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Department of Defense Inspector General
DoD OIG Newsletter - August 2017  Link to DoD OIG RSS Link to DoD OIG You Tube Link to DoD OIG Linked In Link to DoD OIG Flickr  Link to DoD OIG Twitter 

The DoD OIG newsletter summarizes the reports and investigations released by the Department of Defense Office of Inspector General in the previous month and those we anticipate releasing in the coming month. I encourage you to read these reports and to access our website, which lists reports and investigations by year, subject, and DoD component. You'll also find our project announcements and additional news releases highlighting investigations conducted by the Defense Criminal Investigative Service. Thank you for subscribing to our newsletter.

Signature of Glenn A. Fine

UPCOMING REPORTS

Significant reports expected to be issued within the next 30 days include:

DoD Support for Counternarcotics Requirements. This audit determines whether the DoD effectively managed counternarcotics requirements agreed upon between the Department of Justice and DoD.  Specifically, this audit includes a review of the Global Discovery Program, which is an ATR 42-500 aircraft intended for use in counter-drug efforts in Afghanistan.   In March 2010, the Department of Justice Office of the Inspector general reported that the aircraft was inoperable and located at a DoD subcontractor facility.

Audit of Defense Information Systems Agency’s Expired Communication Service Authorizations. This audit determines whether the Defense Information Systems Agency implemented adequate controls over communication service authorizations.  Defense Information Systems Agency acquires global telecommunications services for DoD using an inquiry, quote, order process.  This process is a method for acquiring telecommunication services not available or unobtainable under an existing Indefinite Delivery Contract.  The result of this process is a Communication Service Authorization, which is an order for telecommunications services incorporating a basic agreement that is a binding contractual obligation upon acceptance by the contractor.

Defense Organizations Use of General Services Administration Federal Supply Schedules for Purchases of Supplies. This audit determines whether the contracting officers at Defense organizations made adequate determinations of fair and reasonable pricing for General Services Administration Federal supply schedule orders awarded for purchases of supplies. 

United States Transportation Command Triannual Reviews. This audit determines whether the United States Transportation Command performed its triannual reviews in accordance with applicable regulations. The triannual review is an internal control practice to assess whether DoD obligation and disbursement balances recorded are valid, accurate, and complete.

Evaluation of U.S. and Coalition Efforts to Enable the Afghan Ministry of Defense to Develop its Oversight and Internal Control Capability. This evaluation determines whether U.S. Government and Coalition Train-Advise-Assist efforts will enable the Afghan Ministry of Defense (MoD) and subordinate organizations to develop an oversight capability that helps the MoD to run efficient and effective operations, report reliable information about its operations, and comply with applicable laws and regulations. This report will be CLASSIFIED. 

 

 

RECENTLY ISSUED REPORTS OF INTEREST (to view report, if available, please click on title)

Protection of Electronic Patient Health Information at Army Military Treatment Facilities. This audit determined that the Defense Health Agency, the U.S. Army Medical Command, and the Army military treatment facilities did not consistently implement effective security protocols to protect systems that stored, processed, and transmitted electronic health records and electronic patient health information for active duty service members, including retirees and their family members.  Ineffective security protocols introduced unnecessary risk that could compromise the integrity, confidentiality, and availability of patient health information and result in up to $1.5 million per year in penalties for each category of Health Insurance Portability and Accountability Act of 1996 violations.

External Peer Report on the Army Internal Review Program. This report determined that there were significant deficiencies in the operation and design of the Army Internal Review quality control systems, including areas concerning independence, professional judgment, competence, fieldwork, and reporting.  The report made 23 recommendations to improve the Army Internal Review Program system of quality control.

Follow up on DoD OIG Report No. DODIG-2015-013, Military Housing Inspections – Republic of Korea, October 28, 2014.  This evaluation found that the Army and Air Force had partially implemented, and that the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics was in the process of implementing, recommendations from our previous report concerning the correction of Army and Air Force deficiencies for fire protection, electrical systems, environmental health and safety, and housing management; and USD(AT&L) issuance of mold and radon assessment and mitigation guidance in the Overseas Environmental Baseline Guidance Document. The Army and Air Force collectively reported that 92 percent of deficiencies documented in our prior report were corrected as of August 2016. However, we found that the Army corrected only 62 percent and the Air Force corrected only 35 percent of 251 deficiencies we followed up on at 6 of the 13 installations previously inspected. Both the Army and Air Force agreed to perform oversight and monitor the progress of corrective actions until they are completed. 

Evaluation of Department of Defense (DoD) Efforts to Build Counterterrorism and Stability Operations Capacity of Foreign Military Forces with Section 1206/2282 Funding. This evaluation determined whether the DoD Global Train and Equip Program, initially funded by Section 1206 of yearly National Defense Authorization Acts, now by 10 U.S.C. § 2282, resulted in improved partner nation capability to conduct counterterrorism operations or to participate in stability operations with U.S. Armed Forces. The purpose of the authorization is to build the capacity of a foreign country’s national military forces to conduct counterterrorism operations and participate in or support on-going allied or coalition military or stability operations that benefit the national security interests of the United States. The DoD OIG found deficiencies in the program. For example, the DoD had not developed a programmatic strategy with clear objectives and an overarching execution plan, allocating sufficient personnel and other resources to effectively manage the program. 

 

DEFENSE CRIMINAL INVESTIGATIVE SERVICE HIGHLIGHTS (to view DoJ press release, if available, please click on title)

DCIS Badge

Defense Contractor Sentenced to 30 Months in Federal Prison for $53 Million Procurement Fraud and Illegal Gratuities Scheme.  On June 27, 2017, Andrew Bennett, a former program manager at Advanced C4 Solutions (AC4S) and Superior Communications Solutions, Inc. (SCSI), was sentenced to 30 months in prison followed by 36 months of supervised release for wire fraud conspiracy and for paying illegal gratuities to a Government official in connection with the award of $53 million in Federal contracts. Bennett was also ordered to pay forfeiture and restitution in the amount of $500,000. From September 2009 through August 2012, Bennett conspired with John Wilkerson, part owner of SCSI, and James T. Shank, a program manager at the Space and Naval Warfare Systems Command (SPAWAR), to give AC4S and SCSI an unfair competitive advantage in obtaining Government contracts. In May 2011, after Shank accepted employment with SCSI, but was still working for SPAWAR, he approved more than $1.1 million worth of invoices that benefitted SCSI and Wilkerson.  In addition, Wilkerson paid Shank $86,000 in the year after Shank retired from Government service, funneling the payment through two other companies in order to conceal the source of the funds. Wilkerson was previously sentenced to 5 years in prison followed by 3 years of supervised release. Shank previously pleaded guilty and is awaiting sentencing. This was a joint investigation with the Air Force Office of Special Investigations and the U.S. Small Business Administration Office of the Inspector General.

Former Employee of U.S. Government Contractor in Afghanistan Pleaded Guilty to Accepting Over $250,000 in Kickbacks from Subcontractor. On July 18, 2017, Nebraska McAlpine, a former project manager for a U.S. Government contractor in Afghanistan, pleaded guilty to accepting over $250,000 in illegal kickbacks from an Afghan subcontractor in return for McAlpine’s assistance in obtaining subcontracts on U.S. Government contracts. McAlpine and an Afghan executive agreed that in exchange for illicit kickbacks, McAlpine would ensure that his employer awarded lucrative subcontracts to the executive’s company. McAlpine convinced his employer to award “sole source” subcontracts to the Afghan executive’s company, which allowed the company to supply services without competition. As a result of the kickback scheme, the Afghan executive’s company was paid over $1.6 million, and McAlpine accepted over $250,000 in kickbacks. This was a joint investigation with the Special Inspector General for Afghanistan Reconstruction and the U.S. Army Criminal Investigations Command.

 

RECENTLY ANNOUNCED PROJECTS (to view the announcement letters, click on the title)

Audit of DoD Oversight of Logistics Civil Augmentation Program Invoice Review and Payment. The objective of this audit is to determine whether the DoD adequately monitored contractor performance and conducted sufficient invoice reviews for services provided under the Logistics Civil Augmentation Program IV program. This program involves a series of multiple award indefinite-delivery indefinite-quantity contracts that provide base support Combatant Commanders and Army Service Component Commanders during contingency operations.

Audit of Noncompetitive Information Technology Contracts at the Defense Health Agency. The objective of this audit is to determine whether Defense Health Agency properly awarded and provided oversight of noncompetitive Information technology contracts.

Audit of DoD Incident Response Capability for Mission-Critical Control Systems. The objective of this audit is to determine whether the DoD has an effective program to detect, report, and respond to security incidents on mission-critical control systems. Mission critical controls systems are computer resources, both hardware and software, that are physically part of, dedicated to, or essential in real time to the mission performance of special purpose systems.

Audit of the Trans-Africa Airlift Support Contract. The objective of this audit is to determine whether the DoD has effectively developed requirements for the Trans-Africa Airlift Support Contract.  In February 2017, U.S. Transportation Command awarded three fixed price indefinite delivery, indefinite-quantity contracts to AAR Airlift, Berry Aviation Incorporated, and Erickson Helicopters to provide airlift services in the U.S. Africa Command area or responsibility.

Audit of Spare Parts Procured From TransDigm Group Incorporated. The objective of this audit is to determine whether the DoD is purchasing spare parts at fair and reasonable prices from TransDigm Group Incorporated. TransDigm Group Incorporated designs, produces, and supplies highly engineered proprietary aerospace parts and systems. 

 Audit of Commercial Item and Fair and Reasonable Pricing Determinations for Ammonium Perchlorate. The objective of this audit is to determine whether the DoD properly assessed commerciality and fair and reasonable pricing determinations for ammonium perchlorate. Ammonium Perchlorate is a colorless, odorless, inorganic, crystalline compound. Most DoD missiles use ammonium perchlorate as the main propellant in solid rocket motors.   

Unsafe Decommissioning of Weapons and Missiles at Bluegrass Chemical Agent-Destruction Pilot Plant (BGCAPP). In response to a DoD Hotline complaint, the objective of this evaluation is to determine whether the Assembled Chemicals Weapons Alternatives BGCAPP Program Office followed appropriate safety standards in the design and construction of the BGCAPP weapons destruction facility in Richmond Kentucky.