Department of Homeland Security 

Office of Inspector General 

National Communications System's Management of 


2005 Gulf Coast Hurricanes Mission Assignment Funding 


OIG-09-23 February 2009 
Offce of/nspecior General 

U.S. Department of Homeland Security 

Washington, DC 20528 

Homeland 

Security 

FEB 9 2009 

Preface 

The Deparent of 
 Homeland Securty (DHS) Offce ofInspector General (DIG) was established by 

the Homeland Security Act,of2002 (Public Law 107..296) by amendment to the Inspector General 

Act of 1978. Ths is one of a series of audit, inspection, and special reports prepared as par of our

oversight responsibilties to promote economy. effciency, and effectiveness within the deparent. 

This report addresses the strengts and weakesses of 
 the Nationa Communcations System's 

(NCS') management of 
 mission assignment fuding from the Federal 
 Emergency Management.

Agency (FEMA). It is based on intervews with employees and offcials of relevant agencies and 

institutions, direct obserations, and a review of applicable documents. 

We contracted with the independent public accounting firm of Regis & Associates, PC, to perform 

the review. The 
 contract required that Regis & Associates, PC, perform its review according to 

Management and Budget and the Governent Accountabilty Offce. gudance from the Offce of 


Regis & Associa.tes, PC. identifed five areas where NCS' management of 
 the mission assignents 

and fuds could be improved. Specifically, NCS needs to: (1) improve its preparedness for futue 

responses; (2) improve its disaster response procurement and contract monitoring processes; 

(3) improve oversight for property accountabilty; (4) improve its retention of documentation 

supporting reimbursable expenditues; and (5) improve its mission assignment reimbursement biling 

processes. Regis & Associates, PC. is responsible for the attched independent accountants' report 

and the conclusions expressed therein. 

The recommendations herein have been developed to the best knowledge available to our offce, and 

have been discussed in draft with those responsible for implementation. We trst that this report will 

result in more effective, effcient, and economical operations. We express our appreciation to all of

those who contributed to the preparation of ths 
 report.

r

~ .~. ~,."..

Richad L. Skinner 

Inspector General 
. REGIS . ASSOCIATES, PC
 

MANAGEMT CONSULTANS &
 

CERTIIE PUBUC ACCOUNANS
 

Independent Accountats' Report on Applyin Agreed Upon Procedures 

Offce of Inspector General 

U.S. Deparent of 
 Homeland Securty

Washigton, D.C.
 

We have performed certn agreed-upon procedures (the Procedures), as sumarized in the 

ths report, related to mission assignent fudig to 

the National Communcations System (NCS). These fuds were allocated to NCS by the Federal 

Objectives, Scope, and Methodology section of 


Emergency Management Agency (FEMA) for the 2005 Gulf Coast Hurcanes. This engagement 

consisted of reviewing selected management activities for the 23 mission assignents to NCS for 

Huricanes Katrina (August 2005), Rita (September 2005), and Wilma (October 2005) issued 

though March 31, 2006. 

The Procedures, which were agreed to by the Deparent of Homeland Security Offce of Inspector 

General, Offce of Emergency Management Oversight, were performed to examine the expenditues 

made in executing the mission assignents, and to evaluate the management of the mission
 

assignent process from origintion to closeout. 

Ths agreed-upon procedures engagement was performed according to standads established by the 

American Institute of Certifed Public Accountats, and guidance from the Offce of Management 

and Budget and the Governent Accountability Offce. The sufciency of the Procedures is solely 

make no representations 

regarding the sufciency of the Procedures, either for the purose for which ths report has been 

requested, or for any other purpose. Our test procedures revealed internal control weakesses in five 

the responsibilty of the specified users of the report. Consequently, we 


areas. These fidigs and the associated recommendations are presented in the Results of Review 

section of ths report.
 

We were not engaged to and did not perform an audit, the objective of which would be the 

an opinon on the specified elements, accounts, or items. Accordingly, we do not 

express such an opinion. Had we performed additional procedures, other matters niight have come 

to our attention that would have been reported to you. 

expression of 


Ths report is intended solely for the use of the Deparment of 
 Homeland Security Offce of

Emergency Management Oversight, and should not be used by those 

who have not agreed to the Procedures and taken responsibility for the suffciency of the Procedures 

Inspector General, Offce of 


for their puroses. 

Regis & Associates, PC 

REGIII .,.rrOCIAHS,P' 

1400 Eye Street, NW, Suite 425, Washigton, D.C. 20005 TeI202.296-7101 Fax 202-296-7284 
Table of Contents/Abbreviations 

Executive Summary ............. ................... ...... ...... ........................... .... ........... ........... ...... .......... ... ....... ..1
 

Backgroun d ....... ............ .... ................. ........ ........ ........ ............... ........... ...... ......... .......... ................ .... ...3
 

Res nIts of Review ......... ............ ..... ...... .... .... ................. ................... .................. ... .... .............. ...... ........5
 

A. Planng and Procedures for Procurement, Propert Accountability, and Financial
 

Management.................... .................................................................................................................6
 

B. Disaster Response Procurement and Contract Monitoring Process................................................ 7
 

1. Finaizing Vendor Contracts .............................. .............................................. ............ ...........7
 

2. Procurements of Goods and Services ........... .......................... .... ....... ..... ................................8
 

3. Procurement Periods and Mission Assignment Terms ............................................................8
 

C. Disaster Field Command Location Policies and Procedures ...........................................................9
 

1. Budget Object Class Coding .............................. ............................................ ................. ......1 0
 

2. Control Over Accountable Items ................. ..... ....................... ................. .............................11
 

D. The Retention of Documentation Supporting Expenditures....................................................... ..12
 

13
 E. The Mission Assignment Reimbursement Billing Process............................................................ 


1. Documentation to Support Bilings.... ........ ...................... ................. ........ ............................14
 

2. Subtasked Agencies Biled FEMA Directly..................................... ...... ...............................16
 

3. Funding Statu for Mission Assignments Issued to NCS .....................................................17
 

Management Response and OIG Analysis ......................................................................................18
 

Appendices 

Appendix A: Objectives, Scope, and Methodology ............................................... ............................19
 

Appendix B: Recommendations......................................................... ............................................... .21
 

Appendix C: Schedule of Questioned Costs ............ ......... ......... ............................. ............................23
 

Appendix D: Management Comments to the Draf Report ................................................................24
 

Appendix E: Report Distribution ................................................ ....... .................................... .......... ...31
 

Abbreviations 

DHS U.S. Deparent of Homeland Security
 

FCC Federal Communcations Commission
 

FEMA Federal Emergency Management Agency
 

GSA General Services Administration
 

NCS National Communcations System
 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 
Executive Summary 

Homeland Security, Office of Regis & Associates, PC, under contract with the U.S. Deparent of 


Inspector General, reviewed the National Communications System's management processes and 

internal controls for implementing Federal Emergency Management Agency (FEMA)-issued 

mission assignments related to the 2005 Gulf Coast Huricanes disaster relief efforts. FEMA is 

authorized to task other federal agencies, including components within U.S. Deparment of 

Homeland Security, with needed expertise to cary out specific disaster relief activities. Our 

objective was to determne whether the National Communications System had properly designed and 

implemented management processes and intern controls over the fuds it received for the specific 

mission assignments.
 

The National Communications System reacted quickly to restore emergency telecommuncations 

services to the afected areas. However, it did not initially have a ful understading ofits 

procurement and fiancial management responsibilties under the mission assignments. It leveraged 

ongoing business arangements with the Federal Communcations Commission, the U.S. General 

Services Administration, and the U.S. Deparent of 
 Defense for certain tasks, but experienced

signcant delays in getting key support contracts executed. The delayed execution of support
 

the National Communcations System's contracts, in tu, delayed contractor bilings and some of 


March 2007, the National Communcations System 

had not yet provided adequate supporting documentation to FEMA. Due to those delays, FEMA had 

bilings for reimbursement from FEMA. As of 


its earlier $4 milion reimbursement to the National Communcations System. Also, 

the National Communcations System had not yet accounted for some equipment items. 

reclaied all of 


The National Communcations System entered into interagency agreements with the Deparent of 

Defense's Defense Information Technology Contracting Organzation to establish contracts with 

eligible vendors. Those agreements did not require the Defense Information Technology 

Contractig Organzation to provide supporting documentation for its payments to vendors caring 

out mission assignment roles. We requested that the National Communcations System obtain and 

provide us with ths information. The documentation provided was sufcient to support payments to 

the $4 millon that the Defense Inormation Technology Contracting 

Organzation biled to the National Communcations System for reimbursement, but key approvals 

from the National Communcations System for the Defense Inormation Technology Contracting 

Organzation to pay vendors were missing. The National Communcations System biled FEMA 

vendors for alost all of 


soon afer being biled by the Defense Informtion Technology Contracting Organzation during the 

spring and sumer of 2006, but neither had generated the additional analytical data required by 

FEMA to support reimbursement of incured mission assignent cost. After repeated unsuccessful 

requests to the National Communications System and its administrative support entities for 

documentation, FEMA reclaimed its reimbursement. 

The National Communications System did not have effective procedures for controllng all assets 

with a high-dollar value, or assets of a sensitive natue. These items should have been turned over to 

May 2007, the National Communications 

System was not able to account for 16 portable satellite telephones and a mobile telecommunications 

FEMA prior to biling for reimbursement, but, as of 


NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 1 
system that had been used to restore emergency telephone services. Although much of the 

contractua cost was incurred for personal services, it was not readily obvious whether additional 

equipment items had been purchased, because generic budget coding masked the composition of 

Defense nor the National Communcations System had 

analyzed the supporting documentation and vendor contracts to determe whether additional 

equipment items purchased should have been submitted to FEMA. 

expenditues. Neither the Deparent of 


We are proposing 21 recommendations to the National Communications System for improving its 

preparedness for procurement actions, upgrading controls concernng accountable propert, and 

improving its capacity to generate documentation for supporting costs biled to FEMA under mission 

assignments. 

NCS'Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 2 
Background 

The Robert T, Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), signed into law 

on November 23, 1988, is the statutory authority for most federal disaster response activities, 

especially as they pertain to the Federal Emergency Management Agency (FEMA) and FEMA 

programs. To make federal assistace under the Stafford Act available, states must initiate a request 

for an emergency or maj or disaster declaration that is reviewed by FEMA for approval of the 

President. The Stafford Act permits FEMA to anticipate declarations, and pre-stage federal 

personnel and resources when a disaster that theatens human health and safety is imminent, but not 

yet declared. FEMA canot provide federal assistance until an emergency or major disaster 

declaration is made. 

The Homeland Security Act of 2002 (Homeland Security Act) created the United States Deparent 

of Homeland Security (DBS) and realigned FEMA, previously an independent agency, as par of 

DHS withi the Emergency Preparedness and Response Directorate. In addition, the Homeland 

directives established a new, unfied, all-hazds framework and 

plan for futue responses to terrorism, natual disasters, special events, and emergencies. Ths plan, 

referred to as the National Response Plan, which was revised and renamed the National Response 

Framework in January 2008, establishes a comprehensive all-hazards approach to enhance the abilty 

Security Act and other Presidential 


the United States to manage domestic incidents. The National Response Plan incorporates best 

practices and procedures from incident management disciplines such as emergency management, 

law enforcement, firefighting, public works, public health, responder and recovery worker health and 

of 

safety, and emergency medical assistance, and integrates them into a unfied strctue. It forms the
 

basis of 
 how the federal governent coordinates with state, local, and tribal governents and the

private sector during incidents, and establishes lead agencies for many different aspects of possible 

disaster response. 

The National Communcations System (NCS) plays an important role in assistig the federal 

executive branch in managing telecommuncations fuctions and responsibilties, and in 

coordinating the plang and provision for national security and emergency preparedness
 

communcations. NCS was established during the 1960s to lin, improve, and extend 

communcations facilties and components of 
 various federal agencies. With the inception ofDHS

Defense to DHS' Information Analysis and
 

Infrastrctue Protection Directorate, and in 2005, was internally shifted to the Directorate for
 

in 2003, NCS was transferred from the Deparment of 


Preparedness. In 2007, portons of the Directorate for Preparedness were consolidated into the new 

National Protection and Programs Directorate (National Protection and Programs). NCS is a 

program activity withn ths DHS diectorate and receives various administrative support and other Financial Offcer's offce
 within National fuctions from other DHS offces. Typically, the Chief 


Protection and Programs either performs or coordinates the budgeta, financial management, and 

procurement activities on behalf ofNCS. 

NCS receives anual appropriations for caring out its baseline mission. It may also receive 

mission assignment fuding from FEMA to car out incident response intiatives under the National 

Response Plan.
 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 3 
Aside from its ongoing roles described above, NCS also has an importt role under the National 

Response Plan. NCS' responsibilties under the National Response Plan are an extension of its 

ongoing mission. One of the 15 priar response activities under the National Response Plan is
 

restoring vital communcations fuctions afer an incident of national significance. Emergency 

the National Response Plan calls for NCS to coordinate federal actions to 

provide the required temporary national security and emergency preparedness telecommuncations 

and the restoration of the telecommunications infastrctue. It also is to support federal 

Support Function #2 of 


deparents and agencies in the procurement and coordiation of telecommunications services from 

the telecommuncations and information technology industr during incident response. 

On August 29, 2005, Hurricane Katrina devastated the Gul Coast states of Alabama, Florida, 

Louisiana, and Mississippi with Category Three winds and torrential rains. By September 9, 2005, 

Congress passed legislation that provided over $63 billon to DHS for disaster relief. In the 

Coast Huricanes, FEMA issued NCS 23 mission assignents with authority 

to incur costs up to $13.2 millon as of March 31, 2006. 

aftermath of the Gulf 


NCS used several supporting agencies in carng out its role. Pursuant to the National Response 

Plan, which governs the relationship among these entities, NCS requested assistace from the u.s. 

General Services Administration (GSA), the Federal Communcations Commssion (FCC), and the 

the $13.2 millon, NCS authorized GSA and FCC $8.8 milion for 

18 mission assignments and tasked the Defense Information Technology Contracting Organzation 

with procurement responsibilities for $4.4 milion for the other 5 mission assignments. 

U.S. Deparment of Defense. Of 


NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 4 
Results of Review 

Ths section presents the results of our assessment ofNCS' internal control environment used to 

administer mission assigned tasks and fuding, and our tests to evaluate mission assignent 

procurements, expenditures, and supporting documentation for reimbursement bilings.
 

Our results are presented sequentially, as NCS would have progressed in its plang and 

administration of the 23 mission assignments, staing with organizig the effort and ending with
 

steps for obtaing reimbursement for costs incured on FEMA's behalf. In addition to intervewig 

cognizat NCS management stf and National Protection and Programs managers, including the 

transactions to assess initial preparedness Chief Finacial Offcer, we conducted extensive testing of 

to implement the mission assignments; procurement, budgeta control, and financial management 

system support avaiable and used; conformity of outlays with the mission assignent; controls over
 

receipt, acceptace, and payments for goods and services procured; asset accountabilty; and validity 

and support for reimbursement claims to FEMA. 

The primar focus of our work was the five mission assignments for which NCS biled FEMA 

the biled expenditures under the
 directly. These five mission assignments composed over 90% of 


23 NCS mission assignments. In June 2006, when we intialy requested a detailed list of all mission 

assignment obligation, expenditue, and reimbursement biling transaction activity, NCS had not 

received all the billngs from the Deparent of 
 Defense' s Defense Information Technology

Contracting Organzation. Subsequently, in Januar 2007, NCS provided us with procurement 

documentation and bils submitted to FEMA for reimbursement. In May 2007, NCS provided 

supporting documentation for all amounts that the Defense Inormation Technology Contracting 

Organation had biled to NCS though September 2006. We examined all supporting 

documentation provided for the dua purose of determinng whether the payments made to vendors 

were valid, as well as whether the documentation met FEMA's criteria for reimbursing NCS for its 

costs incured under the five mission assignments identified above.
 

the 18 remainig mission assignments.
 We determined that no costs were incurred under 15 of 


Bilings by 
 the FCC and GSA to FEMA, related to the other thee mission assignments, amounted to

the 23 mission less than $400,000. The followig table details amounts provided to NCS under 


assignents, amounts expended and biled to FEMA, planed amounts to be deobligated, and 

amounts for which fmal decisions were pending as of May 2007. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 5 
Table 1 Biled and Unbilled Amounts, 2005 Gulf Coast Hurricanes Expenditures Through March 31, 2006
 

Biled 

Mission Assignment Disposition 

# 

Issued 

Total 

Obligation 

Amount per 

FEMA 

Expenditures 

Activity 

Through 3/31/2006 

Unbiled 

Amounts 

Fulfilled through the Defense Information 

Technology Contracting Organization 5 $ 4,350,000 $ 4,034,908 $ 315,092 

Executed through subtasked agencies (GSA & 

FCC) 3 1,640,000 348,801 1,291,199 

No activity (to be de-obligated), initially 

subtasked to GSA & FCC 15 7,230,685 --­ 7,230,685 

TOTALS 23 $. 13~220,685 $ 4,383,709 $ 8,836,976 . 

A. Planning and Procedures for Procurement, Property Accountabilty, and 

Financial Management 

We determined that NCS and its supportng DHS entities had not adequately prepared for the 

various administrative tasks associated with mission assignments from FEMA. As discussed in 

more detal in the followig section dealing with procurement, NCS had ongoing business 

relationships with GSA, the FCC, and the Defense Information Technology Contracting 

Organzation on which it relied for caring out the mission assignment work associated with the 

2005 Gulf 
 Coast Huricanes. However, NCS was not fully prepared for unexpected tyes of 

procurements, perhaps parially because it incorrectly assumed that mission assignments conveyed 

their own authority to order goods and servces. 

NCS also did not have procedures for identifying assets that would need to be explicitly accounted 

for and tued in to FEMA prior to biling for the associated costs. This matter is discussed in more 

detail in Section C of ths report concerng accountable assets. 

NCS was not prepared to develop the additional supporting documentation for reimbursement that 

FEMA requires from agencies receiving mission assignment fuds. These requiements, which call 

for more global assessments of what was spent, are explained in detail in Section E of 
 this report. 

The former Chief Financial Offcer of 
 National Protection and Programs and NCS managers said 

they were unaware of the documentation requiements established by FEMA as a condition of 

reimbursement. In addition, NCS did not require the supportg agencies on its mission assignents 

to provide the type of supporting documentation that FEMA required from NCS for reimbursement. 

During 2006, NCS prepared an Emergency Support Function #2 operations manuaL. Whle the 

manual focuses priarily on the coordination and operational aspects of restorig communcations, 

it does mention in broad terms its responsibilty for having contracts in place and accountabilty for 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 6 
equipment items. Additional details and specificity regarding its responsibilty for the matters 

discussed in ths report are needed to avoid recuring problems. 

RECOMMENDATIONS 

We recommend that NCS: 

. Recommendation #1: Develop detaled procedures for admsterig the procurement, 

propert accountability, and fiancial management responsibilties associated with receiving 

mission assignments from FEMA. 

. Recommendation #2: Provide training to key NCS managers and staff on the unque 

requirements ofFEMA's mission assignment fuding. 

B. Disaster Response Procurement and Contract Monitoring Processes 

NCS experienced substantial delays in finalizing five new vendor contracts related to two mission 

assignents. Although we did not identify any delays in satisfying mission assignment objectives, 

the $4.1 milion in goods and services procured though 

the Defense Inormation Technology Contracting Organzation for the 2005 Gulf Coast Huricanes 

mission assignment activity. These contracts, aranged through DHS' Offce of Procurement 

these five contracts accounted for 72% of 


Operations, formalized agreements with telecommunications and service providers after NCS had 

orally commtted the governent to purchase goods and services. Interagency agreements between
 

the Defense Inormation Technology Contracting Organization and DHS, on behalf ofNCS, 

identified periods of 
 performance that extended beyond the dates staed in FEMA's authorized

mission assignments.
 

1. Finalizine: Vendor Contracts 

The five new contracts were entered into for equipment and support service to restore emergency 

communications in the disaster area. While they were all signed in late April 2006, we determined 

that vendor activity on some of 
 these contracts had been completed as early as September 2005.

the expenditures incured under the new vendor contracts were biled to the government 

until May 2006. In progress reports to FEMA and in response to FEMA's inquiies as to whether 

these mission assignents could be closed out, the Federal Emergency Communcations Coorditor 

at the Joint Field Offce said that several mission assignments could not be closed out because no 

None of 


billngs had been received from the vendors.
 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 7 
RECOMMNDATION 

We recommend that NCS: 

. Recommendation #3: Monitor procurement activities of subtasked agencies to ensure that 

contracts are completed expeditiously. 

2. Procurements of Goods and Services
 

NCS' initial field assessment ofhurIcane- and flood-related communcations damage determined 

that it would be necessar to acquire equipment and industr support services to restore critical 

the National Response Plan requires agencies 

to check FEMA's Telecommunications Information Management and Control System to determine 

whether an asset is in FEMA's inventory before the decision is made to buy on the open market. 

Although there was no documentation confrming that ths was done, NCS management officials 

communcations capabilities. The Logistics Anex of 


told us that they first consulted with FEMA on the availability of 
 the requied equipment. Upon

determation that the item was not in FEMA's inventory, FEMA used the mission assignment 

process to satisfy the requirement. 

NCS management offcials informed us that they were under the impression that FEMA's mission 

assignents conveyed separate procurement authority, which may have exceeded their procurement 

capabilties. Proceeding with that understanding and considering the immediate need, NCS 

contated vendors and ordered the equipment, instalation and setup services, and associated support 

services. After determining that they did not have the requisite procurement authority, NCS tued 

to DHS' Offce of 
 Procurement Operations, which, under The Economy Act of 1932 (31 U.S.C. §

1535), entered into interagency agreements with the Defense Information Technology Contracting 

Organzation to formalize the agreements with vendors. Weare not makng a recommendation for 

this condition because it has been previously addressed in Section A of this report. 

3. Procurement Periods and Mission Assi2lment Terms 

Interagency agreements between the Defense Information Technology Contracting Organization and 

DHS, executed on behalf ofNCS, had periods of performance that extended beyond the dates stated 

in FEMA's authoried mission assignments. We identified some orders and expenditues that 

exceeded the period ofpedormance for two of 
 the five mission assignents. Whle these

expenditures were for items and services that could have been anticipated to be bought under these 

mission assignments, they were ordered afer the cutoff date of the mission assignment. Therefore, 

we consider the amounts associated with these events to be questionable costs. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 8 
performance for the eight! mission assignments and identified two that 

had been extended by FEMA. NCS officials indicated to us that for several mission assignments, it 

We analyzed the period of 


was not possible to completely execute the tasks with the scheduled timeframes because its sta 

was bared from the afected areas due to flooding and associated health issues. We noted that the 

circumstances surounding the mission assignents for which costs were incured beyond the
 

performance period were essentially the same as those for another mission assignment that had been 

extended. 

While this issue may represent a technical noncompliance, the Financial Management Support 

Anex of 
 the National Response Plan refers to the general requirement that agencies implement

effective internal controls and financial practices in admstering mission assignment fuds. 

Inherent in these gudelines would be a key budgeta requirement that fuds are available for use 

only during the specified timeframe. 

One additional observation is that the five interagency agreements between DHS' Offce of 

Procurement Operations on behalf ofNCS and the Defense Information Technology Contracting 

Organzation called for a minimum 12-month period of 
 performance. They did not specifically refer

to the stipulated performance periods in the two underlyig mission assignments, which estimated 

completion no later than June 2006 (including mission assignment extensions). 

RECOMMENDATIONS 

We recommend that 
 NCS:

. Recommendation #4: Ensure that performance periods in procurement vehicles are 

consistent with those in the underlying mission assignments. 

. Recommendation #5: Request extensions for all mission assignments immediately upon 

notice of circumstances waranting such. 

C. Disaster Field Command Location Policies and Procedures 

NCS did not provide documentation to verify that all property acquired and used during the 2005 

Gulf Coast Huricanes had been properly accounted for and tued over to FEMA. We identified at 

least $824,600 ($11,200 for satellte telephones and $813,400 estimated cost for emergency 911 

vehicles and antenna) that NCS acquired and biled to FEMA that should have been retued to 

FEMA. The estimated portion of this cost was based on our analysis of the related procurement, 

which identified ordered items and associated cost. Accountabilty for property was weakened by 

inadequate management controls. 

1 Ths number includes the five mission assignments for which NCS biled FEMA and the other three mission 

assignments for which costs were incurred, but which GSA and FCC biled FEMA directly. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 9 
1. Bud2et Obiect Class Codin2
 

NCS and National Protection and Programs financial managers said they decided to obligate all of 

the mission assignent fuds subtasked to the Defense Information Technology Contractig 

Organzation under budget object code 2500 seres (Other Contractual Serces). Therefore,
 

purchases of equipment, set-up and intallation, and wireless and satellte/telephone serices were all
 

biled under that budget object code. The recording ofthese items as contractual serices inhibits 

FEMA's abilty to identify equipment purchases. For example, approximately $1.7 milion 

expended under one mission assignent included a significant amount of telecommunications 

equipment with a designated purose of supporting emergency 911 calls that should have been 

segregated and coded to the budget object code 3100 series (Equipment). 

Budget guidelines establish the codes to be charged for different uses of 
 fuds, and FEMA's

"Mission Assignent Biling and Reimbursement Checklist"i specifically notifies agencies that 

additional reportng requirements are established for equipment purchases considered accountable 

proper over $1,000. FEMA's "Mission Assignent Biling and Reimbursement Checklist" also 

instrcts agencies that prior to biling for equipment purchases, the equipment must be tued over to 

FEMA. 

When NCS biled FEMA for reimbursement of costs, it used the same budget object code used when 

obligatig the mission assignent fuds. One way that FEMA is able to gather the data on 

equipment purchases is its review of 
 bils, detailed by budget object code, as submitted to FEMA for

the correct budget object code is an important interal control from 

FEMA's perspective. Correct budget object codes allow FEMA to examine agencies' bilings to 

identify accountable equipment for which reimbursement is being requested and to confirm that the 

reimbursement. Thus, use of 


biling agency has delivered the proper to FEMA. Although FEMA' s regional staff, who may 

have fist-hand knowledge of equipment purchases, review these bilings, correct coding is an 

important first step. With regard to the equipment purchases identified above, NCS biled for, but 

did not tu over, all equipment items to FEMA. 

RECOMMNDATIONS 

We recommend that NCS: 

. Recommendation #6: Ensure correct budget object codes are used when obligating, 

recordig expenditues, and biling for mission assignent fuds. 

i Requiements established by FEMA for supporting documentation and reimburement transactions on their website 

the (htto://ww.fema.gov/governent/ilinst.shtm) as referred to in the Financial Mangement Support Anex of 


National Response Plan (page FIN-5). 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 10 
. Recommendation #7: Use budget object code coding from agencies' budgetary and 

financial management records, procurement instrents, and other perinent data to identify
 

and track accountable property purchased with mission assignent fuding.
 

. Recommendation #8: Reduce the amounts biled to FEMA by the cost of property not 

tued over to FEMA for futue use. 

2. Control Over Accountable Items
 

In May 2007, we were informed byNCS that the Emergency 911 equipment was stored in a 

governent facility in Louisiana. We were also informed that the vendor retained title to this asset 

although FEMA was biled for the equipment. This occured because the vendor previously 

attempted to convey the title to FEMA, but was unable to do so because they could not identify and 

establish contat with an appropriate, authorized FEMA representative. Since NCS was ultiately 

responsible for the equipment, it should have communicated with the vendor to obtain the title and, 

thus, be in a position to properly convey title prior to, or concurrent with, biling FEMA for 

reimbursement for this asset. As of April 2007, FEMA represented that the equipment was still 

being used in Baton Rouge. However, since FEMA did not have title to this asset, it was unable to 

take possession or physical custody of this equipment. 

NCS could not locate or determine the status of 16 of 
 the 100 portable satellte telephones purchased

for use durng Hurcane Rita. Also, NCS could not provide us with any data such as receiving 

reports, property transfer documents, or any other data necessary for tracking the location of the 

telephones. NCS offcials said they verfied the existence of 
 the remaing 84 portable satellite

telephones that were in FEMA's possession. We were able to successfully confrm the inclusion of

these remainig telephones in FEMA's property management 
 system, on a test basis, by comparg

these the seral numbers and barcodes listed on the vendor invoice. Because the aggregate cost of 


telephones is considered to be material, it would be reasonable and necessar for NCS to adopt the 

relevant physical control procedures described in FEMA's "Personal Property Management 

Program" manuai.3
 

RECOMMENDATIONS 

We recommend that NCS: 

. Recommendation #9: Obtain the legal title(s) for the Emergency 911 telecommunications 

equipment and convey ownership to FEMA. 

3 FEMA Manual 6150.1, "Personal Propert Mangement Program." 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 11 
. Recommendation #10: Determine whether there is a continuing need for the Emergency 

911 telecommuncations equipment at its curent location and, if the imediate need for the 

asset has been satisfied, retreve and physically transfer it to a FEMA-designated location. 

. Recommendation #11: Prepare a lost or stolen propert report for the 16 missing satellte 

telephones and submit it to FEMA in lieu of returng the property. 

. Recommendation #12: Improve physical controls over the issuance of accountable property 

to ensure accountabilty for losses. 

D. The Retention of Documentation Supporting Expenditures 

NCS did not have sufficient supporting documentation for approxiately $965,614 of the $4.4 

September 30, 2006. We identified 

these unupported costs by testing ten biled expenditure transactions totaling $4.1 milion. These 

milion it had expended on the eight mission assignments as of 


ten transactions represented approximately 90% of total outlays under the mission assignents 

issued to NCS. FCC and GSA biled the remaining 10 % of 
 tota outlays directly to FEMA. We

requested the underlying contracts, purchase orders, invoices, and acceptance and receipt 

documentation for the ten transactions and conducted various test procedures that were designed to 

establish the propriety of the expenditues. The results of this testwork revealed that four of the ten 

transactions, totaling approximately $965,614, were not fully supported as discussed below. 

We noted that NCS' approval document (the Task Order Invoice Review/Approval Form) was not 

provided for $952,934 of expenditures incured by one of the two vendors that were tasked under 

existing contracts. These expenditures were made pursuant to interagency agreements between the 

Defense Inormation Technology Contracting Organization and NCS. Under the established 

payment process, pursuant to these interagency agreements, before an invoice can be processed for 

payment, the primary or alternate NCS task monitor must verify that the goods or services indicated 

on the invoice were received and conform to the prescribed terms and conditions. This approval 

must be evidenced by NCS' submission of a completed Task Order Invoice Review/Approval Form 

to the Defense Information Technology Contracting Organzation's Financial Management Services 

Division. The submission of ths fuly executed form by NCS to the Defense Information
 

Technology Contracting Organation, indicating NCS' approval, constitutes acceptance of the 

service as satisfactory and authorizes the Defense Inormation Technology Contracting Organzation 

to pay the vendor's invoice. We requested but did not receive any of 
 the approving forms from

NCS. Curent policies require that such supporting documentation be retained for 6 years and 3 

months. 

Our testwork identified a second expenditure representing an administative fee that was charged to 

NCS by the Defense Information Technology Contracting Organzation for initiating and overseeing 

the support contracts. We noted that the amount charged exceeded the amount allowed under 

the interagency agreement by $12,680. This amount has been categorized as a questioned cost. 

one of 


NCS' Management of2005 Gulf Coast Hurricanes Mission Assignment Funding 12 
Personnel NCS did not bil FEMA for any expenditues coded under the budget object codes of 


Compensation (11), Personnel Benefits (12), and Travel and Transportation (21). These 

expenditures were biled directly to FEMA by the support agencies (GSA and FCC) without NCS 

being par of the expenditue authoriation and approval process, although NCS has ultimate
 

responsibility for the underlying mission assignents. FEMA accepted the documentation and these 

agencies were reimbursed. 

RECOMMNDATIONS 

We recommend that NCS: 

. Recommendation #13: Implement procedures to retain documentation to support its 

approval of invoices for payment. 

. Recommendation #14: Establish policies and procedures to ensure that service fees paid to 

the 

interagency agreements. 

other federal agencies are appropriate and conform to the terms and conditions of 


E. The Mission Assignment Reimbursement Biling Process 

We noted that NCS did not provide FEMA with the requied supportg documentation for the 

$4.1 millon of expenses that it biled and received reimbursement from FEMA under the existing 

mission assignents. These bilings were submitted to FEMA between Februar 2006 and 

September 2006. It was also noted that FEMA submitted several unsuccessfu requests to NCS for 

the required supportng data, and in April 2007, retracted the reimbursements previously paid to 

NCS. 

As the steward of the Disaster Relief Fund, FEMA has the authority to specify the supporting 

documentation requirements for all federal agencies providing support and requesting 

reimbursement from the Fund.4 Under the standard "Intragovernental Business Ru1es,,,5 the 

ordering and performing agencies agree to the form and content ofthe performing agency's 

documented evidence of performance to be provided in support of Intra-Governenta Payment and 

Collection System6 transactions. Generally, the agreed-upon form and content includes the 

information necessar to identify the tranaction, its associated interagency agreement, and the 

4 National Response Plan, Financial Management Support Anex, page FIN-5. 

50MB Memorandum M-03-0 1, "Business Rules for Intragovemmenta Transactions;" Treasury Financial Manual, 

Volume I, Bulleti No. 2007-03, "Intragovemmental Business Rules;" and Treasury Financial Manual, Volume 1, 

Par 6,Chapter 4000, "Intra-Governental Payment and Collection System."
 

6 The Intr-Governental Payment and Collection System's primar purose is to provide a standardized interagency 

funds, with fud transfer mechanism for Federal Program Agencies. It facilitates the intragovemmental transfer of 


descriptive data from one agency to another. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 13 
charges by budget subobject class. Due to the debilitating impact of disaster response activities on 

normal agency internal controls,FEMA augmented its supporting documentation requirements to 

address the increased risk of internal control weakesses that often occur durng the life-saving and 

lie-sustaining rescue and support operations involved with disaster responses. In addition to 

inormation necessar to identify a transaction and the associated mission assignment, FEMA 

requires the following: 

. Description of the goods received or services provided;
 

. Breakdown of hours incurred in support of personnel services; 

. For indiect costs, the percentage applied and a description of the costs included in the cost
 

pool; 

. For contract services, the contract number, vendor name, total contract cost, and a description
 

of its purose; 

. For propert acquisitions:
 

the item, vendor name, and unt cost for all non-expendable or sensitive 

items greater than or equal to $1,000, and 

. A description of 


. The retu of all items described above or an agreement to waive this requiement;
 

. For property leased, a description of 
 the item, vendor name, and unt cost;

. Identification of motor vehicle costs;
 

. Identification of costs subtasked to another agency; and
 

. All "Other Costs" defined.
 

1. Documentation to Support Biline:s 

We observed that NCS had not developed an adequate understandig of its internal business process 

requiements necessary to develop and compile the documentation needed to support expenditures 

the 23 mission assignments. NCS and National Protection and Programs
 

Business Offce, which provides administrative support to the operative entities within National
 

the U.S. Immgration and
 

incured under 5 of 


Protection and Programs, and the financial management division of 


Customs Enforcement, which handles National Protection and Programs' Intra-Governenta 

Payment and Collection System transactions, had not coordinated with each other in identifyng or 

defining the business processes necessar for generating the supportg documentation for billngs. 

This includes establishig the person responsible for preparing the additional supporting
 

documentation. 

the National Protection and Programs and NCS managers said 

that they were not aware of and, therefore, had not discussed matters related to obtaning and 

packaging the additional supporting documentation FEMA required as a condition of 

reimbursement. 

The former Chief 
 Financial Officer of


NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 14 
letters for mission assignents. FEMA highights these requirements on the standard transmittal 


These letters cite the page on FEMA's website7 that contains the detailed requirements and 

instrctions regarding how the documentation requirements may be satisfied. In addition, the 

Financial Management Support Anex of 
 the National Response Plan discusses these documentation

requirements and directs the reader to the website as well. It should be noted that the heads of all 

major federal deparents and agencies sign the National Response Plan, thereby agreeing to
 

provide such documentation, whether they are in a primar or supportng role for mission
 

assignents. 

NCS' initial reimbursement bilings of approximately $4.1 millon, submitted to FEMA between 

Februar 2006 and September 2006, contaied the supporting documentation typically required with 

Intra-Goverental Payment and Collection System transactions. Because FEMA's requirements
 

are more extensive, we deterined that the supporting documentation accompanying the initial NCS 

bilings would need to be augmented. We were informed that durng December 2006, FEMA met 

with NCS management to discuss the information needed and received a commitment that such 

information would be provided. FEMA's records indicate that it also communcated with 

Immgration and Customs Enforcement personnel and informed them that the additional information 

supporting bilings was stil needed, in the absence of which FEMA would charge back the amounts 

previously obtained though the Intra-Goverental Payment and Collection System.
 

Despite FEMA extending the deadlines for submission of the required data, NCS did not provide the 

supportng documentation to FEMA. Durig March 2007, FEMA decided that the only remaining 

option was to charge back the reimbursement, and in early April 2007 it charged back the amount of 

approximately $4.1 milion.
 

the information that is needed to satisfy FEMA's We deterined that NCS has most of 


reimbursement biling supporting documentation requirements. Durg May 2007, NCS provided us 

with supportng documentation that the Defense Information Technology Contracting organization 

would have used as a basis for paying vendor invoices under contracts issued against the five 

mission assignents. We had requested this type of supporting information on numerous occasions 

beginning in June 2006. While we understand that NCS obtained this information to satisfy our data 

requests, NCS should have requested and received information from the Defense Information 

Technology Contracting organation prior to or shortly after being biled by the Defense 

Information Technology Contractig Organation, in order to meet FEMA's reimbursement biling 

supporting documentation requiements. 

7 "Mission Assignment Biling and Reimbursement Checklist" (http://www.fema,gov/governentfbilinst.shtm). 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 15 
RECOMMNDATIONS 

We recommend that NCS: 

. Recommendation #15: Develop and communcate stadard operating procedures for 

reimbursement bilings, including specifying the extent of supporting documentation 

requied. 

. Recommendation #16: Train NCS sta and collaborate with National Protection and 

the financial
 Programs Business Offce to adequately prepare for effective admistration of 


aspects of future mission assignments. 

. Recommendation #17: Designate an individual or position who wil have the primary 

responsibilty for compilng applicable supporting documentation for each mission
 

assignment and who will serve as the point of contact with FEMA for biling and 

reimbursement puroses.
 

. Recommendation #18: Provide FEMA with supporting documentation that meets its 

reimbursement biling requirements. 

2. Subtasked Aeencies Biled FEMA Directly 

NCS subtasked FCC and GSA to provide assistace on the other 18 mission assignments. These 

entities incured costs amounting to approximately $349,000 on three mission assignments.
 

Although mission assignent gudanceS requires subtasked agencies to obtain approvals from the
 

requesting agency on reimbursement requests, we noted that the FCC and GSA biled FEMA
 

directly, without review by NCS, and were reimbursed.
 

RECOMMENDATION 

We recommend that NCS: 

. Recommendation #19: Ensure that any supporting agency tasked with mission assignment 

work on behalf ofNCS provide biling and supporting documentation to NCS for approval 

prior to submission to FEMA. 

8 The Financial Management Support Anex of the National Response Plan (page FIN-5) directs the primar agency to 

which the mission assignent has been issued to review and approve all expenditues incured and supporting
 

documentation for reimbursement requests from agencies that provided supporting services in executing that mission
 

assignment.
 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 16 
3. Fundine: Status for Mission Assil!ments Issued to NCS 

May 2007, FEMA authorized NCS to spend up to $13.2 millon on 23 mission assignents. As of 


approximately $4.4 milion related to 8 of the 23 mission assignments had been biled to FEMA. 

NCS provided us with letters addressed to FEMA certifying that there would be no fuher requests 

for payments submitted against 16 of the 23 mission assignents. The remaig $1.6 milion, 

which wasunbiled (which includes $13.2 milion authorized, minus $4.4 milion biled and $7.2 

milion available to be closed and deobligated), was associated with a mission assignent subtasked 

to GSA and the Defense Information Technology Contracting Organization for which a final 

determtion had not been made.
 

RECO~ENDATIONS 

We recommend that NCS: 

the unbiled amount of$I.6 millon and 

submit all additional bilings to FEMA expeditiously and certify any amounts to be 

deobligated. 

. Recommendation #20: Assess the curent status of 


. Recommendation #21: Submit to FEMA the letters certifying that no fuer requests for 

payment will be submitted agaist the 16 mission assignments.
 

NCS' Man.lgement of 2005 Gulf Coast Hurricanes Mission Assignment Funding 17 
Management Response and OIG Analysis 

The National Protection and Programs Directorate concured with all the recommendations we 

mission assignment 

fuding from the Federal Emergency Management Agency. During the audit and afer our 

fieldwork, the National Communcations System worked to improve its operations involving mission 

offered to improve the National Communications System's management of 


assignents. All recommendations except recommendation 16 have been resolved and closed
 

because they have been implemented. We consider recommendation 16 resolved because steps have 

been taken to implement it; however, ths recommendation wil remain open until it has been fully 

implemented. The National Protection and Programs Directorate anticipates this recommendation 

will be fuly implemented in the first quarr of calendar year 2009. We will close this 

recommendation when the National Protection and Programs Directorate provides evidence it has 

been implemented. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 18 
Appendix A 

Objectives, Scope, and Methodology 

DHS Offce ofInspector General (DIG) contracted with Regis and Associates, PC, to assess NCS' 

mission assignent management and financial management controls and offer recommendations for 

any needed improvements. Ths effort is par of the overall objective of the DHS DIG to ensure 

accountabilty in the management and expenditure of funds for relief and recovery efforts relative to 

disasters. 

The scope of 
 this review includes the 23 mission assignments issued to NCS by FEMA for disaster 

response assistace in the Gulf Coast region resulting from Huricanes Katrina, Rita and, Wilma 

Coast Huricanes); the management processes and financial management controls 

applicable to these mission assignments; and the related contracts, expenditures, and reimbursement 

bilings for the period August 29,2005 though March 31, 2006. Our review objectives were to 

assess whether the management processes and financial management controls were properly 

designed and implemented, and to determine whether the contracts used, expenditues incured, and 

reimbursements requested were authorized, valid, and appropriately supported. 

(2005 Gulf 


The agreed-upon procedures were performed in accordance with stadards established by the 

American Institute of Certified Public Accountats and guidance from the Office of Management 

and Budget and GAD. 

We reviewed selected previous DHS DIG and GAD reports concerning NCS' 2005 Gulf Coast 

Huricanes mission assignment management to familarize ourselves with prior recommendations, 

reguations, and guidance applicable to NCS' processes and controls. The results of these reviews 

were incorporated into our risk assessment for ths engagement and our reported results. 

The management processes and fiancial management controls assessment included information 

gathering through interviews with appropriate personnel, as well as evaluating the management 

controls and process design. These evaluations were done through review of curent policies and 

procedures, and those that existed during the 2005 Gulf Coast Huricanes. 

The determination as to whether the contracts used, expenditues incured, and reimbursements 

requested were authorized, valid, and appropriately supported included our review of supporting 

documentation made available by NCS in each of these areas. We obtaned a list from NCS of all 

procurement, expenditure, and reimbursement biling transactions from its financial management 

system for the period August 29,2005 though March 31, 2006. These tranactions were stratified 

among procurements, expenditures, and reimbursement billng categories for the performance of test 

procedures specifc to each transaction category. 

For our tests of 
 procurements, we determined that these activities were all outsourced to the Defense 

Information Technology Contracting Organzation and used a high-dollar criterion to select eight 

procurement requests that were included with the interagency agreement with the Defense 

Information Technology Contracting Organization, which represented $4.1 millon or 93% of the 

$4.4 millon gross obligation total actively managed by NCS. 

NCS' Management of 2005 Gulf Coast Hurricànei¡ Mission Assignment Funding 19 
Appendix A 

Objectives, Scope, and Methodology 

For our tests of expenditures, we stratified expenditure transactions by budget object code into 

categories with similar processes and controls. These categories are as follow: 

. Other contractual services and rent, communcations, and utilties;
 

. Personnel compensation and benefits;
 

. Equipment;
 

. Supplies and materials; and
 

. Travel and transporttion of persons.
 

We selected all tranactions associated with a billng to FEMA with incured expenditue activity 

through March 31, 2006, and related reimbursement bilings though September 30, 2006. The 

majority of 
 the transactions were categorized by NCS as Other Contractual Services.

When sumarized transactions were selected using the high-dollar value criterion, we made 

additiona judgmental selections and performed detailed tests on individua personnel and travel 

expenditues withn the sumar transaction total. 

For our tests of reimbursement bilings, we selected all eight bilings representing $4.1 milion of the 

total $4.4 millon of reimbursements requested though March 31, 2006. 

Our fieldwork was conducted from April 26, 2006 through June 1,2007, and included visits to NCS 

headquaers in Arlington, Virgina, and its business offices at the National Protection and Programs 

Directorate in Washington, DC. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 20 
Appendix B 

Recommendations 

Recommendation #1: Develop detailed procedures for administering the procurement, property 

accountability, and finacial management responsibilties associated with receiving mission 

assignments from FEMA. 

Recommendation #2: Provide training to key NCS managers and sta on the unque requirements 

ofFEMA's mission assignment fuding. 

Recommendation #3: Monitor procurement activities of subtasked agencies to ensure that contracts 

are completed expeditiously. 

Recommendation #4: Ensure that performance periods in procurement vehicles are consistent with 

those in the underlying mission assignments. 

Recommendation #5: Request extensions for all mission assignments immediately upon notice of 

circumstaces waranting such. 

Recommendation #6: Ensure correct budget object codes are used when obligating, recordig 

expenditures, and biling for mission assignment fuds. 

Recommendation #7: Use budget object code coding from agencies' budgeta and financial 

management records, procurement instrents, and other pertinent data to identify and track 

accountable property purchased with mission assignment fuding.
 

Recommendation #8: Reduce the amounts biled to FEMA by the cost of property not tured over 

to FEMA for future use. 

Recommendation #9: Obtain the legal title(s) for the Emergency 911 telecommunications 

equipment and convey ownership to FEMA. 

Recommendation #10: Determine whether there is a continuing need for the Emergency 911 

telecommunications equipment at its curent location and, if the imediate need for the asset has 

been satisfied, retreve and physically transfer it to a FEMA-designated location. 

Recommendation #11: Prepare a lost or stolen property report for the 16 missing satellte 

telephones and submit it to FEMA in lieu ofretuing the property. 

Recommendation #12: Improve physical controls over the issuance of accountable propert to 

ensure accountabilty for losses. 

Recommendation #13: Implement procedures to retan documentation to support its approval of 

invoices for payment. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 21 
Appendix B 

Recommendations 

Recommendation #14: Establish policies and procedures to ensure that service fees paid to other 

federal agencies are appropriate and conform to the terms and conditions of the interagency 

agreements. 

Recommendation #15: Develop and communcate stadard operating procedures for 

reimbursement bilings, including specifying the extent of supporting documentation required. 

Recommendation #16: Trai NCS staff and collaborate with National Protection and Programs 

Business Offce to adequately prepare for effective administation of the financial aspects of futue 

mission assignments.
 

Recommendation #17: Designate an individua or position who will have the priar responsibilty 

for compiling applicable supporting documentation for each mission assignent and who wil serve 

as the point of contact with FEMA for biling and reimbursement puroses. 

Recommendation #18: Provide FEMA with supporting documentation that meets its reimbursement 

biling requirements.
 

Recommendation #19: Ensure that any supporting agency tasked with mission assignment work on 

behalf ofNCS provide billng and supporting documentation to NCS for approval prior to 

submission to FEMA. 

the unbiled amount of $1.6 milion and submit 

all additional bilings to FEMA expeditiously and certify any amounts to be deobligated. 

Recommendation #20: Assess the curent status of 


Recommendation #21: Submit to FEMA the letters certifying that no fuher requests for payment 

wil be submitted against the 16 mission assignments.
 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 22 
Appendix C 

Schedule of Questioned Costs 

Durg our review, we observed the conditions listed below, which are discussed in detail in the 

Results of Review section of ths report. The following questioned costs were identified:
 

Condition Description Amount 

C Accountable propert not returned to FEMA $ 824,600 

D Unsupported other contractual services 965,614 

D Overbiling of contractual administrative fees 

TOTAL QUESTIONED COSTS . .
 12,680 

$ 1,802,894

Note: "Condition" refers to the lettred section ofthe report in which the questioned costs are described. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 23 
Appendix D 

Management Comments to the Draft Report 

OfJÌt1! ¡i ihe Viile, Seueiiry 

.""lili"",11 Pr/lectiol/ 1/~i1 Prigflllll' Di,eCIIIT,(e 

u.s. \)cllíirllliciiiiil.III1ß1clalid Security 

W:iNliin¡:iim, DC 2115$ 

Homeland 

DEe 0 1 2008
 Security 

MEMORANDUM FOR:	 Richard L. Skinner
 

Inspector General
 

FROM:	 Robert D. Jamison 1!.. i:C)~;. lJ nder Secretary 

SUBJECT:	 National Protection and Programs Directorate Draft Report 

Comments for the DHS/OIG Dr'lli Repol': National 

Commimicatio/1 Sysieii '.l Management ar 2005 Gii(lCoasl 

Hiirricanes Mission Assignment Fiinding 

This rcsponds to YOll September 26,2008, memorandum requesting wriiien commciis on the 

Offce olthe Inspector General (010) Dr'llì Report: NalÌonal Communications System's
 

MCinagement 0/2005 GiilfCOcist Hurricanes Mission Assignmel1 Funding. Thank YOll for 

allowing the National Protection and Progrmns Directorate (NPPD) an oPPOltunity to respond. 

As thc coordinating agency for Emcrgency Support punction (ESF) #2, Communications, under 

the National Response Framework. the National Communications System continucs to refine and 

enhance the procedures and planning documeiintion for emergency communications response 

and recovery. We have made signilicant progress since Kmrinu working with our ESF #2 

partner agencies and the communications industry. 

We concur wiih ullihe rccommendiiiions and have provided responses and attachments 

supporting our continuing etrorts 10 improve our overall capabiliiy in support of Federal 

Emergency Management Agency (rEMA) activities during an Incident or Incident ofNationlil 

Significance. We are prepared to lc)lIow guidance provided to FEMA by ihe Mission 

Assignmcnt Working GroLlp as detailed in the Department of Homeland Security 010 rcpol" 

(010-08-34), FEMA's Preparedness Jor the Next Caiastrophie Disaster. 

Please do noi hesitate to contact me if YOll huve questions. 

Attachments 

cc: Greg Garcia, Assistant Secretary for Cybcrsecul'lY and Communications
 

Jim Madon, DircclOl', National C0l111linications SystCl1 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 24 
Appendix D 

Management Comments to the Draft Report 

National Protection and Progras Directorate 

Dra Report Comments for the DHS/OIG 

Coast Hurricane Draf Report: National Communications System's Management of 2005 Gulf 


Mission As.çignment Funding 

Recommendation ##1: Develop detailed procedures for administering the procurement, property 

accountailty, and finacial management responsibilties associated with receiving mission 

assignments from the Federal Emergency Mangement Agency (FEMA). 

Response: The FEMA Mission Assignent (MA) Stadad Operating Procedurs (SOP) 

(Draft 9344.1-PR of June 12,2006 Atthment One) is the primar document directing 

administrtion, accountabilty and management responsibilties for mission asgnments. 

The National Communications System (NCS) developed and provided trining for Action 

Offcer (Atthment la), Support Specialist (Attchment I b), and Communication 

Restoration Group Supervisor Atthment (Attchment Ie), referencing the reponsibilties 

to be exècuted as outlined in the FEMA MA SOP. These NCS documents have been reresponsibilties. Each now includes the 

following statements: 

wrtten to provide fuer granularity in execution of 


"Mission assignment processing must follow the FEMA Mission Assignent Standar 

Operating Procedure (SOP). The Joint Field Offce (JFO) Operations Section normal 

stafTmg also includes FEMA personnel dedicated to handling mission assignments with 

specifically assigned roles as Mission Assignent Managers, Mission Assignment 

Specialists, and Action Trakers. who are the subject matter experts on mission assignent 

processes and the SOP. 

Disaser Emergency Communications (DEC) Branch Action Offcers, Support Specialists, 

and the Communications Restoration Group Supervsor must follow the FEMA Mission 

Assignent SOP and verify with the FEMA Mission Assignment Speialist tht they meet 

FEMA's reuirements for mission assignment execution, amendments, sub-taking, biling, 

reimburement, and closure." 

Recommendation ##2: Provide training to key NCS managers and staff on the unque 

reuirements ofFEMA's mission assignment funding. 

Response: Training on mission assignment management was provided to all ESF #2 

staeholders during yearly training events including ESF #2 Training Conferences: 

Homestead, FL, (May 2006), Oakton, V A, (December 2006), and New Orlean, LA, (June 

2007), conducted by NCS since Hurcane Katrina. 

Mission assignent trining wil continue to be a topic of discussion at future training 

sessions to ensure all personnel ar awa of the procedures. Consistent with FEMA MA 

SOP (Section i. General Overview, B. General Policies, Subpar 15, Attachment Two), 

FEMA wil trin NCS and Support Agency management and sta on the mission assignment 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 25 
Appendix D 

Management Comments to the Draft Report 

process, policies, and procedurs at the December II, 2008, NCS Telecmmunications 

Training Seminar. 

Recommendation #3: Monitor procurement activities of sub-taked agencies to ensure that 

contracts ar completed expeditiously. 

sub- Response: The procedurs the NCS follows for monitoring procurement activities of 


taked agencies are documented in the FEMA Mission Assignment SOP (Section II. Mission 

Assignent Operations and Procedurs, Par G. Subtaking Other Agencies, Subpar 6, 

Attchment Three). It states the Action Officer for the lead agency is responsible for 

work and ensuring that it's completed within the authorized fuding 

and by the completion date. 

monitoring the status of 


The current relevant ESF #2 
 job aids outlining monitoring procurement activities ofsubtaked agencies to ensure contrcts are completed expeditiously are Action Offcer (Section
 

3.10.1, Atthment Four), Support Specialist (Section 2.4.1, Attahment Five), and 

Communications Restoration Group Supervisor (Section 4.3.10.1, Attachment Six). 

Recommendation ##: Ensure that performance periods in procurement vehicles are consistent 

with those in the underlying mission assignents. 

Response: The FEMA Emergency Management Specialist advised that the period of 

pedonnance specified on the mission assignments represents a short-tenn estimated 

timefre required to obtain the emergency assistace.
 

They can be amended to change the period of perfonnance according to the FEMA Mission 

Assignent SOP (Secton 1. General Overview, Par B. Genera Policies, Subpar 8, 

Attchment Seven). 

Directions for NCS Action Offcer (Section 3.10.2, Attachment Eight), and Support 

Specialist (Section 2.4.2, Atthment Nine) detail the procedures to be followed. 

Recommendation #5: Request extensions for all mission assignments immediately upon notice 

of circumstaces warting such. 

Response: The ESF #2 Job Aids for deployed team members specifically state that 

extensions for mission assignments be forwarded in wrting to the appropriate FEMA MA 

Manager/Specialist, FEMA MA SOP (Section n. Mission Assignent Operations and 

Procedurs Para E, Mission Assignment Amendments, Attchment Ten). 

The Job Aids supportng this recommendation include Action Offcer (Section 3.7.1 

Attachment 11), Support Specialist (Section 5.2.3. 1 Attchment 12), and Communications 

Restoration Group Supervisor (Section 7.5.2 Attachment 13). These positions manage MAs 

in the field. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 26 
Appendix D 

Management Comments to the Draft Report 

Recommendation ##: Ensure correct budget object codes are used when obligating, recording 

expenditures, and biling for mission assignment funds. 

Response: Guidance from the DHS finacial management chain of command was to use
 

"other contracts" Object Class 2S on aU outgoing Interagency Agrements. Since funding for 

the contrcts supporting Hurcane Katrina was submitted via Interagency Agreement (IA) to
 

Defense Information Technology Contrcting Offce (DITCO) Scott AFB, IL, for contract Management and Budget (OMB) execution, Object Class 2S was used. The genera Offce of 


Object Class 25.3 is for "Other purchases of goods and services frm 

Governent Accounts," with the specific description "Interagency agreements for 

description of 


contractu services (including the Economy Act) for the purchase of goods and services."
 

Basd on this specific 10 finding, the NCS Plan and Resoures Brach wil, as documents 

process through for funding, use OMB Circular A-II. Section 83 Object Classification Guide 

to determine the appropriate code. For example, communications services (Attchment 14). 


requirements will cite Object Class 23 (Atthment 1 S); equipment purchases wil cite Object 

Class 31 (Attchment 16), etc. The entire OMB Circular can be found at the following link: 

htt://ww.whitehouse.~ov/omb/circularal l/currnt vear/all toc.htmL.
 

Recommendation #7: Use budget object code coding from agencies' budgetar and rmancial 

management records, procurement instruents, and other pertnent data to identify and track 

accountable property purchased with mission assignment funding. 

Response: As explained in answer #6, NCS Plans and Resources wil ensure appropriate 

object classification codes are used on outgoing documentation. so it flows into the contrct 

and to the items ordered in capital propert records. 

Recommendation ##8: Reduce the amounts biled to FEMA by the cost of property not turned 

over to FEMA for future use. 

Response: Based on MA 1603DRLANCS04 (Attachment 17), an Interagency Agreement 

was processed to the DITCO, and the contract was issued. The vendor deliverd all 100 

phones. issued invoices; the invoices were certified, and paid. Capital property 

accountabilty for the phones is being addressed by the NCS in conjunction with FEMA. 

DHS Fonn 200-2 Report of Surey (Attchment 18) for satellte phones has been submitted 

to FEMA for closeout. 

Recommendation #9: Obtain the legal title(s) for the Emergency 91 1 telecommunications 

equipment and convey ownership to FEMA. 

Response: FEMA Region VI sent the 91 1 mobile trailer title to the FEMA Program 

Management Division located at FEMA HQ, Washington. DC, for processing (Attachment 19). 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 27 
Appendix D 

Management Comments to the Draft Report

Recommendation #10: Determine whether there is a continuing need for the Emergency 91 I the immediate need for the asset has telecommunications equipment at its curent location and, if 


been satisfied, retrieve and physically transfer it to a FEMA-designated location. 

the 91 I Trailer in FEMA Region VII. The Response: FEMA stated they have possession of 


FEMA logistics brach is Point of Contat (PaC) for trcking the vehicle (Attchments 20 

and 20a). 

Recommendation #11: Prepare a lost or stolen property report for the 16 missing satellte 

telephones and submit it to FEMA in lieu ofretuming the property. 

Response: The NCS prepard and submitted to FEMA a Report of Survey form (DHS Form 

200-2 (Atthment 18, Recommendation 8) documenting the loss of 16 satellte phones not 

recovered from response operations. 

Recommendation #12: Improve physical controls over the issuance of accountable property to 

ensur accountabilty for losses. 

Response: In the futue, normal procedures for contracting under emergency conditions wil 

be followed and processed using the FEMA Telecommunications Information Mangement 

and Contrl Systems (FEMA TIMACS). All standard FEMA procedures are used, including 

the contrting process, contracting offcer's technical representative, accounting process,
 

delivery and receipt of goods or services, and propert accountabilty. Property requirements 

outside TIMACS will be handled in accordance with FEMA Manual 6 i 50. I, Chapter 2, 

Accountabilty of Personal Property, Par 2-4, CO Duties, 2-5 Custodian Duties, 2-6 Types
 

Property, 2-8 Serialized Equipment, 2-9 Property Records and 2-1 1, Accountabilty 

Requirements (Attachment 2 i). 

of 

Recommendation #13: Implement procedures to retan documentation to support its approval of 

invoices for payment. 

Response: Normal procedures for contracting under emergency conditions will be followed 

and processed using (FEMA TIMACS). All standard FEMA procedures are used, including 

the contracting process, contracting offcer's technical representative, accounting process, 

delivery and receipt of goods or services, and propert accountabilty. Propert reuirements 

outside TIMACS wil be handled in accordance with FEMA Manual 6 i 50. i , Chapter 2, 

Accountabilty of 
 Personal Property, Par's 2-4, CO Duties, 2-5 Custodian Duties, 2-6 Types

of Property, 2-8 Serialized Equipment, 2-9 Property Records and 2-11, Accountabilty 

Requirements. 

Recommendation #14: Establish policies and procedurs to ensure that service fees paid to the interagency other federa agencies are appropriate and conform to the terms and conditions of 


agreements. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 28 
Appendix D 

Management Comments to the Draft Report 

Response: As described in the anwers to #12 and #13. future purchases under MA as 

directed by FEMA will be made through the FEMA TIMACS system. If an interagency 

agreement is required for an event such as Katrina, ESF #2 Action Offcers will work 

Procurement Operations (OPO). This will generate one 

document, known as an Independent Governent Cost Estimate, prepared by the requester. the estimate and can be negotiated as 

through the DHS Offce of 


Fees chared by the acquisition agency are par of 


appropriate. 

Recommendation #15: Develop and communicate standad operating procedures for
 

reimburement billngs, including specifying the extent of supporting documentation required.
 

Response: Stadad operating procedures for reimbursement bilings, including speifying 

the extent of supporting documentation required, were incorporated into the FEMA MA SOP 

(Section II. Mission Assignment Operations and Procedures, Par H Billng and 

Reimburement Attchment 22). The requirement is also a par of initial and refresher 

Contrcting Offcer Representative (COR), Contracting Offcer Technical Representative
 

(COTR), and Task Manager (TM) training. Job Aids supporting this recommendation 

include the Action Offcer (Section 3.9.2, Attachment 23), Support Specialist (Section 2.3.2, 

Atthment 24), and Communications Restoration Group Supervisor (Section 4.3.11. 

Attchment 25). 

Recommendation #16: Tran NCS sta 
 and collaborate with Nationa Protection and Prgra

the Directorate (NPD) Business Offce to adequately prepare for effective administrtion of 


financial aspects offutur mission assignments. 

Response: Mission assignment traning in collaboration with the NPPD Business Offce wil 

be conducted the first quarer of Calenda Year 2009. This trining builds on the foundation 

mission assignent trning to be conducted at the December I 1, 2008, NCS
 

Telecommunications Training Seminar which wil be attended by NCS and Support Agency 

management and staff (refer to recommendation #2). 

Recommendation #17: Designate an individual or position who wil have the primar
 

responsibilty for compilng applicable supporting documentation for each mission assignment
 

and who will serve as the point of contat with FEMA for billng and reimbursment puroses.
 

Response: Responsibilty for biling and reimbursement reconcilation resides with the NCS 

Plans and Resources Branch Chief. Durng an incident response, the Action Offcer in the 

field or in the NCC is assigned the respnsibilty for compilng and tracking finacial issues 

and works with NCS Plans and Resources Branch to ensure that appropriate processes and 

documents ar completed.
 

Recommendation ##18: Provide FEMA with supporting documentation that meets its 

reimburement biling requirements. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 29 
Appendix D 

Management Comments to the Draft Report 

Response: As described in the answer to # 1 7. the NCS Plan and Resources Branch is 

responsible for processing all documentation associated with MAs issued for an event. 

Documentation associated with the MA is to be gathered during the event and provided to 

FEMA. NCS is ready to assist in all asects of document preparation, submission, and 

retention in keeping with OHS OIG-08-34 (Attchment 26) recommendations for improving 

Federal property. accountabilty for and management of 


Regading contrct efforts accomplished from the Interagency Agrement issued to DlTCO 

durng Katra, NPPD Business Operations obtained all supporting documentation from 

DITCO and the Defense Finace and Accounting Service (OF AS). All documentation was 

processed though the DHS Immigrtion and Customs Enforcement (ICE) Burlington 

Finace Center and FEMA. 

Recommendation #19: Ensure that any supporting agency taked with mission assignment work 

on behalf ofNCS provide biling and supporting documentation to NCS for approval prior to
 

submission to FEMA.
 

Response: The NCS Plans and Resources Branch is responsible for processing MAs in 

support of FEMA under ESF #2. Each MA provides details regaring the need to "sub-MA" 

other governent deparments or agencies. The brach established an SOP for issuing SubTaskings (Atthment 27) using the form directed for use by FEMA (MA SOP. Section II, 

Mission Assignment Operations and Procedures, Par G Subtasking Other Agencies, Subpar 

2 Attachment 28) Through this process, MA request are forwarded to other Deparments 

and Agencies with completed documentation returned to FEMA upon mission closur. 

Recommendation #20: Assess the curent status of the unbiled amount of $1.6 M and submit 

all additional bilings to FEMA expeditiously and certify any amounts to be de-obligated. 

Response: The NCS conducted an assessment of all mission assignments for Fiscal Year 

2005 with the FEMA Emergency Management Specialist and concluded tht all MAs have 

been fully executed with the exception of an obligated amount of $ lOOK on MA 

l6040RMSNCS0900). Guidance provided by FEMA was to send an email to the 

Bilingleimburment Specialist stating there is no outstanding billng associated with MA 

1604DRMSNCS0900 and direct closur. This was accomplished on October 16,2008 

(Attchment 29). The mission assignment (MA 1603 DRLANCS0600) plus amendments, for 

$1.6 M. sub-taked to the General Services Agency, has been closed. 

Re~ommeDdatioD #21: Submit to FEMA the letters certifying that no fuher requests for 

payment will be submitted against the 16 mission assignments. 

Response: Of the 16 missions assignents 15 have been closed. As stated in response to 

recommendation #20, th NCS has directed closure ofMA 1604DR MSNCS0900. 

NCS' Management of 2005 Gulf Coast Hurricanes Mission Assignment Funding 30 
Appendix E 

Report Distribution 

Department of Homeland Securitv 

Secretar 

Deputy Secretary 

Chief of Sta 

Deputy Chief of Staff 

General Counsel 

Executive Secretay 

Director, GAD/GIG Liaison Offce 

Assistat Secretar for Office of Policy 

Assistat Secreta for Office of Public Affais 

Assistant Secreta for Offce of Legislative Affairs 

Under Secreta, National Protection and Programs Directorate 

Assistat Secretar, Offce of Cybersecurity and Communications
 

Acting Director, National Communcations System 

National Protection and Programs Directorate Audit Liaison 

Admistrator, Federal Emergency Management Agency 

Assistat Administrator, Disaster Operations Directorate, FEMA 

FEMA Audit Liaison 

Offce of Mana!!ement and Bud!!et 

Chief, Homeland Security Branch
 

DHS DIG Budget Examiner
 

Cone:ress 

Congressional Oversight and Appropriations Committees, as appropriate 

NCS' Maniigement of2005 Gulf Coast Hurricanes Mission Assignment Funding 31 
ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202) 254-4199, 

fax your request to (202) 254-4305, or visit the OIG web site at www.dhs.gov/oig. 

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