UPCOMING REPORTS

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

Defense Cash Accountability System (DCAS) Application Level General Controls. This audit determines whether Defense Cash Accounting System general controls, including those related to security management, access controls, configuration management, segregation of duties, and contingency planning, are operating effectively. The DoD uses DCAS to process and report its disbursement and collections of funds between the U.S. Treasury and DoD. DCAS processes over 4.5 million transactions each month.

Air Force Joint Surveillance Target and Attack Radar System (JSTARS). This audit determines whether the Air Force made cost effective purchases to support the JSTARS. JSTARS is a joint development project of the US Air Force and Army which provides an airborne, surveillance and target acquisition radar and command and control center.

DoD’s Sustainment of the H-60 Helicopter. This audit determines whether DoD is effectively managing the procurement of H-60 Helicopter spare parts. The Army, Navy, Air Force, and U.S. Special Operations Command all fly different versions of the H-60 for troop transport, personnel recovery, and special operations. The H-60 is made up of over 114,000 different parts. To keep the helicopter operational, spare parts are purchased to repair or replace worn-out parts.

U.S. Special Operations Sensitive Equipment Accountability. This audit determines whether U.S. Special Operations Command is properly accounting for sensitive equipment. Sensitive equipment requires special handling due to the classified nature or special characteristics of the item.

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

The Army Did Not Implement Effective Controls To Maintain Visibility and Accountability of Iraq Train and Equip Fund (ITEF) Equipment (Report No. DODIG-2016-134. This audit determined that Army commands documented procedures for processing and transferring equipment to the Government of Iraq. However, the 1st Theater Sustainment Command did not have effective controls to maintain complete visibility and accountability of equipment. This equipment, such as body armor, ambulances, and cargo trucks, assists the Government of Iraq to combat the Islamic State of Iraq and the Levant.

The Defense Logistics Agency (DLA) Properly Awarded Power Purchase Agreements and the Army Obtained Fair Market Value for Leases Supporting Power Purchase Agreements (Report No. DODIG-2016-137). This audit determined that DLA contracting officials awarded two power purchase agreements using full and open competition in accordance with Federal and DoD guidance. Power purchase agreements are contracts that allow Military Departments to enter into a contract for up to 30 years for energy production facilities on DoD property.

Independent Auditor’s Report on the Agreed-Upon Procedures for Reviewing the FY 2016 Civilian Payroll Withholding Data and Enrollment Information (Report No. DODIG-2016-135). The OIG performed these financial auditing procedures to assist the Office of Personnel Management (OPM) in assessing the reasonableness of employee withholdings and employer contributions that the Defense Finance and Accounting Service reported on health benefits, life insurance, and retirement. The OIG did not express an opinion on whether the contributions were reasonable or accurate. This report is intended solely for the information and use by OPM.

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

Former Executives of Military Contractor Sentenced to Prison for Illegally Exporting Weapons Parts. On August 19, 2016, four former employees of Sabre Defence Industries, LLC, a defense contractor, were sentenced for violating the Arms Export Control Act in connection with their role in illegally exporting firearm components and other defense items. Charles Shearon, the former Sabre President, was sentenced to 18 months in prison; Elmer Hill, the former Chief Financial Officer, was sentenced to 15 months in prison; Michael Curlett, the former Director of Sales and Marketing, was sentenced to 13 months in prison; and Arnold See, Jr., the former International Shipping and Purchasing Manager, was sentenced to 13 months in prison. In addition, all four defendants were ordered to serve 1 year of supervised release. Guy Savage, of London, England, was also charged and is facing extradition proceedings. This was a joint investigation with Homeland Security Investigations and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Former MCC Construction Company Owner Pleaded Guilty to Conspiring to Defraud the Government. On August 23, 2016, Walter Crummy, a former owner of MCC Construction Company, pleaded guilty to conspiracy to commit wire fraud, and agreed to forfeit $105,618. From 2008 through 2011, MCC and others conspired with two companies that were eligible to receive Federal contracts set aside for small, disadvantaged businesses with the understanding that MCC would, illegally, perform the work. MCC was awarded 27 contracts worth over $70 million through this scheme. MCC previously pleaded guilty to conspiracy to commit fraud, and agreed to pay over $1.7 million in criminal penalties and forfeiture. Thomas Harper, another former MCC owner, previously pleaded guilty to conspiracy to obstruct justice before the Small Business Administration (SBA). This was a joint investigation with the FBI, SBA OIG, General Services Administration OIG, and the Army Criminal Investigation Command.

Coastal Spine and Pain Agreed to Settle Allegations of False Claims for $7.4 Million. On August 31, 2016, Physicians Group Services, P.A., doing business as Coastal Spine and Pain (Coastal), agreed to pay $7.4 million to resolve allegations that it violated the False Claims Act by performing medically unnecessary drug screenings. The Defense Health Agency will receive $1.1 million of this settlement to resolve false claims submitted to TRICARE. Coastal allegedly performed and billed for a costly quantitative drug test screen for every patient regardless of the result of the less expensive qualitative test. A quantitative drug test identifies and counts particles of illicit drugs in urine, and is appropriate only if there is reason to doubt the results of the cheaper qualitative drug test screens. This was a joint investigation with the Department of Health and Human Services OIG.

Two Former Executives of Foreign Defense Contractor Charged in Expanding Fraud and Corruption Probe. On September 15, 2016, Neil Peterson and Linda Raja, former executives of Singapore-based Glenn Defense Marine Asia (GDMA), were charged with conspiracy to defraud the United States with respect to claims, conspiracy to commit wire fraud, and making false claims. Peterson and Raja allegedly conspired with Leonard Glenn Francis, the owner of GDMA, to defraud the U.S. Navy by submitting more than $5 million in false claims and invoices. Including Peterson and Raja, a total of 16 individuals and GDMA have been charged in connection with this scheme; of those, 11 individuals and GDMA have pleaded guilty. This was a joint investigation with the Naval Criminal Investigative Service and the Defense Contract Audit Agency.

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

Audit of the U.S. Army’s Modernization of the H-60 Black Hawk Fleet. The objective of this audit is to determine whether the Army is effectively managing its modernization of the H-60 Black Hawk fleet. The Black Hawk is the U.S. Army’s primary medium lift utility transport and air assault aircraft.

Audit of the Supply Chain Risk Management for the Ballistic Missile Defense System at the Missile Defense Agency. The objective of this audit is to determine whether the Missile Defense Agency has implemented an adequate supply chain risk management program for the Ballistic Missile Defense System. This audit is in response to a congressional request and a legislative requirement contained in House Report 114-537, to accompany H.R. 4909, the National Defense Authorization Act for Fiscal Year 2017.

Audit of DoD Procedures for Securing Iraq Train and Equip Fund Equipment. The objective of this audit is to determine whether the DoD has effective procedures for securing Iraq Train and Equip Fund equipment in Kuwait and Iraq. The United States established the Iraq Train and Equip Fund to provide military support to Iraq in the fight against the Islamic State of Iraq and the Levant.

Follow-up on DoD OIG Report No. DODIG-2014-121, Military Housing Inspections- Japan, September 30, 2014. The objective of this inspection is to determine whether adequate management actions have been taken on a previous OIG report’s agreed-upon findings and recommendations regarding housing management issues, including fire protection, electrical systems, environmental health, and safety at military housing in Japan.

Assessment of DoD’s Response to the August 2014 Final Report to the Secretary of Defense, Military Health System Review, Quality of Care. The objective of this evaluation is to determine whether the DoD's response to, and implementation plans and actions resulting from, the 2014 Military Health System (MHS) Review Final Report to the Secretary of Defense, are improving the quality of care across the MHS.