UPCOMING REPORTS

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

Enterprise Resource Planning Systems Within the Department of Defense. This audit evaluates the Enterprise Resource Planning (ERP) systems identified as necessary for the Department of Defense to produce auditable financial statements. Specifically, the audit determines changes in cost of the ERP systems during development and implementation, the impact of schedule changes on DoD's goal to become auditable by 2017, compliance with the business process reengineering requirements of section 1072, “National Defense Authorization Act of 2010,” October 28, 2009, and whether the Chief Management Officers of the Services and Deputy Chief Management Officer of the Department of Defense provided sufficient oversight during development and implementation of the ERP systems.

Funds Balance with Treasury for Other Defense Organizations.  This audit assesses the Other Defense Organizations' FBWT reconciliation processes. The purpose of reconciling is to ensure the accuracy of financial data reflected in the FBWT. FBWT is an asset account that reflects the available budgetary spending authority of a Federal agency. At the agency level, FBWT is similar to a corporation's cash account.

Air Force Global Strike Command. This evaluation assesses the Air Force Global Strike Command organizational structure, roles and responsibilities. The objective of this assessment is to assess the effectiveness and efficiency of current command relationships with its subordinate organizations. This assessment also examines the potential efficiencies and gains in security effectiveness at Minot from alternate organizational structures.

Defense Transportation Coordination Initiative. This audit determines whether the United States Transportation Command effectively monitored the use of third party logistics contractors. Third party logistics contractors are used to improve coordination of freight shipments in the Continental United States.

Assessment of U.S. Government and Coalition Efforts to Develop the Afghan Local Police (ALP).  This report assesses the peace and protection in villages/areas where the presence of Afghan National Security Forces (ANSF) are not sufficient to prevent armed insurgent infiltration and activities. This includes evaluating output/outcome at ALP locations at various stages of their life cycle to determine the effectiveness of U.S./Coalition involvement developing the ALP and Ministry of Interior (MoI) capability to manage the program.

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

Accountability of Night Vision Devices Procured for the Afghan National Security Forces Needs Improvement (Report No. DODIG-2012-103). This audit determined that there was a lack of accountability for the night vision devices, consequently making the devices more vulnerable to theft or loss and putting U.S. and Afghan soldiers at greater security risk during night missions in Afghanistan. This audit was performed because of the importance of night vision devices for the safety and mission of U.S. and Afghan National Security Forces soldiers. Night vision devices are sensitive, unclassified significant military equipment requiring enhanced end-use monitoring.

Acquisition of the Navy Organic Airborne and Surface Influence Sweep Needs Improvement (Report No. DODIG-2012-101). This audit determined that the Navy did not update capability requirements in the draft capability production document after a contractor’s analysis showed the Organic Airborne and Surface Influence Sweep (OASIS) would not work. Without fully defined capability requirements, the Navy cannot determine whether OASIS is effective, suitable, and affordable to produce and deploy. The audit also determined that the low-rate initial production (LRIP) decision review was scheduled before testing and production readiness reviews were completed. Thus, the Navy could commit to acquiring four LRIP units, costing $15 million, which may not meet testing needs to support the full-rate production decision in FY 2015. The Navy also plans to acquire 38 more units at a cost of $140.6 million.

Better Cost-Control Measures Are Needed on the Army’s Cost-Reimbursable Services Contract for Logistics Support of Stryker Vehicles (Report No. DODIG-2012-102). 

The audit determined that the Army’s cost-reimbursable services contract for logistics support of Stryker vehicles lacked adequate cost-control metrics and a tangible deliverable. Although the contractor’s expenditure authorization was approximately $1.453 billion, the audit showed operational support costs of almost $1.117 billion for five years, resulting in about $335.9 million that the contractor used to accumulate inventory that could have been put to better use. As a result, the Project Manager for Stryker Brigade Combat Team identified $152.4 million in excess inventory that will be used to reduce requirements.

Review of the Stability Operations Information Centers in Afghanistan. This review found that while they are providing the kinds of information needed, there is a need to modify joint doctrine to ensure that human terrain doctrine is consistent and that lessons learned in Afghanistan can be leveraged during future joint operations. This review evaluated the Stability Operations Information Centers in Afghanistan to determine if they improved the ability of intelligence to provide critical information regarding the population, economy and government of Afghanistan to senior leaders and commanders. This report is For Official Use Only. The Results in Brief is available online.

Substantiated Reprisal for a Protected Communication (Case No. 11 19190 145). In May 2012, DoD IG substantiated an allegation that an active duty U.S. Army unit commander threatened a soldier with an involuntary separation from the Army in reprisal for that soldier's protected communication to the IG. DoD IG also found that the unit commander made comments to the soldier during a verbal counseling session intended to restrict or discourage the soldier from communicating with an IG. This report is For Official Use Only.

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

Four Sentenced in Connection with Stealing Aviation Fuel. From January 2007 through September 2010, Tomas Quintero and Luis Campos stole aviation fuel while it was stored at a U.S. Army airfield and then to sell the fuel to Fernando and Richard Baca to use in their commercial gravel truck operation. On May 31, 2012, Quintero was sentenced to 30 months in federal prison and ordered to pay $362,134 in restitution. On May 25, Fernando Baca was sentenced to 15 months in federal prison and ordered to pay $362,134 in restitution. On May 24, Campos was sentenced to four months incarceration and four months home confinement and ordered to pay $318,328 in restitution. On May 22, Richard Baca was sentenced to five years probation and ordered to pay $83,815 in restitution. This was a joint investigation with DCIS, Department of Transportation Office of Inspector General, IRS-Criminal Investigation, and U.S. Army Criminal Investigation Command.

Defense Contractor Calnet To Pay $18.1 Million After False Claims Act Lawsuit. On June 1, 2012, Calnet Inc. agreed to pay $18.1 million to settle allegations that the company submitted false claims to DoD. Calnet had three contracts with DoD to provide translation and linguistic services at Guantanamo Bay, Cuba and other locations beginning in 2005. Calnet allegedly overstated its provisional indirect or overhead rates on each of these contracts and submitted inflated claims for payment. The settlement resolves a lawsuit brought by a former Calnet employee, who will share in the settlement and receive $2,669,724 under the False Claims Act.

DoD Contractor Pleads Guilty in Bribery and Kickback Scheme. On June 20, 2012, Nick Park pleaded guilty to two counts of bribery as part of an investigation that has thus far resulted in nine defendants pleading guilty to charges of bribery and kickbacks. In early 2007, Park was employed by government contractor Nova Datacom, LLC. Park would provide items of value to program manager Kerry Khan of the U.S. Army Corps of Engineers in exchange for Khan directing contracts to Nova Datacom; on two occasions this included cash totaling at least $50,000. Park left Nova Datacom in August 2007 to start his own contracting company, Unisource Enterprise Inc., and admitted to paying bribes and providing an ownership interest to another public official in exchange for contracts. This was a joint investigation with DCIS, FBI, Small Business Administration OIG, IRS-CI, and USACID.

Violation of Export Law Results in 92 Months in Prison.
On June 21, 2012, Richard Phillips was sentenced to 92 months in prison after pleading guilty on January 18, 2012 to charges of attempting to export high-technology commodities to Iran in violation of the International Emergency Economic Powers Act. In October 2011, Phillips offered to export a spool of carbon fiber to Tehran via the Philippines. Carbon fiber is used in aerospace and nuclear engineering, and in general engineering and transportation. After being warned that exporting carbon fiber to Iran was illegal, Phillips took possession of a spool of carbon fiber, placed the fiber in a shipping container, and attached a label with a Philippines address. This was a joint investigation with DCIS and Immigration and Customs Enforcement-Homeland Security Investigations.

United Technologies Pleads Guilty to Charges of Helping China Develop Attack Helicopter
On 28 June, 2012, United Technologies Corporation pleaded guilty to violating the Arms Export Control Act in conjunction with the illegal export of US-origin military software used in the development of China's first modern military attack helicopter, the Z-10. UTC also pleaded guilty to making false statements to the U.S. government relating to the illegal exports. In 1998, the U.S. imposed a prohibition on exporting all U.S defense articles to China. UTC and two of its subsidiaries disclosed the export violation to the State Department in 2006, several years after the fact, in response to questions from an investor group. In addition to the plea, UTC and the subsidiaries agreed to pay over $75 million as part of a settlement.

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

Audit of the Acquisition of the Navy P-8A Poseidon Aircraft. The objective of this audit is to determine whether the Navy is effectively preparing the P-8A Poseidon program for the full-rate production decision. Specifically, this audit will evaluate whether the Navy is addressing the system shortfalls and increasing its sample size to fully assess system reliability as the Director, Operational Test and Evaluation advised both before and after the Low-rate Initial Production decision in August 2010.

Audit of Prime Vendor Maintenance, Repair, and Operations Supply Support Contracts. The objective of this audit is to determine whether Defense Logistics Agency Troop Support personnel are managing and administering the Science Application International Corporation maintenance, repair, and operations supply prime vendor contracts in accordance with the Federal and DoD guidance.

Audit of the Acquire-to-Retire Business Process Within the General Fund Enterprise Business System. The objective of this audit is to determine whether the Army's controls over recording accounting transactions within the Acquire-to-Retire business process through the General Fund Enterprise Business System are adequate. In addition, this audit will determine whether these transactions are supported with verifiable audit trails.

TESTIMONY/PREPARED STATEMENTS

Joseph T. (Mickey) McDermott, Special Deputy Inspector General for Southwest Asia, testified at a hearing on the “Assessment of the Transition from a Military to a Civilian-Led Mission in Iraq,” before the House Committee on Oversight and Government Reform, Subcommittee on National Security, Homeland Defense and Foreign Operations on Thursday, June 28th, 2012. A copy of the prepared statement can be found here.

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Unclassified reports are available for download on the DoD IG web site at http://www.dodig.mil/PUBS/index.html.

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