the Defense Centers of
Excellence for Psychological Health and Traumatic Brain Injury (DCOE).
The purpose of our analysis was to determine whether DCOE obligations
were properly recorded at the (1) detailed (2-digit) budget object
class level and (2) subobject class (3-digit) level. We based our
assessment on our analysis of documentation for DCOE obligations and
Office of Management and Budget (OMB) Circular No. A-11 guidance for
proper classification of obligations.[Footnote 56]
Table 4 shows our analysis of the $119.2 million in recorded fiscal
year 2009 DCOE obligations by detailed (2-digit) budget object
classes. Detailed object classes include, among others, personnel
compensation; personnel benefits; rent, communications, and utilities;
other contractual services; supplies and materials; and equipment. Of
the total $119.2 million in DCOE fiscal year 2009 obligations recorded
by the TRICARE Management Agency (TMA), nearly $112 million related to
contractual services obligations (object class 25). Our analysis of
DCOE supporting documentation (obligating documents) and comparison
with OMB Circular No. A-11 guidance identified misclassifications of
obligations across object classes. Our reclassification of the
obligations based on supporting documentation and Circular No. A-11
guidance showed that 94 percent of DCOE's total obligations for fiscal
year 2009 related to object class 25, "other contractual services."
Table 4: GAO Analysis of Fiscal Year 2009 DCOE Obligations:
OMB 2-digit object class: 11;
Object class title: Personnel compensation;
TMA classification: $1,553,597;
GAO reclassification: $1,834,847;
Percentage of total obligations based on GAO reclassification: 1.5%.
OMB 2-digit object class: 12;
Object class title: Personnel benefits;
TMA classification: $417,905;
GAO reclassification: $417,905;
Percentage of total obligations based on GAO reclassification: 0.4%.
OMB 2-digit object class: 21;
Object class title: Travel and transportation of persons;
TMA classification: $1,107,095;
GAO reclassification: $1,107,095;
Percentage of total obligations based on GAO reclassification: 0.9%.
OMB 2-digit object class: 22;
Object class title: Transportation of things;
TMA classification: 0;
GAO reclassification: $610;
Percentage of total obligations based on GAO reclassification: [A].
OMB 2-digit object class: 23;
Object class title: Rent, communications, and utilities;
TMA classification: $2,066,309;
GAO reclassification: $2,137,366;
Percentage of total obligations based on GAO reclassification: 1.8%.
OMB 2-digit object class: 24;
Object class title: Printing and reproduction;
TMA classification: $45,200;
GAO reclassification: $45,200;
Percentage of total obligations based on GAO reclassification: [Empty].
OMB 2-digit object class: 25;
Object class title: Other contractual services;
TMA classification: $112,306,040;
GAO reclassification: $111,953,123;
Percentage of total obligations based on GAO reclassification: 94.0%.
OMB 2-digit object class: 26;
Object class title: Supplies and materials;
TMA classification: $1,046,248;
GAO reclassification: $1,046,248;
Percentage of total obligations based on GAO reclassification: 0.9%.
OMB 2-digit object class: 31;
Object class title: Equipment;
TMA classification: $616,124;
GAO reclassification: $616,124;
Percentage of total obligations based on GAO reclassification: 0.5%.
OMB 2-digit object class: Total DCOE obligations;
TMA classification: $119,158,518;
GAO reclassification: $119,158,518;
Percentage of total obligations based on GAO reclassification: 100.0%.
Source: GAO analysis of TMA data.
[A] Denotes more than zero, but less than 0.1%.
[End of table]
Table 5 shows the results of our analysis of DCOE fiscal year 2009
contractual services obligations by subobject class (type of
contractual services). The majority of DCOE's fiscal year 2009
contractual services obligations were for advisory and assistance
services contracts. Consistent with 10 U.S.C. § 2212 and the Federal
Acquisition Regulation, 2.101(b), Office of Management Budget guidance
in Circular No. A-11, Part 2, Section 83, defines subobject class 25.1
as including (1) management and professional support services; (2)
studies, analyses, and evaluations; and (3) engineering and technical
services. As shown in table 5, DCOE advisory and assistance service
obligations fall into the first two categories.
A significant amount (70 percent) of DCOE's nearly $91 million in
fiscal year 2009 advisory and assistance services obligations
(subobject class 25.1) were for management and professional support
services. According to TMA officials this is because of the lag in
DCOE staffing.
Table 5: Description of Fiscal Year 2009 Services Acquired and
Obligation Amounts of DCOE Obligations for Other Contractual Services:
25.1 Advisory and assistance services:
Management and professional support services:
Description of services acquired by subobject: Administrative,
clinical, financial management and programmatic support - DCOE;
Obligation amount: $24,033,649.
Description of services acquired by subobject: DCOE staff training;
Obligation amount: $4,338.
Description of services acquired by subobject: Program management
support - Defense and Veterans Brain Injury Center;
Obligation amount: $29,110,182.
Description of services acquired by subobject: Program management
support - Telehealth and Technology Center;
Obligation amount: $5,983,571.
Description of services acquired by subobject: Program management
support - National Intrepid Center of Excellence;
Obligation amount: $4,454,913.
Studies, analyses, and evaluations:
Description of services acquired by subobject: Identify and evaluate
the effectiveness of Department of Defense (DOD) programs designed to
support PH and TBI;
Obligation amount: $2,000,000.
Description of services acquired by subobject: Evaluation of
servicemember and family education needs about TBI;
Obligation amount: $125,000.
Description of services acquired by subobject: Study for the Caring
Letters Project to improve suicide surveillance efforts with the Army;
Obligation amount: $490,616.
Description of services acquired by subobject: Understand the effects
of deployment on military families and identify the antecedents and
consequences of family readiness by collecting longitudinal data from
Navy, Air Force, and Marine families across the deployment cycle;
Obligation amount: $3,500,000.
Description of services acquired by subobject: Catalog and evaluate
DOD suicide prevention activities to identify implications for
enhancing DOD programs;
Obligation amount: $175,000.
Description of services acquired by subobject: Review of literature
and best practices for promoting resilience;
Obligation amount: $275,000.
Description of services acquired by subobject: Conducting a
comparative study of resilience-building programs within DOD;
Obligation amount: $2,571,322.
Description of services acquired by subobject: Identify and evaluate
the effectiveness of Department of Defense (DOD) programs designed to
support PH and TBI;
Obligation amount: $2,000,000.
Description of services acquired by subobject: Evaluation of
servicemember and family education needs about TBI;
Obligation amount: $125,000.
Description of services acquired by subobject: Study for the Caring
Letters Project to improve suicide surveillance efforts with the Army;
Obligation amount: $490,616.
Description of services acquired by subobject: Understand the effects
of deployment on military families and identify the antecedents and
consequences of family readiness by collecting longitudinal data from
Navy, Air Force, and Marine families across the deployment cycle;
Obligation amount: $3,500,000.
Description of services acquired by subobject: Catalog and evaluate
DOD suicide prevention activities to identify implications for
enhancing DOD programs;
Obligation amount: $175,000.
Description of services acquired by subobject: Review of literature
and best practices for promoting resilience;
Obligation amount: $275,000.
Description of services acquired by subobject: Conducting a
comparative study of resilience-building programs within DOD;
Obligation amount: $2,571,322.
Description of services acquired by subobject: Event planning,
conference support services, and logistical support for DCOE
conferences, working groups, and meetings;
Obligation amount: $2,848,594.
Description of services acquired by subobject: Evaluation of best
practices;
Obligation amount: $6,165,158.
Description of services acquired by subobject: Identification of best
practices;
Obligation amount: $5,166,698.
Description of services acquired by subobject: Dissemination of best
practices;
Obligation amount: $4,122,040.
Engineering and technical services: None.
Description of services acquired by subobject: 25.1 Advisory and
assistance services, subtotal;
Obligation amount: $91,026,081.
25.2 Other services:
Description of services acquired by subobject: Sesame "Death of a
Loved One" program DVD kits targeting young children within military
families;
Obligation amount: $2,314,000.
Description of services acquired by subobject: Sesame Web portal to
provide for a Web site to target young children within military
families;
Obligation amount: $48,322.
Description of services acquired by subobject: Afterdeployment.org;
Obligation amount: $4,370,774.
Description of services acquired by subobject: Establishment of a 24/7
outreach call center that provides a toll-free number for those
seeking information on PH and TBI;
Obligation amount: $5,877,714.
Description of services acquired by subobject: Real Warriors
Campaign - Planning, developing, execution, and program evaluation of
a national public awareness designed to impact beliefs, attitudes, and
behaviors about seeking care for, and dispelling stigma about
psychological health (PH) and traumatic brain injury (TBI) issues;
Obligation amount: $3,065,720.
Description of services acquired by subobject: Present readings of
Sophocles' Ajax and Philoctetes to military communities across America;
Obligation amount: $3,767,389.
Description of services acquired by subobject: Develop, implement, and
maintain a virtual space in Second life;
Obligation amount: $498,374.
25.2 Other services, subtotal:
Obligation amount: $19,942,293.
25.7 Operation and maintenance of equipment:
Description of services acquired by subobject: Network operations
support--DCOE;
Obligation amount: $984,749.
Description of services acquired by subobject: 25.7 Operation and
maintenance of equipment, subtotal;
Obligation amount: $984,749.
Total obligations for other contractual services:
Obligation amount: $111,953,123.
Source: GAO analysis of TMA and DCOE data.
[End of table]
[End of section]
Appendix IV: Comments from the Department of Defense:
The Assistant Secretary Of Defense:
Health Affairs:
1200 Defense Pentagon:
Washington, DC 20301-1200:
February 2, 2011:
Mr. Randall Williamson:
Director, Health Care:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Williamson:
This is the Department of Defense (DoD) response to the Government
Accountability Office (GAO) Draft Report GA0-11-219, "Defense Health:
Management Weaknesses at Defense Centers of Excellence for
Psychological Health and Traumatic Brain Injury," dated December 22,
2010 (GAO Code #290826).
Thank you for the opportunity to review and provide comments. Overall,
the Department concurs with the draft report's findings and
conclusion. Our responses to the recommendations are enclosed.
In addition, we have enclosed technical comments to clarify several
facts and statements discussed in the draft report to make the final
report as useful a tool as possible. The Department will take the
necessary steps to meet the spirit of the GAO recommendations.
Again, thank you for your review and the opportunity to respond. The
points of contact on this issue are Ms. Anne Giese (Functional (301)
295-3687) and Mr. Gunther Zimmerman (Audit Liaison (703) 681-4360).
Sincerely,
Signed by:
George Peach Taylor, Jr., M.D.
Acting Principal Deputy:
Enclosures: As stated:
[End of letter]
GAO Draft Report ” Dated December 2010:
(GAO Code-290826/GA0-11-219):
"Defense Health: Management Weaknesses At Defense Centers Of
Excellence For Psychological Health And Traumatic Brain Injury"
Department Of Defense Comments To The Recommendations:
To address weaknesses in the Defense Center of Excellence (DCoE) for
Psychological Health and Traumatic Brain Injury strategic plan, we
recommend that the Secretary of Defense, through the Director of TMA,
direct the DCoE Director to:
Recommendation #1: Revisit and revise as necessary the organization's
goals for completing statutorily required responsibilities.
DoD Response: Concur. DCoE's priorities have been influenced by a
variety of external stakeholder interests in addition to its
statutorily required responsibilities resulting in a need for improved
mission focus and a prioritized strategic portfolio. The DCoE Senior
Leadership is currently reviewing its strategic plan. The goal is to
confirm and clarify its mission, strategies, and to establish specific
outcome-focused high priority performance goals. Completion of
congressional requirements and other programs services demonstrating
value are being explicitly identified as a priority.
Recommendation #2: Require the directorates to align their day-to-day
activities to support DCOE's mission and goals.
DoD Response: Concur. DCoE established a quarterly management review
and analysis process during the second quarter of the 2010 fiscal
year. Three reviews have been conducted to date. These reviews
required Directorates to provide information on business unit
activities, impact on DCoE's mission, quarterly goals, and resource
justification. There is inherent difficulty reviewing operational
processes at the same time as strategic goals. To ensure DCoE is
aligning resources and business unit responsibilities to achieve
results clearly linked to organizational goals, DCoE is incorporating
leadership strategy reviews focused on evaluating performance in
achieving our strategic goals to augment a tactical level management
review. This will improve DCoE's capabilities to make needed resource
and strategy adjustments and align and communicate DCoE's strategy to
business units.
Recommendation #3: Improve the performance measures in the plan to
enable DCoE to determine if achievement of each measure fully supports
attainment of its associated goal.
DoD Response: Concur. DCoE recognizes that it is lacking performance
goals and measures that are directly linked to our three strategic
goals. Several performance measures exist that relate to
congressionally defined requirements and other expected results.
However, these measures may not sufficiently reflect achievement of
these tasks or, collectively, the achievement of DCoE's three
strategic goals. DCoE Senior Leadership is currently reviewing its
strategic plan to ensure each strategic goal includes a limited number
of outcomes ” oriented performance measures that will describe what
the organization seeks to change and the strategic measures may have
associated tactical measures subject to more frequent operational and
process monitoring. These strategic performance measures will be
developed with input from our primary stakeholders who may directly
influence or be impacted by the outcome.
To ensure that DCoE obligations were properly classified and recorded
in accordance with OMB guidance, we recommend that the Secretary of
Defense, through the Assistant Secretary of Defense for Health Affairs
(ASD(HA)), direct TMA to:
Recommendations #4 & 5:
4. Develop written procedures with detailed steps to be performed for
ensuring proper classification and recording of obligations in TMA's
financial management systems and;
5. Assign responsibility for updating and maintaining procedural
guidance and systems codes to assure consistency with annual OMB
guidance.
DoD Response: Concur. While TMA agrees in principle with the above
recommendations, there are some additional factors that need to be
taken into account in effectively implementing them.
While TMA is responsible for its own financial statements, TMA, like
other DoD Components, relies heavily on service providers,
particularly DFAS, for both transaction processing and financial
statement preparation.
As GAO states in subject draft report (page 22), TMA, like DFAS,
relied on Washington Headquarters Service (WHS) Budget and Accounting
Classification Manual, which is not consistent with current OMB
guidance. Apparently, so did several other DoD Components, as
indicated on page 26.
It is not clear why internal control is better served at DoD level if
procedures for object class codes become more decentralized down to a
DoD field activity -- which is what GAO recommends. However, TMA does
concur that while it is true that efficiency and effectiveness are
best served if the service provider gets it right in the first place,
it is also true that the service providers' customers need to remain
diligent in ensuring that the service provider follows current
procedures which are consistent with annual OMB guidance. TMA will
seek to incorporate this into future design and testing of internal
controls.
TMA follows Office of the Under Secretary of Defense Comptroller
OUSD(C) Annual Guidance for assessing internal control. TMA has a
Managers' Internal Control Program (MICP) based on the five internal
control standards cited in Standards for Internal Control in the
Federal Government (GAO/AIMD-00-21.3.1). Furthermore, TMA follows the
annual OUSD(C) A-123 Appendix A Internal Control over Financial
Reporting Guidance, including process documentation which includes
internal controls. Current OUSD(C) communications call for
DoD Components to enter into Service Level Agreements or Memoranda of
Understanding with its service providers with respect to internal
control issues. TMA is in the process of doing that with DFAS.
GAO states on page 22 of the draft report: "Our Standards for Internal
Control in the Federal Government require written documentation of
controls in management directives, administrative policies, or
operating manuals." The exact language in GAO/AIMD-00-21.3.1 is as
follows:
Appropriate Documentation of Transactions and Internal Control:
Internal control and all transactions and other significant events
need to be clearly documented, and the documentation should be readily
available for examination. The documentation should appear in
management directives, administrative policies, or operating manuals
and may be in paper or electronic form. (GAO/AIMD-00-21.3.1; p 15)
TMA meets the documentation principle through its compliance with
OUSD(C) annual internal control assessment requirements.
TMA is in the process of transitioning its accounting system from
Washington Headquarters Services Accounting Allotment System to
Defense Agencies Initiative. TMA is aware of the difficulty inherent
in such transitions and seeks to ensure that resources spent on
addressing the above recommendations are consistent with another
principle cited in GAO/AIMD-00-21.3.1:
Internal Control Provides Reasonable Assurance, Not Absolute
Assurance: Management should design and implement internal control
based on the related cost and benefits (GAO/AIMD-00-21.3.1; p 6).
Corrective action has been taken with respect to the particular object
class coding issue raised by GAO. Furthermore, with respect to GAO's
observation that the misclassification of object class has led to
manual processes which are costly and error prone in identifying
contracts subject to the DoD Efficiency Initiative (page 25), such
manual processes would have been used for such a critical initiative
in any event based on another internal control principle cited in
GAO/AIMD-00-21.3.1:
Establishment and Review of Performance Measures and Indicators: These
controls could call for comparisons and assessments relating different
sets of data to one another so that analyses of the relationships can
be made and appropriate actions taken (GAO/AIMD-00-21.3.1; p 14).
In summary, TMA will take steps to meet the spirit of the GAO
recommendations, consistent with emerging DoD management initiatives,
and will do so in a cost-effective manner, consistent with GAO
internal control principles.
[End of section]
Appendix V: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Randall B. Williamson, (202) 512-7114 or williamsonr@gao.gov Asif A.
Khan, (202) 512-9869 or khana@gao.gov:
Staff Acknowledgments:
In addition to the contacts named above, Marcia Mann, Assistant
Director; Mary Ellen Chervenic, Assistant Director; Gayle Fischer,
Assistant Director; Jennie Apter; Carrie Davidson; Tony Eason; Lori
Fritz; Sheila Miller; and Sara Rudow made key contributions to this
report.
[End of section]
Footnotes:
[1] Dana Priest and Anne Hull, "Soldiers Face Neglect, Frustration At
Army's Top Medical Facility," Washington Post (Feb. 18, 2007).
[2] The reports include: Independent Review Group, Rebuilding the
Trust: Report on Rehabilitative Care and Administrative Processes at
Walter Reed Army Medical Center and National Naval Medical Center
(April 2007); Task Force on Returning Global War on Terror Heroes,
Report to the President (April 2007); Department of Defense Task Force
on Mental Health, An Achievable Vision: Report of the Department of
Defense Task Force on Mental Health (June 2007); President's
Commission on Care for America's Returning Wounded Warriors, Serve,
Support, Simplify (July 2007); Veterans' Disability Benefits
Commission, Honoring the Call to Duty: Veterans' Disability Benefits
in the 21st Century (October 2007); and Inspectors General, Department
of Defense, Department of Veterans Affairs, DOD/VA Care Transition
Process for Service Members Injured in OIF/OEF (Operation Iraqi
Freedom/Operation Enduring Freedom) (June 2008).
[3] Pub. L. No. 110-181, §§ 1621-1622, 122 Stat. 3, 453-55 (2008). The
same law required that DOD create a center of excellence for military
eye injuries. See Pub. L. No. 110-181, § 1623, 122 Stat. 455-57. Post-
traumatic stress disorder is a mental health condition. In this
report, we use the terms mental health and psychological health
interchangeably.
[4] TRICARE Management Activity was established in 2001 under
Department of Defense Directive No. 5136.12 as a defense field
activity of the Under Secretary of Defense for Personnel and Readiness
that operates under the authority, direction, and control of the
Assistant Secretary of Defense for Health Affairs. The Secretary of
Defense is authorized to establish defense field activities to perform
supply or service activities that are common to more than one military
department. See 10 U.S.C. § 191. Governance requirements for such
activities are prescribed by 10 U.S.C. § 192 and include periodic
program and budget reviews. TRICARE Management Activity leadership
manages the TRICARE health care program for active-duty members and
their families, retired service members and their families, National
Guard/Reserve members and their families, survivors, and others
eligible for DOD medical care.
[5] Obligation of funds means legally committing them for the payment
of goods and services ordered or received.
[6] Statement of Chairwoman Susan Davis, Military Personnel
Subcommittee, House Armed Service Committee (Apr. 13, 2010).
[7] DCOE's first director resigned in June 2010 and was replaced by an
acting director, who was reassigned in September 2010.
[8] Pub. L. No. 103-62, 107 Stat. 285 (1993), codified, in part and as
amended, in scattered sections of titles 5, 31, and 39 of the U.S. Code.
[9] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, [hyperlink,
http://www.gao.gov/products/GAO/GGD-96-118] (Washington, D.C.: June
1996). For this report, GAO studied a number of leading public-sector
organizations that were successfully becoming more results-oriented,
including state governments such as Florida, Texas, and Virginia; and
foreign governments such as Australia and the United Kingdom.
[10] GAO, Internal Control: Standards for Internal Control in the
Federal Government, [hyperlink,
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.:
November 1999).
[11] [hyperlink, http://www.gao.gov/products/GAO/GGD-96-118].
[12] DCOE's fact sheets are to describe, among other things, DCOE's
activities, budget, staffing, stakeholders, and contracts. The
Campaign Plan and Concept of Operations are dated June 2010; the fact
sheets range in date from December 2009 to January 2010.
[13] DCOE's strategic plan is consistent with, and supports, DOD's
Military Health System Strategic Plan.
[14] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] and
Internal Control Standards: Internal Control Management and Evaluation
Tool, [hyperlink, http://www.gao.gov/products/GAO-01-1008G]
(Washington, D.C.: August 2001).
[15] In performing a walk-through, an auditor follows a transaction
from origination through an agency's processes, including information
systems, until it is reflected in the financial records, using the
same documents and information technology that the agency staff use.
[16] OMB, Circular No. A-11, Preparation, Submission, and Execution of
the Budget, pt. 2, sec. 83 (Washington, D.C., July 21, 2010).
[17] Fiscal year 2009 was the most recently completed fiscal year for
which data were available at the time we initiated our audit.
[18] For the purpose of this report we define DCOE as comprising its
headquarters and eight directorates.
[19] 15 U.S.C. § 638(f) and (g) require DOD and certain other federal
agencies to establish a Small Business Innovation Research (SBIR)
program and administer its own SBIR funding agreements (or delegate
such administration to another agency).
[20] TMA is not the only source of funding for the component centers,
nor are the component centers' activities related to PH and TBI
limited to those obligated by TMA.
[21] TMA's Financial Operations Division received some multiyear
procurement funding in fiscal year 2009.
[22] Many fiscal statutes govern the purpose, amount, and time for
which appropriated funds are available for obligation and expenditure.
Many of these laws have been codified in Title 31 of the United States
Code, particularly in chapters 13, 15, and 33. These chapters contain
the laws known commonly as the Anti-Deficiency Act (31 U.S.C. §§ 1341-
42, 1349-52, 1511-19), the Recording statute (31 U.S.C. § 1501(a)),
the Miscellaneous Receipts statute (31 U.S.C. § 3302(b)), the Purpose
statute (31 U.S.C. 1301(a)), the Bona Fide Needs statute (31 U.S.C.
1502(a)), and the provisions that govern the closing of appropriations
accounts (31 U.S.C. §§ 1551-58). Many other governmentwide and agency-
specific provisions of permanent law govern the use of federal funds,
such as the Adequacy of Appropriations Act (41 U.S.C. § 11).
[23] See 31 U.S.C. § 1105(g), 10 U.S.C. § 2212, and related guidance
in OMB Circular No. A-11 and Federal Acquisition Regulation (FAR)
2.101(b), promulgated at 48 C.F.R. § 2.101(b).
[24] GAO, Federal Contracting: Congressional Action Needed to Address
Long-standing Problems with Reporting of Advisory Assistance Services,
[hyperlink, http://www.gao.gov/products/GAO-08-319] (Washington, D.C.:
Mar. 31, 2008).
[25] FAR 2.101(b).
[26] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, [hyperlink,
http://www.gao.gov/products/GAO/GGD-96-118] (June 1996).
[27] Testimony by Colonel Loree K. Sutton, Special Assistant to the
ASD(HA) for PH and TBI, before the Personnel Subcommittee of the U.S.
Senate Armed Services Committee, (Mar. 5, 2008), Findings and
Recommendations of the Department of Defense Task Force on Mental
Health, the Army's Mental Health Advisory Team Reports, and Department
of Defense and Service-wide Improvements in Mental Health Resources,
Including Suicide Prevention for Servicemembers and their Families;
Testimony by The Honorable S. Ward Casscells, M.D., ASD (HA), before
the Subcommittee on Military Personnel, U.S. House Armed Services
Committee, March 14, 2008, Military Health Issues (Mar. 14, 2008);
Testimony by General Loree Sutton, Special Assistant to the ASD (HA)
for PH and TBI, before the Defense Subcommittee of the U.S. House
Appropriations Committee, March 3, 2009, Psychological Health and
Traumatic Brain Injury Programs (Mar. 3, 2009); and Testimony by Loree
K. Sutton, Director, Defense Centers of Excellence for Psychological
Health and Traumatic Brain Injury, before the Personnel Subcommittee
of the U.S. Senate Armed Services Committee, Testimony on the
Incidence of Suicides of United States Servicemembers and Initiatives
within the Department of Defense to Prevent Military Suicides (Mar.
18, 2009).
[28] A DCOE official told us that as of March 2010, about 65 percent
of DCOE's positions were filled by contractors with plans to
increasingly replace them with federal civilian employees.
[29] Competitive, as used here, refers to competitive civil service
jobs subject to civil service laws that help ensure that applicants
and employees receive fair and equal treatment in the hiring process.
[30] According to comments we received on February 2, 2011, from the
Acting Principal Deputy, Assistant Secretary of Defense (Health
Affairs) on a draft of this report, DCOE's hiring cycle time is
currently averaging 252 days. The comments did not provide
documentation to support this figure.
[31] TMA's Human Resources office develops TMA's human capital
policies subject to civil service laws and regulations and Office of
Personnel Management and DOD guidance.
[32] The National Defense Authorization Act for Fiscal Year 2010,
signed into law on October 28, 2009, directed the Secretary of Defense
to take necessary actions to provide for the orderly termination of
the National Security Personnel System (NSPS) and conversion of all
NSPS employees and positions from NSPS by not later than January 1,
2012. Pub. L. No. 111-84, § 1113(c), 123 Stat. 2190, 2498-99 (2009).
DOD's goal was to transition the majority (approximately 75 percent)
of NSPS employees and positions to the General Schedule classification
and pay system during fiscal year 2010.
[33] Examples of the hiring initiatives include eliminating essay-
related questions from initial applications, requiring agencies to
shorten their hiring time line to 80 days, and the use of lists
maintained by the Office of Personnel Management to refer qualified
applicants to federal agencies for some of the most common occupations
in the federal government.
[34] U.S. Department of Health and Human Services, National Strategy
for Suicide Prevention: Goals and Objectives for Action (Rockville,
Md., 2001).
[35] Specifically, the NDAA 2008 states that the Secretary of Defense
is to ensure that the centers of excellence collaborate to the maximum
extent practicable with VA, institutions of higher education, and
other appropriate public and private entities (including international
entities) to carry out their responsibilities. Pub. L. No. 110-181, §§
1621(b), 1622(b), 122 Stat. 3, 453-54 (2008).
[36] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1].
[37] Washington Headquarters Services (WHS) is a DOD field activity
that provides consolidated administrative and operational support to
several defense agencies, DOD field activities, and various elements
of the military departments, the White House, and to some degree,
Congress. WHS was established to remove operating functions from the
Office of the Secretary of Defense in order to refocus these staff on
matters involving policy analysis and oversight.
[38] See Washington Headquarters Services, Budget and Accounting
Classification Manual, "Object Classification Codes," ch. 8,
[hyperlink, http://www.whs.mil/fmd/budget/] (accessed Aug. 5, 2010).
[39] OMB, Circular No. A-11, Preparation, Submission, and Execution of
the Budget, pt. 2, sec. 83 (Washington, D.C., July 21, 2010).
[40] DOD, Financial Management Regulation, vol. 1, Appendix A,
requires DOD components to follow the OMB guidance. OMB guidance on
object classifications for advisory and assistance contracts is based
on requirements in 10 U.S.C. § 2212 and FAR 2.101(b).
[41] OMB, Circular No. A-127, Financial Management Systems
(Washington, D.C., Jan. 9, 2009).
[42] OMB, Budget of the United States Government, Fiscal Year 2011
(Washington, D.C., Feb. 1, 2010), [hyperlink,
http://www.whitehouse.gov/omb/budget/Overview] (accessed on Nov. 15,
2010). The fiscal year 2011 budget reported data on fiscal year 2009
obligations.
[43] OMB, Budget of the United States Government, Fiscal Year 2009,
Appendix (Washington, D.C., Feb. 4, 2008), [hyperlink,
http://www.gpoaccess.gov/usbudget/fy09/appendix.html] (accessed on
Nov. 15, 2010).
[44] On August 9, 2010, the Secretary of Defense announced the
Efficiency Initiative intended to contribute to a DOD effort to
achieve about $100 billion of savings over the next 5 years.
[45] While the actual care for servicemembers with TBI/PH as well as
wounded, ill, and injured servicemembers is provided in military
hospitals, there are a number of TMA contracts that oversee policy and
program development and oversight of the TBI/PH and wounded, ill, and
injured programs. These contracts provide for contractor staff with
special medical skills to provide staff augmentation support.
[46] OMB Circular No. A-123, Appendix A, Internal Control over
Financial Reporting Guidance, sec. 4.
[47] One respondent left DCOE before we could conduct a follow-up
interview.
[48] GAO, Managing for Results: Critical Issues for Improving Federal
Agencies' Strategic Plans, [hyperlink,
http://www.gao.gov/products/GAO/GGD-97-180] (Washington, D.C.:
September 1997). In this report, we described our analysis of 27
agencies' draft strategic plans using GPRA criteria.
[49] For purposes of GPRA's strategic planning requirement, an agency
is defined as an executive department, a government corporation, and
an independent establishment, but does not include the Central
Intelligence Agency, GAO, the United States Postal Service, and the
Postal Regulatory Commission. See 5 U.S.C. § 306(f).
[50] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, [hyperlink,
http://www.gao.gov/products/GAO/GGD-96-118] (Washington, D.C.: June
1996). For this report, GAO studied a number of leading public sector
organizations that were successfully becoming more results-oriented,
including state governments such as Florida, Texas, and Virginia; and
foreign governments such as Australia and the United Kingdom.
[51] DCOE's fact sheets are to describe, among other things, DCOE's
activities, budget, staffing, stakeholders, and contracts. The
Campaign Plan and Concept of Operations are dated June 2010; the fact
sheets range in dates from December 2009 to January 2010.
[52] GAO, Agencies' Strategic Plans Under GPRA: Key Questions to
Facilitate Congressional Review, [hyperlink,
http://www.gao.gov/products/GAO/GGD-10.1.16] (Washington, D.C.: May
1997).
[53] GAO, Internal Control: Standards for Internal Control in the
Federal Government, [hyperlink,
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.:
November 1999) and Internal Control Standards: Internal Control
Management and Evaluation Tool, [hyperlink,
http://www.gao.gov/products/GAO-01-1008G] (Washington, D.C.: August
2001).
[54] Fiscal year 2009 was the most recently completed fiscal year for
which data were available at the time we initiated our audit.
[55] OMB, Circular No. A-11, Preparation, Submission, and Execution of
the Budget, pt. 2, sec. 83 (Washington, D.C., July 21, 2010).
[56] OMB, Circular No. A-11, Preparation, Submission, and Execution of
the Budget, pt. 2, sec. 83, (Washington, D.C., July 21, 2010).
[End of section]
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