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Audit of Coalition Partner Reimbursement of Dining Facility Services at Resolute Support Headquarters, Kabul, Afghanistan (DODIG-2020-096)

Audit

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Publicly Released: June 26, 2020

 

Objective

The objective of this audit was to determine whether the DoD sought full reimbursement from Coalition partners at Resolute Support Headquarters (RSHQ), Kabul, Afghanistan, for dining facility services provided under the Logistics Civil Augmentation Program (LOGCAP) contract.

Background

LOGCAP is an Army program that uses contractors to provide elements of logistics support, supplies, and services, such as dining facilities, to deployed forces, including Coalition partners. The DoD provides logistics support, supplies, and services to Coalition partners on a reimbursable basis under Acquisition and Cross-Servicing Agreement (ACSA) authority.

The DoD uses ACSAs to acquire or provide logistics support, supplies, and services in exchange for reimbursement between the United States and an authorized foreign country. An ACSA agreement establishes basic terms, conditions, and procedures to facilitate reciprocal provision of logistics support, supplies, and services. The transfer of services under ACSAs is accomplished through supplementary agreements, such as implementing arrangements and ACSA order forms, which contain additional details, terms, and conditions related to a specific acquisition of services, including dining facility services.

The main U.S. personnel and commands responsible for ACSA transactions for dining facility services at RSHQ are personnel from U.S. Forces–Afghanistan (USFOR-A) Multinational Logistics (MNL), U.S. Army Central (ARCENT), and Coalition partner senior national representatives. There are 17 Coalition partners who reimburse the DoD for the logistics support, supplies, and services they receive, also referred to as Pay-to-Play Coalition partners.

The dining facility service transaction process begins when the Coalition partner senior national representative and the ACSA coordinator agree to the terms of the ACSA order request. The ACSA coordinator creates an ACSA order form in the ACSA Global Automated Tracking and Reporting System (AGATRS), the system of record for managing ACSA transactions. The ACSA order form includes the dates of the dining service, per unit cost of dining facility services, and number of personnel who used the services. The Coalition partner senior national representative and the ACSA coordinator sign the ACSA order form, agreeing to the terms of the order form, which constitutes a binding international commitment. After the service is provided, both parties sign the ACSA order form again to acknowledge receipt. The ACSA order form is uploaded into AGATRS and forwarded to ARCENT for review before submission to the Defense Finance and Accounting Service for billing and collection.

Findings

We determined that USFOR-A did not seek full reimbursement for dining facility services provided to Coalition partners at RSHQ through the LOGCAP contract. Specifically, for the 17 Pay-to-Play Coalition partners, ACSA coordinators did not:

• initiate the billing of Coalition partners for 349 months of dining facility services between January 2016 and September 2019 (53 percent of 656 months); or

• consistently calculate the amount owed in accordance with USFOR-A guidance when bills were initiated.

ACSA coordinators did not initiate bills or consistently calculate the amount owed in accordance with USFOR-A guidance because the ACSA program manager did not ensure that all bills were initiated and prepared in accordance with USFOR-A guidance or develop a training program for ACSA coordinators that addressed processing of ACSA transactions in Afghanistan. In addition, the ACSA coordinators did not establish the terms and conditions, including rate and calculation method, with each Coalition partner before services were provided.

As a result of USFOR-A not initiating billing, between January 2016 and September 2019, DoD contractors provided an estimated $6.3 million in dining facility services to Coalition partners that was never billed to Coalition partners. In addition, by not using correct rates, USFOR-A underbilled Coalition partners $2.9 million. AGATRS records indicate that ACSA coordinators initiated bills for only $4.7 million, and as of October 2019, Coalition partners had reimbursed the DoD only $880,000.

Unless USFOR-A establishes terms and conditions with Coalition partners before providing services, develops training specific to Afghanistan, and performs oversight, the DoD will continue to not initiate bills for the full reimbursable amount for dining facility services provided under the anticipated LOGCAP V contract.

Recommendations

We recommend that the USFOR-A MNL Branch Chief:

• develop agreements with each Coalition partner detailing the terms and conditions for dining facility services at RSHQ before providing services;

• determine the months for which ACSA orders were not initiated and negotiate collection with each Coalition partner for services provided;

• develop and implement a process for overseeing ACSA coordinators; and

• update the training program provided to ACSA coordinators to include training related to providing logistics support, supplies, and services in Afghanistan.

We also recommend that the ARCENT MNL Branch Chief update the MNL Standard Operating Procedures to define the oversight roles and responsibilities of the ACSA program manager.

Management Actions Taken

During the audit, USFOR-A MNL facilitated a series of meetings with Coalition partner senior national representatives at RSHQ to agree on payment terms. These meetings have resulted in agreement on a method for placing, executing, and billing dining facility services at RSHQ. USFOR-A MNL will use a combination of actual meal counts during the month and a daily flat rate to determine the reimbursement amount for each month.

In addition, USFOR-A has completed billing for 2019 dining facility services. The ACSA program manager, in cooperation with ARCENT, also reviewed AGATRS records to identify completed bills for 2018 dining facility services. A meeting was held with Coalition partner senior national representatives on March 4, 2020, to discuss terms and conditions for prior year billing and 2018 bills are being distributed to Coalition partner senior national representatives for signature. The 2017 bills will be generated and distributed in April 2020; 2016 billing will also be performed.

USFOR-A MNL has developed and implemented internal controls for centrally tracking ACSA orders by creating a master listing of recurring transactions. ACSA program managers are providing oversight by ensuring that these recurring transactions, such as monthly billing for RSHQ dining facility services, are completed. Additionally, as part of the month-end process, the ACSA program manager will audit records from each location for completion and quality.

USFOR-A MNL training has been supplemented to include 2 weeks of boots-on-ground training in Afghanistan with the MNL ACSA program manager. A central resource is available to all staff providing specific training and standard work aides for routine and irregular tasks, including “sell” transactions for dining facility services provided at RSHQ. An ACSA “sell” transaction occurs when DoD contractors provide logistics services to a Coalition partner nation.

Management Comments and Our Response

The Deputy Commanding General – Operations Chief of Staff, U.S. Forces-Afghanistan, responding on behalf of the USFOR-A MNL Branch Chief, provided further documentation of actions taken to address the recommendations. Specifically, the USFOR-A MNL Branch Chief:

• issued a memorandum to the Coalition partners detailing the terms and conditions agreed to at the meetings with the senior national representatives. We received the memorandum and verified its distribution.

• provided the results of the review to identify the months for which ACSA orders were not initiated, and the requisition numbers for the subsequent orders.

• provided the results of the audits performed by the ACSA program manager for the months of April and May 2020. Additionally, the Branch Chief provided the master listing of recurring transactions used to centrally track ACSA transactions.

• provided the 2-week training program for ACSA coordinators in Afghanistan. The training program includes a full overview of the roles and responsibilities of the ACSA coordinators in “sell” transactions executed in Afghanistan.

The actions taken by USFOR-A MNL Branch Chief were sufficient to close the recommendations.

The ARCENT Operations Division Chief, responding on the behalf of the U.S. Army Central Multinational Logistics Branch Chief, agreed with our recommendation for the ARCENT MNL Branch Chief to update the MNL Standard Operating Procedures to define the oversight roles and responsibilities of the ACSA program manager. The Division Chief stated that the Branch Chief has begun the re-write of the MNL Standard Operating Procedures, and the changes will include weekly, monthly, and quarterly actions and reports to ensure that the ACSA program managers are providing oversight of the ACSA coordinators. The Division Chief stated that the officially signed MNL Standard Operating Procedures are projected to be published by July 15, 2020. These actions are sufficient to resolve our recommendation to update the MNL Standard Operating Procedures to define the oversight roles and responsibilities of the ACSA program manager. We will close this recommendation when we receive the officially signed MNL Standard Operating Procedures.

Although not required to comment, the Department of the Army G-4/5 Plans Division Chief, responding on behalf of the Department of the Army G-4, provided comments on our report and recommendations. While none of our recommendations required action by the Department of the Army G-4, they agreed with all of our recommendations.

 

This report is the product of Proj. No. D2019-D000RJ-0209.000