Defense Management: More Transparency Needed over the Financial and Human Capital Operations of the Joint Improvised Explosive Device Defeat Organization
Published: 2008-03-06T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Improvised explosive devices (IED) have been and continue to be a significant threat to U.S. forces. The Department of Defense (DOD) expanded efforts to defeat IEDs with the establishment of the Joint Improvised Explosive Device Defeat Organization (JIEDDO) in January 2006. GAO was asked to review JIEDDO's management and operations. For this second report in its series, GAO determined (1) the extent to which JIEDDO's management processes provide adequate assurances that its financial information is accurate and provides transparency over its operations and (2) the extent to which JIEDDO identifies, records, tracks, and reports numbers of all personnel, including contractors. GAO analyzed data for the first half of fiscal year 2007, which included 47 funding transactions totaling $1.34 billion for 24 initiatives to address these objectives.
section_title: What GAO Found
paragraphs: JIEDDO's financial management processes do not provide adequate assurances that its financial information is accurate, and as a result, JIEDDO is unable to provide full transparency over the cost of its operations. While JIEDDO has improved its financial management processes, it has not yet reached a point where those processes contain an effective system of internal control. According to federal standards, internal control comprises the plans, methods, and procedures used to meet missions, goals, and objectives of an organization and help it to achieve desired results through effective stewardship of its resources. GAO identified four internal control weaknesses that affect JIEDDO's financial management processes. First, JIEDDO has not comprehensively documented its administrative policies and operating manuals, which affects the consistency of how its financial management personnel perform their duties. Second, JIEDDO does not have adequate funds authorization controls to ensure that transactions are properly authorized before funds are committed. In reviewing funding transactions totaling $795 million, 18 of 24 initiatives were not properly authorized in accordance with internal control standards. As a result, funds may be used without proper scrutiny and without a mechanism to detect, correct, or address this control failure. Third, JIEDDO does not have controls to ensure that transactions are properly categorized. For example, of the $1.34 billion in fiscal year 2007 commitments reviewed, JIEDDO inaccurately categorized at least 83 percent of these dollars under one category that should have been applied to others. This could distort information used in assessing trends and prioritizing funds. Fourth, JIEDDO does not have an adequate internal process to monitor and review the efficacy of its internal controls. In the absence of an adequate system of internal control, the agency may not achieve all of its objectives and its use of resources may not be consistent with DOD priorities. Furthermore, decision makers may be basing their decisions on inaccurate financial data and reports. At the end of this review, JIEDDO managers said that they had corrected these weaknesses; however, because these actions occurred after audit completion, GAO could not determine their effectiveness. JIEDDO does not fully identify, track, and report all government and contractor personnel as provided for in DOD Directive 1100.4. Identifying all government and contractor personnel is important to JIEDDO's management and oversight responsibilities and contributes to its ability to effectively plan for its future workforce needs. While JIEDDO has a system in place for routinely tracking and reporting numbers of personnel JIEDDO regards as staff, this system is limited because it does not track all government and contractor personnel performing work for JIEDDO. However, since its creation in February 2006, JIEDDO has relied heavily on contractor support to accomplish its mission, which is not fully reflected in JIEDDO's system. When the Senate Appropriations Committee directed that JIEDDO provide a comprehensive accounting of all of its personnel, including contractors, by May 2007, JIEDDO had to rely on an ad hoc process to develop the report, which resulted in several inaccuracies and inconsistencies.

section_title: Letter
paragraphs: When major combat operations for Operation Iraqi Freedom ceased in  May 2003, U.S. and coalition forces transitioned to stabilization operations.  Since that time, U.S. forces have come under frequent and deadly attacks  from insurgents using such weapons as improvised explosive devices  (IED), mortars, and rocket launchers. IEDs also have been a significant  threat to U.S. forces operating in Afghanistan. The Congressional Research  Service recently reported that IEDs have caused 60 percent of all  American combat casualties both killed and wounded in Iraq and 50  percent of casualties in Afghanistan. The Department of Defense (DOD)  has described IEDs as the number one weapon of strategic influence in the  Iraq war and consequently has dedicated a high level of resources toward  countering the impact of IEDs and their use by enemy forces.
In response to the threat posed by IEDs, DOD and Congress have provided  resources to fund efforts to defeat IEDs. From fiscal year 2004 through the  end of fiscal year 2007, $11.25 billion has been provided to various DOD  organizations to address the IED threat. For example, in June 2005, the  Deputy Secretary of Defense established the Joint IED Task Force to lead  DOD’s efforts in fighting the IED threat with the intent to establish a  holistic approach to defeating IEDs, streamline the processes for  supporting the warfighter’s efforts to counter IEDs, and build a dedicated  staff with an IED-defeat knowledge base. In January 2006, the Deputy  Secretary of Defense established the Joint Improvised Explosive Device  Defeat Organization (JIEDDO) to expand the task force’s scope by  establishing a permanent organizational structure to execute the IED  defeat mission. In fiscal year 2007, Congress appropriated about   $4.35 billion for JIEDDO, and JIEDDO expects to continue to receive  additional funding through subsequent supplemental appropriations to  complete its fiscal year projects and begin new projects.
Insurgents have adapted to U.S. countermeasures thus requiring JIEDDO  to continue to evaluate and analyze efforts to defeat them. Given long-term  fiscal challenges, congressional committees have expressed concerns  regarding JIEDDO’s rapid growth in structure, scope, and funding, and the  extent to which DOD manages its resources to efficiently and effectively  defeat IEDs. In a series of reviews in response to direction in Senate  Report 109-292, we first reported in March 2007 on several issues related  to JIEDDO’s management and operations, including JIEDDO’s lack of a  strategic plan and the resulting effects on the development of its financial  and human capital management programs. We made several  recommendations to the Secretary of Defense to improve the management  of JIEDDO operations, stressing the development of JIEDDO’s detailed  strategic plan. In this second review, we determined to what extent   (1) JIEDDO’s financial management processes provide adequate  assurances that its financial information is accurate and provides  transparency over its operations and (2) JIEDDO identifies, records,  tracks, and reports numbers of all personnel, including contractors. We  are also conducting a third review that examines JIEDDO’s processes for  coordinating counter-IED intelligence support across DOD, which we will  report on separately.
To address our objectives, we met with JIEDDO officials to gain a general  understanding of JIEDDO’s management of financial resources and  personnel. To assess JIEDDO’s financial management processes, controls,  and data, we analyzed 47 funding actions totaling $1.34 billion for 24 of the  301 initiatives JIEDDO had approved at the time we collected our data.  Nineteen of the 24 initiatives were those with the highest fund  commitments in JIEDDO’s defeat-the-device and attack-the-network  initiatives based on the financial transaction data we collected. The 5  additional initiatives were those receiving Deputy Secretary of Defense  approval after our initial data collection date. We also identified required  approval controls over use of funds, reviewed these selected transactions  for adherence to these controls, and assessed whether the data recorded  in the accounting and managerial systems accurately reflected JIEDDO’s  activities. However, we did not perform a comprehensive assessment of all  of JIEDDO’s internal controls. To assess JIEDDO’s efforts to identify,  record, track, and report numbers of all personnel, including contractors,  we collected and reviewed JIEDDO staff reports and selectively compared  the associated data with corroborating sources to determine whether the  reported figures were comprehensive and accurate. We conducted this  performance audit from April 2007 to December 2007 in accordance with  generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on our  audit objectives. Appendix I provides additional details on our scope and  methodology.
subsections: section_title: Background
paragraphs: JIEDDO was created by the Deputy Secretary of Defense in January 2006  and is responsible for leading, advocating, and coordinating all DOD  efforts to defeat IEDs. Prior DOD efforts to defeat IEDs included various  process teams and task forces. For example, DOD established the Joint  IED Defeat Task Force in June 2005 for which the Army provided primary  administrative support. This task force replaced the Army IED Task Force,  the Joint IED Task Force, and the Under Secretary of Defense, Force  Protection Working Group. To focus all of DOD’s efforts and minimize  duplication, DOD published new IED policy in February 2006 through  DOD Directive 2000.19E, which changed the name of the Joint IED Defeat  Task Force to JIEDDO and established it as a joint entity and jointly  manned organization within DOD, reporting to the Deputy Secretary of  Defense. The directive states that JIEDDO shall “focus (lead, advocate,  and coordinate) all Department of Defense actions in support of the  Combatant Commanders’ and their respective Joint Task Forces’ efforts to  defeat Improvised Explosive Devices as weapons of strategic influence.”  The organization is directed to identify, assess, and fund initiatives that  provide specific counter-IED solutions, and is granted the authority to  approve joint IED defeat initiatives valued up to $25 million and make  recommendations to the Deputy Secretary of Defense for initiatives valued  over $25 million. Under the directive, the Army remains the organization’s  executive agent and is responsible for providing primary administrative  support to JIEDDO.
JIEDDO’s primary role is to provide funding to the military services and  DOD agencies to rapidly develop and field counter-IED solutions. Prior to  fiscal year 2007, JIEDDO did this by working with the DOD Comptroller to  transfer its appropriated funds into a standard DOD appropriation  account, such as one for procurement or one for research, development,  testing, and evaluation. JIEDDO would then send these transferred funds  to the military service that is designated to sponsor the initiatives using a  Military Interdepartmental Purchase Request (MIPR). Beginning in fiscal  year 2007, Congress provided JIEDDO with its own separate direct  appropriation, but it still must transfer funds to the military services using  a duly authorized and signed MIPR, which the Defense Federal Acquisition  Regulation Supplement (DFARS) Subpart 208.7004 (Procedures, Guidance,  and Information (PGI) 208.7004) states is the acquiring department’s  authority for acquiring the goods or services on the requiring department’s  behalf. DFARS PGI 208.7004 also states that the acquiring department, or  military service, is then authorized to create obligations against the  funding without further referral to the requiring department—JIEDDO— and that the military service has no responsibility to determine the validity  of an approved MIPR. Therefore, after JIEDDO provides funding authority  to the military service and the designated program manager for a specific  initiative, the service program manager, not JIEDDO, is responsible for  managing the initiatives for which JIEDDO has provided funds.
JIEDDO’s efforts to counter the use of IEDs and subsequent funding for  those efforts are organized according to three primary lines of operation:  (1) attack the network that enables the use of IEDs, (2) defeat the IED  itself once emplaced, and (3) train the military forces in counter-IED  techniques. JIEDDO assigns all funds used to one of these lines of  operation—or to a fourth line of operation called staff and infrastructure  for miscellaneous expenditures not directly related to the three lines of  operation. When JIEDDO undertakes any effort requiring funds, it assigns  the funds for the effort to one of the lines of operations. JIEDDO further  breaks down its expenditures into more detailed subsets, which it  designates as initiatives, assigning a name and a unique number to track  expenditures related to each initiative. JIEDDO manages and reports on all  funds expended by line of operation and by initiative.
Office of Management and Budget (OMB) Circular A-123 specifies that  federal agencies have a fundamental responsibility to develop and  maintain effective internal control that ensures the prevention or detection  of significant weaknesses—that is, weaknesses that could adversely affect  the agency’s ability to meet its objectives. According to OMB, the  importance of management controls is addressed in many statutes and  executive documents. A memorandum from the OMB Director to the  heads of the executive departments accompanying OMB Circular A-123 as  an attachment requires agencies and individual federal managers to take  systematic and proactive measures to develop and implement appropriate,  cost-effective internal controls for results-oriented management. FMFIA  establishes the overall requirements with regard to internal control.  Accordingly, an agency head must establish controls that reasonably  ensure that (1) obligations and costs are in compliance with applicable  law; (2) funds, property, and other assets are safeguarded against waste,  loss, unauthorized use, or misappropriation; and (3) revenues and  expenditures applicable to agency operations are properly recorded and  accounted for to permit the preparation of accounts and reliable financial  and statistical reports and to maintain accountability over the assets.  Specific internal control standards underlying the internal controls  concept in the federal government are promulgated by GAO and are  referred to as the Green Book.
In March 2007, the Senate Appropriations Committee directed JIEDDO to  identify and track all civilian, military, and contractor personnel in the  organization. In addition, DOD Directive 1100.4, “Guidance for Manpower  Management,” provides that DOD components shall designate an  individual with the authority to establish and maintain a manpower data  system that accounts for all manpower resources, to include active  military, DOD civilian, reserve component, contract, and host-nation  support. The Senate Appropriations Committee, in its report on  emergency supplemental appropriations, expressed concern over  JIEDDO’s exponential personnel growth and ability to track this growth.  The report stated that the committee has limited visibility into current  staffing and future staffing requirements and is concerned that JIEDDO is  not accounting for certain contractor support properly. As a result of these  concerns, the committee directed JIEDDO to provide a report to the  congressional defense committees on current staffing levels and future  staffing requirements, broken down by function, contractor, civilian,  military, and detailed from other agencies, and should include all  contractor support that is provided through various contracts. The  committee further directed JIEDDO to update this report whenever  JIEDDO personnel authorizations change. In response to the committee’s  direction, JIEDDO officials developed the JIEDDO Manning Description in  May 2007 identifying and accounting for civilian, military, and contractor  personnel working for JIEDDO.
section_title: JIEDDO Has Taken Steps to Improve Financial Management Processes but Lacks Effective Internal Controls to Provide Assurances That Its Financial Data Are Accurate and Provide Transparency over Its Operations
paragraphs: JIEDDO has made progress in improving its financial management  processes but has not yet reached a point where its processes contain a  system of internal control that ensures the accuracy of its financial data  related to resources it has used in its operations. According to federal  standards, internal control comprises the plans, methods, and procedures  used to meet missions, goals, and objectives of an organization and help it  to achieve desired results through effective stewardship of public  resources. In addition, our prior work has stated the importance of  organizations addressing internal control weaknesses. Otherwise,  organizations may not achieve their objectives or may not use their  resources to best advantage in achieving their objectives. Before beginning  fiscal year 2007 operations, JIEDDO took several steps to improve its  processes for managing and controlling its financial resources, and  JIEDDO has been proactive in responding to financial management issues  we raised during this audit by pursuing additional financial management  process improvements. Nonetheless, JIEDDO is lacking an effective  system of internal control that will provide adequate assurances of  financial data accuracy and operations transparency. Although JIEDDO  added changes toward the end of our review that are expected to address  internal control weaknesses, their implementation occurred too late for us  to determine their effectiveness. Nonetheless, in the absence of an  adequate system of internal controls, inaccurate financial data and reports  may negatively affect the internal and external decision-making process.
subsections: section_title: JIEDDO Has Taken Steps to Improve Its Financial Management Processes
paragraphs: JIEDDO has taken several steps to improve its financial management  processes. JIEDDO’s actions are divided into (1) those taken in  preparation for the beginning of fiscal year 2007 operations and (2) those  taken to develop and continually improve on its operations.
JIEDDO’s approach for fiscal year 2007 included three changes aimed at  streamlining and reducing data processing and analysis. The first of these  changes was that JIEDDO took direct control of accounting functions  previously performed by Army activities in support of JIEDDO. This  allowed JIEDDO to directly execute and oversee funds budgeted and  made available to JIEDDO. Second, JIEDDO requested and received a  separate appropriation exclusively for its efforts, without having to obtain  approval for funds through other DOD funding streams. Third, JIEDDO  developed a procedure for assigning distinct numbers to specific  initiatives because some initiatives were referred to by more than one  name. The assignment of numbers eliminated confusion over the name of  the initiative and facilitated the automated transfer of data, which was not  possible using only a descriptive name.
JIEDDO’s more recent actions were taken as part of its efforts to fully  establish its organizational framework as the organization evolves and to  continually improve its processes. These actions include issuing an  internal written instruction describing the roles and responsibilities of  JIEDDO subdivisions in greater detail; developing internal controls  imbedded in a new automated document management and storage system;  and establishing a new internal control audit function to be staffed by  three persons, reporting directly to the JIEDDO Director. While these  actions could address JIEDDO’s internal control weaknesses, they have  not yet been fully implemented and occurred too late for us to determine  their effectiveness.
section_title: JIEDDO Lacks Effective Internal Controls to Provide Assurances That Its Financial Data Are Accurate, and JIEDDO Is Unable to Provide Transparency over Its Operations
paragraphs: JIEDDO does not have an effective internal control system in place to  ensure that its financial data are accurate, and without such assurances,  JIEDDO is unable to provide adequate transparency over the cost of its  operations. The ability of JIEDDO to provide accurate financial  information for internal and external decision makers depends on  management accountability and an effective system of internal control.  Consistent with federal standards, JIEDDO would need to adequately  document its financial management processes and procedures, including  related internal controls, and the internal control system would contain  basic elements providing assurance that proper authorization is obtained  before using funds and that once a transaction occurs it is accurately and  promptly recorded. Furthermore, developing adequate oversight  mechanisms within JIEDDO is a key factor in developing the  conscientious control environment required by federal standards.  However, although our review was not designed to identify all significant  deficiencies in internal control, we identified four weak control areas at  JIEDDO, which individually and collectively precluded adequate  assurances of accuracy and usefulness of financial data produced by  JIEDDO’s financial management operations. JIEDDO does not have   (1) comprehensive documentation of its internal controls, (2) adequate  funds authorization controls, (3) sufficient controls to ensure accurate  categorization of transactions, and (4) an adequate process to monitor and  review its internal control program.
First, JIEDDO’s internal control processes related to its financial  management are not adequately documented as required by government  internal control standards. Specifically, JIEDDO has not developed  management directives, administrative policies, or operating manuals that  comprehensively describe how JIEDDO financial management personnel  should perform their duties and the internal control activities designed to  assure management that those duties are timely and accurately performed.  As a result, we found inconsistent financial management control processes  among JIEDDO staff and managers. For example, while DOD’s JIEDDO  directive divides approval authority for JIEDDO initiatives between the  Deputy Secretary of Defense—initiatives valued at greater than   $25 million—and JIEDDO itself—initiatives valued up to $25 million, DOD  did not adequately define in its directive the terms initiative or value with  respect to which initiatives measure over or below $25 million. Not  defining terms would affect interpretation for both those with approval  authority and those making processing and authorization control  decisions. As a result, when determining whether an initiative should be  forwarded to the Deputy Secretary of Defense for approval—a key  external authorization control—or whether the authority rests within  JIEDDO itself because the value does not exceed $25 million, various  JIEDDO officials and contractors provided us with varying descriptions  for value determination (see table 1 for a listing of varying descriptions).  However, any of these approaches could significantly change an  initiative’s value calculations and consequently affect JIEDDO’s approval  control decision process. In November 2007, JIEDDO issued an instruction  that included further guidance on how to determine what constitutes an  initiative for the purposes of requiring approval by the Deputy Secretary of  Defense. However, this instruction has not yet been incorporated into  financial management operating procedures to ensure that staff  understand the definition and apply it consistently when processing  transactions. According to JIEDDO officials, the instruction, while better  documenting the initiative determination and approval processes, does not  provide adequate detail to constitute sufficient standard operating  procedures for the components of JIEDDO. JIEDDO officials added that  they have planned to form internal teams in the upcoming months to  develop the more detailed operating procedures JIEDDO components  need to implement this instruction.
Second, JIEDDO’s internal control system does not have adequate funds  authorization controls to ensure that transactions are properly authorized  before committing funds, which is a fundamental control activity required  by government internal control standards. We reviewed 24 initiatives of  which 18 had funding transactions totaling $795 million that were not  authorized in accordance with the process that JIEDDO officials said  should take place in advance of the commitment of funds on initiatives  valued at greater than $25 million. JIEDDO officials stated that approval of  the Deputy Secretary of Defense had to be obtained before funds could be  committed on initiatives valued at greater than $25 million. Fourteen of the  18 initiatives received the required Deputy Secretary of Defense  authorization after JIEDDO financial management personnel committed  funds by approving the MIPR to transfer funds from JIEDDO to the  external program manager for the initiative. For example, JIEDDO spent  about $8 million in the first quarter of fiscal year 2007 for an initiative that  it expected would, overall, require $57 million for that fiscal year. Since  that overall amount exceeded the $25 million value determination that  requires the approval of the Deputy Secretary of Defense, JIEDDO acted  before obtaining required authorization. JIEDDO did obtain Deputy  Secretary of Defense approval for this initiative, but it was approximately  3 months after JIEDDO had committed funds for this initiative. In another  case, the financial management division initially refused to commit funds  for one initiative exceeding $25 million until JIEDDO management  obtained approval from the Deputy Secretary of Defense. However,  JIEDDO management’s response was to request funds for only one  quarter’s expenses, thus reducing the amount to under $25 million.  According to documentation in the file, the financial management division  then agreed to fund the amount and commit the funds, even though it was  aware that total program costs exceeded $25 million for the fiscal year.  Subsequently, JIEDDO’s legal advisor determined that the project was not  an initiative because it was considered part of JIEDDO’s infrastructure  costs and thus did not require approval by the Deputy Secretary of  Defense. Nevertheless, although JIEDDO eventually decided approval was  not required, the process for approving funds for this project demonstrates  a breakdown in the internal control structure necessary to ensure proper  authorization before funds are spent, since JIEDDO officials avoided  obtaining approval even though they thought prior approval was required.  Additionally, it is not clear whether 4 of the 18 initiatives were authorized  prior to commitment of funds because authorization letters were not  dated, making the time of authorization unverifiable. It is clear, however,  that inconsistent with JIEDDO processes, officials within JIEDDO made  several funding commitments prior to obtaining the approvals required by  JIEDDO processes. This underscores that JIEDDO’s system of internal  control allowed funds to be committed without the scrutiny of authorizing  agents. Furthermore, the system did not detect, correct, or address this  control failure.
Third, JIEDDO internal controls do not ensure that its transactions are  properly categorized, in spite of federal internal control standards  requiring that accurate transaction recording be ensured by an entity’s  internal control system. For example, JIEDDO used about $216 million on  an initiative titled “CREW — USMC - Program Management Support  (Contractor Salaries, Travel & Infrastructure),” recording the expenditure  as management and professional support services. However, the   $216 million actually funded the purchase of tangible equipment—IED  jammers—and therefore should have been recorded as procurement of  equipment instead. Overall, of the $1.34 billion in fiscal year 2007  commitments we reviewed, JIEDDO inaccurately recorded at least 83  percent of the dollars committed—involving 15 of the 24 initiatives we  reviewed—as management and professional support services, when other  categorizations should have been applied by JIEDDO financial managers.
JIEDDO’s system of internal control also does not ensure that all  transactions are accurately recorded in the proper JIEDDO lines of  operation, and this could distort reported expenditures on these lines of  operation. A key part of JIEDDO’s overall strategy to manage operations is  to code various initiatives to reflect one of four JIEDDO lines of operation  to track success in achieving the overall goal of increased effort to attack  the IED network. According to officials, JIEDDO policy is to assign a  single line-of-operation code to each initiative even when operations  overlap, which may result in the reported funding for a given line of  operation being inaccurate. For example, JIEDDO’s initiative involving the  testing of counter-IED devices (constituting $92 million in fiscal year 2007  funds) was coded as an attack-the-network effort, when our analysis  indicates that the initiative more accurately represents JIEDDO’s defeat- the-device line of operation. When originally established, JIEDDO coded  its testing efforts as staff and infrastructure, which reflects general  overhead incurred by JIEDDO, and reported the initiative as such in its  second quarter congressional report. However, subsequently JIEDDO  recoded the initiative and reported it as an attack-the-network initiative in  its third quarter congressional report. We found four other instances of  JIEDDO recoding initiatives in the attack-the-network line of operations  that also affected the third quarter report. JIEDDO officials explained that  the recoding was based on a JIEDDO decision to code or recode any  nondirect overhead staff and infrastructure initiatives as attack-the- network initiatives. They did not have supporting documentation  reflecting JIEDDO’s decision to recode. Documented directions would  serve to track the rationale for how this line of operation was coded and  recoded. The blanket assignment of direct overhead costs to the attack- the-network line of operation, along with reassigning lines of operation  after initial recording affects JIEDDO’s ability to accurately determine  trends in the use of funds in conjunction with its attack the network  objective. Further, in the case of the testing operations, funding for attack  the network is overstated because, according to JIEDDO officials, the  majority of testing operations can be attributed to other lines of operation.
Fourth, JIEDDO’s internal process to monitor and review the efficacy of  its internal controls is inadequate. The first federal government internal  control standard, relating to an entity’s control environment, includes  having oversight mechanisms present within the agency as a key factor in  accomplishing a conscientious control environment. However, JIEDDO  appeared to lack adequate mechanisms to monitor and review its internal  control program during the period of our audit. In a May 2007 internal  control report that JIEDDO prepared for the annual DOD internal controls  assurance statement, JIEDDO described its process for assessing its  controls and, based on that assessment, stated that it was able to provide  an unqualified statement of reasonable assurance that its system of  internal controls met federal internal control objectives. However, we  found several inaccurate statements in the report that were used as the  basis for this conclusion, raising questions about the adequacy of  JIEDDO’s process for assessing its internal control system and  determining reasonable assurance. For example, the financial  management section of the report cited four final audit reports from the  Air Force Audit Agency, DOD Program Analysis and Evaluation, the DOD  Inspector General, and GAO. According to JIEDDO, these reports said the  organizations reviewed JIEDDO financial management for activity  beginning in fiscal year 2004 and did not have findings or  recommendations. However, two of the reports cited do not exist (those  for the Air Force Audit Agency and DOD Program Analysis and  Evaluation), and the DOD Inspector General report focused on assessing  controls over the Army’s purchases from other government activities, not  on JIEDDO’s internal control system. Further, that report concluded that  the Army did not have adequate internal controls over purchases from  governmental sources, which included one JIEDDO fiscal year 2006  expenditure, because the Army did not ensure that expenditures were  properly initiated, prepared, executed, and monitored. Lastly, the GAO  report cited is the predecessor to this review, and it concluded that  JIEDDO’s lack of a strategic plan limits JIEDDO’s ability to properly align  its resource use and management to achieve JIEDDO-wide goals. The  report, however, did not provide any assessment of JIEDDO’s internal  control system.
Another question about the adequacy of JIEDDO’s internal control  assessment process and related assurance report concerns JIEDDO’s  statement that training of its staff has improved internal controls.  However, some of the individuals who actually prepared feeder sections of  the report had not received any training on internal controls or how to  assess them. Further, some of these individuals are not familiar with the  internal control standards and the structured internal control risk  assessment. We did not assess JIEDDO’s stated basis for reasonable  assurance of its internal control standards in its entirety because of the  inaccuracies found relating to resource management and training sections  of the report and because JIEDDO’s report did not identify the significant  control weaknesses we found, such as JIEDDO’s noncompliance with  authorization controls and inaccurate classification of expenditures.
As evidenced by these four weaknesses, in the absence of an adequate  system of internal control the objectives of the agency may not be fully  achieved and its use of resources may not be fully consistent with DOD  priorities. Furthermore, decision makers may be basing their decisions on  inaccurate financial data and reports. JIEDDO officials stated that their  efforts to develop an effective financial management program have been  significantly challenged by turnover in key financial positions and  difficulties hiring adequate numbers of staff. In discussing these internal  control findings at the end of our fieldwork, JIEDDO managers said that  they have taken several actions to address and correct these weaknesses,  which we noted previously. JIEDDO believes that these actions have  already improved the internal control weaknesses found; however, the  changes are still in the early implementation stages, and as such, we have  not been able to evaluate their effectiveness in improving JIEDDO’s  internal control system.
section_title: JIEDDO Does Not Comprehensively Identify, Track, and Report All Government and Contractor Personnel as Described by DOD
paragraphs: JIEDDO does not fully identify, track, and report all government and  contractor personnel as provided for in DOD Directive 1100.4. Identifying  all government and contractor personnel is important to JIEDDO’s  management and oversight responsibilities and contributes to its ability to  effectively plan for its future workforce needs. DOD Directive 1100.4  states that it is DOD policy that manpower requirements be established at  the minimum levels necessary to accomplish mission and performance  objectives. It follows that a manpower data system that accurately  accounts for all personnel, to include contractors, enables manpower  management that promotes efficient and effective use of manpower  resources. While JIEDDO employs various DOD policies to manage  civilian and military personnel, these policies do not include accurately  accounting for all of its personnel, as described in DOD Directive 1100.4.  According to JIEDDO personnel officials, JIEDDO applies existing DOD  policies to address administrative issues, such as performance, pay, and  leave. JIEDDO also refers to the Federal Acquisition Regulation that  includes personnel policy and procedures that are specific to the  acquisition and management of services by contract. Additionally, JIEDDO  issues policy letters as needed to clarify personnel management issues.  For example, JIEDDO issued policy letter #16A that directed the division  chiefs to be aware of the number of hours all employees, including  contractor personnel, were working, and directed all employees to report  all hours worked and obtain approval for their schedules from their  supervisors. Nonetheless, these approaches do not identify, track, and  report all military, civilian, and contractor personnel.
JIEDDO officials track civilian, military, and some contractor personnel on  a daily basis to identify personnel currently staffed and determine  positions remaining to be filled; however, this effort does not track all  personnel performing work for JIEDDO. For example, JIEDDO does not  include some or all of personnel in the following categories:    contractors working as field service representatives,    contractors engaged as interagency liaisons,    contractors providing law enforcement training,    contractors involved in JIEDDO’s interagency partnership team,    civilians and contractors from JIEDDO’s Joint Test Board, and    contractors maintaining infrastructure at the Counter-IED Operations  Integration Center (COIC) facilities.
Personnel officials said that these data are collected to identify changes in  JIEDDO’s on-hand strength as personnel leave or are newly assigned and  are not intended to be a comprehensive data collection. We reviewed  JIEDDO’s daily report from October 9, 2007, which shows that JIEDDO  had 321, including civilian, military, and some contractor personnel, out of  418 authorized positions.
The Senate Appropriations Committee directed JIEDDO to provide a  comprehensive report of all of its personnel by May 2007, and because  JIEDDO does not have a comprehensive process to track all personnel, it  relied on an ad hoc process to develop the report. The results identified a  total of 1,466 personnel working for JIEDDO, as compared to the 321  personnel filling 418 positions routinely tracked by the organization in its  daily snapshots. The figures in the report to Congress tripled the number  of personnel overall and showed a ratio between contractor and  government personnel of nearly 5 to 1 when compared with the figures in  the daily snapshots.
We were not assured of the accuracy of those figures in the congressional  report given the lack of guidance or evidence of a process that would  indicate reasonable accuracy in identifying and reporting all categories of  government and contractor personnel. JIEDDO officials also said that the  organization lacked procedures for identifying and tracking all of its  personnel. When we reviewed the report, we discovered inaccuracies and  inconsistencies in the data that led us to conclude that about 114  personnel had been omitted from the report:    25 civilian positions and about 30 contractor personnel with the Joint Test  Board, all funded by JIEDDO since JIEDDO funds all of the board’s  operations costs, including these positions, and    59 contractor personnel working as field service representatives who were  not included for one initiative but were reported in JIEDDO’s funding  documentation.
In addition, we also found 67 personnel who were not reported in the body  of the report but were reported in JIEDDO’s summary schedule of  personnel, and 9 additional authorized intern positions that were included  in the report but were not included in JIEDDO’s daily snapshots.
When accounting for personnel, different divisions may have applied  inconsistent criteria as they collected data for the May 2007 congressional  report because JIEDDO officials did not provide formal guidance to the  divisions on how to report some personnel. For example, JIEDDO officials  said that they could not tell whether the 474 field service representatives  reported reflected actual individuals or full-time equivalents, which could  represent more than one individual. At the conclusion of our review,  JIEDDO officials were still unable to clarify this issue. In addition to the  fact that the figure could be higher or lower, JIEDDO officials further  explained that the reported field service figure of 474 was inaccurate  because JIEDDO subsequently determined that the number for one  initiative included in the data contained a significant error.
JIEDDO had no means to track and verify the accuracy of its figures  presented in the May 2007 report because officials did not maintain  adequate supporting documentation representing how they arrived at their  figures. For example, when JIEDDO accounted for field service  representatives, we asked JIEDDO officials for clarification on how they  arrived at the number of contractors they reported. However, they could  not explain adequately because they did not document the process and  their recollections were admittedly incomplete. Without adequate  supporting documentation, JIEDDO cannot provide assurance that the  data it reports are accurate. Furthermore, with change of personnel, which  is typical within JIEDDO, new personnel would have difficulty  determining the accuracy of figures as well as what process to follow to  prepare subsequent reports.
Although JIEDDO has not routinely tracked all of its contractors, it has  relied heavily on contractor support to accomplish its mission since its  creation in February 2006. According to JIEDDO officials, this reliance on  contractors was attributed to the lengthy and complex civilian hiring  process, the inability of the military services to fill all of the services’  authorized positions, and the urgency of the organization’s mission.  Contractors have performed a broad range of labor and services for  JIEDDO. Examples of functions contractors have performed include    evaluating initiative proposals from outside contractors,    piloting unmanned aerial vehicles,    managing a division’s efforts to develop useful metrics,    conducting virtually all of the day-to-day management of the various  functions at the COIC, and    providing equipment maintenance and logistics support in theater for new  initiatives.
In addition to playing significant roles in accomplishing JIEDDO’s mission,  contractors have also held critical positions within JIEDDO management  and might have had a significant influence on its decision making. In the  recent past, JIEDDO employed contractor personnel for positions the  organization designated as inherently governmental. OMB defines an  inherently governmental function as one involving the exercise of  substantial discretion in applying government authority, making decisions  for the government, or both. JIEDDO personnel documentation showed  that the organization had staffed contract personnel in positions of key  governmental responsibility, and officials stated that the organization is in  the process of resolving this practice. In July 2007, JIEDDO officials began  transitioning government personnel—primarily temporary military staff— into these positions that until recently were held by contractors.  According to JIEDDO officials, the organization is moving toward filling  these positions with permanent government personnel.
JIEDDO officials said that they did not believe tracking all contractor  personnel was necessary because they are not considered JIEDDO staff,  and consequently, JIEDDO has not developed a comprehensive process to  identify, track, and report all personnel in accordance with DOD policy.  However, without a comprehensive process, JIEDDO is not in a position to  readily provide accurate and reliable information to internal and external  decision makers on its staffing levels. For example, when the Senate  Appropriations Committee directed JIEDDO to identify and report on  staffing levels of civilian, military, and contractor staff, JIEDDO officials  used ad hoc data requests to divisions they receive information from in  their daily reports and to activities that are not being captured by the  current process in order to collect information on contractor personnel.  Despite responding to the committee’s direction for a May 2007 report and  its direction to update this report to reflect future personnel changes,  JIEDDO officials have not developed a policy requiring the collection of  data accounting for all categories of personnel or provided guidance for  doing this accurately.
Additionally, without a comprehensive process to track all government  and contractor personnel, JIEDDO cannot be in a position to effectively  plan for its future workforce needs. For example, according to a JIEDDO  official, in the case of one initiative JIEDDO needed to compare unmanned  aerial vehicle piloting alternatives, contracted versus in-house, and it was  critical for JIEDDO to know the quantity of and functions of contractor  staff employed under the existing contract. However, because JIEDDO’s  manpower management system does not routinely capture contractor staff  information, it would have been difficult for JIEDDO to determine whether  to continue the contract without finding an alternative source for this  information. For this initiative, JIEDDO was able to obtain the information  needed through detailed contract information that happened to be  available. However, according to the JIEDDO official, these details are not  always routinely available, depending on the type and terms of the  contract.
Our prior work also highlights the importance of accounting for and  providing effective oversight of contractors. A recent report concerning  the management and oversight of contractor support for deployed forces  addresses the issue of limited visibility over the number of contractors  deployed with U.S. forces and potential problems with planning for  security and logistics needs if the numbers of contractors are not known  to military commanders in theater. JIEDDO deploys contractor personnel  in the theater to assist with counter-IED solutions. JIEDDO does not track  the number of contractors it employs, and yet its May 2007 report  indicates that the number can significantly affect how JIEDDO uses its  resources and plans for future needs.
section_title: Conclusions
paragraphs: As IEDs continue to pose a significant threat to U.S. forces in Iraq and  Afghanistan, defeating the threat continues to be a high defense priority.  This likely will require a continued significant investment in resources,  both financial and human capital. The volume of resources required,  coupled with the scale and span of JIEDDO’s mission to focus all DOD  counter-IED efforts, creates a challenge to achieving efficient and best use  of funding made available to JIEDDO. However, DOD and JIEDDO cannot  adequately manage JIEDDO’s financial and human capital resources if it  does not have an effective system of internal control to provide reliable  data and insight into how these resources are invested, and external  parties cannot be assured that the information JIEDDO reports is  reasonably accurate, complete, and transparent. Consequently, because of  the absence of adequate internal controls and of a comprehensive efficient  method for identifying, tracking, and reporting JIEDDO’s human capital  resources, JIEDDO’s systems currently cannot efficiently provide the data  and insight needed for internal management. Further, Congress is limited  in its oversight of JIEDDO’s current and future requirements, the  organization’s substantial use of contractors, and the organization’s use of  resources to support its mission because of the unreliable information  JIEDDO has reported. JIEDDO officials are not fully aware of how their  personnel resources are being spent, and cannot fully plan for future  workforce needs if their baseline information on current funds use and  workforce composition is inaccurate. Although JIEDDO has taken several  actions to improve its internal control system, as we noted in this report,  these actions have not yet been fully implemented. As such, it is important  that JIEDDO evaluate its recent actions to ensure that they will address  the control weaknesses we identified and provide for a system of internal  control that fully meets federal standards. Improving JIEDDO’s internal  controls and the quality of its financial and personnel data is critical to  assuring Congress and the public that JIEDDO is focusing all of its  resources and using them wisely to address the threat of IEDs to U.S.  forces.
section_title: Recommendations for Executive Action
paragraphs: To comply with federal internal control standards as well as improve the  quality of JIEDDO’s financial management and the reliability of resulting  financial data and reports, we are recommending that the Secretary of  Defense direct the Director of JIEDDO to develop and document a  comprehensive system of internal control for its financial management  processes. Actions to develop and implement JIEDDO’s system of internal  control to address specific control weaknesses we identified should, at a  minimum, include the following:    Fully documenting all internal control processes and procedures related to  its financial management through the development of management  directives, administrative policies, standard operating procedures, or other  documentation that describe how JIEDDO personnel should perform their  duties.
Establishing effective controls to ensure that transactions are properly  authorized before funding is executed, related documentation supporting  transactions is accurately dated, and exceptions are properly approved  and documented.
Establishing effective controls to ensure that all transactions are properly  classified by lines of operation and other expenditure categories used by  JIEDDO, and to promptly and properly correct misclassifications when  identified.
Developing an internal process, to include involvement of its internal audit  staff, to routinely monitor and review the efficacy of JIEDDO’s system of  internal control and promptly correct any weaknesses identified.
We are also recommending that the Secretary of Defense direct the  Director of JIEDDO to report to Congress on the status of its efforts to  implement its comprehensive system of internal control 1 year from the  date of this report.
To improve JIEDDO personnel or manpower management and provide  Congress with the information it needs to perform its oversight duties  effectively, we are recommending that the Secretary of Defense direct the  Director of JIEDDO to establish and document a method or system to  comprehensively identify, track, and report on a routine basis all  government and contractor personnel.
section_title: Agency Comments and Our Evalutaion
paragraphs: In written comments on a draft of this report, DOD concurred with our  findings and the thrust of our six recommendations. However, DOD did  not concur with our fifth recommendation as originally stated in our draft  report, which was to report on JIEDDO’s efforts to implement internal  control improvements as part of JIEDDO’s recurring quarterly  congressional reports. In its response, DOD proposed an alternative means  for providing this information to the Armed Services and Appropriations  Committees. DOD said that the focus of its quarterly report to Congress is  to describe the IED threat and associated counter-IED efforts, and that  adding the additional information we recommended would blur the focus  of the report. DOD stated that instead, JIEDDO can produce and provide a  report to the oversight committees 1 year after the issuance of our report  as to the steps JIEDDO has taken to address and correct the weaknesses  we identified. We believe that this approach satisfies the intent of our  original recommendation and consequently we modified our  recommendation to reflect this change.
In commenting on our four recommendations dealing with internal control  and financial management, JIEDDO provided several details of the actions  it plans or said it has already taken to address the recommendations.  While we acknowledge that JIEDDO management recognizes the  importance of addressing the weaknesses we identified in our report, we  maintain that more needs to be done before the weaknesses are fully  corrected. For example, regarding our recommendation to develop  documented internal control processes and procedures that describe how  JIEDDO personnel should perform their duties, JIEDDO responded that it  has established and fully implemented an internal control system,  identifying four specific efforts for illustration. However, the specific  efforts listed do not fully support JIEDDO’s statement that needed  controls and operating procedures are fully developed. One of the efforts  cited was JIEDDO’s November 2007 Capability Approval and Acquisition  Management Plan instruction. While we agree and reported that this  instruction is an important step in developing documented processes, it  does not contain operating procedures developed to the level we  recommended because JIEDDO divisions had not developed and  documented roles, responsibilities, and specific procedures for  implementing the JIEDDO Capability Approval and Acquisition  Management Plan. As of February 2008, JIEDDO was still developing and  documenting these roles, responsibilities, and specific procedures for  implementing the JIEDDO Capability Approval and Acquisition  Management Plan. Consequently, the degree to which JIEDDO has  implemented this recommendation is unclear and additional action on  JIEDDO’s part may be needed.
In commenting on our sixth recommendation regarding establishing and  documenting a method to comprehensively identify, track, and report  government and contractor personnel, JIEDDO included extensive  background information on its existing personnel processes and  improvement efforts it is undertaking. However, more remains to be done  in order to fully implement our recommendation. For example, while  JIEDDO stated that it is in the process of accounting for contractors  maintaining COIC facilities, JIEDDO did not identify any additional efforts  to account for the remainder of contractor personnel cited in our report or  any specific steps it plans to take to establish and document a method or  system to comprehensively identify and track all personnel. Instead,  JIEDDO explained that it does not track certain classes of personnel  working in direct support of JIEDDO because these persons are already  accounted for by other organizations in DOD. Consequently, JIEDDO’s  insight into its human capital is limited because it excludes tracking  certain manpower funded by the JIEDDO appropriation, such as personnel  directly working for the Joint IED Defeat Test Board, whose workload is  performed exclusively in support of testing JIEDDO initiatives. We  recognize JIEDDO’s comments regarding the responsibility of the military,  DOD, and other government agencies in providing oversight and reporting  of their staff who may be assigned to work in support of the JIEDDO  mission. However, we believe that as an organization, JIEDDO has an  interest and a responsibility to identify, track, and report all civilian,  military, and contractor personnel working in support of JIEDDO as a  matter of good resource stewardship and sound human capital  management. Any overlapping manpower management interests or  responsibilities between JIEDDO and other organizations could still be  recognized and reported with the appropriate caveats to users of the  information. In its comments related to this recommendation, DOD also  cited ongoing efforts that do not directly address our recommendation as  well as several new efforts that were not established at the time of our  review, and therefore we could not validate or consider them for purposes  of this audit. DOD’s comments and our specific responses to them are  provided in appendix II.
We are sending copies of this report to the appropriate congressional  committees and the Secretary of Defense. We will also make copies  available to others upon request. If you or your staff have any questions  about this report, please contact me at (202) 512-8365 or solisw@gao.gov.  Contact points for our Offices of Congressional Relations and Public   Affairs may be found on the last page of this report. GAO staff who made  major contributions to this report are listed in appendix III.
section_title: Appendix I: Scope and Methodology
paragraphs: To assess the Joint Improvised Explosive Device Defeat Organization’s  (JIEDDO) financial management processes, controls, and data, we  collected data on the $1.9 billion in funds available to JIEDDO for the first  half of fiscal year 2007 and analyzed associated financial management and  counter-improvised explosive device (IED) initiative data available for  management and external reporting of JIEDDO’s activities. We selected  the initial fiscal year 2007 funding provided to JIEDDO because it was  received after JIEDDO made significant changes in its resource  management processes and therefore should reflect impacts and  improvements resulting from those changes. We also identified required  approval controls over use of funds, reviewed selected transactions for  compliance with these controls, and assessed whether the data recorded  in the accounting and managerial systems accurately reflected JIEDDO’s  activities. However, we did not perform a comprehensive assessment of all  of JIEDDO’s internal controls. We drew high-dollar initiatives during the  scoping phase of the review to more efficiently assess the largest portion  of JIEDDO’s funds use in the relatively limited phase. Because the items  initially selected included little in the way of attack the network initiatives,  we added items from this line of operations to do control testing. We also  reviewed large-dollar initiatives approved by the Deputy Secretary of  Defense that had no recorded commitments at the time our initial data  were collected for the first half of fiscal year 2007. Because we identified  weaknesses in the completeness and accuracy of JIEDDO’s  documentation and controls, we did not review the full range of initiatives  we had originally planned because it would have added no further value  for purposes of addressing the objectives of this review. Our analysis  included 47 funding actions totaling $1.34 billion for 24 of the 301  initiatives JIEDDO had approved at the time we collected our data. We  selected initiatives to review that reflected the JIEDDO defeat the device  and attack the network activities as well as some approved most recently  by the Deputy Secretary of Defense. The 24 initiatives we selected were  divided into three subsets: 10 counter-IED initiatives JIEDDO identified as  defeat the device initiatives with the highest fund commitments recorded  as of the time we collected financial data, 9 of the 10 counter-IED  initiatives JIEDDO identified as attack the network initiatives with the  highest fund commitments recorded as of the time we collected financial  data, and 5 additional initiatives that received Deputy Secretary of Defense  approval after the date we collected our comprehensive funding data to  determine whether conditions had changed. We also met with officials  from JIEDDO’s Counter-IED Operational Integration Center, the Joint  Center of Excellence, the Navy Center of Excellence, the Air Force Center  of Excellence, the Technology and Requirements Integration Division, and  the Joint IED Defeat Test Board to gather information corroborating and  explaining the financial activity and documentation related to JIEDDO  initiatives we tested.
To assess JIEDDO’s efforts to identify, record, track, and report numbers  of all personnel, including contractors, we met with officials from  JIEDDO’s Secretariat Division who are responsible for the organization’s  personnel management to discuss and obtain information on the numbers  of JIEDDO personnel, the composition of personnel, and JIEDDO’s  processes for capturing this information. We collected information on the  numbers of JIEDDO personnel from several personnel documents and  reports from the Secretariat Division. We reviewed the information and  selectively compared it with corroborating sources, such as interviews  with JIEDDO officials and JIEDDO’s financial documentation, to  determine whether the reported figures were comprehensive and accurate.  We also met with officials from JIEDDO’s Counter-IED Operational  Integration Center, the Joint Center of Excellence, the Navy Center of  Excellence, the Air Force Center of Excellence, the Technology and  Requirements Integration Division, and the Joint IED Defeat Test Board to  gather information regarding the numbers of and composition of JIEDDO’s  personnel. In addition, we met with officials in the Office of the Secretary  of Defense’s Directorate for Organizational and Management Planning to  discuss the origins of DOD Directive 2000.19E.
We assessed the reliability of JIEDDO’s financial data we reviewed by   (1) corroborating the data with supporting information and documentation  from physical file records at JIEDDO headquarters and from initiative  program offices to verify the accuracy of the data, (2) reviewing existing  information about the data and the system that produced them, and   (3) interviewing agency officials knowledgeable about the data. We found  problems with the reliability of the data, which we discuss in the report  and in part form the basis for our recommendations.
We conducted this performance audit from April 2007 to December 2007 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
section_title: Appendix II: Comments from the Department of Defense
paragraphs: The following are our comments on the Department of Defense’s (DOD)  letter dated February 14, 2008.
subsections: section_title: GAO Comments
paragraphs: 1. DOD states that before our audit commenced, JIEDDO had worked  diligently to formalize and document its processes to ensure that internal  controls were in place. Further, DOD asserts that “many of these  processes were finalized during the audit timeframe,” and then lists details  on four specific “samples” where JIEDDO has “finalized, documented and  implemented processes and procedures.” While we recognize that JIEDDO  has undertaken efforts to improve its operations and resource  management, the specific efforts described in DOD’s comments overstate  the status and degree of implementation regarding these four “samples.”  Specifically, responses 2 through 5 summarize our conclusions regarding  the status and potential effectiveness of JIEDDO “samples” contained in  DOD’s comments.  2. Before our review began in May 2007, JIEDDO planned to spin off part  of an existing division to form a new acquisition oversight division.  JIEDDO did not identify the planned division as relevant to our audit  objectives, and while we were aware of the plans for the new division, we  did not see documented objectives, plans, or policies describing the  division’s role or purpose. The first policy document JIEDDO issued  outlining the oversight division’s responsibilities was a broad instruction  issued in November 2007, which was too late for us to review in the  conduct of our audit. Further, as of mid-February 2008, JIEDDO was still  drafting a roles and procedures manual to implement the instruction’s  requirements for the new division, and none of the five civil service  positions planned for the division had been filled. Consequently, this  particular “sample” cited in the DOD comments does not by itself support  the statement that JIEDDO has “finalized, documented and implemented  processes and procedures.”  3. JIEDDO issued this instruction to define and implement JIEDDO’s  “rapid acquisition management responsibilities” established in its charter  documents and presented to us when we met to close out our fieldwork.
To follow up on the comprehensiveness of the instruction related to the  internal control weaknesses we identified during our review, we had brief  follow-up conversations with JIEDDO personnel involved in the  development of the instruction. At that time, we determined that specific  steps regarding addressing the control weaknesses identified were not  fully developed because JIEDDO divisions had not yet documented or  developed the specific roles, responsibilities, processes, and procedures at  the division level. Further, JIEDDO had not yet identified the persons who  would participate in developing and drafting proposed division-level  instructions for coordination and approval. One official stated that to have  done so before issuing the instruction would have delayed issuance by 1 to  2 months. As with the prior item cited in DOD’s comments on our  recommendation, this instruction does not by itself support the statement  that JIEDDO has “finalized, documented and implemented processes and  procedures.”  4. While JIEDDO has established the Records Management Division in  recognition of the importance of good documentation, it is still an effort in  development and not fully implemented. The comments provided state  that some elements of JIEDDO’s records management processes and  procedures are still in draft and are not scheduled to be initially  operational until March 2008 or fully operational until May 2008. Based on  DOD’s comments, we again conclude that establishment efforts for this  division do not support the summary statement that JIEDDO has  “finalized, documented and implemented processes and procedures.”  5. JIEDDO is in the process of adopting a new financial management  system, adapted from an existing system, and is expecting full  implementation of the new system by March 2008. While JIEDDO has  identified the objectives of the new system and lists expected  improvements for the organization, the comments clearly indicate that all  requirements for the new system have not yet been gathered, which makes  full implementation by March 2008 uncertain. Further, given the tasks yet  to be accomplished for full implementation, JIEDDO’s new system status  does not support the summary statement that JIEDDO has “finalized,  documented and implemented processes and procedures.”  6. DOD states emphatically that funding authorizations are always made  and documented according to the criteria in JIEDDO’s charter directive.  As we reported, this was not the case for the items we selected in our  review. DOD identified a new resource management checklist in its  comments, and while it constitutes a new control measure that is a  positive step, we were not able to test compliance with the new control or  assess its effectiveness.  7. JIEDDO’s reasons for initial assignment and change in its lines of  operations accounting do not address the specific inconsistency and  potential impact on the reliability of its financial reports that we reported  when JIEDDO moved Joint IED Defeat Test Board expenses to its attack  the network line of operation. Further, changes in controls over recording  of fund use into expenditure categories or lines of operation are either still  in development or were not sufficiently developed for us to evaluate their  effectiveness in meeting our recommendation’s intent.  8. DOD’s statements acknowledge JIEDDO’s internal control weaknesses.  The actions proposed and those already taken, if fully implemented, would  substantially address the intent of our recommendation.  9. Expressing full agreement with the findings in our report, DOD  proposed an alternative approach for communicating the status of its  efforts to Congress. We agree that DOD’s approach for reporting its  progress in implementing internal control measures satisfies the overall  intent of our recommendation. Consequently, we modified our original  recommendation to reflect this change.  10. JIEDDO outlines steps that it is taking toward identifying and tracking  civilian, military, and contractor personnel and to improve its personnel  management practices that we highlighted in our report. While a positive  first step, other efforts are needed to comprehensively account for all  personnel, as noted in comments 11 through 16.  11. JIEDDO introduces processes that do not directly address our  recommendation. We were aware of the development of JIEDDO strategic  human capital plan, and based on our review of JIEDDO’s working  documents, we concluded that the strategic human capital plan would not  directly address the extent to which JIEDDO would identify and track all  of its personnel. Also, JIEDDO had not instituted prior to the conclusion of  our audit its Manpower Staffing Request System within the JCAAMP  program to formalize the management of new manpower requirements.  While these steps may assist JIEDDO in improving its personnel  management, they do not directly address our recommendation.  12. We recognize and understand DOD’s comments regarding accounting  for JIEDDO personnel who staff programs under the control and direction  of the military services and other DOD and government departments,  including those funded wholly or in part by JIEDDO. However, we believe  that as an organization, JIEDDO has an interest in accounting for all  civilian, military, and contractor personnel working in any capacity for  JIEDDO, as a matter of sound personnel management. This information  can be collected and reported with caveats stating that the personnel are,  in whole or part, funded by JIEDDO.  13. DOD noted that our report suggested that JIEDDO does not account  for categories of contractor personnel, such as field service  representatives, interagency liaisons, law enforcement training personnel,  interagency partnership team members, and infrastructure contractors,  and stated that the information was included in the Senate report. During  our audit and as stated in our report, we recognized that this information  with the associated charts was included in the Senate report, but we found  that it was not included in any of JIEDDO’s personnel documentation or  daily staffing reports prior to the development of the Senate report. As a  result, we questioned why JIEDDO did not account for these categories of  personnel in its daily staffing reports or in other personnel documentation.  14. DOD explained JIEDDO’s challenges in hiring staff and the steps it is  taking to increase the number of military and civilian billets and to  facilitate the hiring of civilian employees by working with the Army and  the Office of the Secretary of Defense. While these steps appear to address  our recommendation and other areas of concern, we cannot validate the  information because these steps occurred after we completed our audit.  15. We disagree with DOD’s statement that JIEDDO provides some funding  for the staff of the Joint Test Board. According to financial documentation  we obtained and corroborated with interviews, the Joint Test Board’s  primary mission is to provide support to JIEDDO as stated in JIEDDO’s  charter, DOD Directive 2000.19E.  16. See comment 11.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, the following individuals made  contributions to this report: Cary Russell, Assistant Director; Grace  Coleman; Eric Essig; Paul Kinney; Ronald La Due Lake; Stephen Lipscomb;  Lonnie McAllister; Paulina Reaves; James Reynolds; Brian Shiels; Glenn  Slocum; Yong Song; and John Strong.