jurisdiction: US

text: b"Report No. D-2009-028 December 10, 2008\n\n\n\n\n Organizational Structure and Managers'\n Internal Control Program for the\n Assistant Secretary of Defense\n (Public Affairs) and American\n Forces Information Service\n\x0cAdditional Information and Copies\nTo obtain additional copies of this report, visit the Web site of the Department of Defense Inspector\nGeneral at http://www.dodig.mil/audit/reports or contact the Secondary Reports Distribution Unit at\n(703) 604-8937 (DSN 664-8937), or fax (703) 604-8932.\n\nSuggestions for Audits\nTo suggest ideas for or to request future audits, contact the Office of the Deputy Inspector General for\nAuditing at (703) 604-9142 (DSN 664-9142) or fax (703) 604-8932. Ideas and requests can also be\nmailed to:\n\n ODIG-AUD (ATTN: Audit Suggestions)\n Department of Defense Inspector General\n 400 Army Navy Drive (Room 801)\n Arlington, VA 22202-4704\n\n\n\n\nAcronyms and Abbreviations\nAFIS American Forces Information Service\nAFRTS American Forces Radio and Television Service\nASD(PA) Assistant Secretary of Defense (Public Affairs)\nAPO Accountable Property Officer\nDASD Deputy Assistant Secretary of Defense\nDMA Defense Media Activity\nDMC Defense Media Center\nDINFOS Defense Information School\nDPAS Defense Property Accountability System\nIG Inspector General\nMIC Managers\xe2\x80\x99 Internal Control\nOASD(PA) Office of the Assistant Secretary of Defense (Public\n Affairs)\nOSD Office of the Secretary of Defense\nSCIG Strategic Communication Integration Group\nU.S.C. United States Code\nUSD(C)/CFO Under Secretary of Defense (Comptroller)/DoD Chief Financial\n Officer\nWHS Washington Headquarters Services\n\x0c INSPECTOR GENERAL\n DEPARTMENT OF DEFENSE\n 400 ARMY NAVY DR IVE\n ARLINGTON. VIRGINIA 22202-4704\n\n\n\n December 10, 2008\n\n\nMEMORANDUM FOR UNDER SECRETARY OF DEFENSE (COMPTROLLER)/DoD CHIEF\n FrNANCIAL OFFICER\n ASSISTANT SECRETARY OF DEFENSE (PUBLIC AFFAIRS)\n DIRECTOR, ADMrNlSTRATfON AND MANAGEMENT\n DIRECTOR, DEFENSE LOGISTICS AGENCY\n DIRECTOR, DEFENSE MEDIA ACTIVITY\n DIRECTOR, W ASBINGTON HEADQUARTERS SERVICES\n\nSUBJECT: Organizational Structure and Managers ' Internal Contro l Program for the Assistant\n Secretary of Defense (Pub lic Affairs) and American Forces Information Service\n (Report No. 0 -2009-028)\n\n\nWe are providing this report for review and comment. We considered comments from clients on a draft\nof this report when we prepared the final report.\n\n000 Directive 7650.3 requires that all recommendations be resolved promptly. Comments from the\nActing Deputy Chief Financial Officer and Director of Acquisition Management at the Defense\nLogistics Agency were responsive. However, comments on Recommendations A.I.a. , A.I.b, A.2 ., B.l.,\nB.2.a., B.2.b., D.3 .a., D.3.f., and D.3 .g. from the Acting Assistant Secretary of Defense (Public Affairs)\nand Acting Deputy Director of Administration and Management were only partially responsive.\n\nAfter receiving client comments, we met with representatives from the Office of the Under Secretary of\nDefense (Comptroller)/DoD Chief Financial Officer. As a result of the meeting, we redirected\nRecommendation A.2. to the Director, Washington Headquarters Services. We revised\nRecommendations B. l. and C.I. We request additional comments on Recommendations A.I.a., A.I.b,\nA.2., B.l., B.2.a., B.2.b. , C. l. , D.3.a., D.3.f., and D.3.g. by January 12,2009.\n\nPlease send management comments in electronic format (Adobe Acrobat file only) to\nAudDBO@dodig.mil. Copies of the client comments must contain the actual signature of the\nauthorizing official for your organization. We cannot accept the I Signed I symbol in place of the actual\nsignature. If you arrange to send classified comments electronically, they must be sent over the\nSECRET Internet Protocol Router Network (SIPRNET).\n\nWe appreciate the courtesies extended to the staff. Questions should be directed to Mr. Carmelo G.\nVentimiglia at (317) 510-4801, extension 275 (DSN 699-4801) or Mr. George C. DeBlois at\n(317) 510-480 I, extension 273 (DSN 699-480 I). The team members are listed inside the back cover.\n\n\n f~ Q. fJ7~\n Patricia A. Marsh, CPA\n Assistant Inspector General\n Defense Business Operations\n\x0c\x0c Report No. D-2009-028 (Project No. D2007-D000FI-0215.000)\n December 10, 2008\n\n Results in Brief: Organizational Structure\n and Managers\xe2\x80\x99 Internal Control Program for\n the Assistant Secretary of Defense (Public\nAffairs) and American Forces Information Service\n\nWhat We Did unnecessarily purchased about $940,000 in\nWe evaluated the organizational structure and equipment. Further, neither OASD(PA) nor\neffectiveness of the Managers\xe2\x80\x99 Internal Control AFIS effectively implemented the Managers\xe2\x80\x99\nProgram established at the Office of the Internal Control Program.\nAssistant Secretary of Defense (Public Affairs)\n(OASD[PA]) and the American Forces What We Recommend\nInformation Service (AFIS). On October 1, \xe2\x80\xa2 Expedite the selection of the DMA\n2008, DoD consolidated the Military Service Director and other key managers.\nmedia organizations and AFIS into a new \xe2\x80\xa2 Reissue DoD Directive 5122.5.\nDefense Media Activity (DMA). We conducted \xe2\x80\xa2 Implement a DMA-wide personal\nthis audit at the request of the Assistant property program.\nSecretary of Defense (Public Affairs). \xe2\x80\xa2 Investigate potential misuse of funds,\n improper contracting, and statutory\nWhat We Found violations.\nThe organizational structure did not provide the \xe2\x80\xa2 Conduct report of survey investigations\nappropriate segregation of duties between the for missing equipment.\npolicy and oversight functions in the \xe2\x80\xa2 Establish DMA contracting and\nOASD(PA) and the operational functions that purchasing requirements and establish a\nAFIS should perform. Specifically, the failure new DMA contracting office.\nto appoint an AFIS Director for more than \xe2\x80\xa2 Implement DoD Instruction 5010.40 at\n7 years has: DMA.\n \xe2\x80\xa2 limited the day-to-day planning, \xe2\x80\xa2 Establish OASD(PA) as an assessable\n directing, and controlling of the unit of the Office of Secretary of\n decision-making process needed for Defense.\n achieving the AFIS mission;\n \xe2\x80\xa2 allowed the use of AFIS budgetary Client Comments and Our\n resources to support OASD(PA)\n programs;\n Response\n \xe2\x80\xa2 decentralized AFIS business enterprise Clients generally agreed with our\n services; and recommendations. Based on comments from\n \xe2\x80\xa2 jeopardized AFIS resources and the Acting Deputy Chief Financial Officer, we\n subjected them to waste and abuse. redirected one recommendation to the\n Washington Headquarters Services and revised\nIn addition, AFIS did not establish an two other recommendations to clarify their\nentity-wide program to manage personal intent. For the recommendations requiring\nproperty, could not account for almost additional comments, please see the table on the\n$650,000 in personal property, and may have back of this page.\n i\n\x0c Report No. D-2009-028 (Project No. D2007-D000FI-0215.000)\n December 10, 2008\n\nRecommendations Table\n\nClient Recommendations No Additional Comments\n Requiring Comment Required\nUnder Secretary of Defense A.2., B.1., C.1., and D.1.\n(Comptroller)/DoD Chief\nFinancial Officer\nAssistant Secretary of Defense A.1.a., A.1.b, A.2., B.1., A.1.c, A.3., B.2.c., B.2.d.,\n(Public Affairs) B.2.a., B.2.b., C.1., D.3.a., B.2.e., C.2., C.3., C.4., D.2.,\n D.3.f., and D.3.g. D.3.b., D.3.c., D.3.d., and\n D.3.e.\nDoD Director of Administration A.1.b. A.1.a. and A.1.c.\nand Management\nDirector, Defense Logistics C.2.\nAgency\nDirector, Washington A.2.\nHeadquarters Services\n\n\nPlease provide comments by January 12, 2009.\n\n\n\n\n ii\n\x0cTable of Contents\n\nResults in Brief i\n\nIntroduction\n\n Objectives 1\n Background 1\n\nFinding A. DoD Public Affairs Organizational Structure 5\n\n Recommendations, Client Comments, and Our Response 18\n\nFinding B. AFIS Personal Property Accountability and Safeguarding 23\n\n Recommendations, Client Comments, and Our Response 32\n\nFinding C. AFIS Acquisition Process 37\n\n Recommendations, Client Comments, and Our Response 46\n\nFinding D. Managers\xe2\x80\x99 Internal Control Program 51\n\n Client Actions 57\n Recommendations, Client Comments, and Our Response 58\n\nAppendices\n\n A. Scope and Methodology 61\n Review of Internal Controls 62\n Prior Coverage 63\n B. Major Responsibilities and Functions 65\n C. DMA Management Positions 69\n\nClient Comments\n\n Under Secretary of Defense (Comptroller)/DoD Chief Financial Officer 73\n Assistant Secretary of Defense (Public Affairs) 76\n Director of Administration and Management 86\n Defense Logistics Agency 88\n\x0c\x0cIntroduction\nObjectives\nThe Assistant Secretary of Defense (Public Affairs) (ASD[PA]) requested that we review\nthe funding and execution of Office of the Assistant Secretary of Defense (Public Affairs)\n(OASD[PA]) and American Forces Information Service (AFIS) programs. As part of\nthat request, we evaluated the organizational structure and effectiveness of the Managers\xe2\x80\x99\nInternal Control (MIC) Program established at the OASD(PA) and AFIS. Specifically,\nwe determined whether OASD(PA) and AFIS properly segregated duties and established\neffective internal controls. This is the first in a series of audits addressing the concerns of\nthe ASD(PA). See Appendix A for a discussion of the scope and methodology, our\nreview of internal controls, and prior audit coverage related to the objective.\n\nBackground\nSection 143, title 10, United States Code (U.S.C.) established the Office of the Secretary\nof Defense (OSD) personnel limitations, which includes the DoD military and civilian\npersonnel assigned to, or employed in, OSD functions. The OSD includes the DoD\nDirector of Administration and Management and the ASD(PA). These senior DoD\nofficials serve as the principal advisors to the Secretary of Defense on matters related to\ntheir assigned functions. Section 191, title 10, U.S.C. authorized the Secretary of\nDefense to establish various Defense agencies and field activities to provide common\nsupplies or services and conduct day-to-day operations under the oversight of the OSD.\nThe Deputy Secretary of Defense established AFIS as the DoD field activity under the\nauthority, direction, and control of OASD(PA) to provide DoD personnel with media\ninformation support and to train DoD public affairs and visual information professionals.\n\nDoD Director of Administration and Management\nThe DoD Director of Administration and Management is the principal staff assistant and\nadvisor to the Secretary and Deputy Secretary of Defense on DoD-wide organizational\nand administrative management matters. The Director develops and maintains\norganizational charters, oversees assigned programs, serves as the DoD focal point for\nDoD quality management matters, and analyzes and controls OSD personnel\nrequirements. The Director also directs the Washington Headquarters Services (WHS).\nWHS provides consolidated administrative and operational support (such as financial\nmanagement, human resources, and facilities services) to several Defense agencies, DoD\nfield activities, the Military Departments headquarters elements, and the White House.\nThe Under Secretary of Defense (Comptroller)/DoD Chief Financial Officer\n(USD[C]/CFO) provides funding to OASD(PA) through Defense appropriation\nallotments administered by WHS.\n\n\n\n\n 1\n\x0cOffice of the Assistant Secretary of Defense\n(Public Affairs)\nDoD Directive 5122.5, \xe2\x80\x9cAssistant Secretary of Defense for Public Affairs (ASD[PA]),\xe2\x80\x9d\nSeptember 27, 2000, establishes the ASD(PA) as the principal staff assistant and advisor\non public affairs matters to the Secretary and Deputy Secretary of Defense. The former\nASD(PA) resigned in October 2007. On March 21, 2008, the Deputy Secretary of\nDefense appointed a Principal Deputy Assistant Secretary of Defense (Public Affairs)\nand made him Acting ASD(PA).\n\nAs an OSD-level entity, the OASD(PA) provides direct support to the Secretary and\nDeputy Secretary of Defense. The ASD(PA) serves as the DoD public spokesperson and\ninformation release authority, and oversees the performance of such functions as:\n\n \xe2\x80\xa2 developing DoD Public Affairs policies, plans, and programs;\n \xe2\x80\xa2 ensuring the free flow of news and information;\n \xe2\x80\xa2 planning, programming, and budgeting activities; and\n \xe2\x80\xa2 responding to inquiries on DoD policies, programs, and activities.\n\nSee Appendix B for a more comprehensive list of the major responsibilities and functions\nof the OASD(PA). To assist in accomplishing OASD(PA) functions, the former\nASD(PA)s appointed several Deputy Assistant Secretaries of Defense (DASDs) and other\nDirectors. As of September 4, 2007, the OASD(PA) had 89 staff positions assigned to\noffices within the Pentagon. The ASD(PA) also exercises authority, direction, and\ncontrol over AFIS in accordance with DoD Directive 5122.10, \xe2\x80\x9cAmerican Forces\nInformation Service (AFIS),\xe2\x80\x9d November 21, 2000.\n\nAmerican Forces Information Service\nDoD Directive 5122.10 establishes AFIS as a field activity reporting to the OASD(PA)\nand describes the AFIS mission, responsibilities, functions, authority, and relationships.\nAFIS is responsible for the execution of DoD Public Affairs policy and programs. See\nAppendix B for a list of major AFIS functions. In FY 2007, AFIS received\n$148.2 million in Defense Operation and Maintenance funds, $18.8 million in\nsupplemental Global War on Terror funds, and $5.6 million in Defense Procurement\nfunds. As of July 2007, AFIS had approximately 1,263 employees in the following nine\ncomponents.\n\n \xe2\x80\xa2 AFIS Headquarters \xe2\x80\x93 Alexandria, Virginia\n \xe2\x80\xa2 American Forces Radio and Television Service (AFRTS) \xe2\x80\x93 Alexandria, Virginia\n \xe2\x80\xa2 Defense Media Center (DMC) \xe2\x80\x93 Riverside, California\n \xe2\x80\xa2 Overseas Components of Armed Forces Network\n \xe2\x80\xa2 Stars and Stripes \xe2\x80\x93 Washington, D.C. and overseas\n \xe2\x80\xa2 Defense Information School (DINFOS) \xe2\x80\x93 Fort Meade, Maryland\n\n\n\n\n 2\n\x0c \xe2\x80\xa2 Defense Visual Information Center \xe2\x80\x93 Alexandria, Virginia; Riverside, California1\n \xe2\x80\xa2 Joint Combat Camera Center \xe2\x80\x93 Pentagon\n \xe2\x80\xa2 Joint Visual Information Service Distribution Agency \xe2\x80\x93 Tobyhanna, Pennsylvania\n\nDefense Media Activity\nThe FY 2005 Defense Base Realignment and Closure Commission recommended that\nDoD consolidate the media operations and programs of the Military Services, collocate\nthem with AFIS, and relocate them to Fort Meade. The Deputy Secretary of Defense\nmemorandum, \xe2\x80\x9cEstablishment of the Defense Media Activity,\xe2\x80\x9d September 24, 2007,\ndirected that the media organizations of the Military Services and AFIS consolidate into\nthe Defense Media Activity (DMA). The goal was to establish a streamlined\norganization to execute DoD media functions within economies of scale. Major\nmilestones associated with the establishment of DMA include:\n\n \xe2\x80\xa2 May 13, 2005 \xe2\x80\x93 The effective implementation date for the FY 2005 Defense Base\n Realignment and Closure Commission recommendations.\n \xe2\x80\xa2 December 18, 2007 \xe2\x80\x93 DoD Directive 5105.74, \xe2\x80\x9cDefense Media Activity,\xe2\x80\x9d issued.\n It defines the DMA mission, management, functions, and relationships.\n \xe2\x80\xa2 January 1, 2008 \xe2\x80\x93 The ASD(PA) assumed control of the Military Services media\n activities and AFIS. The DMA established a direct liaison to the Military\n Services media units. The Military Services and AFIS will continue to provide\n the funding and administrative support to continue day-to-day media operations\n until formal transfer to DMA.\n \xe2\x80\xa2 October 1, 2008 \xe2\x80\x93 AFIS and Military Services media activities\xe2\x80\x99 personnel,\n funding, and resources formally transfer to DMA. DoD disestablishes AFIS.\n \xe2\x80\xa2 September 15, 2011 \xe2\x80\x93 Planned date of completion for DMA facility construction\n and relocation of those elements identified to move to Fort Meade.\n\n\n\n\n1\n On October 26, 2007, the ASD(PA) established the Defense Imagery Management Operations Center to\nreplace the Defense Visual Information Center, Joint Combat Camera Center, and Joint Visual Information\nService Distribution Agency.\n\n\n 3\n\x0c4\n\x0cFinding A. DoD Public Affairs Organizational\nStructure\nThe OASD(PA) and AFIS did not have clearly defined organizational structures and\nmanagement responsibilities to ensure accomplishment of the DoD Public Affairs\nmissions. Without clearly defined organizational structures and management\nresponsibilities, the ASD(PA) could not ensure that:\n\n \xe2\x80\xa2 resources were used efficiently and effectively to accomplish their mission;\n \xe2\x80\xa2 OASD(PA) and AFIS budgetary resources were not commingled or\n inappropriately used;\n \xe2\x80\xa2 management positions and personnel were assigned in accordance with\n authorized staffing levels; and\n \xe2\x80\xa2 OASD(PA) and AFIS used centrally managed business services to gain\n efficiency and provide appropriate oversight over operations.\n\nThe transition to DMA affords the ASD(PA) the opportunity to separate its public affairs\npolicy and oversight responsibilities from day-to-day business operations and develop an\neffective field activity for managing the DoD Public Affairs mission and resources. The\nASD(PA) should expedite the selection of the DMA Director and, based on the\ncompletion of the DMA organizational and management design study, assign the key\nmanagers needed to ensure that DMA could assume functions efficiently on October 1,\n2008. The DoD Director of Administration and Management should reissue the DoD\ndirectives governing OASD(PA) to clearly define and distinguish the roles and\nresponsibilities between OASD(PA) and DMA and assist the OASD(PA) and DMA in\nmanaging its authorized \xe2\x80\x9cmanpower\xe2\x80\x9d requirements. The ASD(PA) and WHS should\nwork with the USD(C)/CFO to investigate the propriety of the past use of AFIS funding\nto support OASD(PA) activities.\n\nDoD Alignment and Restructure\nGovernment Accountability Office Report No. 00.21.3.1, \xe2\x80\x9cStandards for Internal Control\nin the Federal Government,\xe2\x80\x9d November 1999, emphasizes the need for defined lines of\nauthority, clear reporting relationships, and an appropriate level of management to ensure\na positive control environment. In November 1997, the Secretary of Defense announced\nthe Defense Reform Initiative to review DoD posture, policy, and programs, which\nincluded streamlining the organization and eliminating excess support structures. The\ninitiative focused on unifying the DoD vision by committing leaders to change,\nimplementing core competencies, developing agile organizations, investing in people,\nusing information technology, and removing barriers between DoD Components. In\ndeveloping the initiative, DoD leaders considered assessments of DoD organizational\nstructures and functions to identify duplication of effort and develop better business\npractices. According to the initiative, the composition of the OSD should include a core\n\n\n\n\n 5\n\x0cstaff that provides advice and support to the Secretary of Defense and the Defense\nsupport activities that perform technical and analytical services. The OSD staff should\nprovide the following core functions:\n\n \xe2\x80\xa2 policy and guidance development,\n \xe2\x80\xa2 long-range planning,\n \xe2\x80\xa2 program performance monitoring and evaluation, and\n \xe2\x80\xa2 program and component resource allocation.\n\nThe initiative stated that over time, the OSD became involved in program management,\ndirect control over functional activities, and management of an expanding number of\ncentralized services organized into Defense agencies and field activities beyond the scope\nof its intended functions. The initiative set out to reverse this trend by refocusing the\nOSD on corporate-level tasks and the oversight (as opposed to day-to-day management)\nof its many operating components. This refocus provided a more streamlined structure to\navoid taking on non-core responsibilities and recognized the need to provide additional\nresources to the operating components. As defined by the initiative, the management of\nday-to-day business operations is a function of the DoD agencies and field activities.\nDoD Instruction 5100.73, \xe2\x80\x9cMajor Department of Defense Headquarters Activities,\xe2\x80\x9d\nDecember 1, 2007, states that major DoD headquarters activities (including OSD and\nfield activities directly supporting headquarters) should be organized and staffed in a\nmanner that permits the effective accomplishment of assigned responsibilities with a\nminimum number of personnel. The instruction also warned that the use of dual-hatting\ncould distort the true strength or structure of major DoD headquarters activities.2\n\nOASD(PA) Organizational Structure\nSome senior OASD(PA) management officials assumed operational control over AFIS\nactivities and programs. Since January 2001, the senior executives serving as the\nASD(PA) have not appointed an AFIS Director.3 Instead, they delegated the\nresponsibility for managing AFIS operations to the DASDs. The ASD(PA) should have\nappointed an independent AFIS Director to serve as the day-to-day manager of the field\nactivity and ensured that the OASD(PA) provided the appropriate policy and oversight\nover AFIS. Instead, the ASD(PA) assumed the Director position and over the last 5 years\nhas allowed the DASD for Internal Communications, DASD for Joint Communication,\nand OASD(PA) Director of Administration and Management to assume day-to-day\noperational control over AFIS components and develop OSD-level programs not defined\nin DoD Directive 5122.5. This allowed a breakdown in the separation of duties between\nthe OASD(PA) policy and oversight functions and AFIS operational management, and it\nled to the inappropriate merging of OASD(PA) and AFIS resources. Figure 1 shows the\nOASD(PA) and AFIS organizational structures as of July 12, 2007, and depicts how the\nvarious DASDs had assumed authority for AFIS offices and programs.\n\n\n2\n Dual-hatting occurs when a management official fills more than one distinct position.\n3\n Since January 1, 2001, there have been three ASD(PA)s and three Acting ASD(PA)s.\n\n\n 6\n\x0c OASD(PA) Organizational Structure\n\n ASD(PA) Director\n AFIS\n\n\nDirector DASD for Internal DASD DASD DASD for Director for\n for Communications Press for Media Joint Administration\nWriters and Public Liaison Secretary Operations Communication and\n Group Management\n\n Community Relations Director for Strategic\n and Public Liaison, Communications Communication\n Entertainment Media, Integration Team and\n and Information Outreach Process Management\n Resource Management Team\n\n\n\n AFIS Organizational Structure\n\n Director\n AFIS\n\n\n DASD for DASD for Director, Defense DASD for Director for\n Internal Public Liaison Media Activity Joint Administration\nCommunications Transition Team Communication and Management\n\n\n\n Defense Media Public Defense Media DINFOS and Defense Enterprise Business\n Center, Stars & Communications, Activity Transition Visual Information Services (includes\nStripes, New Media, Public Inquiry, Team personnel\n and Broadcast and Current management, finance\n News Service and accounting)\n\n\n\n*Blue boxes represent dual-hatted positions that should not be part of the AFIS organizational structure.\n\n\n Figure 1. OASD(PA) and AFIS Organizational Structures\n\n\n\n\n 7\n\x0cDASD for Internal Communications\nThe DASD for Internal Communications had roles and responsibilities beyond those in\nDoD Directive 5122.5. In December 2003, the ASD(PA) appointed a DASD for Internal\nCommunications to develop policies, guidelines, and standards for providing central\nmanagement over DoD internal information programs. The major duties described in the\nposition description included providing policy and oversight to AFRTS, internal\ninformation programs, visual information activities, combat camera operations, and the\nStars and Stripes newspaper operations. (See Appendix C for a detailed list on the major\nresponsibilities assigned in the position description.) The position description stated that\nthe DASD for Internal Communications provided staff and operational control over the\nDefense Visual Information Center and the Joint Combat Camera Center and managed\nand allocated the AFIS Internal Communications annual budget. According to DoD\nDirective 5122.10, these functions should reside with the AFIS Director, with the DASD\nfor Internal Communications providing the oversight function. In the absence of an\nAFIS Director, the ASD(PA) permitted the DASD for Internal Communications to\nassume the day-to-day operational management over associated AFIS components and\nprograms. This weakened the internal control structure by permitting the DASD for\nInternal Communications to become the reporting official for various AFIS employees\nand allowing for the commingling of OASD(PA) and AFIS personnel and funding\nrequirements.\n\nOver the last 3 years, the DASD for Internal Communications had also assumed\nmanagement over the OASD(PA) public liaison role and functions. However, she did not\nreceive an official appointment to the position, and the ASD(PA) had not updated the\nposition description of the DASD for Internal Communications to include this new role.\nThe Office of the DASD for Public Liaison had a separate mission from the Office of the\nDASD for Internal Communications. Public liaison responsibilities included providing\npolicy and oversight for the DoD Public Inquiry Office and Current News Service and\nmanagement over programs not specifically included in DoD Directive 5122.5, such as\nWhy We Serve, America Supports You, and the Joint Civilian Orientation Conference.\nThese programs supported the Secretary of Defense requirements for increasing the\npublic\xe2\x80\x99s knowledge of the DoD mission.\n\nThe OASD(PA) had budgeted for a limited staff to support these programs. However,\nthe DASD for Internal Communications also used AFIS personnel and funding not\nspecifically identified in OASD(PA) budget requests to operate these programs. The\nFY 2007 AFIS Authorized Manpower Requirements and Alignment Document\n(manpower document) showed that seven AFIS employees reported directly to the DASD\nfor Internal Communications. Three of these employees were AFIS program managers\nwho reported directly to the AFIS Director.4 The other four employees were public\n\n\n\n\n4\n Because the ASD(PA) had not appointed an AFIS Director or acting director, several of these individuals\nshould have reported directly to the ASD(PA).\n\n\n 8\n\x0caffairs specialists who directly supported the DASD for Internal Communications (one\nindividual had the title of special advisor to the DASD) and should have been part of the\nOASD(PA) manpower document.\n\nThe ASD(PA) should determine whether the internal communication and public liaison\nfunctions require separate DASDs or can remain combined. The ASD(PA) should also\ndetermine whether the OASD(PA) should continue to administer the public inquiry\nprograms at the OSD-level or transfer them to the DMA Director since the field activity\nshould manage all operational programs. After determining the roles of the DASD for\nInternal Communications and the DASD for Public Liaison, the ASD(PA) should work\nwith the DoD Director of Administration and Management to define manning\nrequirements and update DoD Directive 5122.5 to clarify the existing mission of the\nDASDs. The ASD(PA) should then update the manning allocations and position\ndescriptions for the DASD for Internal Communications and the DASD for Public\nLiaison.\n\nDASD for Joint Communication\nThe DASD for Joint Communication had roles and responsibilities beyond those in DoD\nDirective 5122.5. In the position description dated January 6, 2005, the ASD(PA)\nappointed the DASD for Joint Communication to lead the strategic communication\nworking group, represent the ASD(PA) on the Strategic Communication Integration\nGroup (SCIG), supervise education and training programs (including DINFOS), and\noversee visual information. (See Appendix C for all the major duties described in the\nDASD for Joint Communication position description.) However, the ASD(PA) did not\nclearly relate the responsibilities of the DASD for Joint Communication to the DoD\nDirective 5122.5 or appropriately budget for the funds for the DASD to support strategic\ncommunication. The position description also stated that the DINFOS Commandant and\nthe Director of Visual Information would report to the ASD(PA) through the DASD for\nJoint Communication.5 The position description was inconsistent with the guidance\ncontained in DoD Directive 5122.10, which assigned AFIS the responsibility for\nmanaging these activities. The alignment of responsibilities in DoD Directive 5122.5\nshould ensure the proper separation of duties between the OASD(PA) policy and\noversight functions and the day-to-day management of AFIS programs.\n\nStrategic Communication. DoD Directive 5122.5 does not specifically address the\nroles and responsibilities of the DASD for Joint Communication. Those roles and\nresponsibilities have evolved with the need to support the Combatant and Joint Force\nCommanders with joint communications capabilities and synchronize DoD\ncommunication with other Federal agencies. The Quadrennial Defense Review Report,\nFebruary 6, 2006, identified gaps in the primary supporting capabilities of public affairs,\nDefense Support to Public Diplomacy, military diplomacy, and information and\npsychological operations. To close those gaps, the report stated that DoD would focus on\nproperly organizing, training, equipping, and resourcing its key communication\n\n5\n The Director of Visual Information managed the Defense Visual Information Center, Joint Combat\nCamera Center, and Joint Visual Information Distribution Activity.\n\n\n 9\n\x0ccapabilities. On August 25, 2006, the Deputy Secretary of Defense established the SCIG\nand SCIG Secretariat to coordinate and synchronize OSD, Combatant Commander, and\nthe Military Department communications plans and concepts in collaboration with the\nDepartment of State. The Deputy Secretary of Defense requested individuals from\nvarious DoD Components to serve full-time in the SCIG Secretariat. On January 31,\n2007, the Deputy Secretary of Defense appointed the DASD for Joint Communication as\nthe SCIG Secretariat Director. The Deputy Secretary of Defense developed a strategic\ncommunication execution roadmap and defined the SCIG responsibilities as:\n\n \xe2\x80\xa2 institutionalizing processes by incorporating principles of strategic\n communication in the development of DoD strategy, policy formulation,\n planning, and execution;\n \xe2\x80\xa2 defining strategic communication roles, responsibilities, and relationships;\n \xe2\x80\xa2 developing doctrine; and\n \xe2\x80\xa2 providing Military Departments and Combatant Commands resources to\n organize, train, and equip its primary communication supporting capabilities.\n\nFunding for Strategic Communications. The FY 2007 OSD Budget Estimate\nSubmission did not provide funding for strategic communications. Instead, the\nUSD(C)/CFO allocated $2.7 million in FY 2007 Defense Operation and Maintenance\nfunds to the Under Secretary of Defense (Policy) to begin implementing the strategic\ncommunication effort. On April 3, 2007, the DASD for Joint Communication used\napproximately $1 million of these funds for a contract to design and plan the processes\nfor implementing the strategic communication execution roadmap. The FY 2008 Budget\nEstimate Submission from the Under Secretary of Defense (Policy) requested an\nadditional $3 million to support the SCIG. However, the Senate Report to the FY 2008\nNational Defense Authorization Act, June 5, 2007, recommended a $3 million decrease\nin DoD Operation and Maintenance funds and stated that:\n\n The budget request included $3.0 million for the Office of the Secretary\n of Defense for Strategic Communication and Integration. This funding\n would support a contract to help institutionalize strategic\n communications and complete the implementation of the Strategic\n Communication Execution Roadmap. Responsibility for strategic\n communication and public diplomacy rests with the President and\n Secretary of State, and any DoD efforts to formulate a message should\n be informed and framed by those efforts. Moreover, public diplomacy,\n public affairs, and information operations are separate and distinct\n functions, with different purposes and guidelines for their use. Any\n attempt to integrate them could compromise the integrity of each of\n these functions. Nonetheless, the committee supports the use of\n Operation and Maintenance funds of the respective offices conducting\n communications activities in order to improve the Department\xe2\x80\x99s\n communication efforts, including updating regulations and other\n activities being conducted as part of the strategic communication and\n integration effort.\n\nThe Office of the Under Secretary of Defense (Policy) complied with the Congressional\naction and did not allocate funds for the strategic communication initiative in FY 2008;\n\n\n 10\n\x0chowever, the DASD for Joint Communication continued to pursue this effort. From\nAugust through December 2007, the DASD for Joint Communication modified the\ncontract for services through January 15, 2008, using $426,767 in AFIS funds. In\nJanuary 2008, DASD for Joint Communication met with the Deputy Secretary of Defense\nand requested additional funds for strategic communications. Based on the request and\nconfirmation from the Office of the Deputy Secretary of Defense, the USD(C)/CFO\ndirected WHS to provide $500,000 in funding to support the SCIG. WHS then\nreallocated unassigned FY 2008 Defense Operation and Maintenance funds to the Under\nSecretary of Defense (Policy). On January 15, 2008, the Office of the DASD for Joint\nCommunication awarded a second contract for $492,611 citing the Under Secretary of\nDefense (Policy) funds to continue implementation of the strategic communication\nroadmap using this allocation. The contract required the performance of the following\ntasks.\n\n \xe2\x80\xa2 Establish a Program Management Office to provide subject matter expertise\n capabilities to the joint communication initiative.\n \xe2\x80\xa2 Design, develop, and implement a strategy for managing the DoD joint\n communication changes.\n \xe2\x80\xa2 Research, design, and develop an analytical approach for the joint communication\n tasks.\n \xe2\x80\xa2 Design, develop, and execute a seminar of key stakeholders to advance the\n awareness and understanding of the future state of DoD joint communication.\n \xe2\x80\xa2 Provide policy analysis support on communication-related directives, instructions,\n and doctrine.\n\nPersonnel in the Office of the USD(C)/CFO informed us that they provided funding for\nthe SCIG to the Under Secretary of Defense (Policy) because they believed that the SCIG\nwas an Under Secretary of Defense (Policy) program. The Director, WHS should\nconduct an independent assessment and work with the USD(C)/CFO to determine\nwhether the use of OASD(PA) contract services to support the strategic communication\nefforts was appropriate and take appropriate actions to ensure the proper allocation of\nfunding and program administration responsibilities.\n\nStrategic Communication Responsibilities. Without clearly defined strategic\ncommunication responsibilities, DoD may appear to merge inappropriately the public\naffairs and information operations functions. The OASD(PA) should only perform\nstrategic communication responsibilities related to its public affairs mission. The\nstrategic communications responsibilities for information operations should remain\nseparate and under the oversight of the Under Secretary of Defense (Policy).\n\nDoD Joint Publication 3-61, \xe2\x80\x9cPublic Affairs,\xe2\x80\x9d May 9, 2005, states that public affairs and\nthe information operations functions should directly support military objectives, counter\nadversary disinformation, and deter adversary actions. The publication also states that\nalthough public affairs and the information operations functions require planning,\nmessage development, and media analysis, the efforts differ with respect to the audience,\n\n\n\n 11\n\x0cscope, and intent, and must remain separate. The publication further states that\ncommanders should structure their organizations to ensure the separation of public affairs\nand information operations.\n\nDoD Directive 3600.1, \xe2\x80\x9cInformation Operations,\xe2\x80\x9d August 14, 2006, recognizes the need\nfor information operations to use public affairs products and information to communicate\nmilitary objectives, counter misinformation and disinformation, deter adversary actions, and\nmaintain the trust and confidence of the U.S. population. However, the directive assigns the\nUnder Secretary of Defense (Policy) the responsibility to establish specific policy and\noversight for the development and integration of information operations and coordinate with\nthe Under Secretary of Defense (Intelligence) and the ASD(PA) for establishing specific\npolicy and oversight for the development and integration of public diplomacy as a related\ninformation operations capability. Assigning the DASD for Joint Communication the\nresponsibility for synchronizing public affairs and information operations allows for the\nimproper integration of these functions.\n\nAs of March 2008, the Deputy Secretary of Defense had not reauthorized the SCIG;\nhowever, the DASD for Joint Communication continued to implement the strategic\ncommunications initiative using contractors. On April 1, 2008, the Deputy Secretary of\nDefense approved the OASD(PA) memorandum, dated February 22, 2007, requesting an\nadditional $900,000 for strategic communications. If the DASD for Joint\nCommunication is to continue strategic communications efforts, the DoD Director of\nAdministration and Management should update the DoD Directive 5122.5 to clearly\ndefine this role to ensure the OASD(PA) does not assume responsibilities and functions\noutside its mission, and the ASD(PA) should update the position description for the\nDASD for Joint Communication. In accordance with DoD Joint Publication 3-61 and\nDoD Directive 3600.1, the OASD(PA) must ensure that its strategic communications\nefforts do not integrate information operations and public diplomacy support into the\npublic affairs mission.\n\nOASD(PA) Director for Administration and Management\nThe OASD(PA) did not establish a separate office to administer and manage the\nASD(PA) budget and personnel functions. Instead, the AFIS Director for Administration\nand Management managed all budget and personnel functions for OASD(PA) and AFIS.\nThe lack of separate offices enabled the inappropriate use of AFIS funding and personnel\nfor OASD(PA) programs. In addition, OASD(PA) management did not identify all of its\nresource requirements in the OASD(PA) input to the OSD Budget Estimate Submission\nor its manpower document. Likewise, AFIS managers should have identified resource\nrequirements for administering functions assigned to the AFIS Director in its Budget\nEstimate Submission and manpower document. The ASD(PA) should have established\nseparate OASD(PA) and AFIS administrative and management offices to provide basic\nenterprise services for the entities they served and should not have permitted the use of\nAFIS funding and personnel to accomplish missions or programs outside of the AFIS\nmission. In addition, the ASD(PA) should have properly budgeted for the resources\nneeded to operate the OSD-level activities, eliminating the need to use funds budgeted to\noperate AFIS activities.\n\n\n\n 12\n\x0cOASD(PA) Budget Requirements. OASD(PA) did not conduct an adequate budget\nformulation process to identify the funding requirements necessary to conduct programs\nand activities at the OSD level. As an OSD-level organization, the OASD(PA) requests\nfunding as part of the consolidated OSD budget submission. Based on an approved\nbudget request, the USD(C)/CFO provides WHS with a Funding Authorization\nDocument, which WHS targets to the various OSD organizations to administer their\nprograms. The OASD(PA) FY 2007 budget submission primarily covered travel costs\nand contracts for small programs but did not request the funding needed to support\nprograms such as America Supports You, Why We Serve, and the Joint Civilian\nOrientation Conference. The FY 2007 OASD(PA) budget request and approved funding\ndid not include funding for the majority of OASD(PA) related costs. For example, the\nFY 2007 OASD(PA) budget request only contained $267,000 for contract services,\ndespite awarding and administering contracts in excess of that amount. In FY 2008,\nOASD(PA) increased their budget request to $900,000 for contract services; however, the\nDASDs and directors identified an additional $3 million in recurring requirements that\nthey had not funded. Instead of requesting additional funding from the USD(C)/CFO,\nOASD(PA) used funding originally budgeted for AFIS components to accomplish some\nOSD-level programs without accomplishing the necessary reprogramming actions. For\nexample, the DASD for Internal Communications and Public Liaison was the proponent\nof the America Supports You program, but did not request sufficient funding as part of\nthe OASD(PA) budget formulation process to run the program. The Deputy Secretary of\nDefense memorandum, dated September 29, 2006, established the America Supports You\nprogram and required AFIS to submit the budget request to fund the program. The\nFY 2007 and FY 2008 AFIS budget estimate submissions did not include any request for\nthe America Supports You program. However, the FY 2007 Global War on Terror\nSupplemental Appropriation provided AFIS with $3 million for the America Supports\nYou program. Personnel in the Office of the USD(C)/CFO informed us that America\nSupports You program directly supports the Global War on Terror and it provided\nfunding to AFIS for that purpose. However, OASD(PA) administered the program at the\nOSD level and used AFIS funding on several occasions to fund the America Supports\nYou program. For example:\n\n \xe2\x80\xa2 In February and July 2007, the Stars and Stripes contracting office issued a\n contract for the America Supports You Web site design, DefenseLINK Web site\n design, and other services using $320,650 in Stars and Stripes nonappropriated\n funds. According to DoD Instruction 1015.15, \xe2\x80\x9cEstablishment, Management, and\n Control of Nonappropriated-Fund Instrumentalities and Financial Management of\n Supporting Resources,\xe2\x80\x9d October 31, 2007, an entity may only use\n nonappropriated funds for the general welfare of the military community and\n cannot use these funds for public affairs functions outside the purposes for which\n the nonappropriated fund was established. Because America Supports You was\n an OASD(PA) administered program and did not directly support the Stars and\n Stripes nonappropriated fund, Stars and Stripes should not have funded this\n contract using nonappropriated funds. Subsequently, in February 2008, AFIS\n transferred $311,650 in Defense Operation and Maintenance funds that DoD had\n\n\n\n 13\n\x0c originally budgeted to support other AFIS programs to Stars and Stripes to\n reimburse it for the original contract cost.\n \xe2\x80\xa2 In July 2007, AFIS reimbursed Stars and Stripes an additional $1.7 million for the\n nonappropriated funds that Stars and Stripes spent on services related to the\n America Supports You program. AFIS issued a check to Stars and Stripes from\n its contingency funds. AFIS used funds requested as part of the FY 2007 Global\n War on Terror Supplemental Appropriation. Because OASD(PA) administered\n the America Supports You program, AFIS had limited assurance that OASD(PA)\n used AFIS funding appropriately.\n\nThe DASD for Internal Communications and Public Liaison also administered the Joint\nCivilian Orientation Conference that DoD designed to familiarize distinguished citizens\nwith the Department. Although OASD(PA) has conducted this program since 1948, it\ndid not include funding for the conference as part of its FY 2006 through FY 2008 budget\nsubmissions. In FY 2008, the DASD for Internal Communications and Public Liaison\ndirected AFIS to spend $16,635 in AFIS funding to pay for Joint Civilian Orientation\nConference planning fees. The DASD for Internal Communications and Public Liaison\nalso managed a speakers outreach program (Why We Serve) intended to connect the DoD\nmilitary with the public. The OASD(PA) used $122,383 in FY 2007 AFIS Operation and\nMaintenance funds to pay administrative services to support the Why We Serve program.\nIn addition, the OASD(PA) Directorate of Community Outreach used $65,580 in AFIS\nfunding for a contractor to work in the Community Outreach office. Congress\nappropriated funding to conduct the AFIS mission by approving the AFIS Budget\nEstimate Submission. The AFIS budget did not include funding to accomplish these\nOASD(PA) administered programs. Use of AFIS funding for OASD(PA) purposes\nrequires approval and reprogramming action from the USD(C)/CFO. Without the\napproval and reprogramming actions to use AFIS funding, the OASD(PA) should not\nhave used AFIS funding to accomplish the OASD(PA) programs and may have\naugmented its budget. The ASD(PA), in conjunction with the Director, WHS, should\nperform an independent assessment and determine whether the administration of these\nprograms should be budgeted for using AFIS funds and whether the previous use of AFIS\nfunds to support OASD(PA) programs outside the direct control of the AFIS Director\nwas appropriate. Further, the ASD(PA) should identify funding requirements necessary\nto support OASD(PA) programs not transferred to AFIS through its budget formulation\nprocess and include the requirements in its annual budget.\n\nOASD(PA) Personnel. The FY 2007 manpower document for the OASD(PA) did not\nmatch the positions and number of personnel assigned to the OASD(PA) operating\ndirectorates. The document provides the number of authorized positions to comply with\nceilings established in 10 U.S.C. 143. The manpower document should list the\nOASD(PA) employees by office and align their assignment to the correct DASD or\ndirector so that it provides a clear line of authority and accurate personnel reporting. The\nmanpower document, dated September 4, 2007, authorized 89 OASD(PA) positions. In\nJuly 2007, the Special Assistant to the ASD(PA) conducted an evaluation and developed\nan organizational chart showing the number of personnel assigned to each OASD(PA)\noffice. She determined that at least 109 Government and 31 contract employees worked\n\n\n\n 14\n\x0cdirectly for the OASD(PA). Determining how OASD(PA) assigned individuals to\npositions in its manpower document was difficult. Our analysis of the organizational\nchart and the manpower document showed the following.\n\n \xe2\x80\xa2 The offices in the manpower document did not align with the offices that\n physically existed within OASD(PA). For example, the manpower document\n did not include the Television and Radio Booking Office and Media\n Operations Audio Visual Division. However, these organizations existed\n before FY 2007.\n \xe2\x80\xa2 According to the manpower document, the DASD for Internal\n Communications was not an authorized position and the document assigned\n only one position to the DASD for Joint Communications, despite the fact that\n 4 Government employees and 13 contractors worked for that office.\n \xe2\x80\xa2 Nine authorized work force positions did not appear as part of the\n organizational chart.6\n\nOur analysis also showed that OASD(PA) had augmented its offices with 17 AFIS\nemployees and 31 contractors. The DoD Director of Administration and Management\nshould evaluate whether the use of AFIS employees to accomplish OASD(PA) and DoD\nfunctions represented inappropriate augmentation of authorized OSD personnel levels.\n\nAFIS Organizational Structure\nAFIS did not have an organizational structure that ensured that AFIS would accomplish\nits missions efficiently and effectively. DoD Directive 5122.10 requires the ASD(PA) to\nappoint an independent AFIS Director with responsibilities for organizing, directing, and\nmanaging AFIS, its components, and all assigned resources. The directive also requires\neach AFIS component to report directly to the AFIS Director. However, several\nASD(PA)s had failed to appoint an independent AFIS Director and allowed the DASDs\nto become dual-hatted as AFIS managers. This resulted in AFIS no longer having the\nclear lines of authority or the segregation of duties needed to provide a positive control\nenvironment. Commingling AFIS and the OASD(PA) operations and personnel distorted\ntheir management structures and exposed AFIS resources to misuse. The division of\nAFIS programs among the DASDs also resulted in the development of independently\noperating components that lacked the centralized oversight and management needed to\neffectively align and use AFIS resources. AFIS components had developed their own\nenterprise services and business practices preventing management from obtaining\ncomplete information on the requirements needed to fulfill the AFIS mission. For\nexample, we identified the following concerns resulting from the AFIS organizational\nand management design.\n\n \xe2\x80\xa2 AFIS managers expressed concerns that the AFIS structure did not equitability\n serve their mission and that DMA would not provide equitable resourcing.\n\n\n6\n Some discrepancies may have resulted from personnel actions occurring in the 2 months between the\ndates of the documents.\n\n\n 15\n\x0c Because AFIS had two distinct missions (public affairs operations and training), it\n was imperative that each mission received equitable consideration.\n \xe2\x80\xa2 The Military Departments Public Affairs Chiefs expressed concerns that AFIS did\n not have sufficient expertise to administer military personnel requirements and\n that this would carry over to the new DMA structure.\n \xe2\x80\xa2 According to AFIS program managers, AFIS had not conducted any entity-wide\n budget formulation meetings until February 2008. The AFIS Chief Financial\n Officer should have facilitated budget formulation meetings with all program\n managers to ensure the equitable alignment of funds for fulfilling the various\n missions.\n \xe2\x80\xa2 Stars and Stripes management expressed concerns that the use of its contracting\n resources to support the America Supports You program may have compromised\n the independence of Stars and Stripes. In November and December 2007, the\n Stars and Stripes newspaper and the New York Times contained articles\n addressing the concerns of Stars and Stripes staff that their relationship with the\n America Supports You program could cause their readers to question their\n objectivity as an editorially independent newspaper.\n\nWe also discuss issues affected by the AFIS organizational structure in findings B, C, and\nD of this report. Without a well-designed organizational structure and an independent\nAFIS Director to organize, direct, and manage AFIS resources, the ASD(PA) could not\nensure that AFIS efficiently and effectively accomplished its missions. This contributed\nto an overall breakdown in AFIS internal control and resource management. Because\nDMA will subsume AFIS on October 1, 2008, correcting the long-standing issues are an\nessential part of the transition plan.\n\nTransitioning to the DMA\nThe decision to create DMA affords DoD with the opportunity to improve the\neffectiveness of the organization responsible for administering the DoD public affairs\nmission and programs. In December 2006, the ASD(PA) established a DMA Transition\nTeam to develop and manage the execution of implementation plans for establishing\nDMA. This included designing an organizational structure that consolidates AFIS and\nthe Military Department internal communication functions into a single DoD activity.\nThe DMA Transition Team recognized the need for an improved organizational structure\nand management design that can effectively manage DoD public affairs activities. In\nDecember 2007, this team began the process of selecting a DMA Director and other key\nmanagement personnel. In addition, in April 2008, it issued a contract for organizational\nanalysis and design advisory and assistance services in support of the establishment of\nDMA. Organizational elements within AFIS require consolidation and realignment to\nbenefit the organization as a whole. We support the need for a detailed review of the\nDMA organizational and management design.\n\nSelecting a DMA Director\nDoD Directive 5105.74 establishes DMA and requires the ASD(PA) to select a DMA\nDirector that is a career member of the Senior Executive Service or a Flag or General\nOfficer military equivalent. The appointment of the new DMA Director will be essential\n\n\n 16\n\x0cto establishing a strong management structure, alleviating the concerns of the\norganizations involved in the consolidation, and effectively implementing the FY 2005\nDefense Base Realignment and Closure recommendations. The failure to appoint an\nAFIS Director in the past caused the breakdown in the organizational control\nenvironment, placing resources in jeopardy of potential misuse and waste. In\nFebruary 2008, DoD issued a job opportunity announcement for the DMA Director\nposition. The ASD(PA) should expedite the selection of the DMA Director so that the\nnew director can manage the DMA organizational and management design. This would\nallow the new director to play an active role in evaluating the operations and business\npractices of AFIS and the Military Departments\xe2\x80\x99 media organizations during the\ntransition period and help to alleviate the concerns of the Military Departments and AFIS\nmanagers. The DMA Director requires a strong direct reporting staff that includes a\nChief of Staff, Chief Enlisted Advisor, Directors for its operations and training missions,\na Director for Enterprise Business Services to provide centralized management of similar\nbusiness functions, and key advisors in areas such as finance, information technology,\nand legal services. See Appendix C for details.\n\nConclusion\nThe OASD(PA) and AFIS did not have clearly defined organizational structures and\nmanagement responsibilities to manage the DoD public affairs mission efficiently. For\nmore than 7 years, AFIS has not had an independent director to provide the day-to-day\nmanagement over planning, directing, and controlling decisions. The lack of separation\nof duties between policy and oversight and operations also resulted in adverse media\nattention from the Stars and Stripes and non-DoD newspapers. DoD can address these\nissues by establishing a strong control environment within the new DMA. With the\nestablishment of DMA as of January 1, 2008, DoD should select a DMA Director as soon\nas possible to provide the day-to-day management needed to manage the new field\nactivity. As required by DoD Directive 5105.74, this new Director should be a career\nmember of the Senior Executive Service or a military equivalent to provide sustained\nleadership. The DMA Director should consider for implementation the recommendations\nof the DMA ongoing organizational analysis. The ASD(PA) and DMA Director, once\nselected, should expedite the selection of key DMA managers. The DoD Director of\nAdministration and Management, in coordination with the ASD(PA), should reissue DoD\nDirective 5122.5 to define the roles and responsibilities of the OASD(PA), including its\nrelationship to DMA and other DoD organizations, and update the DASD and Director\nposition descriptions accordingly. In defining the roles and responsibilities, the DoD\nDirector of Administration and Management and the ASD(PA) should ensure the\nestablishment of proper segregation of duties between the policy and oversight functions\nadministered by the office and the operational functions assigned to DMA. The\nASD(PA) should transfer programs not requiring OASD(PA) direct management to\nDMA.\n\n\n\n\n 17\n\x0cRecommendations, Client Comments, and Our\nResponse\nRedirected Recommendation\nBased on comments received from the DoD Acting Deputy Chief Financial Officer, we\nredirected draft Recommendation A.2. to the ASD(PA) and Director, Washington\nHeadquarters Services (WHS). The OASD(PA) should work with WHS to perform an\nindependent assessment of AFIS use of funds and personnel and the use of OASD(PA)\ncontract services.\n\nA.1. We recommend that the DoD Director of Administration and Management, in\ncoordination with the Assistant Secretary of Defense (Public Affairs), evaluate the\ncurrent functions and programs administered by the Office of the Assistant\nSecretary of Defense (Public Affairs) and define the mission and functions of the\noffice. Specifically,\n\n a. Reissue DoD Directive 5122.5 to define the roles and responsibilities of the\nOffice of the Assistant Secretary of Defense (Public Affairs), including the\nrelationship to the Defense Media Activity and other DoD organizations. In\ndefining the roles and responsibilities, ensure proper segregation of duties between\nthe policy and oversight functions administered by the office and the operational\nfunction assigned to the Defense Media Activity. The Assistant Secretary of Defense\n(Public Affairs) should transfer programs not requiring direct management by the\nOffice of Assistant Secretary of Defense (Public Affairs) to the Defense Media\nActivity.\n\nDoD Director of Administration and Management Comments\nThe DoD Acting Deputy Director of Administration and Management agreed and\nstated that the Deputy Secretary of Defense signed an updated version of DoD\nDirective 5122.05 (formerly DoD Directive 5122.5) on September 2, 2008, which\nincluded proper segregation of duties between policy and oversight functions. She stated\nthat her staff will continue to work with the ASD(PA) and develop a recommendation for\nthe Deputy Secretary of Defense decision on any transfers of functions or resources\nbetween OASD(PA) and AFIS.\n\nAssistant Secretary of Defense (Public Affairs) Comments\nThe Acting ASD(PA) agreed and stated that he would work with the DoD Director of\nAdministration and Management to amend the DoD Directive.\n\nOur Response\nThe DoD Director of Administration and Management comments are responsive. We\nreviewed the updated guidance and agree that it describes the OASD(PA) relationship to\n\n\n\n\n 18\n\x0cDMA and other DoD organizations, defines the roles and responsibilities, and ensures\nproper segregation of duties between the OASD(PA) policy and oversight functions and\nthe DMA operational functions.\n\nThe Acting ASD(PA) comments are not responsive because he did not fully address all\naspects of the recommendation. The ASD(PA) did not address the need to transfer\nprograms not requiring direct OASD(PA) management to DMA. The ASD(PA) should\nconsider transferring any recurring OASD(PA) programs, those that are not temporary in\nnature or that require special administration, to DMA to ensure proper administration. As\na DoD field activity managed by OASD(PA), the DMA should have the resources and\nexpertise needed to ensure that all programs function according to laws and regulations\nand operate effectively.\n\nWe request that the ASD(PA) provide additional comments on the final report addressing\nthe analysis of which recurring programs need to remain at the OASD(PA) level and\nwhat actions he has taken to transfer other programs to DMA.\n\n b. Update the position descriptions of the Deputy Assistant Secretaries of\nDefense and Directors within the Office of the Assistant Secretary of Defense (Public\nAffairs) based on the revisions to DoD Directive 5122.5.\n\nDoD Director of Administration and Management Comments\nThe DoD Acting Deputy Director of Administration and Management disagreed and\nstated that the OASD(PA) Director for Administration and Management indicated that\nthe DASDs and Directors had current and accurate position descriptions.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated his office is reviewing the position descriptions\nand should complete the review by the end of the first quarter, FY 2009.\n\nOur Response\nThe DoD Director of Administration and Management and ASD(PA) comments\ncontradict each other. We do not agree with the DoD Acting Deputy Director of\nAdministration and Management that the position descriptions are current and accurate.\nOur review showed that several DASD position descriptions contained major\nresponsibilities that belong to the DMA Director.\n\nWe request that the ASD(PA) coordinate with the Director, WHS and update the DASD\nand Director position descriptions to ensure that they include the policy and oversight\nfunctions found in DoD Directive 5122.05 and exclude the functions that should belong\nto the DMA Director.\n\nWe request that the DoD Director of Administration and Management and ASD(PA)\nprovide additional comments on the final report.\n\n\n\n\n 19\n\x0c c. Reevaluate the Authorized Manpower Requirements and Alignment\nDocument and the budget requirements of the Office of Assistant Secretary of\nDefense (Public Affairs) and include these requirements as part of the annual Office\nof Secretary of Defense budget formulation process.\n\nDoD Director of Administration and Management Comments\nThe DoD Acting Deputy Director of Administration and Management agreed and stated\nthat her office has been working closely with the ASD(PA) Director of Administration\nand Management to re-baseline current personnel information against the authorized\nOASD(PA) manpower allocations and the established organizational structure.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that the review process has begun.\n\nOur Response\nThe DoD Director of Administration and Management and ASD(PA) comments are\nresponsive. No further comments are required.\n\nA.2. We recommend that the Assistant Secretary of Defense (Public Affairs), in\nconjunction with the Director, Washington Headquarters Services, perform an\nindependent assessment and determine whether:\n\n a. the use of American Forces Information Service appropriated funding\nand personnel to support Office of Assistant Secretary of Defense (Public Affairs)\nadministered programs augmented the Office of the Secretary of Defense (Public\nAffairs) budget in violation of public law, and\n\n b. the use of Office of Assistant Secretary of Defense (Public Affairs)\ncontract services to support the strategic communication efforts was appropriate.\nTake appropriate actions to ensure the proper allocation of funding and program\nadministration responsibilities.\n\nUSD(C)/CFO Comments\nThe Acting Deputy Chief Financial Officer partially agreed and stated that an\nindependent assessment must be performed. However, he stated that we should address\nthe recommendation to WHS. WHS is the administrator of OASD(PA) funding.\n\nOur Response\nBased on the Acting Deputy Chief Financial Officer comments, we have redirected\nRecommendation A.2. to the ASD(PA) and Director, WHS. The OASD(PA) should\nwork with WHS to perform an independent assessment of AFIS use of funds and\npersonnel and the use of OASD(PA) contract services.\n\nWe request that the ASD(PA) and Director, WHS provide comments in response to the\nfinal report.\n\n\n 20\n\x0cA.3. We recommend that the Assistant Secretary of Defense (Public Affairs):\n\n a. Identify the funding requirements necessary to support Office of Assistant\nSecretary of Defense (Public Affairs) programs and include the requirements in its\nannual budget.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that the OASD(PA) has completed a Lean Six\nSigma project on the budget process within OASD(PA). Based on the project, the\nOASD(PA) made budget process changes in August 2008. He also stated that his office\nhas made significant progress in correcting funding shortfalls by working with WHS and\nthe USD(C)/CFO.\n\nOur Response\nThe ASD(PA) comments are responsive. No further comments are required.\n\n b. Expedite the selection of key managers within the Defense Media Activity\nto include the Director, Defense Media Activity and the direct reporting staff.\nBased on the organizational study, consider hiring a Chief of Staff, Chief Enlisted\nAdvisor, Directors for the operations and training missions, a Director for\nEnterprise Business Services, and key advisors in such areas as finance, information\ntechnology, and legal services.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that he has already filled several key DMA\npositions and the selection process is underway for other positions. Several others are\npending a review of position descriptions and completion of the organizational design\nstudy. He also stated that this report will help guide decisions on the DMA\norganizational structure. DMA management will make decisions on the transitional and\nfinal organizational structures for DMA in the first quarter, FY 2009.\n\nOur Response\nThe ASD(PA) comments are responsive. Although the comments did not directly\naddress the DMA Director position, the DMA Deputy Director/Chief of Staff reported to\nDMA in June 2008. No further comments are required.\n\n\n\n\n 21\n\x0c22\n\x0cFinding B. AFIS Personal Property\nAccountability and Safeguarding\nAFIS had not implemented an effective entity-wide personal property program that\nensured proper accountability and safeguarding of its assets and provided managers with\nthe information needed to make informed decisions. As a result, AFIS had inaccurate\naccountability records and reported the loss of almost $650,000 in personal property\nassets. Because AFIS will consolidate into the new DMA on October 1, 2008, the\nASD(PA) must take actions to implement DoD personal property guidance by:\n\n \xe2\x80\xa2 appointing, in writing, an accountable property officer (APO) to implement an\n entity-wide program by assigning custodial areas and appointing property\n custodians;\n \xe2\x80\xa2 inventorying, reconciling, and consolidating personal property into a single\n Defense Property Accountability System (DPAS) database;\n \xe2\x80\xa2 developing and implementing DMA personal property operating procedures to\n include designation of centralized receiving points for all DMA deliveries;\n \xe2\x80\xa2 controlling access to equipment storage facilities; and\n \xe2\x80\xa2 establishing the personal property accountability threshold, developing standard\n procedures for inventories, and establishing a single bar coding methodology.\n\nThe USD(C)/CFO should direct and monitor an ASD(PA) investigation into potential\nwaste and mismanagement of AFIS personal property and take actions to determine any\nfinancial liability or disciplinary actions for lost assets.\n\nDoD Instruction 5000.64 Requirements\nDoD Instruction 5000.64, \xe2\x80\x9cAccountability and Management of DoD-owned Equipment\nand Other Accountable Property,\xe2\x80\x9d November 2, 2006, requires the DoD Components, to\ndevelop an entity-wide program for managing personal property items.7 DoD\nInstruction 5000.64 delineates the requirements for managing accountable personal\nproperty items from acquisition to disposal. DoD Instruction 5000.64 requires the head\nof each DoD Component to:\n\n \xe2\x80\xa2 establish an integrated accountable property system;\n \xe2\x80\xa2 implement personal property guidance and procedures;\n \xe2\x80\xa2 appoint, in writing, an APO for the entire organization; and\n \xe2\x80\xa2 ensure that all individuals entrusted with Government property are aware of their\n responsibilities for proper care and stewardship.\n\n\n\n\n7\n DoD Instruction 5000.64 defines DoD Components as the OSD, Military Departments, Chairman of the\nJoint Chiefs of Staff, Combatant Commands, DoD Office of Inspector General, Defense agencies, and DoD\nfield activities.\n\n\n 23\n\x0cImplementing the DoD Property Management Program\nAFIS had not implemented an effective personal property program to ensure centralized\nmanagement and oversight over its entity-wide accountability. AFIS established AFIS\nOperating Procedure \xe2\x80\x93 0022, \xe2\x80\x9cProperty Management and Accountability,\xe2\x80\x9d November 30,\n1994, to provide AFIS Headquarters and its components guidance on responsibilities to\naccount for and control personal property. Operating Procedure \xe2\x80\x93 0022 allowed AFIS\ncomponents to implement their own programs, which resulted in establishing different\npersonal property accountability procedures and insufficient oversight over the AFIS-\nwide acquisition of personal property items. The operating procedure was also outdated\nand did not include all of the DoD Instruction 5000.64 requirements. AFIS managers\nfailed to recognize that AFIS was an independent DoD Component governed by DoD\nInstruction 5000.64. They also mistakenly used other DoD Components\xe2\x80\x99 personal\nproperty guidance, such as Army regulations and WHS Administrative Instruction\nNo. 94, \xe2\x80\x9cPersonal Property Management and Accountability,\xe2\x80\x9d October 19, 2007, to\nestablish and guide its personal property program. As a DoD Component, AFIS\nshould have implemented the requirements in the November 2006 update to DoD\nInstruction 5000.64 and revised AFIS Operating Procedure \xe2\x80\x93 0022 accordingly. This\nwould provide AFIS managers with the oversight needed to maintain accountability and\nassist them in making informed decisions. By not implementing all of the DoD\nInstruction 5000.64 requirements, AFIS lacked:\n\n \xe2\x80\xa2 entity-wide oversight by an APO,\n \xe2\x80\xa2 a consolidated personal property database for decision making,\n \xe2\x80\xa2 a consistent personal property accountability threshold,\n \xe2\x80\xa2 an effective physical inventory process,\n \xe2\x80\xa2 adequate safeguards over personal property,\n \xe2\x80\xa2 hand receipting procedures that ensured proper accountability over personal\n property, and\n \xe2\x80\xa2 clearly defined and separated personal property roles and responsibilities.\n\nAccountable Property Officer. AFIS lacked entity-wide oversight of its personal\nproperty program because AFIS management did not appoint an APO to manage all\nAFIS accountable items. The APO is the individual, based on training, knowledge, and\nexperience in property management, who establishes and maintains personal property\naccountability within an organization. AFIS managers considered appointing an APO for\nall of AFIS. However, they decided that the number of personal property items and\ngeographical distance between locations prevented them from appointing one. Instead,\nthey permitted each AFIS component to appoint its own APO, which resulted in seven\nindependent personal property programs. This also resulted in AFIS failing to determine\nthe appropriate number of custodial areas throughout AFIS and appoint property\ncustodians for each area to provide stewardship of personal property items in those areas.\nThis arrangement did not provide the needed oversight over all AFIS personal property to\ndetect the potential for fraud, waste, or abuse. The ASD(PA) should appoint a single\nAPO to administer the program, who could then ensure the appropriate number of\nproperty custodians for designated custodial areas to assist in managing the overall\n\n\n\n 24\n\x0cprogram. This would allow the APO to delegate the day-to-day custody of assets to\ncustodians within the AFIS components while maintaining overall control of the\nAFIS-wide program. Failure to establish this level of control led to the loss and\nmismanagement of AFIS assets.\n\nPersonal Property Accountability System. AFIS did not develop a consolidated DPAS\ndatabase for managing its accountable personal property. Instead, as of February 27,\n2008, nine AFIS components maintained seven separate DPAS databases to manage\nmore than 37,000 items, valued at $81 million. A consolidated database would have\npermitted AFIS managers to integrate the accountability data with AFIS acquisition,\nfinancial, and logistics systems and assist the managers in making decisions concerning\nfuture requirements. A consolidated database would have also provided AFIS managers\nwith better information to ensure the completeness and accuracy of personal property\ninformation and to safeguard personal property items. The table shows the seven unique\nDPAS databases by site identification code and location.\n\n Personal Property Located at AFIS Components\n by DPAS Site Identification Code\n Site Identification Unit Identification No. of\n Code Location Component Code Items\n DI-HQ Alexandria, AFIS-Headquarters HQ0012 3,913\n Virginia\n DI-TOBY Tobyhanna, Joint Visual Information DDAAJB 225\n Pennsylvania Service Distribution\n Agency\n DI-AFISP Tokyo, Japan Stars and Stripes: Pacific W0D1AA 7,025\n\n DI-AFISC Washington, Stars and Stripes: Central W98CSS 506\n District\n of Columbia\n DI-AFISE Griesheim, Stars and Stripes: Europe W81F25 2,855\n Germany\n DI-DIS Ft. Meade, DINFOS W46L05 14,100\n Maryland\n DI-DVIC Riverside, DMC HQ0030 7,393\n California\n Defense Visual HQ0029 1,076\n Information Center\n Television-Audio HQ0028 218\n Support Activity\n Total 37,311\n\n\nDoD Instruction 5000.64 requires that personal property records contain specific data\nelements, such as bar code, name, part number, description, owner, status, quantity,\n\n\n\n 25\n\x0cestimated useful life, and location. As of February 27, 2008, we compared the databases\nand determined that AFIS did not use consistent nomenclature to identify items, such as\ncomputers, or did not use a single bar coding methodology to establish accountability.\nAs a result, AFIS managers could not easily identify the total number of computers that\nAFIS owned, making resource allocations and future purchase decisions difficult. In\naddition, the AFIS components used multiple bar coding methodologies for controlling\nassets. This resulted in 739 items receiving non-unique bar codes, making it difficult to\nestablish accountability over the items. In June 2007, one AFIS component (AFRTS)\nissued a $264,000 contract to test a new bar coding methodology using Radio Frequency\nIdentification. AFRTS reported success using the new bar coding methodology. As\nAFIS components and Military Department media activities transition to the DMA, the\nDMA Director should take steps to establish a consolidated DPAS database using a\nsingle bar coding methodology. Because the Federal Government is moving toward the\nuse of Radio Frequency Identification, DMA should consider this methodology for\nenterprise-wide use.\n\nAccountability Threshold. AFIS managers established a personal property\naccountability threshold that was significantly less than the DoD accountability threshold.\nDoD Instruction 5000.64 requires accountable property records for all items purchased\nwith an acquisition cost of $5,000 or more, leased assets, and assets that are sensitive or\nclassified. DoD Component managers may establish additional criteria to maintain\naccountable property records for items below the threshold such as pilferable property,\nhazardous property, small arms, seized and confiscated property, and heritage assets.\nAFIS Operating Procedure \xe2\x80\x93 0022 established a $300 personal property threshold.\nHowever, several AFIS components implemented a $500 threshold to comply with WHS\nAdministrative Instruction No. 94. AFIS management could not provide justification for\nestablishing a lower accountability threshold and had not developed a detailed listing of\nthe types of items individually valued below the threshold that required accountability.\n\nWe observed that AFIS had many items, such as cameras, televisions, and camcorders\nthat a reasonable person would consider pilferable. However, each AFIS component\nindependently decided what it considered pilferable. AFIS Operating Procedure \xe2\x80\x93 0022\nshould have established a detailed list of items management considered as pilferable\nitems requiring accountability and implemented this requirement consistently across the\norganization. For example, AFIS Headquarters recorded 237 laptop computer docking\nstations, valued at $48,300 (average cost $203.80), because it determined this item to be\npilferable. On the other hand, DINFOS recorded only one of its laptop computers\ndocking stations in DPAS because it exceeded $500. If AFIS managers determined that\ncertain or all types of docking stations required DPAS accountability, then all AFIS\ncomponents should have recorded them. AFIS components inconsistently accounted for\n34,430 DPAS items below the $5,000 threshold and may have unnecessarily expended\nresources to manage them. The DMA Director should rescind AFIS Operating\nProcedure \xe2\x80\x93 0022 and develop DMA guidance for managing and accounting for personal\nproperty. The DMA operating procedure should incorporate the DoD accountability\nthreshold and list the items below that threshold that management determines require\naccountability.\n\n\n\n 26\n\x0cAFIS Stewardship Responsibility. AFIS Headquarters did not maintain proper\nstewardship over personal property items. The APO assigned to AFIS Headquarters\nfailed to conduct required physical inventories, establish consistent accountability\ncontrols, and ensure the proper safeguarding of assets. We reviewed the AFIS\nHeadquarters and DINFOS personal property programs and identified two very different\nprograms with divergent philosophies for implementing stewardship responsibilities.8\nDINFOS implemented a strong program that ensured personal property accountability.\nConversely, AFIS Headquarters lacked proper oversight over its personal property\nprogram, which limited accountability over its $12.6 million in personal property and\nresulted in the loss of almost $650,000 in personal property.\n\n Physical Inventory. AFIS components had not conducted adequate periodic\nphysical inventories of their personal property. DoD Instruction 5000.64 required the\nAPO to properly plan and execute physical inventories at least every 3 years or each time\nthere was a transfer of a property account from one accountable official to another. The\nAPO should also have directed a joint physical inventory whenever a component changed\nits property custodian. Our review showed that DINFOS conducted effective physical\ninventories when transferring accountability between accountable officials. In addition,\ndocumentation supporting the DINFOS inventory process indicated that DINFOS\npersonnel effectively planned and accomplished inventories every 3 years. Conversely,\nwe determined that in at least three instances between January 2006 and January 2008,\nAFIS Headquarters had not conducted joint physical inventories when changing its\naccountable officials. For example, in June 2007, the AFIS Headquarters APO did not\nconduct a 100-percent joint physical inventory before his departure with either his\nsuccessor or the property custodians. Instead, he conducted the inventory by himself and\nsubsequently provided a DPAS hand receipt inventory report and requested a signature\nform each custodian attesting to the completeness of the inventory. However, the\ncustodians refused to sign the hand receipt inventories because they had not participated\nin the inventory and needed to validate the results. As of March 31, 2008, 3 of the\n17 custodians still had not attested to the completeness of that inventory. In addition,\nneither the interim APO nor the new APO at AFIS Headquarters conducted a 100-percent\ninventory when they assumed responsibility for the AFIS Headquarters account in\nJune 2007 and January 2008, respectively. The nine DPAS databases indicated that as of\nFebruary 27, 2008, AFIS had 14,538 items, valued at $30.7 million, which its\ncomponents had not inventoried since at least October 1, 2004.\n\n In December 2007, we attempted to validate the existence of AFIS Headquarters\nand DINFOS accountable property by conducting a physical inventory. We randomly\nselected 90 DINFOS personal property items and were able to locate all 90 items. Our\nresults confirmed our initial assessment that DINFOS inventory controls were in place\nand operating. At AFIS Headquarters, we conducted a 100-percent inventory of all AFIS\nHeadquarters personal property, except those receipted to AFRTS. For AFRTS, we\n\n\n8\n AFIS Headquarters was responsible for the personal property program for all AFIS activities located in\nthe Pentagon and in the AFIS building in Alexandria, Virginia. The DINFOS personal property program\ncovered organizations assigned to the school located at Fort Meade, Maryland.\n\n\n 27\n\x0ccompared the information in DPAS with a December 2007 inventory list developed by\nthe contractor that AFRTS had hired to design and install a Radio Frequency\nIdentification system on AFRTS personal property. Based on our inventory and\ncomparison of AFRTS information, we identified the following discrepancies.\n\n \xe2\x80\xa2 AFIS Headquarters personnel could not locate 172 items, valued at $280,775, at\n the locations specified in DPAS. As of February 21, 2008, AFIS Headquarters\n personnel informed us that they had located 161 of the 172 items and prepared a\n DD Form 200, \xe2\x80\x9cFinancial Liability Investigation of Property Loss,\xe2\x80\x9d to write-off\n the remaining 11 items, totaling $23,000.\n \xe2\x80\xa2 The Radio Frequency Identification contractor identified 778 AFRTS items with\n AFIS bar codes, but no DPAS record. The items included a 42-inch plasma\n monitor, laptop computers, clocks, and cameras. In other AFIS Headquarters\n offices, we identified an additional 73 items with bar codes that AFIS had not\n recorded in DPAS. AFIS Headquarters personnel could not explain why these\n items did not have a DPAS record.\n \xe2\x80\xa2 The Radio Frequency Identification contractor also identified 639 items that did\n not have bar codes. Some of these items, such as a 40-inch plasma monitor,\n computer, and color copier, would have required DPAS accountability and bar\n coding. However, at the time of our inventory, AFIS managers still had not\n assessed how many of these items required accountability or determined why\n AFIS had not recorded the assets in DPAS.\n\n Establishing Accountability. The APO assigned to AFIS Headquarters was\ninconsistent in determining which items required accountability. AFIS Headquarters did\nnot have adequate controls to ensure that the APO assigned a bar code and hand receipted\nthe items to the proper individual or custodian when distributing accountable items.\nDINFOS had a centralized receiving dock for all deliveries and established effective\nprocedures to receive, bar code, and establish a DPAS record. Upon receipt of\naccountable property at the dock, the DINFOS custodian assigned bar codes and\nestablished the DPAS records. However, AFIS Headquarters personnel did not establish\nsimilar procedures. Instead, they had a receiving process for incoming deliveries that\nsometimes allowed AFIS employees to direct vendors to deliver the property to locations\nother than a centralized location. By doing so, they bypassed the property accountability\nprocess. In addition, AFIS Headquarters permitted multiple individuals to maintain and\nassign bar codes without ensuring that they also established the required DPAS records.\nAFIS should ensure that proper accountability procedures are in place and operating and\nthat DPAS information accurately reflects AFIS accountable assets.\n\n Safeguarding Assets. AFIS Headquarters did not adequately safeguard its\npersonal property from theft, unauthorized access, or damage. Government\nAccountability Office Report No. 00-21.3.1 states that an agency must establish physical\ncontrols to secure and safeguard vulnerable assets. Although there was a security guard\nin the main lobby of the AFIS Headquarters building and AFIS Headquarters used one or\n\n\n\n\n 28\n\x0cmore security measures such as Kastle card readers, security cameras, and alarm systems\nto protect the main entry of each office area, AFIS Headquarters could have taken\nadditional measures to safeguard its personal property. For example,\n\n \xe2\x80\xa2 We found two storage areas with lockable doors that were unsecured. One area\n contained 151 laptop computers, valued at approximately $225,000, and the other\n contained 40 computer monitors. The Information Resource Management\n employee who signed the hand receipt for this personal property should have\n maintained controlled access to the storage areas. Although the main entrance to\n the area required a security access card for entry, any AFIS employee, contractor,\n or visitor could gain access to these storage areas once within that main area. In\n addition, there was a security camera to help detect problems, but the camera fed\n to a video screen that AFIS did not monitor continuously. Although these\n security measures were in place, they would not prevent someone from obtaining\n unauthorized access to the personal property or stealing it. After our review,\n AFIS Headquarters took actions to relocate this personal property to more secure\n areas.\n \xe2\x80\xa2 We observed throughout the AFIS Headquarters building numerous unsecured\n laptop computers. AFIS Headquarters policy was to account for all laptop\n computers as pilferable items. However, physical controls would not prevent an\n individual from pilfering a laptop computer once inside the main building entry.\n AFIS Headquarters did not require the use of locking mechanisms to secure the\n laptop computers to workstations.\n\n In addition, AFIS Headquarters had a computer server room with cooling\nproblems. On two separate occasions, months apart, we observed AFIS Headquarters\npersonnel using portable cooling units and fans to prevent equipment from overheating.\nAFIS purchased the fans after temperatures reached 94 degrees in the room. However,\neven with the portable cooling units and fans, the temperature levels in the room\nremained high. The Chief of the Logistics and Operations Office agreed with our\nassessment regarding the temperature problem and stated that AFIS was concerned that\nthe high temperature would reduce life expectancy of equipment. In January 2008, AFIS\nHeadquarters took initial steps to address the high temperature in the computer server\nroom by consulting with an engineering firm to improve the building air conditioning.\nHowever, until they install dedicated air conditioning units to cool the server room or\ntake other appropriate actions, the problem will continue. Figure 2 shows a picture of the\nfans cooling equipment in the server room.\n\n\n\n\n 29\n\x0c Figure 2. Fans Cooling Server Equipment\n\n Preventative measures such as the use of locks, limited access, and proper heating\nand ventilation are essential to safeguard personal property. These controls help prevent\ntheft, loss, and damage of personal property items. AFIS should secure personal property\nstorage areas, limit access to storage areas to only authorized personnel, and install\nproper heating and air conditioning units in the server room.\n\n Maintaining Personal Property Accountability. AFIS did not consistently\nissue and maintain personal property hand receipts or conduct the appropriate\ninvestigations when property was lost, missing, or misused. DoD Instruction 5000.64\nstates that the APO should ensure the issuance of custody receipts or similar documents\nfor all property assigned to an individual or organization to provide accountability and\nestablish financial liability. Although both AFIS Headquarters and DINFOS attempted to\nhand receipt accountability to custodians, neither had consistently hand receipted all\npersonal property to the end users. DINFOS hand receipted personal property to\nstudents, but did not always hand receipt laptop computers and other individual personal\nproperty to its employees. The AFIS Headquarters APO stated that he attempted to hand\nreceipt all personal property to a custodian in each division. However, we identified at\nleast three divisions where the property custodians had not signed for the personal\nproperty. AFIS Headquarters also gave many personal property items such as laptop\ncomputers and cameras to individuals to use in both the workplace or at home without\nobtaining hand receipts from the individuals. For example, we identified at least\n96 items, valued at $123,000 that individuals had taken home without signing a hand\nreceipt. Without issuing and maintaining hand receipts, AFIS assumed significant risk\nfor lost personal property. For example, between May and September 2007, AFIS\nHeadquarters wrote-off more than $625,000 in personal property that could not be\nlocated during physical inventories. The lost items included televisions, cameras, and\n\n\n 30\n\x0cvideo recorders that an individual could easily convert to personal use. Upon completion\nof the inventory, the AFIS APO provided each custodian a list of missing items and\nrequired them to either locate the items or process a DD Form 200 to report the items as\nmissing. The custodians completed the forms because they could not locate the lost\nitems. DoD FMR, volume 12, \xe2\x80\x9cSpecial Accounts Funds and Programs,\xe2\x80\x9d chapter 7,\n\xe2\x80\x9cFinancial Liability for Government Property Lost, Damaged, Destroyed, or Stolen,\xe2\x80\x9d\nMarch 2007, requires managers to conduct an inquiry or formal investigation when\nproperty is lost, damaged, or destroyed to determine whether negligence or financial\nliability existed. AFIS managers told us that they did not conduct an inquiry or a formal\ninvestigation. Investigating culpability ensures that individuals are accountable for the\npersonal property entrusted to them and encourages proper care and stewardship. Since\nAFIS considered many of the missing items pilferable, the ASD(PA) needs to conduct\nreport of survey investigations of all lost or missing property occurring at AFIS to\ndetermine whether individual liability exists. Once completed, the ASD(PA) should\ncoordinate with the Office of Secretary of Defense to obtain concurrence as to whether\nindividual liability exists. In addition, the APO should hand receipt organizational\npersonal property, such as copiers, printers, and teleconference equipment to the property\ncustodians, and personal property intended for individual use to the individual users.\n\nSeparation of Duties. AFIS did not clearly define and separate the roles and\nresponsibilities for purchasing, receiving, and maintaining accountability for personal\nproperty. AFIS should segregate these key duties and responsibilities among different\npeople to reduce the risk of error or fraud. During the audit, we determined that:\n\n \xe2\x80\xa2 For approximately 5 months, the interim AFIS Headquarters property custodian\n was also a Government purchase cardholder who purchased, received, and\n accounted for incoming property. In late November 2007, the Army Contracting\n Center for Excellence contracting representative learned of the situation and\n instructed the property custodian to stop making purchases while performing\n property accountability functions.\n \xe2\x80\xa2 The AFIS Headquarters\xe2\x80\x99 Information Resources Management Operations\n Manager purchased and received computer equipment, assigned and applied bar\n codes, entered DPAS information, and hand receipted personal property. This\n individual had total control over 1,023 accountable items valued at more than\n $3 million as of February 2008. In January 2008, AFIS Headquarters hired a new\n property custodian who began making needed changes to the processes for\n assigning and applying bar codes to personal property and entering information\n into DPAS. This is a step in the right direction, but AFIS must also ensure that\n one individual cannot purchase, receive, and account for personal property.\n\nIn addition, AFIS had not developed controls for determining whether items purchased\nrequired accountability and ensuring that receiving personnel informed the APO of\npersonal property deliveries. Ideally, all personal property should pass through a\ncentralized receiving area where personnel can properly receive the item and, if required,\nallow the APO to enter accountable property information in DPAS before hand receipting\nthe property to the individual requesting it. DINFOS had clearly defined these roles and\n\n\n 31\n\x0cresponsibilities within its receiving and property accountability areas. However, a similar\nprocess was not evident at AFIS Headquarters where AFRTS had assets delivered\ndirectly to the individuals requesting the items and to offsite locations. As a result, the\nAPO could not ensure AFIS personnel bar coded all personal property and accounted for\nit upon receipt. In addition to the previously discussed problems identified by the\nAFRTS Radio Frequency Identification contractor, we identified approximately\n249 items, valued at $420,635, that AFRTS had a vendor ship directly to a Fort Belvoir,\nVirginia, warehouse that the APO had not bar coded and recorded in DPAS.\n\nConclusion\nAFIS did not ensure the proper accountability and adequate safeguarding of AFIS\npersonal property from theft, misuse, and damage. AFIS did not establish a consolidated\nDPAS database, provide centralized oversight, and issue entity-wide policies over AFIS\npersonal property. AFIS should have appointed an APO to administer the AFIS-wide\nprogram and then identified custodial areas and appointed property custodians to manage\nproperty accountability. Without an effective AFIS-wide program, AFIS could not\nprovide the management and oversight needed to properly manage and maintain personal\nproperty accountability and make informed purchasing decisions. As a result, we found\nunsecured personal property, inaccurate accountability records, and inefficient and\nineffective use of AFIS resources.\n\nWith the transition of the AFIS components to DMA, the DMA Director and managers\nneed to develop a sound program that will provide them positive control over personal\nproperty. This program should implement the requirements of DoD Instruction 5000.64\nby consolidating accountability into a single DPAS database controlled by an APO\nresponsible for the entire organization. To ensure that AFIS transfers personal property\ncorrectly to DMA, OASD(PA) managers need to accomplish a 100-percent inventory of\nall AFIS personal property and reconcile the results with their DPAS accountable\nrecords. Furthermore, the USD(C)/CFO should direct the initiation of investigations into\npotential financial liability for lost assets written-off in FY 2007.\n\nRecommendations, Client Comments, and Our\nResponse\nRevised Recommendation\nAs a result of comments from the Acting Deputy Chief Financial Officer, we revised\ndraft Recommendation B.1. to clarify the intent of the recommendation.\n\nB.1. We recommend that the Assistant Secretary of Defense (Public Affairs)\nconduct a report of survey investigation of all lost or missing property occurring at\nAmerican Forces Information Service based on recent inventories and determine\nwhether any individual liability exists. Coordinate the results of the investigation\nand the determination of individual liability with the Office of the Secretary of\nDefense and other interested parties.\n\n\n\n\n 32\n\x0cUSD(C)/CFO Comments\nThe Acting Deputy Chief Financial Officer agreed and stated that a report of survey\ninvestigation should be conducted; however, he stated that the ASD(PA) should work\nwith WHS to complete the survey.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that he has processed a DD Form 200, \xe2\x80\x9cFinancial\nLiability Investigation of Property Loss,\xe2\x80\x9d for all lost property at AFIS Headquarters.\nHowever, due to the extent of the property accountability issues and the inability to rely\non the accountability records, he could not assess individual liability. He stated that\nprocessing the DD Form 200 established a baseline for assigning equipment to DMA and\nholding individuals and managers accountable for future losses.\n\nOur Response\nThe USD(C)/CFO comments are responsive. However, we did not agree that we should\nredirect the recommendation to WHS. After subsequent discussions with representatives\nof the Office of the USD(C)/CFO, we determined that the ASD(PA) should coordinate\nthe results of the report of survey investigation with the Office of the Secretary of\nDefense because it has jurisdiction over AFIS. Therefore, we did not redirect\nRecommendation B.1. to WHS. Instead, we revised the recommendation to clarify its\nintent.\n\nThe ASD(PA) comments are only partially responsive because they do not fully address\nthe recommendation. The recommendation applies to all of AFIS, not just AFIS\nHeadquarters. The ASD(PA) comments did not address the need to conduct report of\nsurvey investigations of all lost or missing personal property within AFIS. Once\ncompleted, the ASD(PA) should coordinate the results with the Office of the Secretary of\nDefense and other interested parties, including the Office of the USD(C)/CFO and the\nOffice of General Counsel, to obtain concurrence as to whether financial liability exists.\n\nWe request that the ASD(PA) reconsider his position and provide additional comments\non the revised recommendation in response to the final report. The additional comments\nshould address the need to include lost or missing personal property from all AFIS\norganizations, including those outside its headquarters, as part of the report of survey\ninvestigation; and coordinating the results with the Office of the Secretary of Defense and\nother interested parties.\n\nB.2. We recommend that the Assistant Secretary of Defense (Public Affairs) direct\nthe Defense Media Activity to implement DoD Instruction 5000.64. Specifically:\n\n a. Appoint, in writing, an Accountable Property Officer for the Defense\nMedia Activity. This individual should assign custodial areas within the Defense\nMedia Activity and appoint property custodians, in writing, for each custodial area.\n\n\n\n\n 33\n\x0cASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that the DMA will appoint, in writing, APOs for\nthe elements of the Military Services and AFIS by December 31, 2008.\n\nOur Response\nThe ASD(PA) comments are partially responsive. The Acting ASD(PA) did not address\nthe need for APOs to assign custodial areas and appoint property custodians. In addition,\ninstead of appointing a single APO for DMA who would appoint property custodians for\nassigned custodial areas within DMA, the Acting ASD(PA) stated that DMA will appoint\nmultiple APOs, each responsible for specific command areas. Based on the ASD(PA)\ncomments on the other B.2. recommendations, the APOs will function under an\noverarching property accountability system monitored at the DMA Headquarters by the\nDMA Chief of Logistics. Placing the APOs under the DMA Chief of Logistics gives one\nindividual ultimate responsibility for ensuring the proper execution of the DMA personal\nproperty program. This will meet the intent of the recommendation.\n\nWe request that the ASD(PA) provide additional comments on Recommendation B.2.a.\nto address the need for APOs to assign custodial areas and appoint property custodians.\n\n b. Conduct a 100-percent inventory of AFIS accountable personal property\nand reconcile the results with the personal property accountability records in the\nDefense Property Accountability System to ensure the accuracy and completeness of\nthe information.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that DMA will conduct a 100-percent physical\ninventory of AFIS Headquarters property and reconcile the results with the property\naccountability system.\n\nOur Response\nThe ASD(PA) comments are partially responsive. The Acting ASD(PA) addressed\nconducting a 100-percent physical inventory of accountable personal property only at\nAFIS Headquarters. He did not address conducting a 100-percent physical inventory of\naccountable personal property assigned to other AFIS entities. We request the ASD(PA)\nprovide additional comments on the final report to address conducting a 100-percent\ninventory at AFIS subordinate organizations and reconciling the results with the property\naccountability system.\n\n c. Consolidate all American Forces Information Service and Military\nDepartment personal property records transferring to the Defense Media Activity in\na single Defense Property Accountability System database.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that DMA will create a single DPAS Site ID to\nmanage all DMA personal property.\n\n\n 34\n\x0cOur Response\nThe ASD(PA) comments are responsive. No further comments are required.\n\n d. Limit access to personal property storage areas to only authorized\npersonnel and properly air condition the server room.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that DMA has taken actions to restrict access to\npersonal property storage areas and to properly air condition the server room.\nSpecifically, he stated that AFIS Headquarters has relocated equipment previously stored\nin unsecured areas to a restricted storage area and adjusted the temperature of the supply\nair in the server room which has reduced the temperature in the space. A completed\nengineering analysis has identified additional recommendations to address the\ntemperature problem in the server room.\n\nOur Response\nThe ASD(PA) comments are responsive. No further comments are required.\n\n e. Develop Defense Media Activity guidance for managing personal property\nand rescind the American Forces Information Service Operating Procedure \xe2\x80\x93 0022,\n\xe2\x80\x9cProperty Management and Accountability.\xe2\x80\x9d This new guidance should:\n\n (1) Designate centralized receiving points for Defense Media Activity\ndeliveries.\n\n (2) Establish the personal property accountability threshold\nconsistent with DoD guidance, and identify pilferable and other items requiring\naccountability that do not meet the accountability threshold.\n\n (3) Develop standard procedures for custodial areas to use during\ninventory testing, and track compliance to ensure the custodial areas conduct\ninventories timely and accurately.\n\n (4) Establish a single bar coding methodology for identifying personal\nproperty accountable items. Consider using radio frequency identification as the\nbar coding methodology.\n\n\n\n\n 35\n\x0cASD(PA) Comments\nThe Acting ASD(PA) concurred and stated that DMA will issue an Operating Instruction\nfor entity-wide management of personal property by November 30, 2008. The new\nguidance will designate centralized receiving points for all personal property, establish an\naccountable personal property threshold, identify accountable personal property below\nthe threshold, develop standard procedures for physical inventory testing and tracking,\nand establish a standard bar coding methodology. After issuing the new guidance, the\nASD(PA) will rescind AFIS Operating Procedure \xe2\x80\x93 0022.\n\nOur Response\nThe ASD(PA) comments are responsive. No further comments are required.\n\n\n\n\n 36\n\x0cFinding C. AFIS Acquisition Process\nAFIS did not properly manage and oversee its acquisition process to ensure that\npurchases were necessary, were properly documented, and complied with legal\nrequirements. As a result, AFIS may have violated fiscal law and spent about $940,000\nthat they could have used to fulfill unfunded requirements of its components. The\nASD(PA), in conjunction with the Director, Defense Logistics Agency, should review\nAFIS contracting authority and processes. The ASD(PA) should implement controls over\nthe AFIS purchasing and contracting practices, train personnel on contracting\nrequirements, and take necessary disciplinary actions for individuals involved in\ninappropriate contracting actions. The ASD(PA) also must investigate, in conjunction\nwith the USD(C)/CFO, whether AFIS purchases fulfilled valid requirements.\n\nBudgetary Resources\nEach year, AFIS submits to Congress a budget estimate through the USD(C)/CFO to\nrequest funding for specific purposes and times. Once approved, AFIS should only use\nthese funds for the purposes that Congress appropriated them in accordance with\n31 U.S.C. 1301, referred to as the Purpose Statute. The Government Accountability\nOffice publication (Red Book), \xe2\x80\x9cPrinciples of Federal Appropriations Law,\xe2\x80\x9d\nJanuary 2004, provides interpretation of 31 U.S.C. 1301. To determine whether an\nexpense fulfills the purpose of an appropriation, the GAO Red Book issued the Necessary\nExpense Test, which states that:\n\n \xe2\x80\xa2 the expenditure must bear a logical relationship to the charged appropriation;\n\n \xe2\x80\xa2 the expenditure must not be prohibited by law; and\n\n \xe2\x80\xa2 the expense must not be an item within the scope of another appropriation or\n statutory funding scheme.\n\nOnce approved, an entity should only use appropriated funds to pay expenses properly\nincurred during the period of availability or to complete contracts within that period in\naccordance with 31 U.S.C. 1502. The GAO Red Book incorporates this statute in the\nBona Fide Needs Rule, which states that an entity may obligate a fiscal year\nappropriation only to meet a legitimate need arising in, or in some cases arising before\nand continuing in, the fiscal year for which the appropriation was made.\n\nIn the FYs 2005 and 2006 Budget Estimate Submissions, AFIS requested $20.3 million\nin Defense Procurement funds for FY 2005 through FY 2007 to provide the capital\ninvestment funding for:\n\n \xe2\x80\xa2 part of the multi-year initiative for the automation of major portions of DMC\n operations;\n \xe2\x80\xa2 normal life cycle replacement of several information technology systems;\n\n\n\n 37\n\x0c \xe2\x80\xa2 replacement of several analog systems with digital technology in support of\n DMC and DINFOS;\n \xe2\x80\xa2 a system to support the upgrade and sustainment of the consolidated\n operations of the Office of the Secretary of Defense Publicly Accessible Web\n Sites Program; and\n \xe2\x80\xa2 a system to support the improved storage, management, and distribution of\n DoD imagery and visual information products.\n\nIn the FYs 2005 and 2006 Budget Estimate Submissions, AFIS also requested\n$272.6 million in Defense Operation and Maintenance funds, including about\n$139.2 million to purchase equipment and contract for items. Personnel in the Office of\nthe USD(C)/CFO administered these appropriations and established administrative\ncontrols as part of its Defense-wide appropriation. AFIS is responsible for spending and\ntracking the funds and providing appropriate training to its financial managers and\nprogram managers on fund control. In Program Budget Decision No. 704,\n\xe2\x80\x9cDefense-Wide Issues,\xe2\x80\x9d December 12, 2006, DoD reduced AFIS funding for FY 2008\nmajor equipment procurement by $3.6 million, citing 3 consecutive years of low\nfirst-year obligation rates.\n\nAFIS Acquisition Process\nAFIS did not effectively manage and oversee its acquisitions of goods and services. The\nacquisition process should begin at the point when an AFIS component establishes its\nneeds and include the description of the requirements to satisfy those needs. The AFIS\ncontracting office and the assigned technical representatives should oversee the\nsolicitation and selection of sources, award of contracts, contract financing, contract\nperformance, contract administration, and those technical and management functions\ndirectly related to the process of fulfilling these needs. The AFIS acquisition process was\nnot effective because AFIS lacked sufficient oversight and management over its\nGovernment purchase card program and acquisition planning process and did not ensure\nthat personal property purchases were properly justified and documented.\n\nOversight and Management of the Acquisition Process\nAFIS lacked sufficient oversight and management of its Government purchase card and\ncontracting programs. The AFIS Chief of Contracting managed the contracting office\nand served as the program coordinator for the AFIS Government purchase card program\nhierarchy.9 However, the AFIS Chief of Contracting could not effectively manage the\nGovernment purchase card program and administer effective oversight over AFIS\ncomponents purchases because she had limited visibility over what AFIS components\npurchased.\n\nGovernment Purchase Card Program. The AFIS Government purchase card program\ndid not provide for agency-wide oversight and was governed by outdated guidance that\n\n\n9\n Government purchase cards use hierarchies to identify the cardholders, approving officials, and program\ncoordinator for each account to track and monitor agency purchases.\n\n\n 38\n\x0cno longer complied with the Federal Acquisition Regulation. AFIS Operating\nProcedure \xe2\x80\x93 0037, \xe2\x80\x9cSupplies and Services,\xe2\x80\x9d August 14, 1995, provides guidance to the\nAFIS components. It states that the AFIS Director of Resource Management controls the\nordering and receiving of goods and services at AFIS Headquarters, but instructed AFIS\ncomponents outside the National Capital Region to follow local procurement procedures.\nThe chief of contracting was responsible for implementation, administration, and\nmonitoring the AFIS Government purchase cardholder program using the AFIS\nGovernment purchase card hierarchy. The purpose of this hierarchal system is to\nmaintain a single AFIS Government purchase card structure permitting AFIS managers to\noversee and administer the purchases made using AFIS funds. However, only DMC and\nseveral other AFIS personnel used the AFIS hierarchy. Several other AFIS components\ncontinued to maintain Government purchase card assigned to the hierarchies of other\nDoD Components. As a result, the AFIS Program Coordinator was unaware of and could\nnot monitor the appropriateness of purchases made using Government purchase cards\nassigned to the other hierarchies. For example, DINFOS and other individuals at AFIS\nHeadquarters used Army-managed hierarchies that did not provide the AFIS program\ncoordinator with visibility over those purchases.\n\nAFIS Operating Procedure \xe2\x80\x93 0037 was significantly outdated and still established a single\npurchase limit on Government purchase cards of $2,500, stating that AFIS would deny\nany purchases in excess of the limit. The Defense Federal Acquisition Regulation,\nsubpart 213.270, \xe2\x80\x9cUse of the Government-wide Commercial Purchase Card,\xe2\x80\x9d permits the\nuse of the Government purchase card for purchasing or paying for purchases valued at or\nbelow the micro-purchase threshold. As of September 28, 2006, the micro-purchase\nthreshold was $3,000, with an exception to place orders or pay invoices on existing\ncontracts not to exceed $25,000. In addition, Federal Acquisition Regulation 13.301,\n\xe2\x80\x9cGovernment-wide Commercial Purchase Card,\xe2\x80\x9d states that agency procedures should\nnot limit the use of the Government-wide commercial purchase card to micro-purchases\nand should encourage contracting officers to use the cards in greater dollar amounts to\nplace orders and to pay for purchases against contracts. Based on our review of\nGovernment purchase card transactions made from October 2006 through\nDecember 2007, we determined that AFIS cardholders correctly followed the Defense\nFederal Acquisition Regulation and were no longer following AFIS Operating\nProcedure \xe2\x80\x93 0037. DMA should establish a new Government purchase card program\nhierarchy for the new organization and update the guidance on requirements for using the\ncards, including specific limits for purchases and payments on existing contracts. DMA\nshould also assign a program coordinator and realign all subsumed AFIS component and\nMilitary Service purchase cards users to a new DMA hierarchy.\n\nContracting Office. AFIS did not have an entity-wide contracting office to oversee all\ncontracting activities. The Federal Acquisition Regulation, subpart 1.603, \xe2\x80\x9cSelection,\nAppointment, and Termination of Appointment,\xe2\x80\x9d states that the agency head may\nestablish contracting activities and delegate authority to manage the contracting functions\nto heads of such contracting activities. Because AFIS did not have contract authority,\n\n\n\n\n 39\n\x0cAFIS selected the Defense Logistics Agency to serve as its contracting authority.10 The\nDefense Logistics Agency provided the AFIS Contracting Office with authority to\ncontract for AFIS and issued contract warrants permitting AFIS contracting personnel to\nissue contracts. The Defense Logistics Agency provided oversight of the program. The\nAFIS Chief of Contracting position description stated that she was responsible for all\nDoD contracting transactions entered into supporting AFIS and its components.\nHowever, the AFIS Chief of Contracting was not aware of all contracting actions ongoing\nto support the AFIS mission because AFIS components also used other contracting\nactivities, such as the Army Contracting Center of Excellence and the Defense\nInformation Systems Agency, without always informing the chief of contracting of these\nactions. She also had limited oversight over the Stars and Stripes contracting process,\nwhich maintained a separate contracting office for awarding nonappropriated fund\ncontracts. Defense Logistics Acquisition Directive, part 1, \xe2\x80\x9cFederal Acquisition\nRegulation System,\xe2\x80\x9d section 1.602-90, \xe2\x80\x9cNonappropriated Funds,\xe2\x80\x9d states that an\nappropriated fund contracting officer may act in an advisory capacity on nonappropriated\nfund contracts. To ensure adequate oversight over AFIS contracting activities and\npromote efficiency, the AFIS Director should have ensured the management of all AFIS\ncontracting actions by the AFIS contracting office. The Director should also have\nensured that the AFIS contracting office provided oversight to the Stars and Stripes\nnonappropriated contracting offices activities.\n\nIn March 2007, the Defense Logistics Agency reviewed the AFIS contracting procedures\nas part of a periodic oversight as the contracting authority to review and ensure the\noperational efficiency and integrity of contracting operations and verify that the\ncontracting officers followed statutory requirements. Although the Defense Logistics\nAgency noted that AFIS contracting personnel were doing an outstanding job of\nsupporting their customers and implementing a reorganization that would increase\noperational effectiveness and efficiency, it identified 20 weaknesses in AFIS contracting\npractices. The Defense Logistics Agency determined that AFIS needed to strengthen\nmanagement and oversight of the Government purchase card program to ensure\ncompliance with applicable acquisition regulations. AFIS provided corrective actions to\nthe Defense Logistics Agency for most of the recommendations but did not respond to\nthe need for additional management and oversight of the Government purchase card\nprogram. The DMA Director should appoint an individual to develop and control\nentity-wide acquisition practices and oversee DMA purchasing requirements, including\nthe use of Government purchase cards. The DMA Director should also rescind AFIS\nOperating Procedure \xe2\x80\x93 0037 and establish new DMA guidance for contracting practices\nand the use of Government purchase cards.\n\n\n\n\n10\n The Defense Federal Acquisition Regulation Supplement lists agencies granted authority for acquisition\nfunctions according to agency charters. Because DoD Directive 5122.10 did not provide AFIS with\ncontracting authority, AFIS signed a Memorandum of Understanding with Defense Logistics Support\nCommand on November 9, 1999, establishing the Defense Logistics Support Command as the Head of the\nContracting Activity for the AFIS contracting office. Defense Logistics Support Command is a subordinate\ncommand of the Defense Logistics Agency.\n\n\n 40\n\x0cPersonal Property Acquisition Process\nAFIS did not properly manage its acquisition of personal property and did not efficiently\nuse about $940,000 in funds to purchase the immediate needs of AFIS and its\ncomponents. In addition, purchases made by AFIS components may have violated\nFederal appropriation laws, including the Purpose Statute (31 U.S.C. 1301) and Bona\nFide Needs Rule (31 U.S.C. 1502[a]). The Federal Acquisition Regulation requires that\nAFIS managers perform acquisition planning and conduct market research for all\nacquisitions. The purpose of this planning is to ensure that the Government meets its\nneeds in the most effective, economical, and timely manner and that managers document\na bona fide need for purchases made. During the physical inventories we conducted in\nDecember 2007, we discovered significant quantities of personal property stored at AFIS\nHeadquarters and off-site facilities that AFIS components had purchased and placed in\nstorage for extended periods. We obtained and reviewed the contracts and supporting\ndocumentation for these purchases to determine whether AFIS had documented the need\nfor acquiring the items. AFIS purchased these items using Defense Procurement and\nDefense Operation and Maintenance funds. In the three instances that follow, neither\nAFIS managers nor contracting officials could provide us documentation showing that\nthey had conducted adequate acquisition planning to determine that a requirement existed\nin the fiscal year in which they contracted for the purchased items. As a result, AFIS\nmay have used its funding to purchase unneeded or untimely-acquired personal property,\nwhile other more immediately required personal property went unfunded.\n\nAFIS Laptop Computer Purchase. AFIS Headquarters purchased laptop computers\nand other computer equipment using its allocation of the FY 2006 Defense Procurement\nfunds. AFIS personnel claimed that they made the procurements as part of normal life\ncycle replacement of older equipment. The following details relate to two AFIS\nprocurements of 215 laptop computers.\n\n \xe2\x80\xa2 On March 8, 2007, AFIS issued a Military Interdepartmental Purchase\n Request providing $369,804 to the Defense Information Systems Agency to\n purchase Dell laptop computers and monitors. According to the remarks on\n the Military Interdepartmental Purchase Request, AFIS purchased the\n computer equipment for the AFIS Public Demilitarization Zone Network\n project to meet the increasing demands for delivering multimedia content to\n the DoD community and the public. On April 12, 2007, the Defense\n Information Systems Agency purchased 185 Dell laptop computers and\n 75 monitors totaling $304,500. AFIS received and accepted the items on\n June 7, 2007.\n\n \xe2\x80\xa2 On March 9, 2007, AFIS also issued a Military Interdepartmental Purchase\n Request to the Defense Information Systems Agency for $74,347 to purchase\n 30 laptop computers for the applications team and AFRTS. AFIS received the\n 30 laptop computers on April 11, 2007.\n\n\n\n\n 41\n\x0cWe found 151 (valued at about $225,000) of the 215 laptop computers stored in a room at\nAFIS Headquarters, Alexandria, Virginia. As of June 4, 2008, AFIS had distributed\n170 laptop computers to AFIS offices, but lost two of the laptop computers. Figure 3\nshows the stored laptop computers.\n\n\n\n\n Figure 3. Laptop Computers Purchased and Kept in Storage\n\nAlthough AFIS personnel justified these purchases as a life cycle replacement for its\nolder laptop computers, they did not perform sufficient acquisition planning for the\nhardware and software needed to accomplish the life cycle replacement. AFIS\ninformation technology personnel stated that AFIS managers continually changed their\nsoftware requirements for the new laptop computers, which delayed issuing the newer\nlaptop computers. This indicates that AFIS had not defined its software requirements for\nthe replacement laptop computers before purchasing them. These requirements should\nhave been part of the acquisition planning process for this life cycle replacement. AFIS\ninformation technology personnel informed us that they did not procure and install the\nsoftware for these laptop computers until January 2008, and a majority of the laptop\ncomputers remained in storage as of June 4, 2008. AFIS Headquarters personnel also\ncould not provide us with any documentation granting them authority to maintain an\ninventory of laptop computers for future use. As a result, AFIS may not have met the\nnecessary expense rule for using FY 2006 Defense Procurement funds. Based on the\nuncertainty of the user software requirements, a more prudent acquisition plan should\nhave finalized the life cycle replacement requirements before contracting for new laptop\ncomputers. A review of budget documentation showed that AFIS could have better used\napproximately $68,000 of its FY 2006 Defense Procurement funds to fulfill the need for\nlaptop computers at DMC and Stars and Stripes. Because of poor acquisition planning,\nAFIS has allowed 151 laptop computers to go unused and permitted at least 7 months of\nthe 2-year and 3-year warranties to expire without benefit to the Government.\n\nPentagon Broadcast Studio Purchase. AFIS did not justify and document the need for\nusing FY 2005 Defense Procurement funds to construct a Pentagon live broadcast studio\nor perform adequate acquisition planning for the studio. As a result, purchasing Pentagon\n\n\n 42\n\x0cstudio may have violated the Purpose Statute contained in 31 U.S.C. 1301. In addition,\nAFIS personnel inappropriately purchased additional equipment that may not have been\nrequired.\n\n Justification of Original Purchase. In May 2006, AFIS issued a contract for\n$639,761 with Innovative Technologies, Inc. to build a broadcast studio in the Pentagon.\nAFIS Headquarters personnel were not able to provide us with support justifying a need\nto construct a studio in the Pentagon. They also could not provide us with documentation\nshowing that its purchase of a new Pentagon studio fulfilled one of the specified\nrequirements that it included in the AFIS FY 2005 Defense Procurement Budget Estimate\nSubmission. Further, they did not provide documentation supporting that AFIS had\naccomplished sufficient acquisition planning to support the use of FY 2005 Defense\nProcurement funds to issue this contract. We concluded that AFIS may have violated the\nPurpose Statute by purchasing equipment that did not meet budgeted requirements for the\nuse of FY 2005 Defense Procurement funds.\n\n Acquisition Planning. AFIS did not sufficiently plan for the acquisition of a\nPentagon studio before issuing a contract to design, build, and install the equipment. The\nAFIS contract included line items for the system design; system integration; and the\ninstallation, testing, and training for the studio. Because the planned location of the\nstudio was undergoing renovation as part of the WHS Pentagon renovation project, AFIS\nagreed to operate the studio in a temporary location in the Pentagon until spring 2009.\nWHS, AFIS, and the contractor conducted site surveys and planning meetings to review\nthe size and layout of the temporary location in August 2006. By November 2006, the\ncontractor had designed and purchased the equipment for the new studio, but could not\ninstall it because the temporary location was not ready. In March 2007, before providing\nWHS funds for site preparation, AFIS requested an estimate of how long the temporary\nlocation would be available. WHS informed AFIS that the temporary location would\nonly be available for 19 months. As a result, in June 2007, AFIS decided not to build the\nstudio at that location, but continued to plan for the installation of the new studio in the\npermanent location. AFIS permitted Innovative Technologies, Inc. to continue\nconstructing the studio at its corporate facility. In July 2007, AFIS requested that the\ncontractor stop work, crate up the equipment, and ship it to Fort Belvoir, Virginia, where\nwe observed the equipment in storage in December 2007. Starting in July 2007, WHS\nworked with AFIS to develop the construction requirements for the permanent location.\nWHS did not finalize the permanent location requirements until February 2008, when it\nsent them to the Pentagon renovation company to obtain a cost estimate. The\nconstruction company required an additional $569,093 to prepare the permanent location\nfor the studio. In March 2008, AFIS personnel cancelled the studio project, stating that\nAFRTS decided not to construct the Pentagon studio because the Army and Air Force\nhad recently finished constructing similar broadcast studios in the Pentagon.\n\n AFIS did not perform sufficient acquisition planning for the Pentagon studio.\nAFIS should have coordinated with WHS before making the decision to acquire the\nstudio to determine how the Pentagon renovation would affect the planned Pentagon\nstudio. AFIS should have planned and factored in the need and cost associated with\n\n\n\n 43\n\x0coperating from a temporary location during the acquisition decision. The lack of final\npermanent location requirements before February 2008 and the knowledge available that\nthe Army and Air Force had similar construction projects planned further illustrates that\nAFIS did not sufficiently plan for the acquisition of the Pentagon studio. Proper\nacquisition planning could have saved the $639,761 AFIS spent for a studio that it will\nnever construct.\n\n Purchase of Additional Equipment. AFIS personnel may have created an\nunauthorized commitment by purchasing additional equipment without accomplishing the\nneeded requirements determination and contracting actions. In July 2007, after AFIS\nrequested the contractor to stop work on the contract, Innovative Technologies, Inc.\nsubmitted invoices for the entire contract amount without first executing all of the\ncontract requirements for training, testing, and installation. AFIS did not approve the\ninvoice submitted for the unexecuted requirements. Innovative Technologies, Inc.\nsubsequently canceled the invoice and resubmitted an invoice in September 2007 for the\nremaining system design and installation costs, leaving a balance of $71,770 on the\ncontract. AFIS used the remaining $71,770 on the contract to purchase additional\nequipment because Innovative Technologies, Inc. was unable to conduct testing and\ntraining without first installing the equipment at the Pentagon. The AFRTS Chief\nEngineer developed a list of additional equipment to purchase with the unused contract\nfunding. This equipment included camcorders, computer servers, and batteries. In\nSeptember 2007, Innovative Technologies, Inc. used the list to develop a quote for an\nadditional $71,770 in equipment. An individual within the AFIS contracting office, who\ndid not have appropriate contract authority, approved the purchase of additional\nequipment in an e-mail to Innovative Technologies, Inc. In December 2007, Innovative\nTechnologies, Inc. submitted an invoice for the additional equipment it delivered in\nNovember 2007. AFRTS accepted the equipment and authorized the payment of the\ninvoice without first ensuring a valid contract modification existed. Based on the AFRTS\nacceptance, the Defense Finance and Accounting Service paid the invoice using the\nremaining available unliquidated funds on the contract. AFIS contracting personnel\nmodified the contract on February 25, 2008, after we brought the issue to their attention.\n\n AFIS purchased the $71,770 in additional equipment without first ensuring that\nAFIS had finalized its plans for constructing the studio at its planned permanent location\nand that installation at the permanent location required the additional equipment. The\ncurrent contracting officer stated that ratification was not required because she believed\nthat her predecessor had properly authorized the change. AFIS personnel could not\nprovide us documentation showing that the previous contracting officer had authorized\nthe purchase of this equipment. Documentation provided to us indicated that AFIS\npersonnel may not actually have required this equipment but simply attempted to spend\nthe remaining funds available on that contract before the funding expired. If AFIS can\njustify the equipment fulfilled another valid requirement at the time of obligation, then\nAFIS needs to perform the necessary accounting and contractual actions for ratifying the\nrequirement and properly fund the equipment. If the purchase was not a properly\nincurred expense, AFIS needs to determine the requirement for collection of funds and\ndisciplinary actions.\n\n\n\n 44\n\x0cPurchase of Equipment for a Hawaii Bureau. AFRTS used $74,839 in FY 2006\nDefense Operation and Maintenance funds to purchase 278 equipment items it stored in a\nwarehouse at Gaithersburg, Maryland, since 2006. According to the AFRTS Chief\nEngineer, AFRTS purchased this equipment for a \xe2\x80\x9cFuture Hawaii Bureau\xe2\x80\x9d at Hickam Air\nForce Base or Pearl Harbor, Hawaii. However, AFRTS could not provide any\ndocumentation that established a valid requirement or a firm acquisition plan for building\na Hawaii bureau that would have required them to use FY 2006 funds to purchase the\nequipment. Most of this equipment is commercial off-the-shelf items such as power\nsupplies, microphones, and video equipment that do not require long lead times to\nprocure. AFRTS potentially violated 31 U.S.C. 1301 by purchasing equipment without a\nvalid requirement and 31 U.S.C. 1502(a) which requires agencies to use funds only to\nmeet the bona fide needs of the fiscal year for which Congress appropriated the funds.\n\nConclusion\nAFIS did not establish an effective acquisition process to ensure purchases fulfilled\norganizational requirements and complied with laws and regulations. Instead, AFIS\nallowed components to conduct separate acquisition, contracting, and Government\npurchase card programs without the proper oversight and centralized management. As a\nresult, AFIS purchasing practices may have violated the 31 U.S.C. 1301 and AFIS may\nhave misspent appropriated funding. AFIS management should budget for, request, and\nappropriately obligate the funds necessary to meet the bona fide needs of AFIS and its\ncomponents. Proper acquisition planning and more effective contracting could have\nalleviated the concerns addressed in this finding. In addition, AFIS personnel could have\nmade better use of the $940,000 they spent on the inadequately planned acquisitions of\n151 laptop computers, a Pentagon Studio, and the equipment for the future Hawaii\nbureau.\n\nTo prevent future contracting issues, the ASD(PA) and the Director, Defense Logistics\nAgency need to assess the practices used by AFIS contracting personnel to determine\nwhether they are ensuring due diligence before approving and contracting for goods and\nservices. Upon assessment, the ASD(PA) should improve controls over its purchasing\nand contracting practices, train contracting personnel, and take necessary ratification and\ndisciplinary actions. The Director, Defense Logistics Agency should consider limiting or\nsuspending the AFIS contracting warrants pending the results of the assessment and\nagency corrective actions. Further, the USD(C)/CFO, in conjunction with the ASD(PA),\nshould perform an assessment and determine whether a formal investigation should occur\ninto the three questionable equipment purchases to determine if they violated the Purpose\nStatute and Bona Fide Needs Rule. Specifically, they should determine whether:\n\n \xe2\x80\xa2 the purchase of the laptop computers and Pentagon live broadcast studio\n equipment fulfilled a bona fide need of the FY 2006 Defense Procurement funds;\n \xe2\x80\xa2 the purchase of the equipment for the Pentagon live studio fulfilled valid\n requirements of the FY 2005 Defense Procurement funds;\n\n\n\n\n 45\n\x0c \xe2\x80\xa2 obligating the Government for $71,770 in additional equipment for the Pentagon\n studio represented a necessary expense and whether contracting actions were\n legitimate;\n \xe2\x80\xa2 whether the purchase of Hawaii Bureau equipment represented a necessary\n expense and fulfilled a bona fide need.\n\nBased on the results of the investigations, they should take appropriate disciplinary\nactions. In addition, the ASD(PA), in conjunction with the DMA Director, should\ndevelop an acquisition process that provides adequate oversight and controls over DMA\nacquisition planning and purchases.\n\nRecommendations, Client Comments, and Our\nResponse\nRevised Recommendation\nAs a result of comments from the Acting Deputy Chief Financial Officer, we revised\ndraft Recommendation C.1. to clarify the intent of the recommendation.\n\nC.1. We recommend that the Assistant Secretary of Defense (Public Affairs)\nperform an assessment and determine whether a formal investigation into the four\nquestionable equipment purchases is warranted. If it is determined that the\npurchases were unnecessary or a potential violation may have occurred, perform a\nformal investigation and take appropriate collection and disciplinary actions.\nCoordinate the results of the assessment and investigation with the Office of the\nSecretary of Defense and other interested parties. Specifically,\n\n a. Review the purchase of 151 laptop computers to determine whether the\nexpense fulfilled a valid requirement of the FY 2006 Defense Procurement\nappropriation.\n\n b. Review the purchase of the equipment for the Pentagon studio to\ndetermine whether the purchases fulfilled valid requirements of the FY 2005\nDefense Procurement appropriation.\n\n c. Determine whether the purchase of $71,770 in additional equipment for\nthe Pentagon studio represented a necessary expense and whether follow on\ncontracting actions were legitimate. If the equipment fulfilled a valid requirement\nfor the American Forces Information Service at the time of obligation, then ensure\nthat the American Forces Information Service performed the necessary accounting\nand contract actions to ratify the commitment and properly fund the equipment.\n\n d. Review the American Forces Radio and Television Service purchase of\n$74,839 in equipment for the Hawaii Bureau and determine whether the purchase\nviolated section 1301, title 31, United States Code and section 1502(a), title 31,\nUnited States Code.\n\n\n\n 46\n\x0cUSD(C)/CFO Comments\nThe Acting Deputy Chief Financial Officer agreed and stated that he agrees that an\nassessment into the questionable equipment purchases must be performed to determine\nwhether the purchases warrant a formal investigation. However, the Acting Deputy Chief\nFinancial Officer stated that the ASD(PA) must work in coordination with WHS to\ncomplete the assessment.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated his office would work with the USD(C)/CFO to\nperform an assessment and determine whether a formal investigation is required.\n\nOur Response\nThe USD(C)/CFO and ASD(PA) comments are responsive. However, we did not agree\nthat we should redirect the recommendation to WHS. The DoD Financial Management\nRegulation, volume 14, \xe2\x80\x9cAdministrative Control of Funds and Antideficiency Act\nViolations,\xe2\x80\x9d chapter 1, \xe2\x80\x9cAdministrative Controls of Appropriations,\xe2\x80\x9d October 2002,\nassigns the Office of the Deputy Comptroller (Program/Budget) administrative control\nover Defense-wide funds. The Office of the USD(C)/CFO allotted Defense funding to\nAFIS, not WHS. Therefore, we see no involvement for WHS in this recommendation.\nAfter subsequent discussions with representatives of the Office of the USD(C)/CFO, we\ndetermined that the ASD(PA) should coordinate the results of the assessment and\ninvestigation with the Office of the Secretary of Defense because it has jurisdiction over\nAFIS. Therefore, we did not redirect Recommendation C.1. to WHS. Instead, we\nrevised the recommendation to clarify its intent. Once completed, the ASD(PA) should\ncoordinate the results of the assessment and investigation with the Office of the Secretary\nof Defense and other interested parties, including the Office of the USD(C)/CFO and the\nOffice of General Counsel, to obtain concurrence as to whether collection and\ndisciplinary actions are required.\n\nWe request that the ASD(PA) provide additional comments on the revised\nrecommendation in response to the final report. The additional comments should address\ncoordinating the results with the Office of the Secretary of Defense and other interested\nparties.\n\nC.2. We recommend that the Assistant Secretary of Defense (Public Affairs), in\nconjunction with the Director, Defense Logistics Agency, review the purchasing\nauthority and contracting practices at the American Forces Information Service to\nensure adequate controls exist to promote efficient and effective contracting actions\nthat are legally compliant. The Director, Defense Logistics Agency should consider\nlimiting or rescinding the American Forces Information Service contracting\nwarrants based on the results of the review and implementation of any corrective\nactions.\n\n\n\n\n 47\n\x0cASD(PA) Comments\nThe Acting ASD(PA) concurred and stated that, in coordination with DLA, they agree to\nlimit AFIS contracting warrants through increased oversight by DLA and DMA.\n\nDLA Comments\nThe Director of Acquisition Management, DLA agreed and stated that, based on the\nresults of its recent review, DLA is limiting the contracting officers\xe2\x80\x99 authority until AFIS\ncan implement corrective actions. She also stated that DLA will work closely with DMA\nto ensure that DMA awards contracts using efficient and effective methods and that the\nresulting agreements are legally compliant.\n\nOur Response\nThe ASD(PA) and DLA comments are responsive. No further comments are required.\n\nC.3. We recommend that the Assistant Secretary of Defense (Public Affairs)\nimprove controls over purchasing and contracting practices, train contracting\npersonnel on contracting requirements, and take necessary disciplinary actions for\nindividuals involved in inappropriate contracting actions.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that he appointed the DMA Director of\nAcquisition and Procurement on July 20, 2008. The individual will serve as the DMA\nChief of Contracting and has responsibility for establishing and managing the DMA\nworld-wide procurement and acquisition program and its associated workforce. The new\nDirector of Acquisition and Procurement also assumed full authority for the direction and\noversight of all AFIS procurement and acquisition functions pending the consolidation of\nthat organization into DMA in FY 2009.\n\nOur Response\nThe ASD(PA) comments are partially responsive, but meet the intent of the\nrecommendation. The DMA Director of Acquisition and Procurement will be\nresponsible for improving controls and addressing personnel issues. No further\ncomments are required.\n\nC.4. We recommend that the Assistant Secretary of Defense (Public Affairs), in\nconjunction with the Director, Defense Media Activity, establish adequate oversight\nand control over Defense Media Activity acquisition planning and purchases.\nSpecifically:\n\n a. Establish a Defense Media Activity contracting office to oversee\nentity-wide acquisition practices and purchasing requirements.\n\n b. Publish guidance and implement standard operating procedures for\nacquiring goods and services with Government purchase cards and contracts.\n\n\n\n 48\n\x0c c. Rescind American Forces Information Service\xe2\x80\x99s Operating\nProcedure - 0037, \xe2\x80\x9cSupplies and Services.\xe2\x80\x9d\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that the new Director of Acquisition and\nProcurement has assumed responsibility for establishing and managing the DMA\nworld-wide procurement and acquisition program and its associated workforce. The new\nDirector will develop and control entity-wide acquisition practices and oversee the DMA\npurchasing requirements, establish a Government purchase card program hierarchy, and\nrescind AFIS Operating Procedure \xe2\x80\x93 0037. The Director will also develop a DMA\nOperating Instruction detailing contracting policies and procedures for DMA Deputy\nDirector/Chief of Staff approval and perform a continuous and comprehensive\nassessment of past acquisition policies and practices. She will update DMA policies and\npractices as needed.\n\nOur Response\nThe ASD(PA) comments are responsive. No further comments are required.\n\n\n\n\n 49\n\x0c50\n\x0cFinding D. Managers\xe2\x80\x99 Internal Control\nProgram\nThe ASD(PA) did not appropriately establish a Managers\xe2\x80\x99 Internal Control (MIC)\nProgram for the OASD(PA) or ensure that the AFIS MIC Program was effective and\nfully complied with the Federal Managers\xe2\x80\x99 Financial Integrity Act of 1982. As a result,\nneither OASD(PA) nor AFIS had the information needed to fairly assess the effectiveness\nof internal controls and identify and correct deficiencies in the internal control\nenvironment. The ASD(PA) should appoint someone from the OASD(PA) to serve as\nthe OASD(PA) MIC Program Coordinator to ensure compliance with internal control\npolicies and provide input to the OSD Annual Statement of Assurance. The DMA\nDirector should:\n\n \xe2\x80\xa2 establish a DMA regulation that defines the MIC Program roles and\n responsibilities and rescind outdated AFIS policies;\n \xe2\x80\xa2 appoint a MIC Program Coordinator to oversee the transition to and\n administration of the DMA MIC Program;\n \xe2\x80\xa2 segment the organization into logical assessable units that ensure all aspects of the\n DMA mission are contained in at least one assessable unit;11\n \xe2\x80\xa2 assign assessable unit managers for each assessable unit and maintain\n documentation to support their internal control responsibilities;\n \xe2\x80\xa2 provide MIC Program training to the MIC Program Coordinator and assessable\n unit managers; and\n \xe2\x80\xa2 establish a senior management council to assess and monitor the MIC Program.\n\nIn addition, the USD(C)/CFO should update DoD Instruction 5010.40, \xe2\x80\x9cManagers\xe2\x80\x99\nInternal Control (MIC) Program Procedures,\xe2\x80\x9d January 4, 2006, to require DoD\nComponents to appoint a MIC Program Coordinator.\n\nManagers\xe2\x80\x99 Internal Control Guidance\nThe Federal Managers\xe2\x80\x99 Financial Integrity Act of 1982 requires an entity head to\nestablish an effective internal control system, assess internal control effectiveness, and\nreport assurance annually. DoD Instruction 5010.40 provides DoD entities guidance for\ncomplying with the Federal Managers\xe2\x80\x99 Financial Integrity Act of 1982 and Office of\nManagement and Budget Circular No. A-123. The circular encourages agency heads to\nestablish and maintain internal control to ensure effective and efficient operations,\nreliable financial reporting, and compliance with applicable laws and regulations. An\neffective MIC Program requires the reporting entity to:\n\n\n\n\n11\n An assessable unit is an organizational subdivision of the total internal control organization that requires\ncompliance with the MIC Program for a DoD Component.\n\n\n\n 51\n\x0c \xe2\x80\xa2 appoint a MIC Program Coordinator to plan, direct, and implement the program;\n \xe2\x80\xa2 assign assessable units;\n \xe2\x80\xa2 appoint assessable unit managers to perform internal control assessments and take\n corrective actions; and\n \xe2\x80\xa2 establish a process for identifying and reporting internal control deficiencies.\n\nTo establish proper oversight, the agency head needs to determine how to assess and\nmonitor the implementation of the MIC Program. Office of Management and Budget\nCircular No. A-123 encourages the use of a senior management council as a mechanism\nto help provide oversight and ensure commitment for establishing internal control. DoD\nInstruction 5010.40 also encourages the use of senior management councils as a forum\nfor assessing and monitoring MIC Program efforts.\n\nThe OASD(PA) Managers\xe2\x80\x99 Internal Control Program\nThe ASD(PA) did not appropriately establish an OASD(PA) MIC Program. The\nOASD(PA), an OSD-level organization, had two programs: one for itself and another for\nAFIS. As part of the OSD MIC Program, the OASD(PA) was an OSD assessable unit\nthat reported the results of its assessments through the DoD Director of Administration\nand Management. The ASD(PA), as the assessable unit manager, should have appointed\nan employee in his office to serve as the OASD(PA) MIC Program Coordinator. Instead,\nthe ASD(PA) assigned the same individual who served as the AFIS MIC Program\nCoordinator to implement and execute the OASD(PA) program. As an AFIS employee\nnot located within the OASD(PA), this individual did not possess the knowledge of the\ninternal control environment needed to assess the OASD(PA) mission and organizational\nstructure. The OASD(PA) MIC Program Coordinator requires this knowledge to\nappropriately conduct the required risk assessments, identify and test internal controls,\nand report through the annual assurance process any material weaknesses found to the\nDoD Director of Administration and Management for consolidation with the remainder\nof the OSD assessment. For example, the list of FY 2007 OASD(PA) assessable areas\ndeveloped by the coordinator did not include an assessment of the DASD for Joint\nCommunication, Advance Office, or Communications Outreach Office. However, the\nlist required an assessment of the Directorate of Public Affairs Training and Education,\nwhich did not exist as of the end of FY 2007. Therefore, the coordinator could only\nprovide limited assurance of the appropriate assessment of all aspects of the OASD(PA)\nmission. The ASD(PA) should have identified and appointed an individual from\nOASD(PA), with sufficient knowledge of the organization, to serve as its MIC Program\nCoordinator to ensure the office conducted appropriate internal control testing and\nassessments.\n\nThe AFIS Managers\xe2\x80\x99 Internal Control Program\nThe AFIS MIC Program was outdated and no longer fully complied with the Federal\nManagers\xe2\x80\x99 Financial Integrity Act of 1982. AFIS established guidelines, policies, and\nprocedures for its MIC Program in Operating Procedure \xe2\x80\x93 0020, \xe2\x80\x9cAFIS Management\nControl Program (MCP),\xe2\x80\x9d May 1, 2000. The program covered AFIS Headquarters, AFIS\nfield activities, and the Stars and Stripes organization. However, AFIS had not updated\n\n\n\n 52\n\x0cOperating Procedures \xe2\x80\x93 0020 when DoD revised DoD Instruction 5010.40 and rescinded\nDoD Directive 5010.38, \xe2\x80\x9cManagement Control (MC) Program Procedures,\xe2\x80\x9d August 26,\n1996. AFIS Operating Procedure \xe2\x80\x93 0020 assigned the Deputy Director and MIC Program\nCoordinator primary responsibility for the AFIS program. The MIC Program\nCoordinator responsibilities included:\n\n \xe2\x80\xa2 planning, implementing, and monitoring the overall program;\n \xe2\x80\xa2 identifying, evaluating, and reporting material weaknesses to the AFIS Deputy\n Director;\n \xe2\x80\xa2 conducting periodic assessable unit reviews;\n \xe2\x80\xa2 designating and ensuring the training of assessable unit managers; and\n \xe2\x80\xa2 developing the AFIS Annual Statement of Assurance.\n\nAFIS Operating Procedure \xe2\x80\x93 0020 assigned day-to-day program responsibilities to the\ncomponent directors. The component directors\xe2\x80\x99 responsibilities included:\n\n \xe2\x80\xa2 assigning, in writing, assessable unit managers to establish and document\n controls, perform vulnerability assessments and management control reviews, and\n report results to the administrator;\n \xe2\x80\xa2 ensuring all assessable unit managers had MIC responsibilities identified in their\n performance standards and job descriptions;\n \xe2\x80\xa2 ensuring corrective actions were taken; and\n \xe2\x80\xa2 preparing and submitting the component Annual Statement of Assurance to the\n MIC Program Coordinator.\n\nAlthough AFIS had a MIC Program, AFIS components inconsistently and incorrectly\nimplemented the Operating Procedure \xe2\x80\x93 0020 requirements. In addition, AFIS Operating\nProcedure \xe2\x80\x93 0020 did not reference or incorporate all the responsibilities for the risk\nassessments, management control plans, and command assistance visits that were detailed\nin an AFIS internal control handbook. AFIS managers did not provide sufficient\noversight and direction to ensure components consistently implemented an entity-wide\nMIC Program that complied with the Federal Managers\xe2\x80\x99 Financial Integrity Act of 1982.\n\nManagers\xe2\x80\x99 Internal Control Program Coordinator\nThe FY 2007 DoD MIC training presentation, \xe2\x80\x9cCHECK IT Campaign and Overall\nManagers\xe2\x80\x99 Internal Control Program Update,\xe2\x80\x9d shows that each management control\nprogram should have an individual to manage the MIC program. The coordinator\nprovides oversight of program implementation and serves as the point of contact for all\nmanagement control matters.\n\nDoD Instruction 5010.40. DoD Instruction 5010.40 does not require the appointment of\nan agency program coordinator. Before its rescission on April 3, 2006, DoD\nDirective 5010.38 required agency heads to appoint a senior management official to be\nresponsible for designing, establishing, and implementing the management control\nprogram. The agency MIC Program Coordinator served as the senior management\nofficial. However, DoD did not include this requirement when it updated DoD\n\n\n 53\n\x0cInstruction 5010.40 on January 4, 2006. The DoD MIC Program Manager was unsure\nwhy this requirement was not included in the new DoD Instruction 5010.40. The\nUSD(C)/CFO should update DoD Instruction 5010.40 to include this requirement. This\nwould help ensure that an agency head, such as the AFIS Director, provides necessary\nauthority to its MIC Program Coordinator.\n\nAFIS MIC Program Coordinator. The AFIS MIC Program Coordinator did not\nsufficiently monitor the AFIS internal control assessment process. The AFIS MIC\nProgram Coordinator, who had been working in that capacity since October 11, 2006,\nwas not formally appointed as the FY 2007 AFIS MIC Program Coordinator until we\nbrought this to the attention of the acting OASD(PA) Director of Administration and\nManagement. The AFIS MIC Program Coordinator relied on procedures outlined in\nAFIS Operating Procedure \xe2\x80\x93 0062, \xe2\x80\x9cAFIS Command Assistance Program (CAP),\xe2\x80\x9d\nMarch 19, 2000, which implements command assistance visits, to monitor component\ncompliance with the MIC Program. Although the MIC Program Coordinator conducted\nvisits to the various components, the evaluations did not identify areas of concern or\ninternal control weaknesses such as the resource management and personal property\ndeficiencies discussed in findings A and B. During command assistance visits, the MIC\nProgram Coordinator asked questions from a checklist to assess compliance without\nverifying the accuracy of the responses. This process did not provide adequate\nmonitoring of the MIC Program. The MIC Program Coordinator should have designed\ntests to evaluate the controls implemented at the components. Several AFIS managers\nexpressed concerns that the individual assigned as AFIS MIC Program Coordinator\nwould not be able to aggressively seek out and report problem areas and did not have\nsufficient authority to affect entity-wide change. Because the future DMA MIC Program\nCoordinator will have a substantially larger program to monitor, the need for\nmanagement oversight and monitoring is even greater. The DMA Director should\nappoint an individual to coordinate its MIC Program. In addition, based on the size and\ncomplexity of the new organization as well as the need to address the issues we identified\nin this report, we believe DMA needs a senior management council to assess and monitor\nMIC Program efforts.\n\nDesignating Assessable Units\nAFIS did not consistently designate assessable units to ensure that it evaluated\ncontrols over the entire organization\xe2\x80\x99s missions, functions, and programs. DoD\nInstruction 5010.40 requires DoD Components to segment all organizational parts\nin its chains of command into assessable units so that the units as a whole assess the\nentire DoD Component. AFIS Operating Procedure \xe2\x80\x93 0020 allowed the AFIS components\nto identify and designate assessable units for their portion of the organization. However,\nthe MIC Program Coordinator did not ensure that AFIS components assigned similar\nassessable units and had limited assurance that AFIS assessed its entire organization.\nThe list of FY 2007 assessable units showed that the AFIS components assigned units\ninconsistently. For example,\n\n \xe2\x80\xa2 the Directorate of Administration and Management assigned its subordinate\n offices as assessable units;\n\n\n 54\n\x0c \xe2\x80\xa2 DINFOS assigned its functions and tasks (such as copiers, telephones, and safety)\n as assessable units; and\n \xe2\x80\xa2 DMC assigned a combination of its offices and functions as assessable units.\n\nIn addition, the list showed Stars and Stripes as a DMC assessable unit, instead of a\nseparate AFIS component with multiple assessable units. The MIC Program Coordinator\nand the Deputy Director should have ensured that AFIS assessed all organizational parts.\nTo ensure AFIS segmented all organizational parts into assessable units, AFIS should\nhave aligned its assessable units to correlate with its organizational structure. As of\nApril 16, 2008, the MIC Program Coordinator had not requested that AFIS components\nrevise assessable units to ensure consistency and proper alignment. As the DMA\nsubsumes AFIS and the other Military Department media activities, the DMA Director\nshould align assessable units to evaluate the controls of the entire organization.\n\nAssigning Assessable Units Managers\nAFIS failed to appoint the appropriate individuals as assessable unit managers and the\nMIC Program Coordinator did not maintain documentation supporting their appointment,\nperformance accountability, and training. DoD Instruction 5010.40 states that assessable\nunit managers must be the heads of organizational segments, and they must have a\ncritical element in their performance appraisal plan that addresses MIC Program\nresponsibilities. It also requires the head of a DoD Component to ensure that the\nassessable unit managers receive training on planning, directing, and implementing the\nprogram. AFIS Operating Procedure \xe2\x80\x93 0020 assigned the MIC Program Coordinator\nresponsibility to designate and train the assessable unit managers. However, AFIS was\nable to provide appointment letters for only 56 of the 93 assessable unit managers. When\nwe reviewed the 56 appointment letters, we identified the following problems.\n\n \xe2\x80\xa2 Appointment letters were outdated for 16 assessable unit managers.\n \xe2\x80\xa2 Six managers did not have appointment letters created until after the date of our\n request.\n \xe2\x80\xa2 AFIS Headquarters appointed an individual as an assessable unit manager\n 2 months after he had left the organization.\n \xe2\x80\xa2 A majority of the individuals appointed were not the head of their assessable unit.\n\nThe MIC Program Coordinator also could not provide documentation showing that the\nAFIS assessable unit managers had MIC Program responsibilities included in their\nperformance appraisal plans or had completed the required training. Many of the AFIS\ncomponents listed the training accomplished by assessable unit managers in their annual\nstatements of assurance. However, without adequate documentation, the MIC Program\nCoordinator had limited assurance that assigned individuals were qualified to serve as\nassessable unit managers. In the future, the DMA Director should require that the MIC\nProgram Coordinator verify and document that assessable unit managers are properly\nappointed, trained, and have a critical element in their performance plans addressing\ninternal control responsibilities.\n\n\n\n\n 55\n\x0cProcess for Testing Controls and Identifying Deficiencies\nAFIS did not implement an adequate process to test controls and identify deficiencies.\nOffice of Management and Budget Circular No. A-123 states that agency managers and\nemployees should identify deficiencies in internal control from the results of their\nassessment process and other external evaluations to the next supervisory level. This\nallows managers in the chain-of-command to determine the relative significance of each\ndeficiency. The process culminates with the AFIS Director determining whether the\ndeficiencies are significant enough to report as material weaknesses in the AFIS Annual\nStatement of Assurance. AFIS had developed an internal control handbook that directed\nassessable unit managers to assess the risk present in the assessable unit, implement\ncontrols to mitigate the risk, and test the effectiveness of the controls. However,\nassessable unit managers did not correctly implement all of the procedures it described.\nIn addition, AFIS Operating Procedure \xe2\x80\x93 0020 did not reference or provide details for\nimplementing the guidance in the internal control handbook.\n\nAFIS assessable unit managers performed vulnerability assessments to identify the\nassessable unit risk levels, but incorrectly used management control review checklists and\ncommand assistance visits as the only methods of testing assessable unit controls. The\nchecklists were simply a series of questions, sometimes unrelated to the assessed area.\nThe assessable unit managers did not have to test controls to answer the questions. Our\nreview of the checklists also showed that annotated comments on the checklists did not\nsupport the responses given and provided little or no information about the strengths,\nweaknesses, recommendations, and followup actions needed. AFIS also incorrectly used\nthe command assistance visits to replace control testing by assessable unit managers.\nAFIS Operating Procedure \xe2\x80\x93 0020 should have provided additional guidance on\nimplementing and testing controls. The DMA should rescind the operating procedure\nand issue DMA guidance detailing the MIC Program.\n\nDeveloping the Annual Statement of Assurance\nAFIS did not have a documented process in place to show how it assessed the\nsignificance of reported deficiencies and determined whether AFIS should report them in\nthe AFIS Annual Statement of Assurance. DoD Instruction 5010.40 requires the AFIS\nDirector to submit an annual statement of assurance based on a general assessment of the\neffectiveness of AFIS internal controls. The annual statement of assurance should\nidentify material weaknesses and the plans to correct them. In addition, AFIS Operating\nProcedure \xe2\x80\x93 0020 requires component directors to submit annual statements of assurance\nfor their areas of responsibility to the MIC Program Coordinator who then develops the\nannual statement of assurance for the AFIS Director. In both FY 2006 and FY 2007, the\nAFIS component directors reported numerous deficiencies to the MIC Program\nCoordinator in their annual statements of assurance. However, the FY 2006 and FY 2007\nAFIS Annual Statements of Assurance did not report any material weaknesses, but\nincluded over 30 accomplishments each year. We concluded that the MIC Program\nCoordinator did not adequately assess the significance of reported deficiencies so the\nAFIS Director could make an appropriate determination as to whether they were material\nand required reporting to a higher level. The following are examples of significant\ndeficiencies that we believe AFIS should have reported to a higher level.\n\n\n 56\n\x0c \xe2\x80\xa2 DMC reported that the AFIS financial systems used to formulate and account for\n financial transactions were inadequate and needed replacement with a new\n financial management system. Because all AFIS components used the same\n financial systems, the MIC Program Coordinator should have identified this as an\n entity-wide deficiency and considered it for reporting as a material weakness.\n \xe2\x80\xa2 DMC reported that property accountability officers were not reconciling\n inventories to DPAS. We identified similar problems at AFIS Headquarters.\n\nOur audit also identified deficiencies in the AFIS budget and personnel management\nareas (finding A), implementation and management of the AFIS personal property\nprogram (finding B), and AFIS purchasing practices (finding C) that AFIS components\nshould have reported to the MIC Program Coordinator and considered for reporting to a\nhigher level.\n\nAFIS Operating Procedure \xe2\x80\x93 0020 also requires the MIC Program Coordinator to\nincorporate all DoD Inspector General (IG) findings when reporting on internal control.\nThe FY 2007 AFIS Annual Statement of Assurance reported that there were no special\nconcerns addressed in DoD IG reports regarding management controls, process, program\nneeds, or problems. However, DoD IG Report No. D-2006-117, \xe2\x80\x9cAmerican Forces\nNetwork Radio Programming Decisions,\xe2\x80\x9d September 27, 2006, identified control\nweaknesses in the review procedures and documentation that support AFRTS radio\nprogramming decisions. As of May 15, 2008, AFIS had not updated its regulation to\naddress the recommended changes that the DASD for Internal Communications agreed to\nmake. DMA needs to develop and document a process for consolidating the deficiencies\nidentified in the internal and external assessments of the AFIS components and\ndetermining the materiality of each deficiency. AFIS should report all material\nweaknesses in the annual statement of assurance.\n\nClient Actions\nDuring FY 2008, the new OASD(PA) Director of Administration and Management\nrecognized the need to maintain a MIC Program apart from AFIS. In May 2008, the\nacting ASD(PA) appointed a new OASD(PA) MIC Program Coordinator. However, the\nappointed individual was in an AFIS personnel billet. The ASD(PA) should realign the\nOASD(PA) MIC Program Coordinator position from AFIS to the OASD(PA). In\nDecember 2007, the acting ASD(PA) also formally appointed an AFIS MIC Program\nCoordinator to conduct the FY 2008 program. In developing the FY 2008 Annual\nStatement of Assurance, the MIC Program Coordinator should consider the\nrecommendations made in this report to ensure proper reporting of significant\ndeficiencies and material weaknesses. The ASD(PA) will not establish a separate MIC\nProgram for DMA until FY 2009 when all the personnel, funding, and other resources\nbudgeted for AFIS and Military Departments\xe2\x80\x99 media operations transfer to DMA. The\nDMA Transition Team\xe2\x80\x99s draft concept of operations for DMA as of March 31, 2008,\nindicated that the team is considering placing the DMA MIC Program Coordinator in the\n\n\n\n\n 57\n\x0cDMA Inspector General Office. These are all steps in the right direction and\nmanagement should consider our recommendations as part of this effort to establish and\nimplement MIC Programs for OASD(PA) and DMA.\n\nRecommendations, Client Comments, and Our\nResponse\nD.1. We recommend that the Under Secretary of Defense (Comptroller)/DoD Chief\nFinancial Officer update DoD Instruction 5010.40 to require each DoD Component\nto appoint a program coordinator to be responsible for designing, establishing, and\nimplementing the component\xe2\x80\x99s Managers\xe2\x80\x99 Internal Control Program.\n\nUSD(C)/CFO Comments\nThe Acting Deputy Chief Financial Officer agreed and stated that by July 2009 his office\nwould update DoD Instruction 5010.40 to require that each DoD Component appoint a\nProgram Coordinator to be responsible for designing, establishing, and implementing the\ncomponent\xe2\x80\x99s MIC Program.\n\nOur Response\nThe USD(C)/CFO comments are responsive. No further comments are required.\n\nD.2. We recommend that the Assistant Secretary of Defense (Public Affairs) realign\nthe Office of the Assistance Secretary of Defense (Public Affairs) Managers\xe2\x80\x99\nInternal Control Program Coordinator position from the American Forces\nInformation Service to the Office of the Assistance Secretary of Defense (Public\nAffairs).\n\nASD(PA) Comments\nThe Acting ASD(PA) partially agreed and stated that the OASD(PA) needs to establish a\nposition for the MIC Program Coordinator. However, he stated that OASD(PA) will use\nan existing OASD(PA) position for the MIC Program Coordinator rather than transfer a\nposition from AFIS.\n\nOur Response\nThe ASD(PA) comments are responsive. The Acting ASD(PA) agreed that OASD(PA)\nshould have a MIC Program Coordinator, but did not want to transfer a position from\nAFIS to OASD(PA). Instead, he preferred to use an existing position available in\nOASD(PA) for the MIC Program Coordinator position. This action meets the intent of\nthe recommendation. No further comments are required.\n\nD.3. We recommend that the Assistant Secretary of Defense (Public Affairs) direct\nthe Director, Defense Media Activity, to improve compliance with the Federal\nManagers\xe2\x80\x99 Financial Integrity Act of 1982 by implementing a Managers\xe2\x80\x99 Internal\nControl Program for the Defense Media Activity that incorporates the requirements\nof DoD Instruction 5010.40. Specifically:\n\n\n 58\n\x0c a. Develop Defense Media Activity guidance that establishes the Managers\xe2\x80\x99\nInternal Control Program, and rescind American Forces Information Service\nOperating Procedure \xe2\x80\x93 0020.\n\n b. Appoint an individual, assigned to the Defense Media Activity, to serve as\nthe Managers\xe2\x80\x99 Internal Control Program Coordinator.\n\n c. Segment the organization into assessable units to ensure all organizational\nparts are contained in at least one assessable unit.\n\n d. Assign assessable unit managers for each unit and maintain\ndocumentation to support their internal control responsibilities.\n\n e. Provide training to the Managers\xe2\x80\x99 Internal Control Program Coordinator\nand assessable unit managers for planning, directing, and implementing the\nManagers\xe2\x80\x99 Internal Control Program.\n\n f. Review deficiencies identified in internal and external assessments of the\nAmerican Forces Information Service and other Defense Media Activity\ncomponents, including those in this audit report; determine the status of corrective\nactions taken and the significance of each remaining deficiency; and report all\nmaterial weaknesses in the annual statement of assurance.\n\n g. Establish a senior management council to assess and monitor the\nManagers\xe2\x80\x99 Internal Control Program.\n\nASD(PA) Comments\nThe Acting ASD(PA) agreed and stated that DMA is in the process of establishing a\nDMA Office of the Inspector General, which will be part of the Command Group and\nwill report directly to the DMA Director. The DMA MIC Program Officer will work for\nthe Office of the Inspector General. The MIC Program Officer will develop a DMA\nOperating Instruction to implement the requirements of DoD Instruction 5010.40 by\nJanuary 31, 2009, and will segment the organization into assessable units. The MIC\nProgram Officer will also be responsible for developing and implementing a training\nprogram to provide all assessable unit managers with the necessary tools to plan, direct,\nand implement their MIC Program responsibilities.\n\nOur Response\nThe ASD(PA) comments are partially responsive. The Acting ASD(PA) did not address\nthe need to review deficiencies identified in internal and external assessments of AFIS\nand other DMA components; determine the status of corrective actions taken and the\nsignificance of each remaining deficiency; and report all material weaknesses in the\n\n\n\n\n 59\n\x0cannual statement of assurance. He also did not address the need to establish a senior\nmanagement council to assess and monitor the MIC Program or the need to rescind AFIS\nOperating Procedure \xe2\x80\x93 0020.\n\nWe request that the ASD(PA) provide comments on the final report addressing the need\nto take these additional actions.\n\n\n\n\n 60\n\x0cAppendix A. Scope and Methodology\nWe conducted this performance audit from June 2007 through August 2008 in\naccordance with generally accepted Government auditing standards. Those standards\nrequire that we plan and perform the audit to obtain sufficient, appropriate evidence to\nprovide a reasonable basis for our findings and conclusions based on our audit objectives.\nWe believe that the evidence obtained provides a reasonable basis for our findings and\nconclusions based on our audit objectives.\n\nWe evaluated the organizational structures and effectiveness of the Managers\xe2\x80\x99 Internal\nControl (MIC) Program established at OASD(PA) and AFIS. To understand the\norganizational structure and the mission and functions of the OASD(PA) and AFIS, we\ninterviewed key senior managers in the OASD(PA), including the five DASDs, the\nDirectors for Communications Outreach, Administration and Management, and the\nAdvance Office, and several AFIS managers. We reviewed OASD(PA) operations in the\nPentagon; Alexandria, Virginia; Washington D.C.; and Fort Meade, Maryland. We also\nreviewed governing DoD guidance for each organization and pertinent organizational\ndesign and personnel information, such as organizational charts, Authorized Manpower\nRequirements and Alignment Documents, and position descriptions of key managers.\nWe compared the OASD(PA) organizational design to the authorized staff levels and\nidentified discrepancies. We also interviewed the Director or Chief of Public Affairs for\neach Military Service concerning the implementation of the FY 2005 Defense Base\nRealignment and Closure recommendations. In addition, we reviewed the planning\ndocuments for establishing DMA.\n\nWe also evaluated the effectiveness of the OASD(PA) and AFIS MIC Programs. We\ninterviewed the MIC Program Coordinator for OASD(PA) and AFIS to determine how he\nimplemented the MIC Program. We obtained MIC Program documentation and reviewed\nthe processes for developing risk analysis, testing internal controls, and preparing annual\nstatements of assurance to evaluate compliance with DoD Instruction 5010.40 in\nFYs 2006 and 2007. Based on our analysis of high-risk areas, we chose to review\nselected controls over contracting, budget formulation, Government purchase cards, and\npersonal property. We compared the FY 2006 and FY 2007 OASD(PA) and AFIS\nbudget amounts to the budget formulation and execution documentation we obtained\nfrom WHS and AFIS. We interviewed the AFIS Chief of Contracting and budget\npersonnel in AFIS and OSD to understand the processes, procedures, and controls in their\nareas. We evaluated controls over Government purchase cards by analyzing the\nhierarchies listing approving officials and program coordinators used by AFIS personnel.\n\nThe Data Mining Directorate, Office of the Deputy Inspector General for Policy and\nOversight used Audit Command Language software to perform a limited review of the\n3,793 Government purchase card transactions that occurred from October 1, 2006,\nthrough December 28, 2007. Specifically, the Data Mining Directorate analyzed the\nuniverse of AFIS Government purchase card transactions to find questionable vendors,\ncardholders not assigned to AFIS, cardholders with multiple cards, duplicate or split\n\n\n 61\n\x0ctransactions, and unusual transactions. We obtained explanations for these anomalies\nfrom the purchase cardholders and the approving officials. We performed a more\nextensive review over personal property.\n\nWe tested controls over AFIS personal property at AFIS Headquarters and DINFOS. We\ninterviewed property accountability personnel to determine how they maintained control\nover accountable property from initial acquisition through authorized disposal. We\nobtained a listing of all AFIS personal property in DPAS as of February 27, 2008, to test\nthe completeness and accuracy of AFIS personal property records. Using Microsoft\nAccess, we analyzed 37,311 AFIS property records for duplicate property records,\noutdated inventories, incomplete data elements, and potential excess items. With the\nexception of property hand-receipted to AFRTS (including the Pentagon Channel and the\nNews Center), we conducted a 100-percent inventory of personal property at AFIS\nHeadquarters in December 2007. For AFRTS, we performed a more limited inventory of\npersonal property. AFRTS had contracted for the purchase of a Radio Frequency\nIdentification system for personal property. The contract required the contractor to\nperform a 100-percent physical inventory. We used the list developed by the contractor\nbecause it included assessments as to the existence and completeness of AFRTS personal\nproperty. We verified the list was accurate based on our review of 25 randomly selected\npersonal property items from the list. Using Microsoft Access, we developed a database\nthat compared the contractor\xe2\x80\x99s list with the DPAS data to test for anomalies in the\nAFRTS inventory. At DINFOS, we interviewed property accountability personnel and\nconducted a walkthrough of the property accountability process. Based on our\nassessment of the controls in place, we randomly selected 90 personal property items\nfrom a November 29, 2007, DPAS list to test for the physical existence of the items. At\nboth AFIS Headquarters and DINFOS, we randomly selected five personal property\nitems to test for the availability of adequate supporting documentation.\n\nReview of Internal Controls\nWe identified material internal control weaknesses for OASD(PA) and AFIS as defined\nby DoD Instruction 5010.40, \xe2\x80\x9cManagers\xe2\x80\x99 Internal Control (MIC) Program Procedures,\xe2\x80\x9d\nJanuary 4, 2006. OASD(PA) and AFIS did not have the necessary internal controls for\norganization management to ensure proper separation of duties. OASD(PA) and AFIS\nalso had not established an effective MIC Program, and AFIS did not have adequate\ninternal controls over its procurement, contract administration, and property management\noperations. Specifically, AFIS controls did not ensure that procurements met necessary\nexpense rules, proper contract support, and personal property accountability records were\naccurate and complete. Implementing Recommendations A.1., B.2., C.2., C.3., C.4., and\nD.3. will improve OASD(PA) and AFIS internal controls. We will provide a copy of this\nreport to the senior OSD official responsible for internal controls.\n\nUse of Computer-Processed Data\nThe Data Mining Directorate, Office of the Deputy Inspector General for Policy and\nOversight conducted limited tests of the AFIS Government purchase card transactions\nobtained from the Defense Manpower Data Center. We relied on additional evidence to\nvalidate data reliability. We compared the Government purchase card transactions to\n\n\n 62\n\x0cdocumentation and interviewed purchase cardholders to explain anomalies identified in\nthe data. We also compared DPAS data for personal property with physical\ndocumentation used to establish records, and we conducted physical inventories of\nproperty at AFIS Headquarters and DINFOS. Although we did not perform a formal\nreliability assessment of the computer-processed data, we determined that the data were\nsufficiently reliable to use in conjunction with physical documentation to test controls\nover AFIS personal property.\n\nUse of Technical Assistance\nTwo directorates of the Office of the Deputy Inspector General for Policy and Oversight\nassisted on this audit. Senior auditors of the Data Mining Directorate imported data from\nthe DoD Office of Inspector General copy of purchase card transactional data into ACL\nsoftware and pulled data based on purchase card hierarchies for AFIS. An operations\nresearch analyst from the Quantitative Methods Directorate, Office of the Deputy\nInspector General for Policy and Oversight assisted in developing the personal property\ntest by determining the selection size necessary to review existence at DINFOS.\n\nPrior Coverage\nDuring the last 5 years, the Department of Defense Inspector General (DoD IG) has\nissued two reports related to the OASD(PA) and AFIS. Unrestricted DoD IG reports can\nbe accessed at http://www.dodig.mil/audit/reports.\n\nDoD IG\nDoD IG Report No. D-2006-117, \xe2\x80\x9cAmerican Forces Network Radio Programming\nDecisions,\xe2\x80\x9d September 27, 2006\n\nDoD IG Report No. D-2005-050, \xe2\x80\x9cAmerican Forces Information Service\xe2\x80\x99s Data Call\nSubmissions and Internal Control Processes for Base Realignment and Closure 2005,\xe2\x80\x9d\nApril 13, 2005\n\n\n\n\n 63\n\x0c64\n\x0cAppendix B. Major Responsibilities and\nFunctions\nDoD Directive 5122.5\nDoD Directive 5122.5 is the OASD(PA) organization charter and assigns the following\nresponsibilities and functions to the ASD(PA):\n\n \xe2\x80\xa2 Develop policies, plans, and programs supporting DoD public affairs\n objectives and operations, the National Media Pool, public relations, and\n international public information programs.\n \xe2\x80\xa2 Promote coordination and cooperation and develop a mutual understanding\n among the DoD Components, other Federal, State, and local agencies, and the\n public.\n \xe2\x80\xa2 Serve on boards, committees, and other groups as the public and media\n representative of the Secretary of Defense and as the spokesperson and release\n authority for DoD information and audiovisual materials.\n \xe2\x80\xa2 Ensure the free flow of information to DoD personnel, the general public, and\n the news media, including the preparation of materials for public release (such\n as speeches, public statements, congressional testimony, and articles for\n publication) and respond to inquiries from the media and the general public.\n \xe2\x80\xa2 Provide liaison for requests to provide DoD speakers and support\n entertainment-oriented motion picture, television, and video productions.\n \xe2\x80\xa2 Perform such other functions as the Deputy Secretary of Defense may\n prescribe.\n\nThe ASD(PA) appointed DASDs and Directors to help perform some of these functions.\nThe position descriptions outlined the major responsibilities for the DASDs for Internal\nCommunications and Joint Communication.\n\nDASD for Internal Communications\nThe DASD for Internal Communications contributes to the operational readiness and\ncombat effectiveness of the DoD through development of policies, guidelines, standards,\nand centralized management of DoD internal information programs. The position\ndescription of the DASD for Internal Communications listed the following major duties.\n\n \xe2\x80\xa2 Establish and provide DoD policy and guidance concerning the conduct and\n support of internal information programs.\n \xe2\x80\xa2 Develop and issue operational and procedural policy and guidance for the\n operation and support of AFRTS outlets, including the acquisition,\n duplication, distribution, and transmission of radio and television program\n materials.\n \xe2\x80\xa2 Provide overall policy and guidance to establish DoD visual information and\n audiovisual activities standards.\n\n\n 65\n\x0c \xe2\x80\xa2 Provide policy, guidance, and direction for managing DoD public affairs\n programs, internal information programs, radio and television programs,\n combat camera operations, print and visual information media products that\n support DoD public affairs internal information and other programs, and DoD\n audiovisual and visual information activities.\n \xe2\x80\xa2 Provide policy, guidance, and direction for the provision of broadcast and\n visual information equipment system design, engineering, and procurement\n services through the Television-Audio Support Activity.\n \xe2\x80\xa2 Oversee and provide policy guidance for the business operations and financial\n management of the Stars and Stripes Newspaper.\n \xe2\x80\xa2 Approve and submit an annual budget for internal communications programs.\n \xe2\x80\xa2 Provide policy, guidance, and direction to senior DoD officials for resolving\n complex, joint-Service, and DoD Component issues involving state-of-the art\n audiovisual and visual information.\n\nDASD for Joint Communication\nOn January 6, 2005, the ASD(PA) created the position of the DASD for Joint\nCommunication to shape DoD-wide processes, policy, doctrine, organization, and\ntraining for DoD communications. The ASD(PA) created this position to maximize its\ncapability to communicate in an aggressive and synchronized manner. The\ncommunication capabilities included public affairs, Defense Support for Public\nDiplomacy, visual information, and information and psychological operations. The\nDASD for Joint Communication also manages the OASD(PA) transformation program.\nThe position description of the DASD for Joint Communication listed the following\nmajor duties:\n\n \xe2\x80\xa2 Lead the Quadrennial Defense Review Strategic Communication Working\n Group ongoing efforts focusing on improving and integrating primary\n communication capabilities supporting policy and operational planning.\n \xe2\x80\xa2 Coordinate DoD communication efforts that ensure the communication\n environment is included in future plans, policies, programs, and operations.\n \xe2\x80\xa2 Represent the ASD(PA) to the Strategic Communication Integration Group\n (SCIG).\n \xe2\x80\xa2 Coordinate and synchronize interagency communication efforts by\n maintaining liaison with the National Security Council, State Department,\n Central Intelligence Agency, and the White House.\n \xe2\x80\xa2 Oversee joint proponency for primary communication capabilities supporting\n Combatant and Joint Task Force Commanders to ensure DoD is structured to\n best organize, train, and equip communicators for the joint warfighter.\n \xe2\x80\xa2 Supervise the establishment and implementation of communication education\n and training programs, including DINFOS.\n \xe2\x80\xa2 Maximize and enhance Combatant Command and Service public\n communication collaboration and DoD\xe2\x80\x99s public communication capability.\n \xe2\x80\xa2 Oversee visual information policy, funding, operating, training, and\n maintenance of DoD-wide visual information systems.\n\n\n\n 66\n\x0cDoD Directive 5122.10\nDoD Directive 5122.10, \xe2\x80\x9cAmerican Forces Information Service (AFIS),\xe2\x80\x9d November 21,\n2000, is the organization charter for AFIS. DoD Directive 5122.10 listed the following\nmajor functions for AFIS:\n\n \xe2\x80\xa2 Train DoD public affairs, broadcast, and visual information professionals.\n \xe2\x80\xa2 Provide communication services to support the requirements of Combatant\n Commanders.\n \xe2\x80\xa2 Develop policies, guidelines, and standards for its program management\n \xe2\x80\xa2 Provide broadcasting, visual information, and audiovisual equipment and\n systems life-cycle logistics management.\n \xe2\x80\xa2 Sustain information technology systems.\n \xe2\x80\xa2 Operate and maintain the DefenseLINK Website.\n \xe2\x80\xa2 Provide, in coordination with the Assistant Secretary of Defense for\n Command, Control, Communications, and Intelligence, policy oversight and\n guidance to ensure effective dissemination of DoD information to the public\n on the Internet.\n \xe2\x80\xa2 Maintain a central DoD World Wide Web site registration system.\n \xe2\x80\xa2 Consolidate OSD public Web site operations.\n \xe2\x80\xa2 Exercise policy and program oversight for DoD internal information\n programs.\n\nDoD Directive 5105.74\nDoD Directive 5105.74, \xe2\x80\x9cDefense Media Activity,\xe2\x80\x9d December 18, 2007, is the\norganization charter for the DMA. DoD Directive 5105.74 listed the following major\nresponsibilities for the DMA Director:\n\n \xe2\x80\xa2 Organize, direct, and manage DMA and all assigned resources.\n \xe2\x80\xa2 Develop, acquire, produce, manage, distribute, and archive media products.\n \xe2\x80\xa2 Convey DoD-wide and Military Service unique messages consistent with the\n strategic communications objectives.\n \xe2\x80\xa2 Coordinate and integrate the utilization of media product in a manner that\n most effectively relates and distributes DoD and Military Service themes and\n messages to their target audiences.\n \xe2\x80\xa2 Provide public affairs, broadcast, print, journalism, and visual information\n common core training through DINFOS.\n \xe2\x80\xa2 Administer Stars and Stripes Newspaper, respecting editorial independence\n consistent with the First Amendment.\n \xe2\x80\xa2 Administer the AFRTS.\n \xe2\x80\xa2 Develop and oversee the implementation of DoD wide policies and\n procedures for DoD Internal Information Program, Hometown News Program,\n DoD Visual Information, publication of DoD newspapers and magazines, and\n related training.\n\n\n\n\n 67\n\x0c\xe2\x80\xa2 Provide central DoD receipt, access, distribution, asset and life-cycle\n management, storage and preservation of DoD still and motion imagery.\n\xe2\x80\xa2 Manage and operate the consolidated DoD Public Web Program.\n\xe2\x80\xa2 Support the command information requirements of the Secretaries of the\n Military Departments, the Combatant Commanders, and combat forces.\n\xe2\x80\xa2 Provide life-cycle logistics and commodity management support\n for broadcasting, visual information, audiovisual, and related Web systems\n and equipment for DoD Components.\n\n\n\n\n 68\n\x0cAppendix C. DMA Management Positions\nThe DMA will provide a streamlined organizational structure and opportunities for\nadditional economies of scale in the execution of DoD media functions. The DMA\norganizational structure should create opportunities for cost savings through\nconsolidation of common business enterprise services and cooperation among the various\nDoD media functions. The DMA Director, in coordination with the DMA Transition\nTeam, will develop the DMA organizational structure and consider recommendations\nfrom the ongoing organizational analysis. Based on discussions with OASD(PA) DASDs\nand Directors and Military Service Public Affairs Chiefs, we identified key management\npositions helpful in the development of the DMA. In developing the DMA\norganizational design, DMA leadership should all consider the following key\nmanagement positions and advisors as the direct reporting staff to the DMA Director.\n\nChief of Staff and Chief Enlisted Advisor\nThe DMA will incorporate the Military Service internal communication programs and\nmust be equipped to meet the needs of the 1,038 Service members assigned to DMA as of\nFY 2008. A Chief of Staff provides the Military command and control and assists in the\nday-to-day management of business matters on behalf of the Director. A Chief Enlisted\nAdvisor advises the Director on issues pertaining to the integration, utilization, and\ndevelopment of Military Service members. Both positions are necessary to ensure that\nDMA meets the needs of the Military Commanders and effectively communicate\nmessages and themes from the Secretary of Defense, Service Secretaries, Joint Chiefs of\nStaff, and other military leaders.\n\nDirector of Operations and Director of Training\nThe DMA missions defined in DoD Directive 5105.74 fall into two distinct business\nareas. The first business area is operations: operations includes providing information\nproducts to the DoD family; communicating messages and themes from DoD leaders;\nproviding U.S. radio and television programs, news, and information to the DoD family;\nand providing visual information products. The programs that support these missions\ninclude such current AFIS entities as Stars and Stripes, AFRTS, Defense Visual\nInformation Center, DMC, Joint Visual Information Service Distribution Agency, and the\ninternal communication function assigned to Military Departments. These programs\nprovide a wide variety of information products to the entire DoD family and external\naudiences. The second business area is training: the DMA will provide joint education\nand training to DoD military and civilian personnel in public affairs, broadcasting, and\nthe visual information career fields. Both business areas require strong management to\ncommunicate their needs to the DMA Director. Because of the complexity of DMA and\nits distinct business areas, the DoD should consider creating a DMA Director of\nOperations to administer broadcast, Web-based, visual, and print media activities and a\nDMA Director of Training to administer DINFOS and any other related training.\n\n\n\n\n 69\n\x0cThe incumbents of these positions should report directly to the DMA Director and have\nequal weight in making management decisions to alleviate some of the concerns of\nwhether both business areas will have appropriate representation within the new\nstructure.\n\nBusiness Enterprise Services\nAn effectively managed organization centralizes its common business enterprise services\nin order to streamline its business processes, reduce redundancy, and gain greater\neconomies of scale. To implement the new DMA successfully, it is imperative that the\nDMA Director have a support staff to manage common business enterprise services. This\nwould ensure that all components implement common business practices and enable\nDMA managers to have a complete overview of resource allocation. A key position in\nthis effort would be a DMA Director of Business Enterprise Services. The Business\nEnterprise Services office would provide administrative services such as human resources\noffice, supplies and services, printing, mail services, records management, forms\nmanagement, conference room management, regulation management, and travel and\ntransportation. The Business Enterprise Services should also provide uniform oversight\nand management over support functions whose personnel are located within the DMA\ncomponents. Functions that require centralized oversight at the Business Enterprise\nService level include acquisition management, personnel management, and property\nmanagement.\n\nAcquisition Management\nCentralized acquisition management helps to ensure that purchases of goods and services\nfulfill the requirements of the organization. The acquisition management office should\ndevelop and control entity-wide contract management practices, manage the DMA\nGovernment purchase card program, and oversee the DMA purchasing requirements.\nThrough centralized acquisition management, the DMA can realize greater efficiencies\nthrough combined purchases and ensure compliance with Federal and DoD acquisition\nregulations.\n\nPersonnel Management\nAnother important function to the success of the new DMA is the need for a consolidated\npersonnel management function. The personnel management office should be\nresponsible for all aspects of military and civilian personnel management and work\nclosely with the Chief Financial Officer, DoD Civilian Personnel Management Service,\nthe Military Departments, and the DMA Senior Enlisted Advisor. The need to centralize\npersonnel functions will increase as Military Departments\xe2\x80\x99 resources transfer in.\n\nProperty Management\nThe DMA will need a centralized property management function to provide construction\nand space utilization planning and execution. Because the DMA will assume control\nover extensive resources at Ft. Meade and other locations throughout the world, it will\nneed this function to administer control over all DMA property. The property\nmanagement function would develop the systems and processes for acquiring,\nmaintaining, and disposing resources at DMA facilities.\n\n\n 70\n\x0cKey Area Advisors\nAn effectively managed organization benefits from having an individual in control of\nsuch areas as financial management, information resource management, and internal\nreview. Because of the complex requirements, one individual should oversee each of\nthese functions and provide information directly to the DMA Director.\n\nChief Financial Officer\nThe Chief Financial Officer is an important position to ensure the proper allocation,\naccountability, and execution of financial resources. This individual would be\nresponsible for oversight of all financial management activities; developing and\nmaintaining accounting and budget systems; providing financial and budget reports; and\ndirecting, managing, and providing policy and oversight of financial management\npersonnel, activities, and operations. A Chief Financial Officer is necessary to ensure\nthat DMA properly accounts and safeguards financial resources.\n\nChief Technology Officer\nA Chief Technology Officer would provide overall management of DMA information\ntechnology resources. DMA provides a variety of information products using emerging\ntechnologies. A Chief Technology Officer would formulate technical visions and\nstrategies and have visibility of all information technology resources. This position is\nnecessary to ensure that the DMA maintains and effective life cycle management\nprogram and provides accountability and safeguarding of information technology\nresources.\n\nInspector General\nAn Inspector General would provide an independent and objective advice to the DMA\nDirector through audits and investigations relating to DMA programs and operations.\nThe DMA Inspector General would report on the status of DMA; perform investigative,\ninspection, and evaluation functions as instructed by the Director; and maintain liaison\nfunctions with the Government Accountability Office and the DoD OIG. In addition, the\nInspector General office could also oversee the DMA Managers\xe2\x80\x99 Internal Control\nProgram and prepare the DMA Annual Statement of Assurance for the Director. This\nposition is important to ensure effective and efficient operations, reliable financial\nreporting, and compliance with applicable laws and regulations.\n\nLegal Counsel\nA key advisor to the Director should be the legal counsel who advises the organization on\nlegal requirements. The legal counsel should provide support for all DMA areas and be\ninvolved in the implementation of program and activities. The legal counsel would\nensure that DMA policies, programs, and transactions comply with public law.\n\n\n\n\n 71\n\x0c72\n\x0cUnder Secretary of Defense (Comptroller)/DoD Chief\nFinancial Officer Comments\n\n\n\n\n Click to add JPEG file\n\n\n\n\n 73\n\x0c Final Report\n Reference\n\n\n\n\nClick to add JPEG file\n\n Redirected\n Recommendation\n\n\n\n\n Revised\n Recommendation\n\n\n\n\n 74\n\x0c Final Report\n Reference\n\n\n\n\nClick to add JPEG file Revised\n Recommendation\n\n\n\n\n 75\n\x0cAssistant Secretary of Defense (Public Affairs) Comments\n\n\n\n\n Click to add JPEG file\n\n\n\n\n 76\n\x0cClick to add JPEG file\n\n\n\n\n 77\n\x0c Correct date is\n March 31, 2009 per\n ASD(PA)\n\n\n\n\nClick to add JPEG file\n\n\n\n\n 78\n\x0cClick to add JPEG file\n\n\n\n\n 79\n\x0cClick to add JPEG file\n\n\n\n\n 80\n\x0cClick to add JPEG file\n\n\n\n\n 81\n\x0cClick to add JPEG file\n\n\n\n\n 82\n\x0cClick to add JPEG file\n\n\n\n\n 83\n\x0cClick to add JPEG file\n\n\n\n\n 84\n\x0cClick to add JPEG file\n\n\n\n\n 85\n\x0cDoD Director of Administration and Management\nComments\n\n\n\n\n Click to add JPEG file\n\n\n\n\n 86\n\x0cClick to add JPEG file\n\n\n\n\n 87\n\x0cDefense Logistics Agency Comments\n\n\n\n\n Click to add JPEG file\n\n\n\n\n 88\n\x0cClick to add JPEG file\n\n\n\n\n 89\n\x0c90\n\x0cTeam Members\nThe Department of Defense Office of the Deputy Inspector General for Auditing,\nDefense Business Operations prepared this report. Personnel of the Department of\nDefense Office of Inspector General who contributed to the report are listed below.\n\nPatricia A. Marsh\nCarmelo G. Ventimiglia\nGeorge C. DeBlois\nBradley D. Grubb\nBarbara A. Purvis\nLisa L. Brown\nJerrod F. McFarland\nErin S.-E. Hart\n\x0c\x0c"