Secure Border Initiative: Controls over Contractor Payments for the Technology Component Need Improvement
Published: 2011-05-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 2005, the Department of Homeland Security (DHS) initiated a multibillion-dollar contract to secure part of the nation's borders, the Secure Border Initiative (SBI). At that time, SBI was to include a single solution technology component; SBInet. DHS assigned the U.S. Customs and Border Protection (CBP) responsibility for overseeing the SBI contract, including SBInet. In January 2011, DHS announced that it was ending SBInet, and replacing it with a new technology portfolio. GAO was asked to (1) assess CBP's controls over payments to the prime contractor under the original SBInet program, and (2) provide information about the SBI program prime contractor's reporting against small business subcontracting goals. GAO assessed CBP controls against federal standards for internal control and relevant federal regulatory provisions, and summarized data on contractor performance against small business contracting goals.
section_title: What GAO Found
paragraphs: GAO's review of CBP's controls over payments to the prime contractor under the original SBInet program identified the need to improve controls in two critical areas. Specifically, GAO found that CBP's design of controls for SBInet contractor payments did not (1) require invoices with sufficiently detailed data supporting billed costs to facilitate effective invoice reviews or (2) provide for sufficiently detailed, risk-based invoice review procedures to enable effective invoice reviews prior to making payments. Although CBP's established procedures were based on the Federal Acquisition Regulation (FAR), GAO identified numerous instances of CBP contracting officers lacking detailed support in the SBInet contractor invoices they received for review. Because CBP's preventative controls were not fully effective, the agency will continue to (1) be impaired in providing assurance that the reported $780 million it already paid to the contractor under the original SBInet program was allowable under the contract, in the correct amount, and only for goods and services provided, and (2) rely heavily on detective controls (such as timely, effective contract closeout audits) for all SBInet funds disbursed. Further, timely action to improve CBP's preventative controls is critical for the estimated $80 million in original SBInet program funds yet to be disbursed. Also, in light of the recent DHS announcement that it is replacing the originally conceived SBInet program with a new technology portfoliobased approach, GAO's findings concerning weaknesses in CBP's design of controls over payments to the prime contractor under the recently ended SBInet program can serve as "lessons learned" to be considered in designing and implementing controls as part of the newly announced portfolio-based approach to providing technological support to border security. With respect to performance against small business contracting goals, the prime contractor reported that it met two of the six small business subcontracting goals for the overall SBI program. Specifically, it reported that it met subcontracting participation goals for Historically Underutilized Business Zone and Veteran-Owned small business categories, but was unable to meet the other four small business goals because a large steel purchase significantly reduced the subcontract dollars available for small businesses to participate in the SBI contract.
section_title: What GAO Recommends
paragraphs: GAO makes five recommendations to improve CBP controls over prime contractor payments under the SBInet and the successor technology portfolio, including actions to strengthen invoice review procedures, provide more detailed support, and to better focus closeout audits. DHS concurred in principle with all recommendations, but for some, DHS also commented on the cost-effectiveness or others' role in implementation. GAO addresses these comments in the report.

section_title: Letter
paragraphs: The Department of Homeland Security’s (DHS) Secure Border Initiative  (SBI), begun in November 2005, was intended as a multiyear effort to  secure the nation’s borders. At that time, the Secure Border Initiative- network (SBInet) component of SBI was intended to provide a single  technology-based solution for the nation’s entire Southwest border using a  highly integrated set of fixed sensor towers. The U.S. Customs and Border  Protection (CBP), a component of DHS, was assigned responsibility for  monitoring and overseeing the prime contractor, including contractor  payments, for both the overall SBI and SBInet programs.
Since its inception, we have issued a number of reports highlighting issues  concerning technical problems, cost overruns, and schedule delays with  the SBI program. In March 2010, the Secretary of Homeland Security  announced a freeze on all SBInet program disbursements, with the  exception of SBInet contractual agreements to support technology-based  security for a 53-mile section along the Arizona border. In January 2011,  the Secretary directed CBP to terminate the SBInet program as originally  conceived, and instead focus on developing terrain- and population-based  solutions utilizing existing proven technologies. The Secretary also  provided that while the new technology approach should include elements  of the former SBInet program where appropriate, DHS did not plan to use  the current contract to procure any of the technology systems under the  new approach, but rather would solicit competitive offers. Since the  inception of the SBI program, for which Congress has appropriated a total  of about $4.4 billion through fiscal year 2010, about $1.5 billion of that  amount has been available for the original SBInet program. As of January  2011, CBP reported it had paid the prime contractor a total of about   $780 million under the original SBInet program, and had obligated, but not  yet disbursed, almost an additional $80 million.
In response to your request, this report provides (1) our assessment of  CBP’s controls over payments to the prime contractor related to the  original SBInet program and (2) information about the overall SBI  program prime contractor’s reporting on the extent to which it met small  business subcontracting goals. In addition, this report provides our  analysis of the implications of the January 2011 DHS SBInet termination  decision on our findings and conclusions related to prime contractor  payment controls under the original SBInet program.
To accomplish our first objective, we assessed the original SBInet  program’s internal controls over prime contractor payments in  comparison with our Standards for Internal Control in the Federal  Government and other relevant criteria, including relevant provisions of  the Federal Acquisition Regulation (FAR), the Department of Homeland  Security Acquisition Regulation (HSAR), DHS policies, and CBP  procedures. We conducted structured interviews with CBP officials and a  walk-through of CBP’s prime contractor invoice review, approval, and  processing procedures under the original SBInet program.
We also selected five task orders issued by CBP under the prime Indefinite  Delivery/Indefinite Quantity (IDIQ) contract to review. These task orders  represented 84 percent of all payments made to the prime contractor and  79 percent of the total value of all task orders from the original SBInet  program’s inception in November 2005 through the end of fiscal year 2009.  The selected task orders included types priced on both a fixed price and  cost reimbursement basis and included both open and closed task orders.  For each of the five task orders selected for review, we obtained and  reviewed available contract documentation, including individual task  orders, task order modifications, statements of work, and invoices. We  also obtained available information related to all 99 invoices submitted  under the five task orders for the purpose of assessing the extent to which  they complied with the original SBInet contract and were properly  supported.
To address our second objective of providing information about DHS’s  prime contractor’s reporting on the extent to which it met small business  subcontracting goals for the overall SBI program, we obtained and  summarized information from the prime contractor’s Subcontractor Plan,  the prime contractor’s five semiannual Small Business Subcontracting  Review Summit reports from November 2007 through May 2010, and  documentation supporting the prime contractor’s small business  subcontracting award reports. We did not assess or validate the accuracy  or reliability of the contractor’s reporting and supporting data.
We also gathered and assessed information DHS provided concerning its  January 2011 decision to terminate the original SBInet program.  Specifically, we assessed information provided in terms of its implications  for the remaining funds yet to be disbursed under the original SBInet  program, SBInet contract closeout audits, and the limited information  available as to the contractor and related contractor payment controls  under the new technology portfolio approach.
We conducted this performance audit from June 2009 to May 2011 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.
subsections: section_title: Background
paragraphs: Figure 1 provides an overview of CBP organizational components that had  prime contractor invoice review, approval, and payment responsibilities  under the original SBInet program.
CBP’s Contracting Division, which is part of the Office of Administration  Procurement Directorate’s Enterprise Contracting Office, was assigned  SBInet program prime contractor management and administrative  responsibilities, including receiving and approving or rejecting invoices.  The Office of Technology Innovation and Acquisition within CBP was  assigned responsibility for managing key program and contractor  oversight acquisition functions associated with SBInet, such as verifying  and accepting contract deliverables. This office was also to work closely  with CBP’s SBI Contracting Division. Contracting officers (CO) and  contracting officer’s technical representatives (COTR) in the SBI  Contracting Division were assigned responsibility for reviewing invoices  and maintaining contract files. The SBI Business Operations Division was  responsible for providing CO-approved invoices to CBP’s National Finance  Center (NFC) for processing contractor invoices for payment.
In carrying out its assigned prime contractor invoice-related  responsibilities under the original SBInet program, CBP relied on the FAR,  HSAR, as well as DHS, CBP, and SBI program policies and procedures.  The overarching policy for federal contracting is the FAR. DHS issued a  supplemental regulation, HSAR, an acquisition manual for DHS  contracting and, in October 2008, CBP’s SBI Contracting Division issued  standard operating procedures (SOP) setting out required review,  approval, and processing steps for all SBI prime contractor invoice  processing.
Figure 2 provides an overview of CBP’s process for reviewing, approving,  and paying prime contractor invoices under the original SBInet program.
CBP’s process for reviewing, approving, and paying prime contractor  invoices under the original SBInet program relies on both preventative and  detective controls. Generally, preventative controls are more efficient  and effective than detective controls. CBP’s detective controls began with  SBInet’s prime contractor submitting an invoice to the SBI Contracting  Division’s CO, COTR, and CBP’s NFC for review. After reviewing the  invoice, the COTR was responsible for recommending whether the CO  should approve or reject the invoice. If the CO and COTR approved an  invoice, the CO was to notify the SBI Business Operations Division within  the Program Management Office to check for fund availability. If funds  were available, CBP’s NFC was to be notified to process the invoice for  payment. Further, while not required, CBP’s COs may request the Defense  Contract Audit Agency (DCAA), a defense agency within the U.S.  Department of Defense, to conduct an invoice review or rate verification  for any invoice. In addition, CBP officials told us that the CO will always  request DCAA to conduct a closeout audit (a detective control) for any  task order, although this is not required. DHS’s Office of Procurement  provides that the CO submit a memorandum to request a final audit for the  entire IDIQ contract, or any of it delivery order, or task order components.
section_title: Controls over Prime Contractor Payments for SBI Technology Component Need Improvement
paragraphs: Under the original SBInet program, CBP took actions intended to establish  internal controls over contractor payments. CBP established SOPs setting  out required contractor invoice review, approval, and processing steps for  CBP’s COs and COTRs to follow. These procedures were based on  requirements in the FAR. We identified the need to improve CBP’s  controls in two important areas. Specifically, we identified the need to  improve CBP’s preventative controls over payments to the SBInet program  contractor with respect to requiring  invoices with sufficiently detailed data supporting billed costs to  facilitate effective invoice review and  specific, sufficiently detailed, risk-based invoice review procedures to  enable full, effective, and documented reviews prior to making  payments.
Because CBP’s preventative controls were not fully effective, the agency  will continue to (1) be impaired in its ability to provide assurance that the  estimated $780 million already paid the prime contractor under the  original SBInet program was proper and allowable, in the correct amount,  and only for goods and services provided and (2) rely heavily on detective  controls (primarily contract closeout audits) for assurance concerning the  propriety of SBInet program disbursements. Further, until CBP takes  action to improve its preventative controls, it will continue to be impaired  in its ability to effectively review the estimated $80 million obligated, but  yet to be disbursed, to the prime contractor under the original SBInet  program. In addition, our findings have implications as possible “lessons  learned” for DHS to consider and address as appropriate in designing and  implementing contract payment controls for its new technology portfolio  approach.
subsections: section_title: Detailed Data Supporting Invoiced Costs Not Required
paragraphs: Standards for Internal Control in the Federal Government and related  guidance provide that an entity’s internal controls should enable it to  verify that ordered (invoiced) goods and services were proper and met the  government’s specifications. CBP’s policies and related SOPs applicable  to the original SBInet program required the prime contractor to submit  invoices showing total costs incurred by cost element (i.e., direct labor,  direct materials, major subcontracts, other direct costs, overtime  premium, overhead, travel, and general and administrative expenses).  However, CBP’s policies and procedures did not require the invoices to  include any additional supporting detail. Not requiring such detail not only  precluded us from testing whether invoiced costs complied with the  SBInet contract and were properly supported, but, more important,  resulted in numerous instances in which CBP’s COs and COTRs did not  have the detailed support they needed to effectively review the SBInet  contractors’ invoices. For example, in one instance a CO requested  additional detailed information such as travel dates and travel destinations  to review the reasonableness of a lump sum invoiced cost amount for  travel.
Figure 3 shows an example of a SBInet prime contractor invoice submitted  and paid for costs incurred for the period from September 12 through 25,  2008. Figure 3 also highlights lump sum invoiced costs for the “Direct  Labor” and “Travel” cost elements.
In this example, the SBInet prime contractor billed, and CBP paid, a total  of $3,705,718.70, including $1,518,873.38 for the period for direct labor  without any supporting details such as the hours worked and labor rate  category. Supporting details are necessary to allow reviewing officials to  determine, for example, whether the appropriate rate was charged and to  assess the reasonableness of the hours charged.
Similarly, for the $108,148.57 billed for travel for the period, the contractor  did not provide supporting details necessary for a reviewing official to  assess the amount claimed, such as the purpose of the trip and travel  destination. Supporting details help CBP’s COs and COTRs assess the  propriety of invoice cost elements billed to the government, and  effectively review the prime contractor’s invoices.
Lacking sufficiently detailed data supporting the original SBInet  contractor’s invoiced costs, we were unable to determine whether the 99  invoices we sampled for review were proper and in compliance with  original SBInet program contract provisions. Our review identified  numerous instances of CBP CO and COTR frustration when they were  unable to obtain detail to support SBInet contractor lump sum invoiced  costs, despite repeated requests. The SBInet prime contractor denied  these requests on the basis that CBP’s policies did not require supporting  detail. CBP paid the invoiced amounts in all cases.
In November 2009, CBP requested, and the SBInet prime contractor began  providing, some additional information with its invoices submitted under  the original SBInet program task orders. For example, the prime  contractor included additional information on work performed for the  invoice period. However, the additional information the contractor  provided did not include sufficient additional detail needed to support an  effective review of invoiced costs, such as hours worked, labor rate  category, purpose of travel, or travel destination.
CBP could have relied on a provision of the contract to obtain additional  support for lump sum invoiced costs. That is, as authorized by the  contract’s Allowable Cost and Payment Clause (FAR 52.216-7 (a) (1)), CBP  could have required the SBInet contractor to provide, in such form and  with reasonable details, support for lump sum invoiced cost element  claims. CBP and SBI Contracting Division management officials told us  they were aware of their ability to obtain supplemental detailed supporting  cost information under the FAR Allowable Cost and Payment clause.  However, they also told us that CBP made a business decision for the  overall SBI program (including the original SBInet program) not to request  such detailed supporting data from its prime contractor, but rather to rely  on other oversight mechanisms (such as closeout audits) to help identify  any contractor billing issues.
Closeout audits are less effective as a control to identify or correct any  contractor payment issues because they may not be conducted until a  number of years after completion of a contract. The contractor’s ability to  repay any improper payments may deteriorate, responsible prime  contractor officials may change, their memories may fade, or needed  supporting data may be lost.
section_title: Design of Procedures for Review and Approval of Original SBInet Contractor Invoices Was Not Sufficiently Detailed
paragraphs: As provided by Standards for Internal Control in the Federal  Government, well-developed and consistently implemented policies and  procedures are critical in providing reasonable assurance that  management’s directives are carried out and program risks, such as the  risk of improper payments, are minimized.
CBP’s SOP applicable to COs’ and COTRs’ reviews of SBInet contractor  invoices provided general guidance that COs and COTRs were to “evaluate  invoices to certify receipt of the product or service in accordance with the  terms of the contract or order, as well as the accuracy and validity of the  elements in the invoice.” However, CBP’s procedures for reviewing prime  contractor invoices submitted under the original SBInet program were not  sufficiently detailed and appropriately risk based to enable consistent,  effective, and documented invoice reviews.
CBP’s prime contractor invoice review procedures under the original  SBInet program did not identify the specific review steps required for COs  and COTRs to carry out and document effective, risk based reviews that  could reasonably ensure that the SBInet contractor’s invoices were in the  correct amount and accurately reflected all and only allowable goods and  services as provided for under the original SBInet program. For example,  CBP’s SOP for reviewing payments to the prime contractor under the  original SBInet program did not reflect such specific review steps as how  to consider the relative risks and review invoice cost elements (including  major subcontracts, direct materials, direct labor, and other direct costs);  what qualifies as sufficient supporting evidence for amounts invoiced by  the prime contractor; and how to review invoice credit amounts and  contract reserve adjustments.
section_title: SBI’s Prime Contractor Reported That It Met Two of Its Six Small Business Subcontracting Goals
paragraphs: SBI’s prime contractor reported to CBP that it met two of its six small  business subcontracting goals that were identified in the prime  contractor’s subcontracting plan for the reporting period ended March 31,  2010. The prime contractor reported that it was unable to meet the  remaining small business goals primarily as a result of non-small business  contract awards necessitated by the Secure Fence Act of 2006, as  amended. Specifically, to obtain the material needed to meet the 2006  statutory directive, in December 2007, the prime contractor entered into a  large-scale steel purchase of approximately $242 million that it told us was  only available from a large business. Consequently, the SBI prime  contractor reported that this steel purchase reduced the subcontract  award dollars available such that it was unable meet all of its small  business contract award goals for the SBI program.
The SBI’s prime contractor reported on its performance against small  business subcontracting goals that were identified in its subcontracting  plan and aligned with the categories used by the Small Business  Administration (SBA) for prime contracts. That is, consistent with SBA  definitions, the SBI prime contractor established five socio-economic  subcategories for its SBI program: (1) Small Disadvantaged Business,   (2) Woman-Owned Small Business, (3) Historically Underutilized  Business Zone (HUBZone), (4) Veteran-Owned Small Business, and   (5) Service-Disabled Veteran-Owned Small Business. The SBI prime  contractor-established goals for each subcategory ranged from 1 to 5  percent of the total SBI program contract dollars awarded. Additionally,  the SBI prime contractor also established an overall small business goal of  awarding 40 percent of the total SBI program contract dollars to small  businesses, which included, but was not limited to socio-economic small  business goals.
As shown in table 1, as of March 31, 2010, the SBI contractor reported that  it met subcontracting participation goals for the HUBZone and Veteran- Owned small business categories. Further, the prime contractor reported  that while it had awarded a total of over $262 million in SBI program funds  to small businesses, its overall small business participation rate of  approximately 33 percent from November 2005 through March 31, 2010,  fell short of the 40 percent subcontracting goal.
SBI prime contractor officials told us they relied on self reported  subcontractor data to report on the extent to which it met established  small business participation targets.
section_title: Implications of January 2011 Decision to End the Original SBInet Program
paragraphs: DHS’s January 2011 decision to end the original SBInet program has  implications for contractor payments controls under both the original  SBInet program and its successor program. That is, our SBInet contractor  payment findings apply to the remaining residual original SBI program  funds, to SBInet contract closeout audits, and as “lessons learned” for the  successor SBI technology program.
In January 2011, the Secretary directed CBP to end SBInet as originally  conceived as a single technology solution, and instead to implement a new  border security technology portfolio approach utilizing existing  technologies tailored to specific sectors of the Southwest border and their  varying terrains and population densities. DHS announced that it intends  to acquire all the technologies for the new approach through full and open  competitions. The Secretary also directed that while the new technology  approach should include elements of the former SBInet program where  appropriate, DHS did not plan to use the current SBInet prime contract to  procure any of the technology systems under the new plan. Therefore, our  SBInet contractor payment findings are directly relevant to the remaining  $80 million in original SBI program funds obligated but not yet disbursed.  As discussed previously, CBP has an opportunity to improve the design of  its preventative controls with respect to the remaining funds to be paid to  the original SBInet program prime contractor.
Further, our findings have implications for the contract closeout activities  associated with the contract and task orders under the original SBInet  program. Given our findings on the design of prime contractor payment  controls under the original SBInet program, prompt action to complete  closeout audits related to payments to the prime contractor under the  original SBInet program contract and task orders is imperative.
While CBP has the authority to do so as of February 2011, it had not yet  requested that DCAA to conduct closeout audits on any of the original  SBInet program contracts and related task orders. CBP actions to timely  request and monitor effective completion of these audits are important  because it may take several years for a contractor to close its books and  additional time for DCAA to review the final rates applicable in each  calendar year. Also, in requesting and monitoring contract closeout audits,  it will be important that CBP also provide information on our findings so  that DCAA can adjust its planned review and testing procedures  accordingly. However, CBP has not yet established a monitoring  mechanism to follow up on the status of any DCAA closeout audits.
Internal control standards provide that any previously identified  deficiencies related to an entity or program should be considered in  planning future audits of the entity or program. They also state that an  entity should establish performance monitoring activities. Such  monitoring represents an essential internal control activity that can be  used to help assess the effectiveness of CBP controls over contractor  payments (including vulnerability to, and recovery of, any improper  payments), and whether any additional follow-up actions are necessary.
Finally, our findings concerning payments to the prime contractor under  the recently ended SBInet program are useful as “lessons learned.” Our  findings related to DHS controls over prime contractor payments under  the original SBInet program will be applicable to designing procedures and  controls for future technology portfolio contracting efforts. Our findings  related to the design of current SBInet prime contractor payment policies  and procedures represent important “lessons learned” for designing and  implementing appropriate controls over contractor payments under the  new technology portfolio approach.
section_title: Conclusions
paragraphs: Effective controls over contractor payments are essential to helping  provide assurance that SBInet program funds were disbursed only for  authorized goods and services, and in the correct amounts. Because  preventative controls are generally more cost-efficient and effective than  detective controls, timely actions to strengthen controls in this area are  particularly important with respect to the remaining $80 million in original  SBInet program funds not yet disbursed. Furthermore, given the nearly  $800 million in contract payments CBP already disbursed, full and timely  completion of detective controls, particularly closeout audits, will also be  essential in providing reasonable assurance that SBInet program funds  were disbursed only for authorized goods and services and in the correct  amounts. As such it will be important for CBP to take prompt actions to  (1) request that DCAA design and conduct closeout audits recognizing the  need to strengthen detective controls and (2) establish a mechanism to  coordinate and track completed closeout audits to ensure that such audits  are fully effective, and completed in time to effectively address to any  errors or improper payments identified. Further, our findings concerning  the design of CBP’s controls over payments to the prime contractor under  the recently ended SBInet program serve as “lessons learned” to be  considered in designing and implementing controls as part of the newly  announced technology portfolio approach.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of Homeland Security direct CBP’s SBI  Contracting Division Director to take the following five actions.
With respect to the remaining funds not yet disbursed under the original  SBInet contract:    Revise CBP’s SBI SOPs to require the SBInet contractor to submit data  supporting invoiced costs to CBP in sufficient detail to facilitate  effective CO and COTR invoice review.
Revise CBP’s SBI SOPs to include specific, risk-based steps required  for COs and COTRs to properly review and approve contractor  invoices to ensure that they accurately reflect all program costs  incurred, including specifying required documentation of such review  and approval.
With respect to closeout audits under the original SBI prime contract and  any task orders that receive closeout audits under DHS’s SOPs:    Request that DCAA to perform closeout audits as expeditiously as  possible, including providing information on the contractor payment  control findings concerning the original SBInet program that we  identified for consideration in determining the extent and nature of  DCAA testing required as part of such audits.
Establish procedures for coordinating with DCAA to monitor the  status of closeout audits related to the original SBInet program.
With respect to the new technology portfolio approach:    Document the consideration and incorporation as appropriate, of  lessons learned based on our findings on the design of controls over  payments to the original SBInet contractor in designing and  implementing contract provisions and related policies and procedures  for reviewing and approving prime contractor invoices. Such  provisions should provide for obtaining sufficiently detailed data  supporting invoiced costs to support effective invoice reviews and  include the specific, appropriately risk-based steps required for COs  and COTRs to carry out an effective contractor invoice review.
section_title: Agency Comments and Our Evaluation
paragraphs: In commenting on a draft of this report, DHS concurred with two of our  recommendations and concurred in principle with the remaining three.   DHS agreed that the government needs to perform adequate review of  contractor requests for interim and final payments and that the  government should maintain effective and repeatable processes for risk- based reviews to provide effective “preventative” management controls.
With respect to the two recommendations for which it concurred, DHS  cited actions under way to provide more focused, risk-based invoice  review procedures, and incorporate lessons learned from past contractor  invoice review experience into policies and processes for invoice review  under the new technology portfolio approach.
For the three recommendations with which it concurred in principle, DHS  expressed concerns with respect to the cost-effectiveness or  appropriateness of the recommended actions. Specifically, regarding our  recommendation to revise CBP’s procedures to require the SBInet  contractor to submit data supporting invoiced costs to CBP in sufficient  detail to facilitate effective CO and COTR invoice review, CBP stated that  it plans to enhance its current required review process by June 30, 2011, to  provide copies of all contractor invoices directly to DCAA. However, DHS  commented that requiring the prime contractor to submit substantial  supporting documentation data where controls are already in place is not  cost-effective. In this regard, we modified our recommendation by deleting  examples of details to accompany invoices in order to allow CBP  flexibility to decide specifically what detailed supporting data are needed.  Nonetheless, as evidenced by numerous CO and COTR requests for more  detailed data to support their invoice reviews discussed previously in our  report, we continue to believe that the contractor should be required to  provide information in sufficient detail to facilitate invoice reviews that  can function as effective preventative controls in this area.
DHS also concurred in principle with our recommendations to request and  monitor the expeditious completion of DCAA closeout audits. DHS agreed  that there is a need to close out contracts as soon as practical and plans to  continue to discuss with DCAA the importance of completing annual  incurred cost audits so that contracts can be closed. However, DHS  commented that DCAA management, not DHS, ultimately determines the  completion of these audits. As discussed in our draft report, the focus of  our recommendations was on DHS assisting DCAA in efficiently and  effectively carrying out its responsibilities. Specifically, we recommended  that DHS provide DCAA with information on our findings concerning the  SBInet contractor’s invoices to help focus its audit work and coordinate  with DCAA to monitor the status of closeout audits. We continue to  believe that DHS and CBP need to establish a mechanism to monitor  completed closeout audits to ensure that such audits are fully effective  and completed in time to effectively address to any errors or improper  payments identified. By strengthening their monitoring of the status of  DCAA closeout audits, DHS and CBP officials could better help ensure  that corrective actions and lessons learned are effectively implemented  and adopted, as appropriate. We therefore believe that these two  recommendations remain valid. We also made changes as appropriate  throughout the draft in response to DHS technical comments. DHS  comments are reprinted in appendix I.
We are sending copies of this report to the Chairmen and Ranking  Members of the Senate and House Committees on Appropriations and  other Senate and House committees and subcommittees that have  authorization and oversight responsibilities for homeland security. We will  also send copies to the Secretary of Homeland Security, the Commissioner  of U.S. Customs and Border Protection, and the Director of the Office of  Management and Budget. The report also is available at no charge on the  GAO Web site at http://www.gao.gov.
Should you or your staff have any questions on matters discussed in this  report, please contact me at (202) 512-9095 or at raglands@gao.gov.  Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this report. Key contributors to  this report are listed in appendix II.
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Chanetta Reed, Assistant Director;  Kwabena Ansong; Heather Dunahoo; Nicholas Epifano; Aaron Livernois;  and Stephen Lowery made key contributions to this report.