Federal Bureau of Investigation
Actions Taken to Address Most Procurement Recommendations Gao ID: GAO-11-794 September 6, 2011The FBI has spent over $900 million on the Trilogy and Sentinel information technology (IT) projects intended to provide FBI with an upgraded IT infrastructure and an automated case management system to support FBI agents and analysts. In February 2006 and July 2008, GAO reported on significant internal control weaknesses related to FBI's contract administration, processing of contractor invoices, and accountability for equipment acquired for these projects. GAO made 27 recommendations to the FBI to address these deficiencies. The FBI concurred with all 27 recommendations. This report provides an assessment of (1) the FBI's corrective actions to address GAO's 27 recommendations and (2) whether there were any indications of implementation issues related to the policies and procedures the FBI developed to address 17 of the 27 recommendations. GAO reviewed FBI policies and procedures, performed walk-throughs, and conducted detailed tests on statistically and nonstatistically selected samples of transactions.
The corrective actions developed by FBI were sufficient to address 21 of the 22 Trilogy recommendations and all 5 Sentinel recommendations. The FBI substantially addressed: 17 Trilogy recommendations related to contract administration, invoice processing, and property accountability by establishing or revising policies and procedures; 4 by contracting for follow-up audits of the Trilogy costs; and the 5 Sentinel recommendations by revising Sentinel policies and procedures. The one Trilogy recommendation that FBI did not address completely was related to 1,205 missing, lost, or stolen Trilogy assets. As of February 2011, the FBI had researched and determined the status of all but 134 of these assets. FBI officials stated that almost all of these assets had a useful life of 7 years, and if they were not already returned or destroyed, they are now obsolete. There are diminishing returns to continue to pursue these assets, which included several information technology items that could potentially contain sensitive information. However, if the FBI is able to determine the status of any of these assets in the future, officials stated that they will make the entries to properly record them in FBI's property management application (PMA). In assessing implementation of the policies and procedures developed in response to GAO's 17 Trilogy recommendations related to contract administration, invoice processing, and property accountability, GAO found that policies and procedures related to the 4 recommendations dealing with contract administration, including interagency agreements, were effectively implemented but also identified a new issue. Specifically, GAO found that forms--required by the Federal Acquisition Regulation to support the use of interagency agreements to conveniently or economically obtain supplies and services--were not timely completed for 15 of 54 statistically selected interagency agreements tested, and found that FBI's monitoring did not identify this deficiency. GAO estimates that as much as 39.5 percent of FBI's fiscal year 2009 interagency agreements did not meet this requirement, increasing the risk that funds may have been disbursed for goods or services that were not in the best interest of the government. In addition, GAO's testing of FBI's implementation of polices and procedures for the remaining 13 recommendations that were related to invoice processing and property accountability found indications of implementation issues in 3 areas. (1) Regarding the review of contractors' invoices, 5 invoices (of the 37 tested) that had been reviewed and approved by FBI officials included labor rates that were not fully supported by the contract documentation. Without verifying labor charges against the contractor's proposal as required by FBI policy, there is an increased risk of disbursing funds for unallowable charges. (2) For property accountability, GAO found instances in which FBI (1) did not record accountable property items in its system in a timely manner and (2) did not accurately record key accountability information, such as location and serial numbers, as required by FBI's policies. These shortcomings increase the risk that assets could be lost or stolen and not be detected and investigated in a timely manner. GAO makes three new recommendations to improve interagency agreement controls and determine if additional actions are necessary to improve controls for invoice processing and property accountability. The FBI concurred with all three recommendations and discussed actions it has initiated to address GAO's recommendations.
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: Jeanette M. Franzel Team: Government Accountability Office: Financial Management and Assurance Phone: (202) 512-9471GAO-11-794, Federal Bureau of Investigation: Actions Taken to Address Most Procurement Recommendations
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United States Government Accountability Office:
GAO:
Report to the Ranking Member, Committee on the Judiciary, U.S. Senate:
September 2011:
Federal Bureau of Investigation:
Actions Taken to Address Most Procurement Recommendations:
GAO-11-794:
GAO Highlights:
Highlights of GAO-11-794, a report to the Ranking Member, Committee on
the Judiciary, U.S. Senate.
Why GAO Did This Study:
The FBI has spent over $900 million on the Trilogy and Sentinel
information technology (IT) projects intended to provide FBI with an
upgraded IT infrastructure and an automated case management system to
support FBI agents and analysts. In February 2006 and July 2008, GAO
reported on significant internal control weaknesses related to FBI‘s
contract administration, processing of contractor invoices, and
accountability for equipment acquired for these projects. GAO made 27
recommendations to the FBI to address these deficiencies. The FBI
concurred with all 27 recommendations. This report provides an
assessment of (1) the FBI‘s corrective actions to address GAO‘s 27
recommendations and (2) whether there were any indications of
implementation issues related to the policies and procedures the FBI
developed to address 17 of the 27 recommendations. GAO reviewed FBI
policies and procedures, performed walk-throughs, and conducted
detailed tests on statistically and nonstatistically selected samples
of transactions.
What GAO Found:
The corrective actions developed by FBI were sufficient to address 21
of the 22 Trilogy recommendations and all 5 Sentinel recommendations.
The FBI substantially addressed: 17 Trilogy recommendations related to
contract administration, invoice processing, and property
accountability by establishing or revising policies and procedures; 4
by contracting for follow-up audits of the Trilogy costs; and the 5
Sentinel recommendations by revising Sentinel policies and procedures.
The one Trilogy recommendation that FBI did not address completely was
related to 1,205 missing, lost, or stolen Trilogy assets. As of
February 2011, the FBI had researched and determined the status of all
but 134 of these assets. FBI officials stated that almost all of these
assets had a useful life of 7 years, and if they were not already
returned or destroyed, they are now obsolete. There are diminishing
returns to continue to pursue these assets, which included several
information technology items that could potentially contain sensitive
information. However, if the FBI is able to determine the status of
any of these assets in the future, officials stated that they will
make the entries to properly record them in FBI‘s property management
application (PMA).
In assessing implementation of the policies and procedures developed
in response to GAO‘s 17 Trilogy recommendations related to contract
administration, invoice processing, and property accountability, GAO
found that policies and procedures related to the 4 recommendations
dealing with contract administration, including interagency
agreements, were effectively implemented but also identified a new
issue. Specifically, GAO found that forms”required by the Federal
Acquisition Regulation to support the use of interagency agreements to
conveniently or economically obtain supplies and services”were not
timely completed for 15 of 54 statistically selected interagency
agreements tested, and found that FBI‘s monitoring did not identify
this deficiency. GAO estimates that as much as 39.5 percent of FBI‘s
fiscal year 2009 interagency agreements did not meet this requirement,
increasing the risk that funds may have been disbursed for goods or
services that were not in the best interest of the government.
In addition, GAO‘s testing of FBI‘s implementation of polices and
procedures for the remaining 13 recommendations that were related to
invoice processing and property accountability found indications of
implementation issues in 3 areas.
* Regarding the review of contractors‘ invoices, 5 invoices (of the 37
tested) that had been reviewed and approved by FBI officials included
labor rates that were not fully supported by the contract
documentation. Without verifying labor charges against the
contractor‘s proposal as required by FBI policy, there is an increased
risk of disbursing funds for unallowable charges.
* For property accountability, GAO found instances in which FBI (1)
did not record accountable property items in its system in a timely
manner and (2) did not accurately record key accountability
information, such as location and serial numbers, as required by FBI‘s
policies. These shortcomings increase the risk that assets could be
lost or stolen and not be detected and investigated in a timely manner.
What GAO Recommends:
GAO makes three new recommendations to improve interagency agreement
controls and determine if additional actions are necessary to improve
controls for invoice processing and property accountability. The FBI
concurred with all three recommendations and discussed actions it has
initiated to address GAO‘s recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-11-794]. For more
information, contact Jeanette M. Franzel at (202) 512-9471 or
franzelj@gao.gov.
Contents:
Letter:
Background:
FBI Developed Policies and Procedures and Took Other Specific
Corrective Actions Sufficient to Address 26 of 27 Prior
Recommendations:
Potential Issues Identified in Certain Areas Related to Implementation
of FBI-Wide Policies and Procedures:
Conclusions:
Recommendations:
Agency Comments:
Appendix I: Scope and Methodology:
Appendix II: Status of Trilogy and Sentinel Recommendations and
Actions Taken by the FBI:
Appendix III: Comments from the Federal Bureau of Investigation:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Summary of Interagency Agreement and Contract Testing Results:
Table 2: Summary of Testing Results for Other Selected Transactions:
Abbreviations:
CSC: Computer Sciences Corporation:
DCAA: Defense Contract Audit Agency:
FAR: Federal Acquisition Regulation:
FASAB: Federal Accounting Standards Advisory Board:
FBI: Federal Bureau of Investigation:
IPC: Information Presentation Component:
IT: Information Technology:
OMB: Office of Management and Budget:
PMA: Property Management Application:
PMO: Project Management Office:
SAIC: Science Applications International Corporation:
TNC: Transportation Network Component:
UAC: User Application Component:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
September 6, 2011:
The Honorable Charles E. Grassley:
Ranking Member:
Committee on the Judiciary:
United States Senate:
Dear Senator Grassley:
Since 2001, the Federal Bureau of Investigation (FBI), an agency of
the United States Department of Justice, has spent more than $700
million, as of August 2010, on two projects to develop an automated
investigative case management system to support FBI agents, analysts,
and other management officials, and more than $200 million on
upgrading its information technology (IT) infrastructure. Our February
2006 report on the FBI's Trilogy project and July 2008 report on its
subsequent Sentinel project focused on whether the FBI's internal
controls provided reasonable assurance that payments to the Trilogy
and Sentinel contractors were for allowable costs and properly
supported, and that accountability was maintained over equipment
purchased for the projects.[Footnote 1] [Footnote 2] We identified
internal control weaknesses, some significant, related to the FBI's
contract administration, processing of contractor invoices, and
accountability for equipment acquired during these projects. We made
27 recommendations to the FBI to address the identified deficiencies.
Many of these recommendations focused on developing or revising
policies and procedures, which had broad applicability to the FBI's
procurement processes, while others focused on specific Trilogy or
Sentinel project weaknesses.
Because the FBI continues to enter into contracts to acquire goods and
services and disburses millions annually related to these contracts,
it is critical that the FBI fully address the internal control
deficiencies identified in our Trilogy and Sentinel reports. In
accordance with your request and as agreed to with your staff, our
objectives are to assess whether:
(1) the FBI's new or revised policies and procedures and other
specific corrective actions were sufficient to address the
recommendations we made in our Trilogy and Sentinel reports and:
(2) there were any indications of implementation issues related to the
policies and procedures FBI developed to address 17 of the 27
recommendations.
To assess if the FBI's new or revised policies and procedures and
other corrective actions were sufficient to address the
recommendations in our prior reports, we (1) reviewed the FBI's
documented corrective actions for each recommendation and supporting
documentation; (2) held interviews with FBI personnel responsible for
the development of the corrective actions; (3) reviewed documentation
related to new or revised policies and procedures as well as related
training materials; and (4) requested and reviewed additional relevant
documentation identified during our interviews.
To assess whether there were any indications of FBI-wide
implementation issues related to the policies and procedures that FBI
developed in response to 17 of our 27 recommendations, we performed
several types of procedures. Depending on the nature of the policy and
procedure being implemented, or other corrective action being taken,
our follow-up work consisted of detailed testing of certain
statistically and nonstatistically selected transactions, walk-
throughs, document reviews, and interviews. For example, we performed
detailed testing of interagency agreements and contracts statistically
selected from the universe of interagency agreements and contracts
executed by the FBI during fiscal year 2009. We then nonstatistically
selected purchase orders, invoices, and accountable property
associated with the selected contracts and performed detailed testing
to determine whether there were any indications that the FBI did not
fully or consistently perform the activities prescribed in its new or
revised policies and procedures. We evaluated these selected
transactions against the FBI's documented policies and procedures and
considered the Federal Acquisition Regulation (FAR), Office of
Management and Budget's (OMB) guidance for interagency agreements, our
Standards for Internal Control in the Federal Government, and the
Federal Accounting Standards Advisory Board's (FASAB) accounting
standards for accountable property.[Footnote 3] [Footnote 4] [Footnote
5] Further details on our scope and methodology are included in
appendix I.
We provided the FBI with a draft of this report for review and
comment. The FBI provided written comments, which are reprinted in
appendix III. The FBI also provided technical comments, which we have
incorporated as appropriate. We conducted this performance audit from
February 2010 through September 2011 in accordance with generally
accepted government auditing standards. Those standards require that
we plan and perform our audits 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:
In May 2001, the FBI initiated a major IT upgrade project known as
Trilogy. Trilogy consisted of three parts: (1) the Information
Presentation Component (IPC) to upgrade FBI's computer hardware and
software, (2) the Transportation Network Component (TNC) to upgrade
the FBI's communication network, and (3) the User Application
Component (UAC) to upgrade and consolidate the FBI's five most
important investigative applications.
The IPC component provided for new desktop computers, servers, and
commercial-off-the-shelf automation software, including Web-browser
and e-mail software to enhance usability by the agents. The TNC
component called for upgrading the complete communication
infrastructure. These upgrades were expected to provide the physical
infrastructure that would run the applications that were to be
developed under the UAC component of the Trilogy project to replace
the FBI's paper case files with electronic files and improve
efficiency and replace the obsolete Automated Case Support system, the
FBI's primary investigative application that uploads and stores case
files electronically.
Our 2006 audit of the project's costs identified significant internal
control deficiencies over administration of contracts and interagency
agreements, the processing (review, approval, and payment) of
invoices, and the accountability over assets purchased under the
project.[Footnote 6] More specifically, we reported that the FBI's
review and approval process for contractor invoices did not provide an
adequate basis for verifying that goods and services billed were
actually received by the FBI or that payments were for allowable
costs. This occurred in part because responsibility for the review and
approval of invoices was not clearly defined in the interagency
agreements related to the Trilogy project and because contractors'
invoices frequently lacked the detailed supporting documentation
necessary for an adequate review of invoice charges. During our audit,
we identified more than $10 million in questionable contractor costs
paid by the FBI for the Trilogy project. With respect to property, we
reported that the FBI: (1) did not adequately maintain accountability
for purchased computer equipment; (2) relied extensively on
contractors to account for Trilogy assets while they were being
purchased, warehoused, and installed; (3) did not establish controls
to verify the accuracy and completeness of contractors' records on
which the FBI was relying; (4) did not ensure that only the items
approved for purchase were acquired by the contractors, and that the
bureau received all those items; and (5) did not establish adequate
physical control over the assets. As a result of these deficiencies,
we identified more than 1,200 pieces of missing equipment that we
estimated to be worth more than $7.5 million.
We made 22 recommendations to the FBI in our 2006 report on Trilogy.
[Footnote 7] Of the 22 recommendations, 17 were focused on developing
agencywide policies and procedures to address internal control
weaknesses in the FBI's procurement and contract administration
processes. The remaining five recommendations were specific to the
Trilogy project and were related to contractor overpayments and
accountable property.
The FBI discontinued the virtual case file component of its Trilogy
project in March 2005, after it was determined to be infeasible and
cost prohibitive to implement as originally envisioned. FBI's Sentinel
project was approved in July 2005 and was to succeed and expand on
elements of the Trilogy project, namely to provide the FBI with a
modern, automated investigative case-management system. The Sentinel
project management office (PMO) had designed and implemented policies
and procedures that assigned specific invoice-review responsibilities
and required Sentinel contractors to provide detailed support for all
invoiced amounts and to obtain advance approval from the Sentinel PMO
for travel, overtime, and other direct costs.
With respect to Sentinel equipment, we reported that the Sentinel PMO
had established policies and procedures specific to the Sentinel
project to ensure Sentinel's equipment purchases were properly
authorized and that received property was timely inspected and entered
into the FBI's Property Management Application (PMA). However, we did
identify some additional opportunities for the Sentinel PMO to improve
controls over purchased equipment for the Sentinel project. We made
five recommendations to the FBI related to Sentinel.
FBI Developed Policies and Procedures and Took Other Specific
Corrective Actions Sufficient to Address 26 of 27 Prior
Recommendations:
The corrective actions developed by the FBI were sufficient to address
21 of the 22 Trilogy recommendations and all 5 of the Sentinel
recommendations we made in our prior reports.[Footnote 8] The FBI
substantially addressed 17 Trilogy recommendations related to contract
administration, invoice processing, and property accountability by
establishing or revising policies and procedures, 4 by contracting for
follow-up audits of the Trilogy costs, and the 5 Sentinel
recommendations by revising Sentinel policies and procedures. Of the
27 prior recommendations, 17 focused on establishing, revising, or
reinforcing policies and procedures with FBI-wide applicability. We
found that the FBI had sufficiently developed, revised, or updated
these policies and procedures as we recommended. For example, in
response to our recommendation that the FBI revise its policies and
procedures to require that accountable assets be entered into PMA
immediately upon receipt rather than within the prior 30-day time
frame, the FBI issued a new policy that required that accountable
property be recorded in PMA within 48 hours of being received.
Appendix II provides information on each of the 27 Trilogy and
Sentinel recommendations and the specific corrective actions developed
by the FBI.
We also made four recommendations in our Trilogy report related to the
recovery of overpayments and reimbursement of questionable costs from
Trilogy contractors. In response to these recommendations, the Defense
Contract Audit Agency (DCAA), an independent third party, was engaged
to perform post audit reviews of contractor billings for the Trilogy
project. DCAA conducted separate audits of the billings submitted by
the two prime contractors, Computer Sciences Corporation (CSC) and
Science Applications International Corporation (SAIC), as well as the
billings submitted by the numerous subcontractors, and identified over
$18 million in questioned costs. [Footnote 9] DCAA defines questioned
costs as those costs that are not acceptable for negotiating a fair
and reasonable contract price. DCAA's audits included reviewing the
areas with potential overpayments we had identified as well as
assessing if other identified questionable costs should be reimbursed.
The most significant questioned costs were costs incurred outside the
effective dates of temporary labor agreements, missing supporting
documentation, application of incorrect billing rates, unapproved
timesheets, unapproved overtime, and subcontractor overbillings.
The one recommendation that the FBI had not fully addressed from our
Trilogy report recommended that the FBI investigate the 1,205 assets
that we identified as missing, lost, or stolen and determine whether
any confidential or sensitive information may be exposed to
unauthorized users, and identify any patterns related to the equipment
that could necessitate a change in FBI policies and procedures.
[Footnote 10] These assets consisted of a variety of information
technology items, including desktop computers, servers, and laptops
that could potentially contain confidential or sensitive information
that could be exposed to unauthorized users.
In February 2011, FBI officials provided documentation accounting for
the status of all but 134 assets, including desktop computers,
laptops, and servers that could contain sensitive information. With
regard to the 134 assets, the FBI stated that all of these assets had
a useful life of 7 years or less and that if they were not already
returned or destroyed, they are now obsolete and that spending more
time or resources to search for the obsolete equipment would be
wasteful. Instead the FBI is focused on implementing a new property
management system, and incorporating property management lessons
learned from the Trilogy project. However, FBI officials also stated
they would make the necessary entries to properly record any of the
remaining 134 assets for which they subsequently determine the status.
Potential Issues Identified in Certain Areas Related to Implementation
of FBI-Wide Policies and Procedures:
Although the FBI developed or revised policies and procedures in
response to 17 of our prior recommendations, our testing to assess
their implementation FBI-wide identified possible issues in certain
areas. In our testing of the four recommendations dealing with
interagency agreements and contracts, we found that they were
effectively implemented, but we identified a new issue unrelated to
our prior recommendations. In our implementation testing for the
remaining 13 corrective actions, we identified indications of
implementation issues for 3 of them.
Tests Show Effective Implementation of Actions Related to Interagency
Agreements and Contracts, but One New Issue Identified:
As shown in table 1, our tests related to policies and procedures over
interagency agreements and contracts indicated that the FBI had
effectively implemented these corrective actions.
Table 1: Summary of Interagency Agreement and Contract Testing Results:
Recommendation: Establish policies and procedures so that future
interagency agreements establish clear and well-defined roles and
responsibilities for all parties included in the contract
administration process;
Summary of test results: Roles and responsibilities were clearly
defined for the statistical sample of 55 interagency agreements
reviewed.[A]
Recommendation: Establish policies and procedures so that labor rates,
ceiling prices, treatment of overtime hours, and other key terms for
cost determination are clearly specified and documented for all
contracts, task orders, and related agreements;
Summary of test results: Contract documentation (contracts, proposals,
and other supporting documentation) for the 32 statistically selected
contracts we reviewed included specific rates for goods and services
to be provided such as labor rates, overtime hours and ceiling prices.
The contract documentation also included Federal Acquisition
Regulation clauses for areas such as travel or review of subcontractor
charges.[B]
Recommendation: Establish policies and procedures so that an
appropriate process is in place to assess the adequacy of contractor's
review and documentation of submitted subcontractor charges before
such charges are paid by FBI;
Summary of test results: Contract documentation (contracts, proposals,
and other supporting documentation) for the 32 statistically selected
contracts we reviewed included specific rates for goods and services
to be provided such as labor rates, overtime hours and ceiling prices.
The contract documentation also included Federal Acquisition
Regulation clauses for areas such as travel or review of subcontractor
charges.[B]
Recommendation: Establish policies and procedures so that future
contracts clearly reflect the appropriate Federal Acquisition
Regulation travel cost requirements, including the purchase of the
lowest standard, coach, or equivalent airfare;
Summary of test results: Contract documentation (contracts, proposals,
and other supporting documentation) for the 32 statistically selected
contracts we reviewed included specific rates for goods and services
to be provided such as labor rates, overtime hours and ceiling prices.
The contract documentation also included Federal Acquisition
Regulation clauses for areas such as travel or review of subcontractor
charges.[B]
Source: GAO analysis of test results.
[A] We did not find any exceptions during our test of 55 interagency
agreements randomly selected from a population of 494 interagency
agreements. (See appendix I for additional details related to the
interagency agreement population.) Based on the results of our review,
we are 95 percent confident that the actual error rate associated with
sampling error inherent in statistical sampling for this sample is not
more than 4.86 percent.
[B] We did not find any exceptions during our test of 32 contracts
randomly selected from a population of 51 contracts. (See appendix I
for additional details related to the contracts population.) We are 95
percent confident that the actual error rate associated with sampling
error inherent in statistical sampling for this sample is not more
than 3.92 percent.
[End of table]
In the course of testing the interagency agreement sample
transactions, we identified a new issue unrelated to our prior
recommendations. Specifically, the Federal Acquisition Regulation
(FAR) requires that any interagency agreement entered into under the
authority of the Economy Act, 31 U.S.C. § 1535, be supported by a
Determination and Findings document.[Footnote 11] The Determination
and Findings form identifies the responsible agencies to the agreement
(requesting agency and servicing agency), is prepared by the
requesting agency, and identifies the goods or services that are to be
provided by the servicing agency. In addition, it documents the
requesting agency's determination that, among other things, the use of
an interagency acquisition is in the best interest of the government,
and the supplies or services cannot be obtained as conveniently or
economically by contracting directly with a private source. The FAR
also requires that the requesting agency complete the Determination
and Findings form before placing an order for supplies or services
with another government agency.
In reviewing our statistical sample of 55 interagency agreements
[Footnote 12] with regard to implementation of our prior
recommendations, we identified 54 interagency agreements that were
required to comply with FAR requirements related to Determination and
Findings and found that 15 of them did not comply with these FAR
requirements. For these 15 cases, the required Determination and
Findings forms supporting the execution of interagency agreements
between the FBI and other federal entities were prepared and signed
after the interagency agreements were executed--in some cases more
than a year later.
* Three Determination and Findings forms were signed less than 3
months after the date of the related purchase orders were issued.
* One Determination and Findings form was signed between 3 months and
6 months after the date of the related purchase order was issued.
* Seven Determination and Findings forms were signed between 6 months
and 1 year later.
* Four Determination and Findings forms were signed more than a year
after the date of the related purchase orders.
Based on the results of our review, we are 95 percent confident that
the total percentage of interagency agreements executed by the FBI in
fiscal year 2009 that lacked a required Determination and Findings
form prior to the FBI placing the order could be as much as 39.5
percent.
FBI officials acknowledged that the Determination and Findings forms
were not completed prior to placing orders for goods and services and
provided two explanations. The interagency agreements and related
documentation for some of them were executed by a new employee who was
instructed to prepare and include the Determination and Findings forms
after the files had been reviewed by the Unit Chief, and a contracting
officer did not prepare and submit the interagency agreement
documentation to the Unit Chief in a timely manner for the others. The
FBI's monitoring of the interagency agreement process did not identify
that the Determination and Findings forms were not properly prepared
as required. Internal controls should be designed to assure that
ongoing monitoring occurs in the course of normal operations. By not
completing a required Determination and Findings form prior to issuing
a purchase order, obligating the agency for the purchase order amount,
the requesting agency risks obligating funds for supplies and services
or both that are not in the best interest of the government, and
executing a contract that is not in compliance with federal laws or
regulations.
Other Tests Identified Issues with Implementation of Certain FBI-wide
Policies and Procedures:
Of the remaining 13 corrective actions that involved the
implementation of FBI-wide policies and procedures, our testing found
indications that 3 of them may not have been fully or consistently
implemented. As shown in table 2, our tests of non-statistically
selected transactions identified implementation issues primarily in
policies and procedures related to review of contractor invoices and
accountability for purchased assets.
Table 2: Summary of Testing Results for Other Selected Transactions:
Recommendation: Establish policies and procedures so that appropriate
steps are taken during the invoice review and approval process for
every invoice cost category (i.e., labor, travel, other direct costs,
equipment, etc.) to verify that the (1) invoices provide the
information required in the contract to support the charges, (2) goods
and services billed on invoices have been received, and (3) amounts
are appropriate and in accordance with contract terms;
Summary of test results: We reviewed a non-statistical selection of 37
contractor invoices and found documented evidence that a detailed
review of the invoices had been performed by the FBI contracting
officer's technical representative (COTR) and contracting officer and
that the goods or services had been received. However, we found 5
invoices that included labor rates billed by the contractors and
subcontractors that were not included in the contract documentation.
FBI's review of these invoices failed to detect these issues.
Recommendation: Revise FBI policies and procedures to require that
accountable assets be entered into PMA immediately upon receipt rather
than within the current 30-day time frame;
Summary of test results: In our testing of accountable property,
selected on a non-statistical basis, we found that 406 of the 674
property items tested had not been recorded in the property management
system within 48 hours, as required by the FBI's revised policies and
procedures.
Recommendation: Require officials inputting data into PMA to enter (1)
the actual purchase order number related to each accountable equipment
item bought, (2) asset descriptions that are consistent with the
purchase order description, and (3) the physical location of the
property;
Summary of test results: Our testing of the 674 accountable property
items showed that the FBI did not always properly record property
information, including location and serial number, in PMA.
Source: GAO analysis of testing results.
[End of table]
Review and Approval of Contractor Invoices:
As shown in table 2, our detailed testing found instances in which the
FBI had not fully implemented the policies and procedures established
in response to our prior recommendations in this area. Internal
control standards require agencies to establish controls that
reasonably ensure, among other things, that funds, property, and other
assets are safeguarded against waste, loss, or unauthorized use. The
FBI requires contractors bidding on contracts to submit proposals that
include direct labor categories and rates, subcontractor labor
categories and rates, and other direct costs used to calculate the
total cost of their proposal. Contractor invoices must include key
information such as employee name, labor classification, rate of pay,
hours worked for billed labor charges and support for other charges.
FBI guidance states that staff performing invoice reviews should
compare the key data to the contractor proposal to verify the accuracy
of amounts charged.
During our review of a non-statistical sample of 37 contractor
invoices, we found unsupported charges of $292,684 on five invoices
submitted by three contractors for three separate contracts that
totaled $6,293,046 for prime contractor and subcontractor direct
labor, materials, and other direct costs. Specifically, these totals
include:
* We reviewed an invoice, dated October 5, 2009, submitted by one
contractor that included direct labor charges of $16,963 for one labor
group that was not included in the contractor's cost proposal.
[Footnote 13] The FBI acknowledged that the labor group was not listed
in the original proposal by the contractor but stated that during the
course of the contractual effort, the contractor determined there was
a need for labor to be performed on the contract that required the
skill set of a labor group that had not been included in the
contractor's cost proposal. In addition, the FBI stated that the rate
charged resulted in a savings to the FBI under this contract without
affecting the contract schedule or deliverables. However, the FBI did
not provide us with documentation supporting the FBI's approval of the
new labor rate for the contract prior to the period billed on the
invoice. In addition, the invoice included $50,000 for the work of a
subcontractor. In our review of the contractor's proposal related to
subcontractor labor, we noted that it included, for this specific
subcontractor, a proposed labor rate of $184.84 for 610 hours for a
total of $112,752. However, the invoice documentation did not include
any information such as the name of the subcontractor employee(s), the
labor category, the hours worked, or the rate of pay under other
direct costs that would allow the FBI to verify the accuracy and
validity of the charges.
* In our review of two invoices submitted by another contractor, we
found that the contractor had billed the FBI $97,851 for direct labor
and subcontractor labor at rates, six for the contractor and three for
a subcontractor, which were not included in the contractor's proposal.
* Similarly, in our review of two invoices submitted by a contractor
for a third contract we found that they included labor charges of
$127,870 at hourly labor rates, for four contractors and two
subcontractors, which were not supported by the contractor's proposal.
We also discussed our findings related to the second and third
contractor's invoices with FBI officials, and they explained that in
reviewing the invoices they focus on the status of the project and its
various components or tasks. They also stated that both contractors
submitted monthly reports to the FBI that included the actual costs of
the project for each current month as well as the costs of the project
to date and compared the costs to project's budget. However, the FBI
also stated that it did not require the contractors to provide
analyses for cost variances except when variances exceed thresholds
set for the two contracts. Without verifying labor groups and labor
rates billed on contractor invoices against the contractor's proposal
as required by FBI policy, the FBI is at increased risk that it will
not identify erroneous or improper billings and will disburse
government funds for unallowable contractor charges.
Accountability for Purchased Assets:
As shown in table 2, we also found instances in which the FBI did not
record accountable property items in its system in a timely manner and
did not accurately record key accountability information such as
location and serial numbers as required by the FBI's policies and
procedures.
* The FBI's revised policy, which is in response to our prior
recommendation, requires that accountable property be recorded into
the Property Management Application (PMA) within 48 hours of receipt
instead of within 30 days of receipt, which was the FBI's policy at
the time our 2006 report. Internal control standards require agencies
to establish controls that reasonably ensure, among other things, that
funds, property, and other assets are safeguarded against waste, loss,
or unauthorized use. In our review, we found 406 pieces of accountable
property out of the 674 we tested had not been recorded in PMA within
48 hours of being received as now required and that some had not been
recorded until more than a month after being received.[Footnote 14]
However, we also noted that the FBI, while not adhering to its more
stringent current policy, had recorded 90.7 percent of the accountable
property we tested within 30 days of receipt. This represents an
improvement from the situation that existed at the time of our Trilogy
work. During its agencywide upgrade of hardware and software under the
Trilogy project, the FBI only recorded 28.4 percent of accountable
property that we reviewed, within 30 days of receipt, as reported in
our 2006 report.
FBI management acknowledged that property was not being recorded in
compliance with its policy. FBI management officials explained that
this condition was due to property being ordered and received by
numerous FBI divisions and field offices and that some of these
divisions and field offices, did not have dedicated staff for
recording purchased assets in PMA immediately upon receipt of the
property. This situation serves to delay the recording of the assets
in PMA. In addition, they explained that some accountable property
ordered by the various FBI offices is delivered to FBI storage
facilities and held for security reasons before being delivered to the
end user and that these properties are not recorded in PMA until
received by the end user. Recording of property in PMA is critical in
establishing accountability. The longer it takes to record property in
PMA, the greater the risk that property may be stolen or lost without
detection by the FBI.
* In 2006, the FBI issued a policy to all FBI divisions that made
recording the location field when accountable property is added to PMA
or when corrections to records are made, mandatory. In addition, the
policy stated that the information recorded in the location data field
is the location of the property within the division or "legat."
[Footnote 15] In reviewing the data entry screens for recording assets
in the FBI's property management application we noted that there are
fields that can be utilized by the property custodian to provide a
location within the division or legat. In our review of the PMA
screens for the selected property items we found that the information
recorded in PMA for 80 of the 674 records did not provide sufficient
information on the location of the property within the division as
required.
In addition, we found that the serial number field was either blank,
incomplete, or had the entry "719TOBEADDED" in the PMA records for 14
of the 674 tested assets. In addition, the five records that had
"719TOBEADDED" recorded, had not been updated for more than a year. We
also found 45 PMA records in which the model description was entered
as "TO BE ADDED." The model description was missing for all 45 assets
for more than a year, with 6 of these assets lacking this information
for almost 2 years since they were first entered in PMA.
* We brought these findings above to the attention of FBI officials.
With regard to the location information, the FBI stated that while the
location field is mandatory, there is no requirement on the amount of
detail to be listed. However, as mentioned previously, the 2006 policy
issued by the Asset Management Unit clearly states that the
information recorded in the location data field is the location of the
property within the division or legat. The lack of key information
such as model, manufacturer, description, serial number, and specific
location information in PMA as required by FBI policy would limit its
ability to investigate assets reported as missing during physical
inventories. In addition, inadequate location information results in
the lack of a systematic means of identifying where an asset is
located or when it is moved, transferred, or disposed of.
Conclusions:
The FBI has taken action to address 26 of the 27 recommendations we
made in our prior Trilogy and Sentinel reports. Many of these actions
involved developing policies and procedures. Developing and
communicating policies and procedures, while critical, is only the
first step that the FBI must take to address the identified internal
control weaknesses. Management must also ensure that the policies and
procedures are effectively implemented throughout the agency. Although
we found that the FBI had effectively implemented policies and
procedures related to interagency agreements and contracts, our tests
on the statistical selected transactions showed that additional action
is needed to ensure that Determination and Findings forms are properly
completed before the FBI enters into interagency agreements. With an
estimated 40 percent of its interagency agreements lacking a properly
completed Determination and Findings form, the FBI increases the risk
that it is obligating funds for supplies and/or services that are not
in the best interest of the government or executing a contract that is
inconsistent with federal laws or regulations. Further, we identified
several other areas where the implementation of policies and
procedures, primarily related to review of contractor invoices and
accountability for purchased assets, may need to be strengthened. Our
testing of selected invoice transactions identified unsupported labor
categories and rates billed by contractors. This situation points to a
lack of thorough review of contractor invoices. This weakness puts the
FBI at risk of making payments to contractors for questionable or
improper charges. Additionally, our testing of selected accountable
property items identified property items that were not timely or
accurately recorded. This problem decreases the FBI's ability to
adequately safeguard its accountable property. Identifying and
correcting any systemic weaknesses in these areas will be critical to
achieving sustainable improvements in the FBI's agencywide controls
over its procurement activities.
Recommendations:
We recommend that the Director of the FBI direct the Chief Financial
Officer take the following three actions.
* Enhance the monitoring of the interagency agreements process to
ensure that Determination and Findings forms are prepared, when
applicable, in accordance with federal and agency requirements.
* In the area of contractor invoice review and approval, we recommend
the Director of the FBI to direct the Chief Financial Officer to:
- review agencywide implementation of the new or revised policies and
procedures related to our prior recommendations to verify that invoice
costs are in accordance with contract terms to determine if the
indications of issues we identified in this report represent systemic,
agencywide implementation deficiencies, and:
- take appropriate, cost-effective actions to better ensure agencywide
compliance with the applicable policies and procedures.
* In the area of property accountability, we recommend the Chief
Financial Officer be directed to:
- review agencywide implementation of the new or revised policies and
procedures related to our prior recommendations to record specific
data for acquired assets within specified time frames to determine if
indications of issues we identified in this report represent systemic,
agencywide implementation deficiencies, and:
- take appropriate, cost-effective actions to better ensure agencywide
compliance with the applicable policies and procedures.
Agency Comments:
In its written comments, FBI concurred with our recommendations and
stated that it has already initiated changes to its processes and
procedures to address our recommendations. FBI stated that it provided
interagency agreement training to its contract specialists and is now
testing an application to monitor, collect, and document information
for all FBI interagency agreements. The FBI further stated that it is
taking steps to ensure that invoices are properly reviewed, including
strengthening its procurement training curriculum and modifying the
current contract specialist file review checklist to include comparing
invoiced labor categories and costs to labor categories and costs in
supporting contracts. Additionally, the FBI stated that it has
developed an accountable property officer training course intended to
help ensure that its divisions have an effective and efficient
property management program, and that actions are under way to
configure a new property management application to include additional
controls to better track physical location of purchased assets. If
properly implemented, the activities outlined in FBI's letter should
help further improve FBI's accountability for future interagency
acquisitions and accountable property. FBI's comments are reprinted in
their entirety in appendix III. FBI also provided technical comments,
which we have incorporated as appropriate.
As we agreed with your office, unless you publicly announce the
contents of this report earlier, we plan no further distribution of it
until 30 days from the report date. At that time, we will send copies
to interested congressional committees. We will also send copies to
the Attorney General, the Director of the Federal Bureau of
Investigation, and other interested parties. The report will also be
available at no charge on GAO's Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-9471 or franzelj@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 IV.
Sincerely yours,
Signed by:
Jeanette M. Franzel:
Managing Director, Financial Management and Assurance:
[End of section]
Appendix I: Scope and Methodology:
[End of section]
To address our first objective to determine whether the FBI's new or
revised policies and procedures and other specific corrective actions
were sufficient to address the 27 recommendations we made in our
Trilogy and Sentinel reports, we performed an assessment of the FBI's
corrective action plans and reviewed additional supporting
documentations received from the FBI. Specifically, in its required 60-
day letter to Congress, the FBI explained the corrective actions it
had taken or planned to take to address the issues we identified in
our report.[Footnote 16] In addition, in mid-2006, the FBI submitted
additional documentation to GAO which included revised or updated
corrective action plans for each recommendation. Also, in the third
quarter of 2009, the FBI submitted additional documentation to GAO for
selected recommendations to support additional corrective action steps
taken since 2006. We also identified key operations and management
officials at the FBI responsible for the development of the corrective
actions and conducted interviews and walk-throughs to ensure that we
fully understood the corrective actions. We reviewed additional
information and documentation identified during our interviews, as
well as new and revised policies and procedures and training materials
received from the FBI, and utilized this information to make a
determination of whether the corrective actions were adequately
designed to address our recommendations.
To address our second objective to determine whether there were any
indications of implementation issues related to the policies and
procedures that the FBI developed to address 17 of the 27
recommendations, we selected statistical samples of interagency
agreements and contracts. We then non-statistically selected purchase
orders, invoices, and accountable property from the contracts selected
in the statistical samples and performed a variety of detailed tests.
In our review of the FBI's corrective action plans, we determined that
the agency had continued to take corrective actions to address our
recommendations through fiscal year 2008. Therefore, in order to
obtain a more representative population of transactions that had
occurred after the last corrective actions had been put in place, we
decided to select statistical samples from a population of
transactions that occurred in fiscal year 2009.
Because we selected statistical samples for testing implementation of
certain new or revised policies and procedures, we assessed the
reliability of the FBI's contracting, interagency-agreement, and
property-data files by first identifying and documenting the controls
in place at the FBI for ensuring accurate and complete data is
recorded into information systems during the FBI's contracting,
interagency-agreement, and property-acquisition processes and then
assessing whether these controls appeared adequate. We inquired about
the processes by which interagency agreements, contracts, and purchase
orders are completed and recorded and developed an understanding of
the controls designed to ensure data entered into FMS for interagency
agreements and contracts is accurate and complete. In addition, we
reviewed DOJ's annual financial statement internal control reports for
fiscal years 2007, 2008, and 2009 to identify any material weaknesses
or reportable conditions related to the information systems identified
in the step above. We also analyzed data listings to identify any
anomalies in the data fields such as blank cells or inconsistent
naming conventions for contracts and interagency agreements and
obtained explanations for any anomalies noted. Based on these steps,
we determined the FBI's contract, interagency-agreement, and property-
data files were sufficiently reliable to address the objectives of
this report.
We selected a statistical sample of 55 interagency agreements from a
total population of 494 interagency agreements executed by the FBI
during fiscal year 2009. In our testing of interagency agreements, we
verified that all agreements clearly defined the roles and
responsibilities relative to contract administration including invoice
submission for both parties. During our testing, we also considered
new guidance on interagency agreements issued by the Office of
Management and Budget's (OMB) Office of Federal Procurement Policy
that the FBI disseminated to all of its procurement chiefs.[Footnote
17]
We selected a statistical sample of 32 contracts from a population of
51 contracts executed in fiscal year 2009. In addition, for each of
the 32 contracts in the sample, we selected all related purchase
orders for testing. The total number of purchase orders selected for
testing was 34. Our contract and purchase-order testing consisted of
determining whether the contracts and/or purchase orders (1) clearly
specified key cost determination provisions; (2) clearly reflected the
appropriate Federal Acquisition Regulation travel cost requirements;
and (3) contained provisions regarding the contractor's review of
subcontractor charges. In addition, for purchase orders only, we
determined whether the purchase orders were sufficiently detailed to
verify the receipt of property and other goods and services.
We obtained a listing of all invoices that had been submitted to the
FBI for the purchase orders we selected noting that invoices had not
yet been submitted to FBI for 7 of the 34 purchase orders. A total of
110 invoices had been submitted for the other 27 purchase orders we
selected--one invoice each had been submitted for 16 of the purchase
orders, two invoices each for 3 of the purchase orders, and three or
more invoices had been submitted for the remaining 8 purchase orders.
In selecting invoices for testing, we selected all invoices for those
purchase orders that only had either one or two invoices. For each of
the 8 purchase orders with three or more invoices, we selected the
invoice with the highest dollar value for testing and one other
invoice on a non-judgmental basis. The total number of invoices
selected for testing was 37. Our invoice testing consisted of
determining whether the contractor's invoice and supporting
documentation (1) provided evidence of the FBI review and approval of
the charges by the parties designated in the contract; (2) included
evidence that goods and services billed on the invoice were received;
(3) provided sufficient information to support the charges; (4)
included amounts that were appropriate and in accordance with contract
terms; and (5) provided evidence that the FBI properly documented the
resolution of invoice discrepancies.
We also asked the FBI to provide a listing of all accountable property
included in its Property Management Application (PMA) for each of the
34 purchase orders we reviewed. According to the FBI's listing, 20 of
the 34 purchase orders included accountable property that had been
recorded in the FBI's PMA. There were a total of 674 individual items
of accountable property for the 20 purchase orders. We included all
674 items of accountable property for our property testing. Our
property testing consisted of determining whether the FBI (1) entered
in PMA the appropriate purchase order number, asset description, and
physical location of the accountable property purchased; (2) entered
all accountable property in PMA within the time frame specified in the
FBI's policy; (3) assigned bar codes to the accountable property when
received and annotated the assigned bar codes in the receiving reports
and in PMA; (4) properly documented any accountable property rejected
immediately upon delivery; and (5) properly updated the PMA records of
all accountable property returned after being accepted.
We requested comments on a draft of this report from the FBI. We
received written comments from the FBI on August 11, 2011, and have
summarized those comments in the Agency Comments section of this
report. FBI's comments are reprinted in appendix III. We conducted
this performance audit from February 2010 through September 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform our audits 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 II: Status of Trilogy and Sentinel Recommendations and
Actions Taken by the FBI:
Trilogy recommendations:
Interagency agreements and contract Administration:
Recommendation area/recommendations: 1. To improve FBI's controls over
its review and approval process for cost-reimbursement type contract
invoices, the Director of FBI should instruct the Chief Financial
Officer to establish policies and procedures so that future
interagency agreements establish clear and well-defined roles and
responsibilities for all parties included in the contract
administration process, including those involved in the invoice review
process, such as contracting officers, technical point of contacts,
contracting officer's technical representatives, and contractor
personnel with oversight and administrative roles;
Development of policies and procedures and other actions taken: In
July 2008, FBI's Senior Procurement Executive issued Procurement
Guidance Document 08-10 to all Bureau Procurement Chiefs that
incorporated a memorandum from the Office of Federal Procurement
Policy (OFPP), Office of Management and Budget (OMB), which discussed
new guidance on interagency agreements. The new OFPP guidance, issued
in June 2008, requires the requesting agency and the servicing agency
to assign specific roles for each agency and is to be fully
implemented for all interagency agreements executed after November 3,
2008. The guidance discusses, among other things, the need for
defining roles such as the COTR and establishing specific
responsibilities for those roles. It further elaborates on
responsibilities for identifying an appropriate invoice review
official prior to submittal of the first invoice and inspecting and
rejecting contract work as necessary;
Status: Closed.
Recommendation area/recommendations: 2. To improve FBI's controls over
its review and approval process for cost-reimbursement type contract
invoices, the Director of FBI should instruct the Chief Financial
Officer to establish policies and procedures so that labor rates,
ceiling prices, treatment of overtime hours, and other key terms for
cost determination are clearly specified and documented for all
contracts, task orders, and related agreements;
Development of policies and procedures and other actions taken: In
December 2008, FBI's Policy Training Unit created an intranet site,
the Contract Specialist Corner, to provide contract
specialists/contract officers with procurement information and
guidance. The site includes links to procurement guidance and
directives issued by DOJ, the FBI's Policy Training Unit, and Federal
Acquisition Regulation (FAR) circulars issued by the FAR council, as
well links to standard procurement forms used in the procurement
process. The site also provides access to contract execution
checklists for different contract types, as well as standard FAR
clauses applicable to various types of acquisitions including clauses
related to labor rates, ceiling prices, treatment of overtime hours,
and other key contract terms. In addition, in 2009, the Policy
Training Unit created a separate intranet site for contracting officer
technical representatives (COTR) as well as one for field offices to
provide on-line access to procurement guidance and documentation. In
addition, since January 2009 the Policy Training Unit has held monthly
training sessions for contract specialists/contracting officers to
ensure that directives issued by DOJ and FBI are being implemented
properly;
Status: Closed.
Recommendation area/recommendations: 3. To improve FBI's controls over
its review and approval process for cost-reimbursement type contract
invoices, the Director of FBI should instruct the Chief Financial
Officer to establish policies and procedures so that an appropriate
process is in place to assess the adequacy of contractor's review and
documentation of submitted subcontractor charges before such charges
are paid by FBI;
Development of policies and procedures and other actions taken: In
December 2008, FBI's Policy Training Unit created an intranet site,
the Contract Specialist Corner, to provide contract
specialist/contract officers with procurement information and
guidance, including references (and hyperlinks) to all procurement
guidance documents that have been issued by DOJ, the Policy Training
Unit, and FAR circulars issued by the FAR council. In addition, the
site includes a section, FAR Matrix of Clauses, which provides
information on applicable FAR clauses, including guidance useful to
contract specialists in determining whether subcontractor clauses are
necessary. In addition, in 2009, the Policy Training Unit also created
two other separate intranet sites for contracting officer technical
representatives (COTR) and Field Offices. The COTR site includes links
to procurement guidance that includes discussion of contract
administration responsibilities related to the COTR, prime contractor
and subcontractor, as well as provides access to the documentation
related to the activities of the COTR. In addition, since January
2009, the Policy Training Unit has held monthly training sessions for
contract specialists/contracting officers to ensure that directives
issued by DOJ and FBI are being implemented properly;
Status: Closed.
Recommendation area/recommendations: 4. To improve FBI's controls over
its review and approval process for cost-reimbursement type contract
invoices, the Director of FBI should instruct the Chief Financial
Officer to establish policies and procedures so that future contracts
clearly reflect the appropriate Federal Acquisition Regulation travel
cost requirements, including the purchase of the lowest standard,
coach, or equivalent airfare;
Development of policies and procedures and other actions taken: In
December 2008, FBI's Policy Training Unit created an intranet site,
the Contract Specialist Corner, to provide contract
specialist/contract officers with procurement information and
guidance, including references to all procurement guidance documents
issued by DOJ, the Policy Training Unit, and FAR circulars issued by
the FAR council, including those related to travel cost requirements
(i.e., using the lowest standard coach or equivalent airfare).
Specifically, the site includes a section, FAR Matrix of Clauses,
which provides information on applicable FAR clauses, including those
related to travel cost requirements. In addition, since January 2009,
the Policy Training Unit has held monthly training sessions for
contract specialists/contracting officers to ensure that directives
issued by DOJ and FBI are being implemented properly;
Status: Closed.
Review and Approval of Contractor Invoices:
Recommendation area/recommendations: 5. To improve FBI's controls over
its review and approval process for cost-reimbursement type contract
invoices, the Director of FBI should instruct the Chief Financial
Officer to establish policies and procedures so that appropriate steps
are taken during the invoice review and approval process for every
invoice cost category (i.e., labor, travel, other direct costs,
equipment, etc.) to verify that the (1) invoices provide the
information required in the contract to support the charges, (2) goods
and services billed on invoices have been received, and (3) amounts
are appropriate and in accordance with contract terms;
Development of policies and procedures and other actions taken: FBI
has established policies and procedures designed to provide guidance
on its invoice review and approval process. Specifically, FBI issued
two electronic communications that provided guidance on the invoice
review and approval process. The first electronic communication,
titled "Invoice Processing - Purchase Orders and Contracts," states
that the Contracting Officer is responsible for ensuring that the
requirements for a proper invoice are attached and incorporated as a
condition of the purchase order and for contracts, ensuring that the
applicable clause is included. The second electronic communication,
titled "Vendor Invoice and Payment Matter," provides guidance on the
information that constitutes a proper invoice and on the documentation
required to support the payment of invoices. FBI incorporated these
electronic communications in its Manual of Administrative Operations
and Procedures (MAOP) Part 2 - Section 6-5.2, titled "Invoices under
Purchase Orders/Contracts," issued in February 2007. The section
states that prior to submitting an invoice to the FBI's Contracting
Officer (CO) for approval and payment, the FBI requesting division is
responsible for ensuring that goods and services are received in
accordance with contract terms. Section 6-5.2 of the MAOP also states
that the FBI CO is responsible for verifying that all required
information is on the invoice before approving it;
Status: Closed.
Recommendation area/recommendations: 6. To improve FBI's controls over
its review and approval process for cost-reimbursement type contract
invoices, the Director of FBI should instruct the Chief Financial
Officer to establish policies and procedures so that the resolution of
any questionable or unsupported charges on contractor invoices
identified during the review process is properly documented;
Development of policies and procedures and other actions taken: FBI
has established policies and procedures related to properly
documenting the resolution of any questionable or unsupported charges
on invoices identified during the invoice review process.
Specifically, Part 2, Section 6-9.3.3 of FBI's Manual of
Administrative Operations and Procedures (MAOP), version dated
2/26/07, titled "Review of Invoices," and FBI's Electronic
Communication titled "Vendor Invoice and Payment Matter" specifies
requirements for FBI to properly document the reasons for determining
that an invoice is improper, the date the invoice is returned to the
vendor, and the date a corrected invoice is received from the vendor;
Status: Closed.
Recommendation area/recommendations: 7. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to establish policies and
procedures so that invoices are paid only after all verified purchase
order and receipt documentation has been received by FBI payment
officials and reconciled to the invoice package;
Development of policies and procedures and other actions taken: In
November 2006 FBI issued a policy titled, "Implementation of Invoice
Submission Form for Invoices and Intragovernmental Payment and
Collection Process by CPCSU," 319E-HQ-A1487524-FD. This policy
requires that all invoices sent to the commercial payment unit
beginning in November 2006 must include a completed invoice submission
form as the cover sheet. The new required form includes the following
fields to be completed by the submitting division: vendor number,
invoice date, acceptance date, purchase order number, purchase order
line number, purchase order quantity, total amount, date the COTR and
the contracting officer (1) received the invoice form, (2) approved
it--with their signature, and (3) the date they sent it on to the next
responsible party. Collectively, these actions to establish policies
requiring confirmation of receipt of goods and services before payment
addresses our recommendation;
Status: Closed.
Recovery of Contractor Payments:
Recommendation area/recommendations: 8. To address issues on the
Trilogy project that could represent opportunities for recovery of
costs, the Administrator of General Services, in coordination with the
Director of FBI, should determine whether other contractor costs
identified as questionable in this report should be reimbursed to FBI
by contractors;
Development of policies and procedures and other actions taken:
(applies to # 8, 9, 10, and 11) In January 2007 GSA requested, on
behalf of the FBI, that Defense Contract Audit Agency (DCAA) perform
post-award audits of direct costs incurred and billed by contractors
under the FBI's Trilogy project. In March 2008, DCAA reported the
results of its audit related to SAIC reporting questioned costs of
$3.7 million. As a result of this audit, FBI recovered $3.2 million
from SAIC. In December 2008, DCAA reported the results of its audit of
the direct costs incurred and billed by Computer Sciences Corporation
(CSC) reporting questioned costs of $14.95 million, $9.7 of which was
related to labor charges. In addition to questioned costs related to
labor rates exceeding ceiling rates, DCAA reported additional CSC
questioned costs of $1,825,952 related to airfare costs because the
costs were inadequately supported and exceeded the lowest customary
standard coach or equivalent airfare, and $979,187 of labor costs
because of lack of personnel qualifications or lack of supporting
documentation that shows the employees' labor qualifications. DCAA's
report also incorporated evaluations of costs incurred by the largest
subcontractors that performed under CSC's task order. The report
questioned costs for subcontractors CACI, DigitalNet,
PlanetGov/Apptis, Inc. and others totaling $5.1 million. The types of
subcontractor questioned costs reported by DCAA included 1) supporting
timesheets that were either not certified by the consultant or not
approved by an appropriate/approving authority 2) use of personnel
that did not meet the minimum labor qualifications, and 3) unsupported
or inadequately supported transactions. With regard to these
questioned costs, in March 2009, the Department of Justice, Office of
Inspector General, began an investigation to determine whether the
billings were potentially fraudulent and involved criminal conduct by
CSC and its subcontractors. In commenting on a draft of this report,
the FBI informed GAO that the Inspector General's report on this
matter was under review by OIG management;
Status: Closed.
Recommendation area/recommendations: 9. To address issues on the
Trilogy project that could represent opportunities for recovery of
costs, the Administrator of General Services, in coordination with the
Director of FBI, should further investigate whether DynCorp
Information Systems' labor rates exceeded ceiling rates and pursue
recovery of any amounts determined to have been overpaid;
Status: Closed.
Recommendation area/recommendations: 10. To address issues on the
Trilogy project that could represent opportunities for recovery of
costs, the Administrator of General Services, in coordination with the
Director of FBI, should confirm the Science Applications International
Corporation's (SAIC) informal Extended Work Week policy and work with
SAIC to determine and resolve any overpaid amounts;
Status: Closed.
Recommendation area/recommendations: 11. To address issues on the
Trilogy project that could represent opportunities for recovery of
costs, the Administrator of General Services, in coordination with the
Director of FBI, should consider engaging an independent third party
to conduct follow-up audit work on contractor billings, particularly
areas of vulnerability identified in this report;
Status: Closed.
Accountability for purchased assets:
Recommendation area/recommendations: 12. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to reinforce existing policies
and procedures so that when assets are delivered to FBI sites, they
are verified against purchase orders and receiving reports. Copies of
these documents should be forwarded to FBI officials responsible for
reviewing invoices as support for payment;
Development of policies and procedures and other actions taken: The
FBI has reinforced policies and procedures related to verifying assets
received to purchase orders and receiving reports. Specifically, FBI
issued an Electric Communication to all divisions in November 2005 to
reinforce FBI's policy that all accountable property be entered in the
Property Management Application (PMA) immediately upon receipt and
that data recorded in FBI's financial management system must include
the purchase order number and the destination division. The
information entered into the financial management system is to be
immediately uploaded to PMA for verification of the accuracy of
property being recorded in PMA with specific purchase orders. In
addition, the FBI issued an electronic communication to all divisions
in November 2006 to implement a new invoice submission form to be used
with all commercial invoices to improve the information provided to
the payment unit for invoices. The electronic communication required
that the invoice submission form include various fields, including,
purchase order line number - purchase order line number to charge the
invoice, purchase order quantity - quantity to be paid for the
invoice, and Total amount - total amount to be paid by purchase order
line;
Status: Closed.
Recommendation area/recommendations: 13. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to establish policies and
procedures so that (1) purchase orders are sufficiently detailed so
that they can be used to verify receipt of equipment at FBI sites, and
(2) contractor invoices are formatted to tie directly to purchase
orders and facilitate easy identification of equipment received at
each FBI site;
Development of policies and procedures and other actions taken: The
FBI formed the Policy Training Unit in 2007 which is responsible for
all acquisition policy and acquisition training within the FBI,
including implementation, updates, and training of specialized
acquisition matters. Since January 2009, the Policy Training Unit
holds monthly contractor specialist training sessions at which
participants discuss new procurement guidance issued by DOJ and
procurement directives issued by FBI and implementation. According to
FBI, during these procurement training sessions, the Policy Training
Unit staff have stressed the importance to contracting officers of
generating purchase orders with a sufficient level of detail so that
the requesting division can use the purchase order to verify equipment
receipt. In addition, the FBI formed the Acquisition Strategy and
Planning Unit in March 2006. The Acquisition Strategy and Planning
Unit developed training materials for acquisition planning that
included guidance on the FD-369, the requisition form which is also
used in generating purchase orders, which states that equipment and
services be on separate lines;
Status: Closed.
Recommendation area/recommendations: 14. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to establish a policy to require
that upon receipt of property at FBI sites, FBI personnel immediately
identify all accountable assets and affix bar codes to them;
Development of policies and procedures and other actions taken: In
order to record an asset on PMA it must have a bar code assigned. In
November 2005, FBI issued an electric communication to reinforce
accountable property policies and procedures by requiring that all
divisions record accountable property in PMA within 48 hours of being
received. If fully and effectively implemented, this policy should
improve the FBI's accountability over purchased assets;
Status: Closed.
Recommendation area/recommendations: 15. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to revise FBI's policies and
procedures to require that all bar codes are centrally issued and
tracked through periodic reconciliation of bar codes issued to those
used and remaining available. Assigned bar codes should also be noted
on a copy of the receiving report and forwarded to FBI's Property
Management Unit;
Development of policies and procedures and other actions taken: FBI
has taken action to strengthen controls that help ensure all
accountable property is bar coded and properly recorded by issuing a
March 2009 electronic communication (approved by the Chief Financial
Officer) that requires all FBI offices to perform a weekly review of
the On Order Report to ensure that all property that has been
receipted in FBI's financial management system is also added to PMA.
The On Order Report lists all property items associated with a
particular purchase order that do not show having been recorded in the
PMA, thus providing FBI with the ability to identify and investigate
potentially missing and/or unrecorded property items. Also, our
September 2010 walk-through of the process to enter assets into PMA
found that the bar code numbers are annotated on copies of the
receiving reports that are forwarded to the property custodian as we
had recommended. In addition, we noted that the FBI's Asset Management
Unit is solely responsible for issuing bar codes to FBI offices and
the unit requires that all offices sign an FD-281 verifying receipt of
bar codes;
Status: Closed.
Recommendation area/recommendations: 16. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to revise FBI policies and
procedures to require that accountable assets be entered into PMA
immediately upon receipt rather than within the current 30-day time
frame;
Development of policies and procedures and other actions taken: In
November 2005, FBI issued an electric communication to reinforce
accountable property policies and procedures by requiring that all
divisions record accountable property in PMA within 48 hours of being
received;
Status: Closed.
Recommendation area/recommendations: 17. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to require officials inputting
data into PMA to enter (1) the actual purchase order number related to
each accountable equipment item bought, (2) asset descriptions that
are consistent with the purchase order description, and (3) the
physical location of the property;
Development of policies and procedures and other actions taken: The
FBI has taken action to enhance its PMA to help ensure the accuracy
and completeness of reporting on the status of property on order, the
On Order Report, including installing a system edit limiting data
entry to those transactions with valid purchase order numbers.
Specifically, FBI issued an electric communication "Property
Management Application Policy Change" on 02/15/2006 that provides that
assets added to PMA must include data in the PMA location field. We
confirmed that the FBI developed and put in place system edit checks
that were effective in ensuring that only valid purchase order numbers
were recorded into PMA and that related purchase order information was
automatically and accurately uploaded from the financial management
system into PMA;
Status: Closed.
Recommendation area/recommendations: 18. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to establish policies and
procedures related to the documentation of rejected or returned
equipment so that the (1) equipment that is rejected immediately upon
delivery is notated on the receiving report that is forwarded to FBI
officials responsible for invoice payment and (2) equipment that is
returned after being accepted at an FBI site (e.g., items returned due
to defect) is annotated in PMA, including the serial number and
location of any replacement equipment, under the appropriate purchase
order number;
Development of policies and procedures and other actions taken: In
September 2006, FBI issued an electric communication to all divisions
requiring that the Asset Management Unit be notified of any
accountable property returned to vendors to ensure that the return of
the property is recorded in PMA. If a replacement is provided by the
vendor the Asset Management Unit is to revise the PMA records to
provide descriptive information for the new property item (serial
number and barcode) and show it as "Active" and show the barcode of
the returned piece of property as "Inactive." In addition, when a
piece of accountable property delivered to FBI is returned and a
replacement is to be provided by the vendor, the item is to remain on
FBI's On Order Report until a replacement is received and not to be
recorded in PMA. We also noted, during our discussions with officials
from the FBI's commercial payment unit that FBI's financial management
system will not allow a disbursement of funds until the property has
been recorded as received;
Status: Closed.
Recommendation area/recommendations: 19. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to expand the next planned
physical inventory to include steps to verify the accuracy of asset
identification information included in PMA;
Development of policies and procedures and other actions taken: FBI
issued an electric communication "2009 Wall-to-Wall Inventory of
Property, Plant, Equipment, and Issued Personal Property" that
included additional directions to the inventory staff to ensure that,
property information recorded in PMA was accurate. Specifically, the
directive included detailed steps on how to request changes to correct
errors in the manufacturer or model description fields in PMA for
property identified during the inventory. The directive included as an
attachment, a form titled "2009 INVENTORY CHANGES FOR MANUFACTURER &
MODEL #s" to request a change or modification to these fields;
Status: Closed.
Recommendation area/recommendations: 20. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to reassess overall physical
inventory procedures so that all accountable assets are properly
inventoried and captured in the PMA system and that all unlocated
assets are promptly investigated;
Development of policies and procedures and other actions taken: FBI
has reassessed its inventory procedures as reflected in changes to
instructions provided to all divisions through electronic
communications in advance of wall-to-wall inventories. The FBI issued
an electronic communication in advance of the wall to wall inventory
titled "2009 The Wall-to-Wall Inventory of Property, Plant, Equipment
and Issued Personal Property" on 3/31/2009 for the wall-to-wall
inventory to be held beginning 4/13/09. The electronic communication
includes instructions that are related to findings we reported. For
example, the 2009 electronic communication states that during the
inventory, only the PMA custodians will have access to change only the
serial number due to the fact that 95% of the manufacturer and/or
model information has now been standardized on PMA. In addition, the
2009 electronic communication included additional language that
stressed a complete inventory, stating that all additions must be
added to the PMA during the inventory period in order to comply with a
"fully completed" wall-to-wall inventory because failure to comply
with the procedure would result in an "incomplete" inventory. The 2009
electronic communication also included new language on property issued
to individual employees and contractors, which stated, Each office is
to ensure that the issued personal property for each employee and
contractor is inventoried. Discrepancies for issued personal property
are to be forwarded to the appropriate FBIHQ Program Managers and the
Asset Management Unit should be notified of these changes. Lastly, the
electronic communication included a section titled "Required
Procedures for Concluding Inventory" that included additional language
related to lost and stolen property and additions;
Status: Closed.
Recommendation area/recommendations: 21. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to establish an internal review
mechanism to periodically spot check whether the steps listed above-
including verifications of purchase orders and receiving reports
against received equipment, immediate identification and bar coding of
accountable assets, maintenance of accurate asset listings, prompt
entry of assets into PMA, documentation of rejected and returned
equipment, and improved bar coding and inventory procedures-are being
carried out;
Development of policies and procedures and other actions taken:
Beginning in 2008, the FBI's Finance Division's audit unit expanded
its audit coverage to include conducting audits of compliance with FBI
policies and procedures for review and approval of contractor
invoices, government purchase card usage, and oversight for the semi-
annual audits of property and equipment at the FBI field offices and
divisions. Further, the Audit Unit Chief informed us that his unit
expanded the scope of its audits to include audits of internal
controls related to accountable property on a periodic basis as needed
in response to significant events at FBI. For example, in fiscal year
2009 the FBI initiated the Next-Generation Workstation Tech Refresh
program (NGW) to purchase approximately 47,000 new computers. The
Finance Division audit unit performed on-site reviews at the Seattle
field office and the Portland field office to determine whether
required controls over property accountability were in place as the
computers from the NGW program were being distributed throughout the
agency;
Status: Closed.
Recommendation area/recommendations: 22. To improve FBI's
accountability for purchased assets, the Director of FBI should
instruct the Chief Financial Officer to investigate all missing, lost,
and stolen assets identified in this report to (1) determine whether
any confidential or sensitive information and data may be exposed to
unauthorized users and (2) identify any patterns related to the
equipment (e.g., by location, property custodian, etc.) that
necessitates a change in FBI policies and procedures, such as
assignment of new property custodians or additional training;
Development of policies and procedures and other actions taken: In
March 2011, the FBI provided us with documentation on the results of
its investigation into the status of the over 1,200 assets that
acknowledged that 134 assets remained unaccounted for. The assets that
remain unaccounted for include some that could contain sensitive
information, such as desktop computers, laptops, and servers. The FBI
has not provided an analysis to identify any patterns related to these
assets that would be helpful for identifying any needed changes to FBI
policies and procedures;
Status: Open.
Sentinel recommendations:
Accountability for purchased assets:
Recommendation area/recommendations: 23. We recommend that the
Director of the FBI direct the Sentinel Program Manager to modify
existing Sentinel policies and procedures to require the Sentinel
property manager to verify for every property shipment that data in
the Lockheed Martin database are complete and accurate before using
these data to create or update FBI's official property records in PMA;
Development of policies and procedures and other actions taken: FBI
modified its existing policies and procedures to include a policy of
verifying accuracy and completeness of data in the Lockheed Martin
database. Specifically, Section 2.2.3 of FBI's Property Management
Policy & Procedures, prepared by Office of IT Program Management,
Sentinel Program and Business Management Team, version dated 9/3/2008,
titled "Receipt of Property" policy specifies requirements of the
Sentinel Property Manager to verify the accuracy of equipment data on
the property list uploaded by the contractor before using this data to
enter equipment to PMA upon receipt and verification of equipment. The
equipment data on the property list refers to the Lockheed Martin
database for Sentinel project;
Status: Closed.
Recommendation area/recommendations: 24. We recommend that the
Director of the FBI direct the Sentinel Program Manager to modify
existing Sentinel policies and procedures to require that the Sentinel
property manager perform monthly reconciliations of the key property
records (i.e., the BOM, the vendor invoices, the Lockheed Martin
database, and PMA) throughout each subsequent phase of Sentinel rather
than a single close-out reconciliation at the completion of a phase;
Development of policies and procedures and other actions taken: FBI
modified its existing policies and procedures to include periodic
reconciliation of the key property records. Specifically, Section 3.2
of FBI's Property Management Policy & Procedures, prepared by Office
of IT Program Management, Sentinel Program and Business Management
Team, version dated 9/3/2008, titled "Data Requirements" specifies
that the Sentinel Property Manager will perform at least monthly
reconciliations of the key property records including Bill of
Materials, invoices, contractor property list (Lockheed Martin
database) and PMA throughout the Sentinel Program;
Status: Closed.
Recommendation area/recommendations: 25. We recommend that the
Director of the FBI direct the Sentinel Program Manager to modify
existing Sentinel policies and procedures to require the Sentinel
property manager to document the initial inspection of property as it
is received, including verification that the property was properly
barcoded;
Development of policies and procedures and other actions taken: FBI
modified its existing policies and procedures to include initial
inspection of property upon receipt, including verification that the
property was properly barcoded. Specifically, Section 2.2.3 of FBI's
Property Management Policy & Procedures, prepared by Office of IT
Program Management, Sentinel Program and Business Management Team,
version dated 9/3/2008, titled "Receipt of Property" specifies that
the Sentinel Property Manager will match quantity, manufacturer, make,
model and serial number and barcode number on the shipping document,
packing lists, or invoice to the physical inventory of equipment
received, and after the verification the document will be annotated
with receipt noted and signed by the Property Administrator and
Sentinel Property Manager;
Status: Closed.
Recommendation area/recommendations: 26. We recommend that the
Director of the FBI direct the Sentinel Program Manager to modify
existing Sentinel policies and procedures to require the Sentinel
property manager to record in the Lockheed Martin database the date
Sentinel property is received to allow for assessments of whether
Sentinel property was timely recorded into PMA;
Development of policies and procedures and other actions taken: FBI
modified its existing policies and procedures to require the received
date be tracked. Specifically, Section 3.2 of FBI's Property
Management Policy & Procedures, prepared by Office of IT Program
Management, Sentinel Program and Business Management Team, version
dated 9/3/2008, titled "Data Requirements" specifies that in order to
be useful to both the PMO and contractor the key data points,
including the date received and Shipping Document/Item Receipt
Verification Date, should be tracked by either an electronic
spreadsheet or listed on a locally devised inventory sheet. According
to FBI's Sentinel team, the "Date Received" column in the Lockheed
Martin database now tracks the received date of each property;
Status: Closed.
Recommendation area/recommendations: 27. We recommend that the
Director of the FBI direct the Sentinel Program Manager to modify
existing Sentinel policies and procedures to require the Sentinel
property manager to follow up on and document actions taken with
respect to the 20 property records we identified as having valuation
discrepancies, including any adjustments to the valuations in either
FBI's or the contractor records;
Development of policies and procedures and other actions taken: FBI
followed up with the 20 items identified in our report and took
necessary corrective action to eliminate valuation discrepancies. We
reviewed accountable property records maintained in the PMA and the
Lockheed Martin database provided by FBI for those 20 items and
verified that FBI has made adequate adjustments to the valuation in
PMA and the Lockheed Martin database;
Status: Closed.
Source: GAO.
[End of table]
[End of section]
Appendix III: Comments from the Federal Bureau of Investigation:
U.S. Department of Justice:
Federal Bureau of Investigation:
Washington, D.C. 20535-0001:
August 11, 2011:
Ms. Kay L. Daly:
Director, Financial Management and Assurance:
Government Accountability Office:
441 0 Street, N.W.
Washington, D.C. 20548:
Dear Ms. Daly:
The Federal Bureau of Investigation (FBI) appreciates the opportunity
to review and respond to your draft report entitled, "Federal Bureau
of Investigation: Actions Taken To Address Most Procurement
Recommendations" (hereinafter "Report").
We are pleased the Report found that the corrective actions developed
by FBI were sufficient to address 26 of the 27 recommendations made in
your prior Trilogy and Sentinel reports. In addition, through recent
audit sampling, you determined the FBI had properly recorded 90.7
percent of tested accountable property. As aptly stated in the Report,
"This represents an improvement from the situation that existed at the
time of our Trilogy work." To be certain, this is a vast improvement
to your previous 2006 finding that the FBI had only recorded
28.4 percent of tested accountable property.
The FBI is committed to further strengthening current internal
controls. We continue to document procedures and develop clear
policies. While safeguarding the nation is the FBI's first priority,
we are also cognizant of meeting the fiduciary responsibilities of the
public trust. To that end, thank you for the GAO's assistance, and for
the opportunity to respond to the Report.
Based upon a review of the Report, the FBI concurs with the three
recommendations directed to the FBI and has already initiated changes
to processes and procedures to fully address these issues. Please feel
free to contact me at 202-324-1345 should you have any questions or
need further information.
Sincerely,
Signed by:
Richard Lee Haley II:
Assistant Director:
Finance Division:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Jeanette M. Franzel, (202) 512-9471 or franzelj@gao.gov:
Acknowledgments:
Staff members who made key contributions to this report include:
Phillip McIntyre, Assistant Director; William E. Brown; Sharon Byrd;
Liliam Coronado; Joshua Edelman; Francine DelVecchio; Francis Dymond;
Wendy Johnson; Galena Phillips; Lisa Reijula; and Seong Bin Park.
[End of section]
Footnotes:
[1] GAO, Federal Bureau of Investigation: Weak Controls over Trilogy
Project Led to Payment of Questionable Contractor Costs and Missing
Assets, [hyperlink, http://www.gao.gov/products/GAO-06-306]
(Washington D.C.: Feb. 28, 2006).
[2] GAO, Financial Management: FBI Has Designed and Implemented
Stronger Internal Controls over Sentinel Contractor Invoice Review and
Equipment Purchases, but Additional Actions Are Needed, [hyperlink,
http://www.gao.gov/products/GAO-08-716R] (Washington D.C.: July 15,
2008).
[3] 48 C.F.R. chp.1.; Office of Management and Budget, Office of
Federal Procurement Policy, Interagency Agreements (June 2008).
[4] GAO, 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).
[5] Federal Accounting Standards Advisory Board, Statement of Federal
Financial Accounting Standards 6, Accounting for Property, Plant, and
Equipment ( November 1995).
[6] [hyperlink, http://www.gao.gov/products/GAO-06-306].
[7] Five additional recommendations included in the Trilogy report
were made to the General Services Administration (GSA) since GSA's
Federal Systems Integration and Management Center (FEDSIM) and the FBI
entered into an interagency agreement to use FEDSIM's Millennia
governmentwide acquisition contract for the implementation of Trilogy,
and that FEDSIM, as the contracting agency, provided contract
administrative services necessary to support the task orders.
[8] [hyperlink, http://www.gao.gov/products/GAO-06-306] and
[hyperlink, http://www.gao.gov/products/GAO-08-716R].
[9] DCAA reported the results of its audit related to SAIC in March
2008, reporting questioned costs of $3.7 million. As a result of the
findings reported by DCAA, SAIC paid $3.2 million to GSA. DCAA
reported the results of its audit related to CSC and its
subcontractors in December 2008, reporting questioned costs of $14.95
million. In March 2009, the Department of Justice, Office of Inspector
General (DOJ/OIG), began an investigation into CSC's questioned
billings to determine whether the billings were potentially fraudulent
and involved criminal conduct by CSC and its subcontractors. As of
August 11, 2011, the FBI informed GAO that the OIG's report on this
matter is currently under review by OIG management before submission
to the FBI, in accordance with normal procedure.
[10] The IPC/TNC task order was awarded to CSC (formerly DynCorp) and
the UAC task order was awarded to SAIC. We reported that there were
926 CSC-purchased items, 242 SAIC-and FBI-purchased items, and 37 FBI-
purchased IPC/TNC government-furnished equipment assets that were
missing, lost, or stolen.
[11] See 48 C.F.R 17.503.
[12] See appendix I for details related to this sample.
[13] The contractor's proposal included multiple labor groups, for
specific skill sets, each with a related hourly rate.
[14] See appendix I for details related to how accountable property
was selected for testing.
[15] The FBI has offices around the globe. These offices--called legal
attachés or "legats"--are located in U.S. embassies.
[16] See 31 U.S.C. § 720.
[17] 48 C.F.R. chp.1.; Office of Management and Budget, Office of
Federal Procurement Policy, Interagency Agreements (June 2008).
[End of section]
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