DoD OIG Semiannual Report to the Congress | April 1, 2016 to September 30, 2016
The Semiannual Report to the Congress has been issued. For the reporting period of April 1 through September 30, 2016, the DoD OIG issued a total of 65 audit, inspection, and evaluation reports that identified $52.4 million in questioned costs and $1 billion in funds put to better use. The DoD OIG also achieved $1.3 million in financial savings based on management-completed corrective actions related to reports issued in this and previous reporting periods. Defense Criminal Investigative Service (DCIS) investigations, including those conducted jointly with other law enforcement organizations, resulted in $445.3 million in civil judgments and settlements; $56 million in criminal fines, penalties, and restitution ordered; and $42.1 million in administrative recoveries such as contractual agreements and military nonjudicial punishment.
Audit issued 45 reports identifying questioned costs and funds put to better use that addressed improvements in DoD operations; management of DoD weapon system acquisitions; fair and reasonable pricing decisions; eliminating improper payments; contract oversight; financial reporting and audit readiness; and cybersecurity and operations. For example, in a followup to a previous report, Audit determined that DoD management did not take appropriate action in response to a previous OIG report, which found travel cardholders potentially misused their travel cards at casinos and adult entertainment establishments. In another report, Audit determined that the Joint Improvised–Threat Defeat Agency (JIDA) needed to improve management of initiatives to rapidly deploy solutions for countering improvised explosive devices on the battlefield. In a series of reports on the DoD use of suspense accounts, which are designed to temporarily hold Government funds but are missing data necessary to be recorded correctly, Audit determined that the Defense Finance and Accounting Service (DFAS) did not have controls in place to accurately record suspense account balances on the proper Component-level financial statements or clear suspense account transactions within the required timeframes. Audit also determined that the Navy did not ensure all software assurance countermeasures were fully performed while developing critical software for the Littoral Combat Ship–Mission Modules, thereby increasing risk that critical software contains vulnerabilities that, if exploited, could result in mission failure.
Defense Criminal Investigative Service (DCIS) opened 254 cases, closed 253 cases, and has 1,612 ongoing investigations. Cases resolved in this reporting period addressed criminal allegations of procurement fraud, public corruption, product substitution, health care fraud, and the illegal transfer of technology. For example, one investigation resulted in a $9.4 million civil settlement with Alcon, Inc., to resolve allegations of illegally exporting highly sophisticated medical equipment to Iran and Syria. Another investigation resulted in a jail sentence of 69 months for an individual who used his father’s identity to qualify for DoD contracts intended for servicedisabled, veteran-owned small businesses. Another case resulted in restitution of $3.1 million and a jail sentence of 111 months for an individual who defrauded Federal health care benefit programs.
Administrative Investigations (AI) completed 29 senior official and reprisal investigations and oversaw 584 senior official and reprisal investigations completed by Service and Defense Agency IGs. During the reporting period, AI received a total of 443 senior official and 802 whistleblower reprisal and restriction complaints and closed a total of 441 senior official and 883 whistleblower reprisal and restriction complaints. The DoD Whistleblower Ombudsman received 154 contacts and the DoD Hotline’s Whistleblower Rights and Protections webpage received 10,986 visits. The DoD Hotline received 7,036 contacts, opened 3,373 cases, and closed 3,329 cases.
Intelligence and Special Program Assessments (ISPA) issued eight reports. Four of the reports addressed the intelligence enterprise. Two reports addressed the nuclear enterprise and the last two reports dealt with security issues.
Policy and Oversight (P&O) issued 10 evaluation reports addressing its oversight of audit, investigative, and technical issues in the DoD. In one report, P&O found that data residing in the Contract Audit Follow-Up System, which the DoD Components use to track and manage the status of actions that contracting officers take in response to the Defense Contract Audit Agency (DCAA) audit reports, had errors totaling $11 million in the overstatement of contractor questioned cost and questioned cost upheld by the contracting officer. P&O also found that the Pentagon’s Transparency Office had not updated DoD policies on the Freedom of Information Act (FOIA) to reflect current FOIA requirements, as required by DoD policy. P&O performed inspections at the King Abdullah II Special Operations Training Center (KASOTC) in Amman, Jordan, and Camp Buehring, Kuwait, for compliance with DoD health and safety policies and standards regarding the electrical and fire protection systems of U.S. military‑occupied facilities. The inspections identified a total of 824 deficiencies that could affect the health, safety, and well-being of the warfighters. Of the total deficiencies, 77 at KASOTC were deemed critical and required immediate corrective action.
Special Plans and Operations (SPO) issued two reports. The first report assessed the uniform application of biosafety and biosecurity policy and directives, plans, orders, and guidance across DoD Component laboratories that were conducting research using biological select agents and toxins (BSAT) and evaluated the DoD’s biological, safety, and security oversight at laboratories for compliance with Federal, DoD, and Service policies. The second report assessed the effectiveness of the Afghan National Army Special Operations Forces (ANASOF) to conduct combat operations. This report is classified.
Overseas Contingency Operations (OCO) supports Lead IG responsibilities and oversight coordination related to Operation Inherent Resolve (OIR) and Operation Freedom’s Sentinel (OFS), including coordination with the OIGs from the U.S. Department of State (DOS), the U.S. Agency for International Development (USAID), and other agencies. During this reporting period, the OCO published two quarterly reports on each of the overseas contingency operations