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Audit of the Planning for and Implementation of the Afghan Personnel and Pay System DODIG-2019-115

Audit

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Publicly released: August 19, 2019 

Objective

The objective of this audit was to determine whether the DoD’s planning for and implementation of the Afghan Personnel and Pay System (APPS) will result in a system that will accurately track and pay Afghan forces. Because APPS was not fully implemented as of the audit team’s site visit to Afghanistan, our audit examined the planning and system capabilities as of July 2018. Subsequent engagements with Combined Security Transition Command–Afghanistan (CSTC-A) and Army Contracting Command–Afghanistan (ACC-A) officials between August and December 2018 confirmed that APPS still had incomplete and inaccurate personnel listings and was still missing system capabilities required by the contract.

Background

In January 2016, CSTC-A developed the requirements for the APPS software development contract to integrate existing Afghan human resource data with compensation and payroll data to process authorizations, record unit-level time and attendance data, and allow the Government of the Islamic Republic of Afghanistan (GIRoA) to automatically generate payroll calculations and forms required to process salary payments. CSTC-A developed APPS to reduce the opportunity for corruption, such as fake personnel records, and improve the transparency, accountability, and auditability of the Afghan payroll process.

Finding

We determined that, as of December 2018, CSTC-A had not validated the accuracy of the personnel records for the Ministry of Defense (MoD) and the Ministry of Interior (MoI) personnel added to APPS and had not verified that the contractor developed the system in accordance with contract requirements.

This occurred because CSTC-A did not:

  • develop a controlled data entry process to ensure that personnel records were created in APPS in a timely manner;
     
  • document or communicate contractor non-performance related to the development of system interfaces between APPS and the Afghan biometric and financial systems or retirement of the previous human resource system; or
     
  • maintain contract documentation, such as acceptance of APPS version one, or ensure receipt of required contract deliverables, such as the APPS system design documents or the system transition plan to gradually transfer APPS operation and sustainment to GIRoA.

As a result, CSTC-A paid $26.2 million, as of December 2018, to the APPS software development contractor for a system that cannot communicate directly with Afghan systems, relies on the same manually intensive human resource and payroll processes that the system was designed to streamline, and does not accomplish the stated objective of reducing the risk of inaccurate personnel records or fraudulent payments through the use of automated controls. In addition, the MoD and MoI were not using APPS to generate payroll data as of April 2019, even though CSTC-A officials stated that they would fund salaries based on APPS-generated payroll data when the system was designated fully operational for the MoD in July 2018 and MoI in November 2018.

Furthermore, because APPS does not have an interface with the Afghan biometric system and requires manual input of the biometric identification number, there is no link between the two systems to validate the authenticity of the biometric number recorded in APPS. Therefore, the DoD does not have definitive assurance that APPS personnel records are biometrically linked and is still at risk of funding payroll for fraudulent personnel records.

Recommendations

We recommend that the CSTC-A Commander require the APPS Project Management Office to develop and implement:

  • procedures to audit the accuracy of biometric identification numbers and personnel data for APPS records to ensure personnel records have an authentic biometric identification number and are biometrically linked; and
     
  • corrective action plans that include root cause analysis of, corrective actions, and timelines for (1) implementing the remaining APPS capabilities, (2) streamlining the data validation efforts, (3) increasing oversight and controls of the process for creating personnel records, (4) retiring the previous Afghan human resource system, and (5) executing the required interfaces with Afghan biometric and financial systems.

We recommend that the CSTC-A Commander, in coordination with GIRoA, develop and implement a plan to transition APPS to Afghan control. The plan should include benchmarks and timelines.

We recommend that the ACC-A Commander, in coordination with the APPS Project Management Office, develop a plan to identify all contract requirements not met on the software development contract and remedy contractor non-performance.

Management Actions Taken

According to the CSTC-A Deputy Commander’s January 1, 2019, memorandum and subsequent DoD OIG inquiries and review regarding the status of planned actions, CSTC-A identified the following actions taken:

  • CSTC-A created a Human Resource Branch, to streamline functional and technical teams under one leader to further enable APPS goals and objectives;
     
  • CSTC-A officials standardized the manual data entry process;
     
  • CSTC-A retired the previous human resource system on April 30, 2019, and proposed courses of action for transitioning APPS to GIRoA.

CSTC-A’s actions taken address our recommendations to improve oversight and controls of the APPS record creation process, retire the previous human resource system, and develop a plan to transition APPS to GIRoA; therefore, these recommendations are resolved. The recommendations will remain open until we obtain and review documentation regarding the oversight and controls for creating personnel records directly in APPS, and the approved plan to transition APPS to GIRoA.

Management Comments and Our Response

The CSTC-A Chief of Staff, responding for the CSTC-A Commander, agreed with all of the recommendations in the report. To implement the recommendations, the Chief of Staff stated that CSTC-A will:

  • conduct an audit of APPS biometric identification numbers and personnel data to ensure the records are accurate and biometrically linked;
     
  • validate and implement the remaining APPS capabilities and seek financial consideration or request development of interfaces from the APPS contractor;
     
  • conduct sampling and physical inspection of personnel records to verify that soldiers and officers are entered into APPS and that APPS operators are sufficiently trained; and
     
  • prepare a government cost estimate to support the ACC-A’s demand for financial consideration for the development of the biometric personnel database and financial system interfaces.

Comments from the CSTC-A Chief of Staff addressed the recommendations to (1) develop procedures to audit the accuracy of APPS records, (2) develop and implement root cause analysis of, corrective actions, and timelines for implementing the remaining APPS capabilities, streamlining the data validation efforts, increasing oversight and controls of the process for creating personnel records, and executing the required interfaces with Afghan biometric and financial systems, and (3) develop and implement a plan to transition APPS to Afghan control. Therefore, the recommendations are resolved but will remain open until we verify that the planned management actions have been completed.

Additionally, CSTC-A provided evidence that it took action to retire the previous human resource system. Therefore, that recommendation is closed.

The Deputy Assistant Secretary of the Army (Procurement), responding for the ACC-A Commander, agreed with the recommendation that the ACC-A develop a plan to identify all contract requirements not met and remedy contractor nonperformance. The Deputy Assistant Secretary stated that the ACC-A is developing a plan to jointly review contractor performance and requirements to identify areas the Government considers non‑performance and document corrective actions taken.

Comments from the Deputy Assistant Secretary of the Army (Procurement) addressed all elements of the recommendation. Therefore, the recommendation is resolved but will remain open until we obtain and review documentation showing the results of the ACC‑A’s review of contractor performance and corrective actions taken.

This report is a result of Project No. D2018-D000RJ-0135.000.