BACKGROUND

Senate Report 110-77, to accompany the National Defense Authorization Act (NDAA) for Fiscal Year 2008, addresses funding for the Office of the Inspector General, Department of Defense (DoD IG) stating that, “The committee is concerned that funding levels for this important independent audit and investigative function is not keeping pace with the demands for Inspectors’ General services in the global war on terror.” 

The report also directs the IG to, “provide to the defense committees, by March 31, 2008, an analysis of the current and future personnel, organization, technology, and funding requirements of the OIG” to include, “a comprehensive and detailed master plan, with annual objectives and funding requirements, that provides the fastest possible increase in audit and investigative capabilities.”

In addition, Section 842, “Investigation of Waste, Fraud, and Abuse in Wartime Contracts and Contracting Processes in Iraq and Afghanistan,” of the Act (P.L. 110-181) requires the DoD IG to conduct, “thorough audits…to identify potential waste, fraud, and abuse in the performance of – Department of Defense contracts, subcontracts, and task and delivery orders for the logistical support of coalition forces in Iraq and Afghanistan.”

As a result of these concerns and due to the complex operational environment in Southwest Asia, we are establishing an Office for Strategic Plans and Operations for GWOT.  The new component will focus on the Global War on Terror (GWOT) and other high value, high visibility assessment missions as assigned.  Our Principal Deputy Inspector General will take on the additional responsibility of serving as the Special Deputy Inspector General for Strategic Plans and Operations for GWOT, and the current Director of the DoD IG Office of Strategic Initiatives will be appointed as the Assistant Inspector General for this new office.

Strategic Plans and Operations for GWOT will have component status with its own budget, personnel, and work space.  Staffing for this office will be drawn from DoD IG personnel who will participate in integrated IG and interagency teams.  These teams will address priority DoD and IG issues, such as the Global War on Terror and our presence in Southwest Asia.  The establishment of this new office will supplement the efforts currently being undertaken by DoD IG components.  This initiative is part of an ongoing Organizational Development Project that was initiated in January 2008 to assess corporate-level strategies, organizational alignments, geographical locations, personnel development, business practices, culture, and performance to best position the DoD IG to execute current, emerging and future missions.

Another initiative addressing the above-mentioned concerns was the realignment of internal core mission assets within the Office of the Deputy Inspector General for Auditing to form the Joint and Overseas Operations Directorate to support Southwest Asia audit operations.  This expeditionary audit directorate was formed in November 2007 to address corruption, fraud, waste, and abuse in Southwest Asia; combat illegal and improper expenditures; and improve accountability of DoD resources that support operations in Southwest Asia.  To accomplish this mission, we expanded our presence in Qatar, Afghanistan, and Iraq; established a field office in Korea; and are establishing field offices in Germany and Hawaii.

The committee report also notes that within the last three years there has been “exponential growth in the number and cost of Department contracts for operations, procurement, research, and construction within the United States and around the world.”  DoD contracts have increased from $241B in FY 2004 to $316B in FY 2007, increasing by $75 billion (31%) in the last three years.

The report further states that, “the nation’s annual defense costs have crossed the $500 billion mark, well beyond the annual budgets of just over $200 billion before the start of the GWOT in 2001.  Despite this growth, the personnel strength of the OIG has remained nearly constant.  The committee is concerned that the capabilities of the OIG are not keeping pace, in terms of qualified personnel, with the growth in the size of the defense budget and the numbers of contracts.”

As a result, the SASC recommended an increase of $10 million for FY 2008 for the DoD IG to start and accelerate the growth of the DoD IG.  The DoD IG subsequently was provided additional funding in the amount of $24.0 million in the FY 2008 Department of Defense Appropriations Act (P.L. 110-116) to improve contract management oversight.