DOE and DOD Lack Clear OUO and FOUO Guidance in Key Aspects

Both DOE and DOD have established offices; designated staff; and  promulgated policies, manuals, and guides to provide a framework for the  OUO and FOUO programs. However, based on our assessment of the  policies governing both DOE’s and DOD’s programs, their policies to  assure that unclassified but sensitive information is appropriately  identified and marked lack sufficient clarity in important areas that could  allow for inconsistencies and errors. DOE policy clearly identifies the  office responsible for the OUO program and establishes a mechanism to  mark the FOIA exemption used as the basis for the OUO designation on a  document. However, our analysis of DOD’s FOUO policies shows that it is  unclear which DOD office is responsible for the FOUO program, and  whether personnel designating a document as FOUO should note the FOIA  exemption used as the basis for the designation on the document. Also,  both DOE’s and DOD’s policies are unclear regarding at what point a  document should be marked as OUO or FOUO, and what would be an  inappropriate use of the OUO or FOUO designation. In our view, this lack  of clarity exists in both DOE and DOD because the agencies have put  greater emphasis on managing classified information, which is more  sensitive than OUO or FOUO information.
DOE’s OUO program was created in 2003 and DOD’s FOUO program has  been in existence since 1968. Both programs use the exemptions in FOIA  for designating information in a document as OUO or FOUO. Table 1  outlines these exemptions.
The Federal Managers Financial Improvement Act of 1982 states that  agencies must establish internal administrative controls in accordance  with the standards prescribed by the Comptroller General. The  Comptroller General published such standards in Standards for Internal  Control in the Federal Government, which sets out management control  standards for all aspects of an agency’s operation. These standards are  intended to provide reasonable assurance of meeting agency objectives,  and should be recognized as an integral part of each system that  management uses to regulate and guide its operations. One of the  standards of internal control—internal control activities—states that  appropriate policies, procedures, techniques, and mechanisms should  exist with respect to each of the agency’s activities and are an integral part  of an agency’s planning, implementing, and reviewing.
DOE’s Office of Security issued an order, a manual, and a guide in April  2003 to detail the requirements and responsibilities for DOE’s OUO  program and to provide instructions for identifying, marking, and  protecting OUO information. According to DOE officials, the agency  issued the order, manual, and guide to provide guidance on how and when  to identify information as OUO and eliminate various additional markings,  such as Patent Caution or Business Sensitive, for which there was no law,  regulation, or DOE directive to inform staff how such documents should  be protected. The overall goal of the order was to establish a policy  consistent with criteria established in FOIA. DOE’s order established the  OUO program and laid out, in general terms, how sensitive information  should be identified and marked, and who is responsible for doing so. The  guide and the manual supplement the order. The guide provides more  detailed information on the eight applicable FOIA exemptions to help staff  decide whether exemption(s) may apply, which exemption(s) may apply,  or both. The manual provides specific instructions for managing OUO  information, such as mandatory procedures and processes for properly  identifying and marking this information. For example, the employee  marking a document is required to place on the front page of the  document an OUO stamp that has a space for the employee to identify  which FOIA exemption is believed to apply; the employee’s name and  organization; the date; and, if applicable, any guidance the employee may  have used in making this determination. According to one senior DOE  official, requiring the employee to cite a reason why a document is  designated as OUO is one of the purposes of the stamp, and one means by  which DOE’s Office of Classification encourages practices consistent with  the order, guide, and manual throughout DOE. Figure 1 shows the DOE  OUO stamp.
The current DOD regulations are unclear regarding which DOD office  controls the FOUO program. Although responsibility for the FOUO  program was shifted from the Director for Administration and  Management to the Office of the Assistant Secretary of Defense,  Command, Control, Communications, and Intelligence (now the Under  Secretary of Defense, Intelligence) in October 1998, this shift is not  reflected in current regulations. Guidance for DOD’s FOUO program  continues to be included in regulations issued by both offices. As a result,  there is currently a lack of clarity regarding which DOD office has primary  responsibility for the FOUO program. According to a DOD official, this  lack of clarity causes personnel who have FOUO questions to contact the  wrong office. The direction provided in Standards for Internal Control in  the Federal Government states that an agency’s organizational structure  should clearly define key areas of authority and responsibility. A DOD  official said that they began coordination of a revised Information Security  regulation covering the FOUO program at the end of January 2006. The  new regulation will reflect the change in responsibilities and place greater  emphasis on the management of the FOUO program.
DOD currently has two regulations, issued by each of the offices described  above, containing similar guidance that addresses how unclassified but  sensitive information should be identified, marked, handled, and stored.  Once information in a document has been identified as FOUO, it is to be  marked For Official Use Only. However, unlike DOE, DOD has no  departmentwide requirement to indicate which FOIA exemption may  apply to the information, except when it has been determined to be  releasable to a federal governmental entity outside of DOD. We found,  however, that one of the Army’s subordinate commands does train its  personnel to put an exemption on any documents that are marked as  FOUO, but does not have this step as a requirement in any policy. In our  view, if DOD were to require employees to take the extra step of marking  the exemption that may be the reason for the FOUO designation at the  time of document creation, it would help assure that the employee  marking the document has at least considered the exemptions and made a  thoughtful determination that the information fits within the framework of  the FOUO designation. Including the FOIA exemption on the document at  the time it is marked would also facilitate better agency oversight of the  FOUO program since it would provide any reviewer/inspector with an  indication of the basis for the marking.
Both DOE’s and DOD’s policies are unclear at what point to actually affix  the OUO or FOUO designation to a document. If a document is not marked  at creation, but might contain information that is OUO or FOUO and  should be handled as such, it creates a risk that the document could be  mishandled. DOE policy is vague about the appropriate time to apply a  marking. DOE officials in the Office of Classification stated that their  policy does not provide specific guidance about at what point to mark a  document because such decisions are highly situational. Instead,  according to these officials, the DOE policy relies on the “good judgment”  of DOE personnel in deciding the appropriate time to mark a document.
Similarly, DOD’s current Information Security regulation addressing the  FOUO program does not identify when a document should be marked. In  contrast, DOD’s September 1998 FOIA regulation, in a chapter on FOUO,  states that “the marking of records at the time of their creation provides  notice of FOUO content and facilitates review when a record is requested  under the FOIA.” In our view, a policy can provide flexibility to address  highly situational circumstances and also provide specific guidance and  examples of how to properly exercise this flexibility.
In addition, we found both DOE’s and DOD’s OUO and FOUO programs  lack clear language identifying examples of inappropriate use of OUO or  FOUO markings. According to Standards for Internal Control in the  Federal Government, agencies should have sufficient internal controls in  place to mitigate risk and assure that employees are aware of what  behavior is acceptable and what is unacceptable. Without explicit  language identifying inappropriate use of OUO or FOUO markings, DOE  and DOD cannot be confident that their personnel will not use these  markings to conceal mismanagement, inefficiencies, or administrative  errors or to prevent embarrassment to themselves or their agency.

	Neither DOE nor DOD Requires Training or Conducts Oversight

Standards for Internal Control in the Federal Government discusses the  need for both training and continuous program monitoring as necessary  components of a good internal control program. However, while both DOE  and DOD offer training to staff on managing OUO and FOUO information,  neither agency requires any training of its employees before they are  allowed to identify and mark information as OUO or FOUO, although some  staff will eventually take OUO or FOUO training as part of other  mandatory training. In addition, neither agency has implemented an  oversight program to determine the extent to which employees are  complying with established policies and procedures. DOE and DOD  officials told us that limited resources, and in the case of DOE, the  newness of the program, have contributed to the lack of training  requirements and oversight.

		OUO and FOUO Training Is Generally Not Required

While many DOE units offer training on DOE’s OUO policy, DOE does not  have a departmentwide policy that requires OUO training before an  employee is allowed to designate a document as OUO. As a result, some  DOE employees may be identifying and marking documents for restriction  from dissemination to the public or persons who do not need to know the  information to perform their jobs and yet may not be fully informed as to  when it is appropriate to do so. At DOE, the level of training that  employees receive is not systematic and varies considerably by unit, with  some requiring OUO training at some point as a component of other  periodic employee training, and others having no requirements at all. For  example, most of DOE’s approximately 10,000 contractor employees at the  Sandia National Laboratories in Albuquerque, New Mexico, are required to  complete OUO training as part of their annual security refresher training.  In contrast, according to the senior classification official at Oak Ridge,  very few staff received OUO training at DOE’s Oak Ridge Office in Oak  Ridge, Tennessee, although staff were sent general information about the  OUO program when it was launched in 2003 and again in 2005. Instead,  this official provides OUO guidance and other reference and training  materials to senior managers with the expectation that they will inform  their staff on the proper use of OUO.
DOD similarly has no departmentwide training requirements before staff  are authorized to identify, mark, and protect information as FOUO. The  department relies on the individual services and components within DOD  to determine the extent of training employees receive. When training is  provided, it is usually included as part of a unit’s overall security training,  which is required for many but not all employees. There is no requirement  to track which employees received FOUO training, nor is there a  requirement for periodic refresher training. Some DOD components,  however, do provide FOUO training for employees as part of their security  awareness training.

		Oversight of OUO and FOUO Programs Is Lacking

Neither DOE nor DOD knows the level of compliance with OUO and  FOUO program policies and procedures because neither agency conducts  any oversight to determine whether the OUO and FOUO programs are  being managed well. According to a senior manager in DOE’s Office of  Classification, the agency does not review OUO documents to assess  whether they are properly identified and marked. This condition appears  to contradict the DOE policy requiring the agency’s senior officials to  assure that the OUO programs, policies, and procedures are effectively  implemented. Similarly, DOD does not routinely review FOUO information  to assure that it is properly managed.
Without oversight, neither DOE nor DOD can assure that staff are  complying with agency policies. We are aware of at least one recent case  in which DOE’s OUO policies were not followed. In 2005, there were  several stories in the news about revised estimates of the cost and length  of the cleanup of high-level radioactive waste at DOE’s Hanford Site in  southeastern Washington. This information was controversial because  there is a history of delays and cost overruns associated with this  multibillion dollar project, and DOE was restricting a key document  containing recently revised cost and time estimates from being released to  the public. This document, which was produced by the U.S. Army Corps of  Engineers for DOE, was marked Business Sensitive by DOE. However,  according to a senior official in the DOE Office of Classification, Business  Sensitive is not a recognized marking in DOE. Therefore, there is no DOE  policy or guidance on how to handle or protect documents marked with  this designation. This official said that if information in this document  needed to be restricted from release to the public, then the document  should have been stamped OUO and the appropriate FOIA exemption  should have been marked on the document.

	Conclusions

The lack of clear policies, effective training, and oversight in DOE’s and  DOD’s OUO and FOUO programs could result in both over- and  underprotection of unclassified yet sensitive government documents that  may need to be limited from disclosure to the public or persons who do  not need to know such information to perform their jobs to prevent  potential harm to governmental, commercial, or private interests. Having  clear policies and procedures in place, as discussed in Standards for  Internal Control in the Federal Government, can mitigate the risk that  programs could be mismanaged and can help DOE and DOD management  assure that OUO or FOUO information is appropriately marked and  handled. DOE and DOD have no systemic procedures in place to assure  that staff are adequately trained before designating documents OUO or  FOUO, nor do they have any means of knowing the extent to which  established policies and procedures for making these designations are  being complied with. These issues are important because they affect  DOE’s and DOD’s ability to assure that the OUO and FOUO programs are  identifying, marking, and safeguarding documents that truly need to be  protected in order to prevent potential damage to governmental,  commercial, or private interests.

	Recommendations for Executive Action

To assure that the guidance governing the FOUO program reflects the  necessary internal controls for good program management, we  recommend that the Secretary of Defense take the following two actions:  revise the regulations that currently provide guidance on the FOUO  program to conform to the 1998 policy memo designating which office  has responsibility for the FOUO program and  revise any regulation governing the FOUO program to require that  personnel designating a document as FOUO also mark the document  with the FOIA exemption used to determine the information should be  restricted.
We also recommend that the Secretaries of Energy and Defense take the  following two actions to clarify all guidance regarding the OUO and FOUO  designations:  identify at what point the document should be marked as OUO or  FOUO and    define what would be an inappropriate use of the designations OUO or  FOUO.
To assure that OUO and FOUO designations are correctly and consistently  applied, we recommend that the Secretaries of Energy and Defense take  the following two actions:    assure that all employees authorized to make OUO and FOUO  designations receive an appropriate level of training before they can  mark documents and    develop a system to conduct periodic oversight of OUO and FOUO  designations to assure that information is being properly marked and  handled.

	Agency Comments and Our Evaluation

In commenting on a draft of this report, both DOE and DOD agreed with  the findings of the report and with most of the report’s recommendations.  DOE agreed with our recommendations to clarify its guidance to identify  at what point a document should be marked OUO and define what would  be an inappropriate use of OUO. They also agreed with our  recommendation that all employees authorized to make OUO designations  receive training before they can mark documents. DOD concurred with  our recommendations to revise the regulations designating which office  has responsibility for the FOUO program, to clarify guidance regarding at  what point to mark a document as FOUO and to define inappropriate  usage of the FOUO designation, and to assure that all employees  authorized to make FOUO designations receive appropriate training.
Both DOE and DOD partially concurred with our recommendation to  develop a system to conduct periodic oversight of OUO or FOUO  designations. They agreed with developing a system for periodic oversight  of OUO or FOUO designations, but disagreed with the recommendation in  our draft report to conduct period reviews of OUO or FOUO information  to determine if the information continues to require that designation. DOE  stated that much of the information designated as OUO is permanent by  nature—such as information related to privacy and proprietary interests— and a systematic review would “primarily serve to correct a small error  rate that would be better addressed by additional training and oversight.”  In its comments, DOD stated that such a review would not be an efficient  use of limited resources because “all DOD information, whether marked as  FOUO or not, is specifically reviewed for release when disclosure to the  public is desired by the Department or requested by others. Any erroneous  or improper designation as FOUO is identified and corrected in this review  process and the information released as appropriate. Thus, information is  not withheld from the public based solely on the initial markings applied  by the originator.” Based on DOE’s and DOD’s comments, we believe the  agencies have agreed to address the principal concern that led to our  original recommendation. We therefore have modified the report and our  recommendation to focus on the need for periodic oversight of the OUO  and FOUO programs by deleting the portion of the recommendation  calling for a periodic review of the information to determine if it continues  to require an OUO or FOUO designation.
DOD did not concur with our recommendation to require that personnel  designating a document as FOUO also mark the document with the  applicable FOIA exemption(s). DOD stated that “if the individual  erroneously applies an incorrect/inappropriate FOIA exemption to a  document, then it is possible that other documents that are derivatively  created from this document would also carry the incorrect FOIA  exemption or that the incorrect designation could cause problems if a  denial is litigated. Additionally, when the document is reviewed for release  to the public, the annotated FOIA exemption may cause the reviewer to  believe that the document is automatically exempt from release and not  perform a proper review.” However, we believe that the practice of citing  the applicable FOIA exemption(s) will not only increase the likelihood  that the information is appropriately marked as FOUO, but will also foster  consistent application of the marking throughout DOD. Using a stamp  similar to the one employed by DOE (see fig. 1), which clearly states that  the marked information may be exempt from public release under a  specific FOIA exemption, should facilitate the practice. Furthermore, as  DOD stated above, “all DOD information, whether marked as FOUO or  not, is specifically reviewed for release when disclosure to the public is  desired by the Department or requested by others. Any erroneous or  improper designation as FOUO is identified and corrected in this review  process and the information released as appropriate. Thus, information is  not withheld from the public based solely on the initial markings applied  by the originator.” Therefore, if DOD, under the FOIA process, properly  reviews all documents before they are released and corrects any  erroneous or improper designation, then prior markings should not affect  the decision to release a document, particularly if such markings are  identified as provisional. Therefore, we continue to believe our  recommendation has merit.
Comments from DOE’s Director, Office of Security and Safety  Performance Assurance and DOD’s Deputy Under Secretary of Defense  (Counterintelligence and Security) are reprinted in appendix I and  appendix II, respectively. DOE and DOD also provided technical  comments, which we included in the report as appropriate.
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If you or your staff have any questions concerning this report, please  contact either of us. Davi M. D’Agostino can be reached at (202) 512-5431  or dagostinod@gao.gov, and Gene Aloise can be reached at (202) 512-3841  or aloisee@gao.gov. Contact points for our Offices of Congressional   Relations and Public Affairs may be found on the last page of this report.  GAO staff who made major contributions to this report are listed in  appendix III.

Appendix I: Comments from the Department of Energy

Appendix II: Comments from the Department of Defense

Appendix III: GAO Contacts and Staff Acknowledgments

	GAO Contacts

	Acknowledgments

In addition to the contacts named above, Ann Borseth and Ned Woodward,  Assistant Directors; Nancy Crothers; Doreen Feldman; Mattias Fenton;  Adam Hatton; David Keefer; William Lanouette; Gregory Marchand; David  Mayfield; James Reid; Marc Schwartz; Kevin Tarmann; Cheryl Weissman;  and Jena Whitley made key contributions to this report.

Summary:
Why GAO Did This Study

In the interest of national security and personal privacy and for other reasons, federal agencies place dissemination restrictions on information that is unclassified yet still sensitive. The Department of Energy (DOE) and the Department of Defense (DOD) have both issued policy guidance on how and when to protect sensitive information. DOE marks documents with this information as Official Use Only (OUO) while DOD uses the designation For Official Use Only (FOUO). GAO was asked to (1) identify and assess the policies, procedures, and criteria DOE and DOD employ to manage OUO and FOUO information and (2) determine the extent to which DOE's and DOD's training and oversight programs assure that information is identified, marked, and protected according to established criteria.

What GAO Found

Both DOE and DOD base their programs on the premise that information designated as OUO or FOUO must (1) have the potential to cause foreseeable harm to governmental, commercial, or private interests if disseminated to the public or persons who do not need the information to perform their jobs and (2) fall under at least one of eight Freedom of Information Act (FOIA) exemptions. According to GAO's Standards for Internal Control in the Federal Government, policies, procedures, techniques, and mechanisms should be in place to manage agency activities. However, while DOE and DOD have policies in place, our analysis of these policies showed a lack of clarity in key areas that could allow for inconsistencies and errors. For example, it is unclear which DOD office is responsible for the FOUO program, and whether personnel designating a document as FOUO should note the FOIA exemption used as the basis for the designation on the document. Also, both DOE's and DOD's policies are unclear regarding at what point a document should be marked as OUO or FOUO and what would be an inappropriate use of the OUO or FOUO designation. For example, OUO or FOUO designations should not be used to cover up agency mismanagement. In our view, this lack of clarity exists in both DOE and DOD because the agencies have put greater emphasis on managing classified information, which is more sensitive than OUO or FOUO. While both DOE and DOD offer training on their OUO and FOUO policies, neither DOE nor DOD has an agencywide requirement that employees be trained before they designate documents as OUO or FOUO. Moreover, neither agency conducts oversight to assure that information is appropriately identified and marked as OUO or FOUO. According to Standards for Internal Control in the Federal Government, training and oversight are important elements in creating a good internal control program. DOE and DOD officials told us that limited resources, and in the case of DOE, the newness of the program, have contributed to the lack of training requirements and oversight. Nonetheless, the lack of training requirements and oversight of the OUO and FOUO programs leave DOE and DOD officials unable to assure that OUO and FOUO documents are marked and handled in a manner consistent with agency policies and may result in inconsistencies and errors in the application of the programs.