Pursuant to a series of laws passed since 1989, DOD is authorized to undertake actions intended to enhance the effectiveness of domestic law enforcement agencies through direct or material support. DLA Disposition Services administers the LESO program, managing the transfer of DOD’s excess controlled and non-controlled property to federal, state, local, and tribal law enforcement agencies. According to DLA policy, to participate in the program, a law enforcement agency must be a federal, state, or local government agency whose primary function is the enforcement of applicable federal, state, and local laws and whose sworn compensated law enforcement officers have powers of arrest and apprehension. According to LESO program data, as of August 2016, there were over 8,600 federal, state, and local law enforcement agencies participating in the program. Of these, approximately 96 percent were state and local law enforcement agencies and approximately 4 percent were federal law enforcement agencies. LESO program data also shows that during calendar years 2013 through 2015, approximately two-thirds of DOD excess controlled property items had been transferred to state and local agencies, and one-third had been transferred to federal agencies, as shown in Table 1. The data also showed that as of August 2016 the majority of the law enforcement agencies (76 percent) participating in the program have 50 or fewer full-time sworn officers, as shown in figure 1, and that approximately 30 percent of state and local law enforcement agencies active in the program had 10 or fewer sworn officers. State and local law enforcement agencies work first through their Governor-appointed state coordinator to obtain excess property through the LESO program from DLA. As specified by DLA policy, state coordinators must sign a memorandum of agreement (MOA) with DLA, which outlines, for example, general terms and conditions for state coordinators and state and local law enforcement agencies to provide accountability and oversight of the LESO program. Further, LESO program guidance requires state coordinators to develop a State Plan of Operation outlining how the program will be managed in their state, and each participating state or local law enforcement agency must sign the plan, attesting to the terms and conditions of the program. According to LESO officials, unlike state and local agencies, federal law enforcement agencies work directly with the LESO program office. As of December 2016, the LESO program office finalized a memorandum of understanding (MOU) that it plans to sign with participating federal agencies. According to the MOU, it will establish DLA’s authority as the owner of the program and, among other things, establish general terms and conditions. Figure 2 provides additional details on LESO program stages and processes for federal and state and local law enforcement agencies. Law enforcement agencies submit property requests electronically—after viewing available items online or in person while at a Disposition Services’ site. According to LESO officials, they manually review all property requests forwarded from state coordinators for state and local law enforcement agencies, as well as requests submitted directly from federal agencies, for final approval or denial. LESO officials told us they look for detailed justifications, including who will use the property and how, when reviewing requests for approval. For certain items, such as aircraft, vehicles, and weapons, law enforcement agencies are required to answer additional questions and provide additional documentation, such as their training plan(s) and how the items will be secured. According to LESO officials, they follow statutory direction in U.S. Code title 10 which authorizes preference be given to property requests indicating that the use of the property will be for counterdrug, counterterrorism, and border- security activities. LESO officials also stated that a request for excess property may be denied for a variety of reasons, including if the request was not detailed enough or if the law enforcement agency has met its allowed allocation for certain property. For example, according to program documentation, for small arms, only one type is allocated for each qualified full-time or part-time officer; for HMMWVs, only one vehicle is allocated for every three officers; and for MRAPs, only one vehicle is allocated per law enforcement agency. However, according to LESO officials, most denials are because a requested item has already been awarded. When DOD declares items as excess to its needs, the property is turned into a DLA Disposition Services site and can be made available for transfer to DOD components and other eligible recipients, including approved LESO participants. According to program documentation, when an application to participate in the LESO program is approved, an Authorization Letter for Property Screening is generated and forwarded to the state coordinator or federal agency. If the approved participant is a state law enforcement agency, the state coordinator will provide the participant with the letter of authorization. The letter of authorization that includes, for example, the full name of the law enforcement agency, DOD activity address code, telephone number, address, and digital signatures, must be on the centralized file maintained by DLA prior to the arrival of the person picking up the property and be dated less than one year from the current date. The screening authorization lists individuals eligible to search, view and request property on behalf of their participating law enforcement agency, including physical on-site screening. The DLA Disposition Services’ site uses the information on this letter to contact an agency, if needed, to coordinate the direct pickup of property. Direct pickup for allocated property may be made by an individual with a valid identification and the appropriate DOD authorization form that is signed by the authorized individual listed in the screener letter. The President issued Executive Order 13688, Federal Support for Local Law Enforcement Equipment Acquisition, January 16, 2015, to better coordinate federal support for the acquisition of certain federal equipment by state, local and tribal law enforcement agencies. The Executive Order also established a Federal Interagency Law Enforcement Equipment Working Group (hereafter the Working Group). In May 2015, the Working Group issued a report that included a list of prohibited equipment not eligible for acquisition by law enforcement agencies and a list of controlled equipment identified by category of equipment that may be acquired by law enforcement agencies after submitting additional information such as a detailed justification for each requested item of controlled equipment. Further, the Working Group developed 13 programmatic and policy recommendations to improve federal equipment acquisition programs, including that the members of the Working Group form a permanent Federal Interagency Law Enforcement Equipment Working Group, calling for this permanent working group to meet regularly to support oversight and policy development functions for controlled equipment programs. DLA has taken some actions and plans additional actions to address identified weaknesses in its excess controlled property program. DLA has revised its policy and procedures, is developing additional training, and is establishing MOUs for the LESO program with participating federal law enforcement agencies. However, DLA confirmed, and our independent testing of the LESO program’s internal controls identified, deficiencies in the processes for the verification and approval of federal law enforcement applications and the transfer of controlled property. DLA has taken some steps to address identified weaknesses in its processes for transferring and monitoring its excess controlled property through revisions to its policy and procedures on the management, oversight, and accountability of the LESO program. Such revisions were made, in part, because of recommendations made by the DOD and DLA Offices of Inspector General. The DOD and DLA Offices of Inspector General conducted four audits of the LESO program between 2003 and 2013 that identified more than a dozen recommendations, such as to: develop and implement written standard operating procedures that include, for example, criteria for approval and disapproval of law enforcement agency property requests; strengthen policy and procedures on disbarring law enforcement agencies and state coordinators that do not comply with LESO program conditions; improve oversight and accountability of property; use the automated processing system for requisitioning, approving, and issuing items; and further develop procedures for the issuance, transfer, turn-in and disposal of LESO property. We found the department had taken the following actions to enhance its transfer process through revisions to policy and procedures: transitioned full management responsibility of the LESO Program to DLA Disposition Services in 2009; developed LESO Program Standard Operating Procedures in 2012 and updated them in 2013; transitioned to a new data system, Federal Excess Property Management Information System in 2013 after identifying that the old system was not capable of post-issue tracking; revised the DLA instruction that provides policy, responsibility, and procedures for DLA’s management responsibilities of the LESO program in 2014 and 2016; and revised LESO program processes in 2016 to incorporate recommendations made by the Federal Interagency Law Enforcement Equipment Working Group, such as defining executive order- controlled property or prohibiting schools K-12 from participating in the program. Additionally, according to LESO officials, they conduct Program Compliance Reviews every two years for all states and territories with state and local law enforcement agencies enrolled in the LESO program. LESO officials, in consultation with the state coordinator, select a sample of state and local law enforcement agencies for site visits to physically verify all controlled property in their possession, by serial number. We observed the LESO Program Compliance Review at numerous locations in one state. Moreover, in 2017, LESO program officials revised their program application to create two applications—one for federal law enforcement agencies and the other for state and local law enforcement agencies. The application for federal agencies requires additional information from prospective federal applicants, such as certification that their agency meets the LESO definition of a government law enforcement agency and attesting that the agency that they represent is a legitimate law enforcement agency. Likewise, the application for state and local agencies was also revised to include a similar certification of eligibility and attestation. During our review, officials at participating law enforcement agencies— federal, state, and local—reported the need for more training on LESO program policies and procedures, and DLA is in the process of developing this additional training through an online training tool. Our analysis of the responses to our surveys and case study interviews with federal, state, and local law enforcement agencies showed that (1) not all participating agency officials had received training on all aspects of the LESO program, including its policies and procedures; and that (2) officials wanted more training to better understand, for example, LESO program processes, such as the turn-in or transfer of controlled property. Our analysis of the responses to our survey of select federal law enforcement agencies showed that training had not been regularly provided. For example, 10 of the 13 respondents to the federal survey stated that either they did not receive training from LESO or they did not know if their agency had received any training from LESO regarding the LESO program. LESO officials told us that they have not regularly provided training to federal law enforcement agencies in the past, with training mainly provided to the state coordinators participating in the LESO program. Survey results of federal law enforcement agencies also showed that officials generally stated that training on the LESO program would be beneficial. For example, 9 of the 13 respondents to the federal survey stated that refresher training provided by LESO would be beneficial to their agency. Table 2 shows the types of refresher training that most federal law enforcement agencies in our survey stated would be beneficial to their agency. Furthermore, officials we interviewed from state and local law enforcement agencies reported different experiences about the availability and accessibility of training on policies and procedures of the LESO program from their state coordinators and stated that they would benefit from additional training on policies and procedures, such as on returning property to DLA. For example, an official from one law enforcement agency we interviewed told us that it took 8 months to receive training from his state coordinator upon joining the program. Our analysis of the results from our survey of state coordinators showed that nearly three-fourths of the state coordinators reported that they do not provide mandatory training on LESO program policies and procedures to state and local law enforcement agencies within their state. We also found that state coordinators varied in the types of training they provided on LESO program policies and procedures. For example, our analysis found that 40 percent (18 of 45) of responding state coordinators reported that they do not provide in-person refresher or annual training and 15 percent (7 of 46 responding to the question) reported that they do not provide training aids or reference aids (i.e., PowerPoint format). The majority of state coordinators (94 percent) reported they would find additional LESO training modules helpful. Table 3 shows our analysis of the survey responses on the topics state coordinators indicated that additional training would be useful. See Appendix IV for additional details on the results regarding training from our survey. LESO provides some training aids on program policies and procedures on their program website for federal, state and local agencies. LESO also provides training to state coordinators at an annual training seminar, and then, according to program guidance, state coordinators are to train state and local law enforcement agencies in their states. However, over the course of our review, DLA officials stated that they recognize the need to enhance aspects of training and are in the process of developing an online training tool, which is expected to be established in late 2017. Specifically, LESO program officials stated that they are enhancing training by working to establish an online training tool that will assist in providing specific information and training modules on LESO program policies and procedures to federal law enforcement agencies and that state coordinators can provide to state and local law enforcement agencies in their states. Some training modules have been completed and published on LESO’s website, such as a quick-start guide. Other training modules that are planned include, for example, a guide for returning controlled property for proper disposal, among other program policies and procedures. We acknowledge that DLA to date has taken action on the issue by recognizing the need for additional training, assigning a lead, and developing a quick start tool. However, it is too early to evaluate whether the actions taken and the developed and planned training will address the issues our survey and case studies identified. DLA is establishing MOUs with federal law enforcement agencies. Until 2016, DLA lacked a mechanism to establish the general terms and conditions of the participating federal law enforcement agencies, such as restrictions on further transfer or sale of controlled property. According to DLA and LESO officials, LESO officials had discussed taking steps to develop a MOU in past years for federal law enforcement agencies, similar to those of state and local agencies. DLA expedited and completed the development of a MOU in December 2016, in part, because federal law enforcement agencies began contacting the LESO program office regarding gaining visibility over items transferred to their respective agencies including subordinate agencies and their field offices and had questions regarding who was authorized to screen and request property for their agency. These inquiries were in part a result of our effort to confirm which federal agencies, including their subordinate agencies, had received excess controlled property, and some of them did not know that their subordinate agencies had obtained excess controlled property through the LESO program. In our survey of 15 federal law enforcement agencies, completed in October 2016, we found federal law enforcement officials were unaware of the extent to which their agency requests and receives DOD-controlled property through the program. For example, 5 of the 13 federal survey respondents reported they either did not internally track or did not know if their agency internally tracked DOD- controlled property obtained by their field offices through the LESO program. As of April 2017, DLA and LESO officials had sent the MOU to all participating federal law enforcement agencies and 7 had been signed. LESO program officials told us they have assigned a LESO official to lead the federal agency aspect of the LESO program, including assisting DLA Disposition Services in finalizing the MOUs and establishing designated points of contact at all participating federal agencies’ headquarters. For example, according to LESO officials, LESO is working with designated points of contact at the federal agencies to establish a more centralized approval process to increase federal agencies’ visibility over property requests submitted by federal agency field offices, prior to the requests being approved by LESO officials. DLA officials estimated that MOUs will be established with all participating federal agencies by mid-2017. Given that the MOUs have either been recently established or are in the process of being finalized with some federal agencies, it is too early to evaluate the effect of the MOUs in improving the management of the LESO Program. See Appendix V for additional details on the results of the survey of federal law enforcement agencies. Our independent testing of the LESO program’s internal controls identified deficiencies in the processes for verification and approval of federal law enforcement agency applications. Specifically, our investigators, posed as authorized federal law enforcement agency officials of a fictitious agency, applied and were granted access to the LESO program in early 2017. In late 2016, we emailed our completed application to the LESO program office. Our application contained fictitious information including agency name, number of employees, point of contact, and physical location. We also created mail and e-mail addresses, and a website for our fictitious law enforcement agency using publicly available resources. All correspondence, including follow-up questions regarding our application, was conducted by email with LESO officials. For example, after reviewing our initial application, LESO officials informed us that we needed to revise specific information on the application and resubmit it, indicating that when we did so we would be approved to participate in the program. In early 2017, we resubmitted our application and soon thereafter we were notified that our fictitious law enforcement agency was approved to participate in the LESO program. LESO officials also emailed us to request confirmation of our agency’s authorizing statute; in response, our investigators provided fictitious authorizing provisions presented as a provision in the U.S. Code. At no point during the application process did LESO officials verbally contact officials at the agency we created—either the main point of contact listed on the application or the designated point of contact at a headquarters’ level—to verify the legitimacy of our application or to discuss establishing a MOU with our agency. According to DLA policy, DLA is responsible for ensuring the successful implementation of the LESO program and for issuing program policy, procedures, and guidance in agency instructions and manuals. However, DLA’s internal controls for verifying and approving federal agency applications and enrollment in the LESO program were not adequate to prevent the approval of a fraudulent application to obtain excess controlled property. LESO’s reliance on electronic communications without actual verification does not allow it to properly vet for potentially fraudulent activity. For example, DLA did not require supervisory approval for all federal agency applications, or require confirmation of the application with designated points of contact at the headquarters of participating federal agencies. Additionally, at the time we submitted our application, DLA officials did not visit the location of the applying federal law enforcement agency to help verify the legitimacy of the application. However, after our briefing of DLA officials in March 2017 on the results of our investigative work, DLA officials stated they took immediate action, and in April 2017 have visited 13 participating federal law enforcement agencies. Further, DLA has not reviewed and revised the policy or procedures for verifying and approving federal agency applications and enrollment in the LESO program. Without reviewing and revising the internal controls in policy or procedures for verifying and approving federal agency applications and enrollment in the LESO program, DLA and LESO management will lack reasonable assurance of the legitimacy of applicants before transferring valuable, and in some cases potentially lethal, controlled property. Our independent testing of DLA’s internal controls also identified deficiencies in the transfer of controlled property, such as DLA personnel not routinely requesting and verifying identification of individuals picking up controlled property or verifying the quantity of approved items prior to transfer. Our investigators, after being approved to participate in the LESO program, obtained access to the department’s online systems to view and request controlled property. We subsequently submitted requests to obtain controlled property, including non-lethal items and potentially-lethal items if modified with commercially available items. In less than a week after submitting the requests, our fictitious agency was approved for the transfer of over 100 controlled property items with a total estimated value of about $1.2 million. The estimated value of each item ranged from $277 to over $600,000, including items such as night-vision goggles, reflex (also known as reflector) sights, infrared illuminators, simulated pipe bombs, and simulated rifles. Our investigator scheduled appointments, visited three Disposition Service sites, and obtained the controlled property items, as shown in Figure 3. Using fictitious identification and law enforcement credentials, along with the LESO-approved documentation, our investigator was able to pass security checks and enter the Disposition Service warehouse sites. Personnel at two of the three sites did not request or check for valid identification of our investigator picking up the property. According to DLA guidance, direct pickup of allocated property may be made by an individual with a valid identification and the appropriate DOD authorization form that is signed by the authorized individual listed in the letter. DLA has not ensured compliance that on-site officials routinely request and verify valid identification of the individual(s) authorized to pick up allocated property from the LESO program, as required by the guidance. However, DLA officials acknowledged they could take additional steps to ensure compliance with the requirements in the handbook. If DLA does not ensure that Disposition Services on-site officials routinely request and verify valid identification, then DLA will lack reasonable assurance that controlled property is transferred to authorized individuals. Furthermore, although we were approved to receive over 100 items and the transfer documentation reflects this amount, we were provided more items than we were approved for. The discrepancy involved one type of item—infrared illuminators. We requested 48 infrared illuminators but on- site officials at one Disposition Services site provided us with 51 infrared illuminators in 52 pouches, of which one pouch was empty. Additionally, we found that one Disposition Services site had a checklist as a part of their transfer documentation for their personnel to complete. The checklist required manual completion of a number of items, including quantity, date, and who fulfilled the order. The other two Disposition Services sites, including the site that transferred the wrong quantity, did not include this checklist with the transfer documentation we received. DLA guidance states that accountability records be maintained in auditable condition to allow property to be traced from receipt to final disposition. Also, the Standards for Internal Control in the Federal Government state that management may design a variety of transaction control activities for operational processes, which may include verifications, reconciliations, authorizations and approvals, physical control activities, and supervisory control activities. Additionally, DLA has guidance that describes procedures for managing and handling, among other things, sensitive, and pilferable controlled inventory items but does not specifically address all items that are transferred to law enforcement agencies. Without guidance that specifically requires DLA Disposition Services’ on- site officials to verify the type and quantity of approved items against the actual items being transferred prior to removal from the sites, then DLA will lack reasonable assurance that the approved items transferred are appropriately reflected in their inventory records. While DLA has taken some steps, mostly in early 2017, to address identified deficiencies in the LESO program, DLA lacks a comprehensive framework for instituting fraud prevention and mitigation measures. During the course of our review, DLA revised the LESO program applications by requiring applicants to sign an attestation that the agency that they represent is a legitimate law enforcement agency. Further, DLA officials stated they are more carefully reviewing the legitimacy of some information on the application such as email addresses and physically visiting federal agencies that enter into MOUs with the LESO program. However, as previously discussed, we identified internal controls weakness in the policy or procedures for verifying and approving federal agency applications and enrollment as well as weakness throughout the process from approval to the actual transfer of the items to the agencies, which indicates that DLA has not examined potential risks for all stages of the process. Standards for Internal Control in the Federal Government note that management should remediate identified internal control deficiencies on a timely basis, assess fraud risk by considering the potential for fraud when identifying, analyzing, and responding to risks, and analyze and respond to identified fraud risks so that they are effectively mitigated. Additionally, according to GAO’s Fraud Risk Framework, effective fraud risk managers collect and analyze data on identified fraud schemes, use these lessons learned to improve fraud risk management activities, and plan and conduct fraud risk assessments that are tailored to their programs. The framework states there is no universally accepted approach for conducting fraud risk assessments since circumstances among programs vary. However, per leading practices, assessing fraud risks generally involves five actions: (1) identifying inherent fraud risks affecting the program, (2) assessing the likelihood and effect of those fraud risks, (3) determining fraud risk tolerance, (4) examining the suitability of existing fraud controls and prioritizing residual fraud risks, and (5) documenting the program’s fraud risk profile. In conducting the fraud risk assessment, the framework identifies that managers should develop and document an antifraud strategy which describes, among other things, existing fraud control activities as well as any new control activities a program may adopt to address residual fraud risks. The DLA Office of Inspector General has an investigation ongoing, but DLA Office of Inspector General officials told us that a number of internal control weaknesses were identified and several recommendations were made to DLA that if implemented could help to mitigate future potential fraud risks. As such, DLA has begun to examine some risk associated with the LESO program. During our March 2017 meeting with DLA officials, they acknowledged that they have not conducted a fraud risk assessment on the LESO program, to include the application process, and as such, has not designed or implemented a strategy with specific control activities to mitigate risks to the program. Conducting such an assessment could have program-wide improvements, including strengthening the controls to verify the legitimacy of state and local law enforcement agencies. If DLA conducted a fraud risk assessment on the LESO program, to include the application process, and designed and implemented a strategy with specific internal control activities to mitigate assessed fraud risks, DLA would be more effective in preventing, detecting, and responding to potential fraud and security risks. The National Defense Authorization Act for Fiscal Year 2016 included a provision for DOD to create and maintain a publicly available Internet site that provides information on the controlled property transferred and the recipients of such property. DOD was required to include all publicly accessible unclassified information pertaining to the request, transfer, denial, and repossession of controlled property, among other items, on the website. DLA maintains information on the controlled and non-controlled items on the LESO program homepage and has links to Excel documents about its property transfers. The property transfer lists, which date back to 1991, are updated quarterly according to LESO officials, and include information about the transfer of all excess property transferred to federal, state, and local law enforcement agencies. In September 2016, in response to the statutory requirement, LESO officials added the following information to their LESO program homepage, and plan to include this information on the LESO program homepage for future property transfers: Pending transfer requests for property reclassified as controlled property by the Law Enforcement Equipment Working Group, pursuant to Executive Order 13688; Shipments (transfers), including non-controlled and controlled property, including justification language submitted by the law enforcement agencies; and Cancellations, including reasons for denial, broken out by three categories: state coordinator, LESO headquarters, or system denial. During the course of our audit work, we determined that the information on DLA’s Internet site did not distinguish between controlled versus non- controlled items. Specifically, DLA’s information on its Internet site did not distinguish for the general public which items were considered controlled versus non-controlled property because the information was not displayed in a transparent format that is clearly understandable by the general public. DLA provided the demilitarization codes, which are used to identify controlled and non-controlled items, but the general public would need to have an understanding of demilitarization codes to identify which items were controlled based on those codes. Furthermore, as of March 2017, DLA’s Internet site did not provide a definition to explain that property with demilitarization code B, for example, is considered controlled whereas property with demilitarization code A is considered non-controlled. However, after we briefed DLA officials in April 2017 on the results of our audit, DLA officials took immediate action and added a definition of controlled property to their Internet site to distinguish for the general public what items are considered controlled. DLA transfers excess controlled property to thousands of federal, state, and local law enforcement agencies that request approval to participate in the LESO program. DLA has taken some actions and plans additional actions to address identified weaknesses in its excess controlled property program, including changes in program policy and providing training. However, our investigators tested the LESO program’s internal controls by creating a fictitious agency allowing us to gain access to the program and to obtain over 100 controlled property items valued at about $1.2 million. DLA’s internal controls were not adequate to prevent the approval of a fraudulent application and DLA has not reviewed and revised the policy or procedures for verifying and approving federal agency applications and enrollment in the LESO program. Without reviewing and revising the internal controls in policy or procedures for verifying and approving federal agency applications and enrollment in the LESO program, DLA and LESO management will lack reasonable assurance of the legitimacy of applicants before transferring valuable, and in some cases potentially lethal, controlled property. Moreover, our investigative work found DLA has not ensured compliance that officials at DLA Disposition Services’ sites routinely request and verify valid identification of the individual(s) authorized to pick up allocated property from the LESO program. Without improving internal controls, DLA will lack reasonable assurance that its Disposition Services on-site officials are transferring controlled property to authorized individuals. Controlled items in the wrong hands—items such as simulated rifles and pipe bomb trainers—could result in criminal activities, including terrorism or illegal sale or transfer of items. Additionally, we found that on-site officials did not verify the quantity of approved items prior to transfer. If DLA does not issue guidance that requires DLA Disposition Services on-site officials to verify the type and quantity of approved items against the actual items being transferred prior to removal from the sites, then DLA will lack reasonable assurance that the approved items transferred are appropriately reflected in their inventory records. Correct accounting, according to DLA guidance, for all excess property by DLA Disposition Services’ sites is critical as non-compliance can result in property being misappropriated with potentially severe consequences. Finally, we found that DLA lacks a comprehensive framework for instituting fraud prevention and mitigation measures that would allow it to examine potential risks for all stages of the process from application to transfer of excess controlled property to legitimate law enforcement agencies. If DLA conducted a fraud risk assessment for all stages of the process, DLA would be more effective in preventing, detecting, and responding to potential fraud and security risks. We are making four recommendations to enhance the department’s transfer of its excess controlled property. To strengthen LESO program internal controls for the application and enrollment of federal agencies, we recommend the Under Secretary of Defense for Acquisition, Technology and Logistics direct the Director of DLA to review and revise policy or procedures for verifying and approving federal agency applications and enrollment. For example, such steps could include LESO supervisory approval for all federal agency applications; confirmation of the application with designated points of contact at the headquarters of participating federal agencies; or visiting the location of the applying federal law enforcement agency. To help ensure controlled property is picked up by authorized individuals, we recommend that the Under Secretary of Defense for Acquisition, Technology and Logistics direct the Director of DLA to ensure compliance that on-site officials responsible for the transfer of items at Disposition Services’ sites request and verify valid identification of the individual(s) authorized to pick up allocated property from the LESO program. To help ensure the accurate quantity of approved items is transferred, we recommend that the Under Secretary of Defense for Acquisition, Technology and Logistics direct the Director of DLA to issue guidance that requires DLA Disposition Services on-site officials to verify the type and quantity of approved items against the actual items being transferred prior to removal from the sites. To strengthen LESO program internal controls, we recommend that the Undersecretary of Defense for Acquisition, Technology, and Logistics direct the Director of DLA to conduct a fraud risk assessment to design and implement a strategy with specific internal control activities to mitigate assessed fraud risks for all stages relating to LESO’s transfer of excess controlled property to law enforcement agencies, consistent with leading practices provided in GAO’s Fraud Risk Framework. We provided a draft of this report to the Department of Defense (DOD) for review and comment, and written comments are reproduced in Appendix IX. DOD concurred with all four recommendations and highlighted the actions it was taking to address each recommendation. Regarding the first recommendation, DOD stated DLA had reviewed and revised the procedures for verifying and approving federal agency applications and now requires federal agency headquarters to assign a point of contact and sign a memorandum of understanding (MOU). In addition, DOD noted DLA is updating policy to reflect the revised procedural changes. In regards to the second and third recommendations, while DLA has policies requiring on-site officials to request and verify identification from all customers and to verify the type and quantity of approved items being transferred prior to removal from sites, DOD stated DLA will conduct additional training on the processes to all DLA Disposition Services Field sites by October 1, 2017. Regarding our fourth recommendation, DOD noted DLA will conduct a fraud risk assessment and implement a strategy to mitigate assessed fraud risks by April 1, 2018. We are sending copies of this report to the appropriate congressional committees, the Secretary of Defense; the Director, Defense Logistics Agency; the Secretaries of the Army, the Navy, and the Air Force; and the Commandant of the Marine Corps. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact Zina Merritt at (202) 512-5257 or merrittz@gao.gov or Wayne McElrath at (202) 512-2905 or mcelrathw@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 members who made key contributions to this report are listed in appendix X. Federal, state, and local law enforcement agencies reported various uses and benefits from the receipt of DOD’s excess controlled property through the Law Enforcement Support Office (LESO) program. Federal law enforcement agencies and state coordinators in our survey— as well as officials we interviewed from federal, state, and local law enforcement agencies—reported various uses of DOD excess controlled property for law enforcement activities. The reported uses included enhancing counterdrug, counterterrorism, and border-security activities. Also, law enforcement agencies reported using DOD’s excess controlled property for other law enforcement activities, such as search and rescue, natural disaster response, surveillance, reaching barricaded suspects, police training, and the serving of warrants. For example, the Bureau of Indian Affairs reported they have used vehicles to support its Office of Justice Services’ drug unit during marijuana eradication and border operations by providing transport to agents over inhospitable terrain in mountainous and desert environments. Also, Texas law enforcement officials reported that the San Marcos and Hays County police departments used their issued Mine Resistant Ambush Protected (MRAP) vehicles to rescue more than 600 stranded people from floodwaters in October 2015. In another example, the Los Angeles County Sheriff’s Department reported that it used a robot to remove a rifle from an attempted murder suspect who had barricaded himself. Table 4 includes additional examples reported to us on the use of excess controlled property. Federal, state, and local law enforcement agencies and state coordinators also reported various benefits from receiving DOD excess controlled property through the LESO program. The benefits were reported in survey results and identified through our case studies. Table 5 provides examples of the reported benefits. This report addresses the extent to which the Defense Logistics Agency (DLA) has: (1) taken actions to enhance processes, including internal controls, relating to its transfers of excess controlled property; and (2) addressed the statutory requirement to maintain a public Internet site that provides transparency about controlled property transfers and about the recipients of such property. We also include survey and case study information collected between April 2016 and October 2016 on how federal, state, and local law enforcement agencies reported using and benefiting from excess controlled property transferred to them through DLA’s Law Enforcement Support Office (LESO) program in accordance with the purposes of the program, including enhancement of counterdrug, counterterrorism, and border-security activities in appendix I. For the report, we relied on the Department of Defense (DOD) definition of controlled property as outlined in DLA and LESO program policy and guidance. We also confirmed the definition with LESO program officials. For objective one, we reviewed DLA and LESO program policy and guidance on LESO program processes for transferring controlled property, including DLA instructions, LESO program standard operating procedures, and memorandums of agreement between LESO and participating states, which set forth the terms and conditions of transfer, monitoring, training, accountability, and disposal of controlled property obtained through the LESO program. In addition, we reviewed Executive Order 13688, Federal Support for Local Law Enforcement Equipment Acquisition (Jan. 16, 2015) and interviewed members from the permanent Federal Interagency Law Enforcement Equipment Working Group regarding additional federal requirements for participating law enforcement agencies to obtain specific types of controlled property. We compared the additional federal requirements in the Executive Order to DLA policy, guidance, and processes to gain an understanding of how DLA has incorporated and implemented such requirements. We also reviewed DOD policy, including DLA Instruction 4140.11, Department of Defense 1033 Program (December 22, 2016), and prior issuances, to gain an understanding of policy, responsibility, and procedures regarding the administration, management, oversight and implementation of the department’s LESO program. We reviewed the LESO program standard operating procedures, which outline legislative, policy, and procedural guidance; program eligibility criteria; requisitioning procedures; property accountability; property transfers and the return process; program compliance reviews; annual inventories; and training; as well as guidance specific to aircraft, watercraft, tactical vehicles, and weapons. Further, we reviewed the memorandums of agreement, between LESO and participating LESO state coordinators, which outlines the general terms and conditions that each participating state agree to regarding the management, oversight, and implementation of the LESO program to participating law enforcement agencies within the state. We analyzed DLA Electronic Freedom of Information Act Library data from calendar years 2013, 2014, and 2015 to gain an understanding of the controlled property that was transferred to federal, state, and local law enforcement agencies. Additionally, we requested and analyzed data from DLA’s automated information system on controlled property transferred to federal, state, and local law enforcement agencies. To assess the data, we interviewed relevant DLA and other agency officials who have direct knowledge of the LESO program about the steps taken to ensure the quality and accuracy of data. We determined that the data were sufficiently reliable for the purposes of our methodology as well as for background and context purposes. We tested the department’s internal controls and control activities related to LESO program enrollment and application after identifying a case of an unauthorized or ineligible agency gaining access to the LESO program and being awarded controlled property early in our review. Our investigators posed as a federal law enforcement agency and, using publicly available resources, created a fictitious website describing that agency’s activities. We completed the application paperwork, submitted it to LESO officials, and corresponded by email to answer follow-up questions. We provided a fictitious statute as a means to legitimize our agency, were approved to participate in the program, and given access to the LESO program systems. We reviewed available controlled property and submitted requests for a variety of items located at four Disposition Service sites. After our requests for controlled property were approved, we corresponded with officials at the Disposition Service sites to arrange for pickup of the property. Our investigators visited three eastern U.S. Disposition Service sites, presented the appropriate paperwork, and obtained possession of the controlled property items. We also compared DLA and LESO practices to those identified in GAO’s A Framework for Managing Fraud Risks in Federal Programs (hereafter cited as the Fraud Risk Framework). The Fraud Risk Framework has the following components: commit to combating fraud, assess fraud risk, design and implement a strategy for mitigating risk, and evaluate outcomes. We selected leading practices from the component of assess fraud risk because the use of these practices could be objectively verified. Issued in July 2015, GAO’s Fraud Risk Framework is a comprehensive set of leading practices that serves as a guide for program managers to use when developing efforts to combat fraud in a strategic, risk-based manner. The framework describes leading practices for (1) establishing an organizational structure and culture that are conducive to fraud risk management; (2) assessing the likelihood and effect of fraud risks; (3) developing, documenting, and communicating an antifraud strategy, focusing on preventive control activities; and (4) collecting and analyzing data from reporting mechanisms and instances of detected fraud for real- time monitoring of fraud trends, and use the results of monitoring, evaluations, and investigations to improve fraud prevention, detection, and response. Additionally, we conducted two surveys—one with federal law enforcement agencies that were major recipients of LESO controlled property and the other with state coordinators. First, for federal law enforcement agencies, we selected the top four federal departments whose law enforcement agencies had received controlled property from the LESO program during calendar years 2013, 2014, and 2015. These departments were the U.S. Department of Justice, U.S. Department of Homeland Security, U.S. Department of the Interior, and the United States Department of Agriculture. This accounted for approximately 99 percent of both the total initial acquisition value and the quantity of controlled property distributed to federal law enforcement agencies from calendar years 2013 through 2015. To gain an understanding of how federal law enforcement agency headquarters manage and oversee the LESO program, we developed and distributed a survey to the responsible officials at the headquarter level of all 15 law enforcement agencies within the four selected departments that received DOD-controlled property from calendar years 2013 through 2015. The selected agencies were: Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Drug Enforcement Administration, U.S. Department of Justice; Federal Bureau of Investigation, U.S. Department of Justice; Federal Bureau of Prisons, U.S. Department of Justice; Federal Protective Service, U.S. Department of Homeland Security; Transportation Security Administration, U.S. Department of Homeland Bureau of Indian Affairs, U.S. Department of the Interior Bureau of Land Management, U.S. Department of the Interior U.S. Customs and Border Protection, U.S. Department of Homeland U.S. Fish and Wildlife Service, U.S. Department of the Interior U.S. Forest Service, United States Department of Agriculture U.S. Immigration and Customs Enforcement, U.S. Department of U.S. Marshals Service, U.S. Department of Justice; U.S. National Park Service, U.S. Department of the Interior; and U.S. Secret Service, U.S. Department of Homeland Security. The survey asked about the excess control property program’s accountability, policy and guidance, and the requests and justifications made for excess property. We worked with a survey specialist, a communications analyst, and subject matter experts from LESO to develop this survey. To ensure that the questions were clear, comprehensible and technically correct, we conducted one expert review of our draft survey with LESO officials, and one pre-test of our draft survey with federal headquarters staff from the Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice. During the pre-test, which was conducted in person, we read the instructions and each survey question aloud and asked the Bureau of Alcohol, Tobacco, Firearms and Explosives officials to tell us how they interpreted the question. We then discussed the instructions and questions with officials to identify any problems and potential solutions by determining whether (1) the instructions and questions were clear and unambiguous, (2) the terms we used were accurate, (3) the survey was unbiased, (4) the survey did not place an undue burden on the officials completing it. We noted any potential problems and modified the survey based on feedback from the expert reviewers and pre-tests, as appropriate. We sent an email to selected federal agency headquarters beginning on September 1, 2016, notifying them about the topics of our survey and when we expected to send the survey. We sent the self- administered Microsoft Word form and a cover email to 15 federal agency headquarters on September 6, 2016, and asked them to complete the survey and email it back to us within 2 weeks. We closed the survey on October 31, 2016. We received 13 completed responses for an overall response rate of 87 percent. To gain an understanding of how state coordinators manage the LESO program within their state, we developed and distributed a survey to the 53 state coordinators participating in the program, including the 49 states and the territories of Guam, Northern Marianas Islands, Puerto Rico, and the U.S. Virgin Islands that participate in the program. For example, our survey questions were focused on basic background information, LESO policies and training, process and accountability of the property received, and ways in which controlled property was used by law enforcement agencies. We worked with a survey specialist and a communications analyst to develop the survey. To ensure that the questions were clear, comprehensible and technically correct, we conducted four pre-tests of our draft survey with state coordinators and state points-of-contacts from four states. During the pre-tests conducted by teleconference, we read the instructions and each survey question aloud and asked the state coordinators and state points of contact to tell us how they interpreted the question. We then discussed the instructions and questions with officials to identify any problems and potential solutions by determining whether (1) the instructions and questions were clear and unambiguous, (2) the terms we used were accurate, (3) the survey was unbiased, (4) the survey did not place an undue burden on the officials completing it. We noted any potential problems and modified the survey as appropriate. We sent the self-administered Microsoft Word form and a cover email to the state coordinators on September 20, 2016, and asked them or their designated state points of contact to complete the survey and email it back to us within 2 weeks. We closed the survey on October 31, 2016. We received 50 completed responses for an overall response rate of 94 percent. The practical difficulties of conducting any survey may introduce errors, commonly referred to as non-sampling errors. For example, differences in how a particular question is interpreted, the sources of information available to respondents, how the responses were processed and analyzed, or the types of people who do not respond can influence the accuracy of the survey results. We took steps in the development of the survey, the data collection, and the data analysis to minimize these non- sampling errors and help ensure the accuracy of the answers that were obtained. For example, a survey specialist designed the survey, in collaboration with our staff who have subject matter expertise. Then, as noted earlier, the draft surveys were pre-tested to ensure that questions were relevant, clearly stated, and easy to comprehend, and in the case of the federal agency survey we conducted an expert review. Data were manually extracted from the Microsoft Word form into an Excel spreadsheet and that data entry accuracy was verified. We examined the survey results and performed analyses to identify inconsistencies and other indications of error, and addressed such issues as necessary. Quantitative data analyses and a review of open-ended responses were conducted by our staff who have subject matter expertise. Results of select survey questions can be found in Appendix I, IV and V. Further, we conducted non-generalizable case studies of five states: Arizona, Georgia, Maryland, Michigan, and Texas. We selected these states based on quantity, type, and initial acquisition value of controlled property received during calendar years 2013, 2014, and 2015 as well as geographic dispersion. We selected these calendar years because they were the last three complete years prior to our audit work. First, for each state, we met and interviewed the state coordinator and when applicable, each state’s point of contact(s), to discuss roles and responsibilities in managing and overseeing the LESO program within each state. Second, we selected at least one federal, state, local, and university law enforcement agency within each case study state. To help ensure that we obtained the input of a broad range of law enforcement agencies, we selected specific agencies for our case study based on the size, type, and location of the agency, how much controlled property was received by quantity and initial acquisition value, as well as specific types of controlled property during calendar years 2013, 2014, and 2015. Selected law enforcement agencies accounted for large and small percentages as well as different types of controlled property received within each state. For example, we selected law enforcement agencies that received weapons, tactical vehicles, and aircraft, as well as night-vision equipment and other miscellaneous items. We met with law enforcement officials from the selected federal, state, local, and university law enforcement agencies to discuss the LESO program and to gain an understanding of the transfer process, including how they screen for, obtain, and dispose of DOD excess controlled property. Further, we reviewed LESO’s program policy to gain an understanding of how LESO ensures accountability of controlled property through an annual inventory and certification process and to gain an understanding of the program compliance review process in which LESO officials visit select law enforcement agencies within each state to verify all controlled property. We accompanied a LESO performance compliance review team as its members conducted their review in the annual program compliance review in Georgia. We attended the LESO-led in-brief and out-brief with the Georgia state coordinator and his team, as well as accompanied them to seven law enforcement agencies in Georgia to physically verify the serial numbers of controlled property. Additionally, we also analyzed survey responses, as previously discussed, from federal law enforcement agencies and state coordinators regarding DLA’s processes for transferring controlled property and training on LESO program policies and processes. We interviewed officials from DLA Disposition Services, who have authority over the LESO program, as well as officials from LESO headquarters who manage the program, to gain an understanding of LESO program policies and processes for transferring its excess controlled property to law enforcement agencies, including past and planned program enhancements. We also interviewed these officials to gain an understanding of how law enforcement agencies are trained on LESO program policies and procedures. We also met with officials from select law enforcement agencies, as previously discussed, to gain an understanding of LESO program processes, including how they screen for, obtain, and dispose of DLA excess controlled property, enhancements made to the program, and how they are trained on LESO program policies and processes. We selected these law enforcement agencies based on a number of factors, including range of quantity of items, total acquisition value, and item type. We reviewed training materials provided by LESO and attended the 15th annual training seminar provided to state coordinators. Finally, we visited two Disposition Service sites in the United States to observe their processes for disposing of excess property received from the military services. We selected the two Disposition Service sites based on geographic location and personnel availability. For objective two, we reviewed the statute requiring DOD to develop and maintain an Internet site that provides information on the controlled property transferred to gain an understanding of the statutory requirements regarding the contents of the website, such as to include all publicly accessible unclassified information pertaining to the request, transfer, denial, and repossession of controlled property, among other items. Additionally, we analyzed the capabilities of the DLA website, including the fields it contained and the searches that can be performed using it. We compared the information in and capabilities of the website with the statutory requirements to provide publicly available information on controlled property transferred and the recipients of such property in a transparent manner. We also interviewed officials from LESO headquarters to obtain updates on the status of DOD’s implementation of the Internet site. Also, appendix I of this report includes survey and case study information collected between April 2016 and October 2016 on how federal, state, and local law enforcement agencies reported using and benefiting from excess controlled property transferred to them through DLA’s LESO program in accordance with the purposes of the program, including enhancement of counterdrug, counterterrorism, and border-security activities. Additionally, we analyzed survey responses pertaining to the reported use of controlled property. For each case study, we interviewed law enforcement officials from federal, state, and local law enforcement agencies to discuss the transfer process and how controlled property transferred to them through the LESO program is used by their law enforcement agencies, including whether it had enhanced their counterdrug, counterterrorism, and/or border-security operations. The manner in which law enforcement agencies used controlled property items was self-reported, and we have made no assessment of the agencies’ reported use. Table 6 lists the offices that we visited or contacted during our review. We conducted this performance audit from January 2016 to July 2017 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. We conducted our related investigative work in accordance with investigative standards prescribed by the Council of the Inspectors General on Integrity and Efficiency. Since 1989, the Department of Defense (DOD) has been authorized to undertake actions intended to enhance the effectiveness of domestic law enforcement agencies through direct or material support. Table 7 includes legislative actions and key dates in the history of the LESO program. Survey results from select federal law enforcement agencies and LESO program state coordinators as well as interviews with law enforcement agencies in our case studies, between April 2016 and October 2016, identified that not all participating agency personnel have received training on all aspects of the LESO program, including its policies. In our survey of select federal law enforcement agencies, training had not been regularly provided to participating federal law enforcement agencies. For example, 3 of the 13 respondents to the federal survey reported that their agency had received training from LESO; the remaining 10 respondents to the federal survey stated that either they did not receive training from LESO or they did not know if their agency had received any training from LESO regarding the LESO program. LESO officials told us that they have not regularly provided training to federal law enforcement agencies in the past, with training mainly provided to the state coordinators participating in the LESO program. Survey results of federal law enforcement agencies also showed that officials generally stated that training on the LESO program would be beneficial. For example, 9 of the 13 respondents to the federal survey stated that refresher training provided by LESO would be beneficial to their agency. In addition, officials from federal agencies’ field offices in our case studies generally stated that training provided by LESO would be beneficial to them in participating in the LESO program and that they wanted more training to better understand, for example, LESO program processes, such as the turn-in or transfer of controlled property. Officials from federal field offices in our case studies also generally stated that they were mostly self-taught on the LESO program. According to LESO officials, LESO funds and provides an annual training seminar that includes training on LESO policies and procedures for state coordinators. LESO officials stated that as a part of this annual training they direct state coordinators to train participating law enforcement agencies, and state coordinators have discretion to establish their own training. However, our survey results showed that nearly three-fourths of the state coordinators reported that they do not provide mandatory training on LESO program policies and procedures to law enforcement agencies. Also, we found that state coordinators varied in the types of training they provided on LESO program policies and procedures to law enforcement agencies in their state, as shown in table 8. For example, our survey found that 40 percent (18 of 45) of responding state coordinators reported that they do not provide in-person refresher or annual training and 15 percent (7 of 46 responding to the question) reported that they do not provide training aids or reference aids (i.e., PowerPoint format). The majority of state coordinators reported they found LESO training “helpful”, as shown in table 9. However, the majority of state coordinators also reported they would find LESO training modules helpful, as shown in table 10. Moreover, officials from state and local law enforcement agencies in our case studies reported different experiences about the availability and accessibility of training on policies and procedures of the LESO program from their state coordinators and stated that they would benefit from additional training on policies and procedures, such as on returning property to DLA. For example, an official from one law enforcement agency in our case study told us that it took 8 months to receive training from his state coordinator upon joining the program. In another example, an official stated that he received little formal training from his state coordinator or from LESO officials; rather, he was trained by his predecessor when he was assigned to manage the LESO program for his law enforcement agency. In contrast, for example, an official from another law enforcement agency stated that he attended mandatory training with his state coordinator upon joining the LESO program to learn how to set up an account and screen for items and that his state coordinator is responsive when questions arise. As noted in this report, DOD is enhancing its processes for the transfer of excess property by developing additional training for participating law enforcement agencies on LESO program policies and procedures by establishing an online training tool. According to DLA officials, the online training tool will assist in providing specific information and training modules on LESO program policies and procedures to federal law enforcement agencies, and state coordinators can provide the training to law enforcement agencies in their states. DLA officials estimated the training tool would be completed in mid-2017. In our survey of 15 federal law enforcement agencies, completed in October 2016, we found that the majority (11 of 13) stated that their agency either had no memorandum of understanding (MOU) or did not know if their agency had a MOU with the Department of Defense (DOD) regarding the LESO program. Also, the majority (11 of 13) reported that the LESO program office had not provided, or they did not know if the LESO program office had provided, any policy or guidance to their agency on program roles and responsibilities regarding the LESO program, as shown in Table 11. Moreover, the majority (7 of 13) reported that their agency did not have any standard operating procedures, or standard practices outlined in policy or guidance that apply to DOD LESO-controlled property, as shown in Table 11. The majority of the federal survey respondents stated that their agency had not provided any policy or guidance, or training, on topics related to the LESO program to their field locations that use the program. Table 12 shows the federal survey respondents and whether or not their agency provided policy or guidance, or training was provided on the listed topics. Additionally, tables 13, 14, and 15 provide survey results regarding federal law enforcement agency interactions with LESO, whether their agency had a process for requesting and obtaining controlled property, and their familiarity with the LESO program’s processes for transferring controlled items. Figure 4 shows the application form on LESO’s website for federal law enforcement agencies. Figure 5 shows the application on LESO’s website for state and local law enforcement agencies. Figure 6 shows the 2016 version of the application on LESO’s website for law enforcement agencies. In addition to the contacts named above, Marilyn Wasleski, Gary Bianchi, and Helena Wong (Assistant Directors), Laura Czohara (Analyst-in- Charge), Martin de Alteriis, Robert Graves, Pamela Harris, Jason Kelly, Amie Lesser, Barbara Lewis, Felicia Lopez, Maria McMullen, George Ogilvie, Richard Powelson, Ray Rodriguez, Martin Wilson, and Samuel Woo made key contributions to this report. GAO, Excess Personal Property: DOD Should Reassess the Priorities of Its Disposal Process. GAO-16-44. Washington, D.C.: January 29, 2016. DOD Excess Property: Control Breakdowns Present Significant Security Risk and Continuing Waste and Inefficiency. GAO-06-943. Washington, D.C.: July 25, 2006. DOD Excess Property: Control Breakdowns Present Significant Security Risk and Continuing Waste and Inefficiency. GAO-06-981T. Washington, D.C.: July 25, 2006. DOD Excess Property: Management Control Breakdowns Result in Substantial Waste and Inefficiency. GAO-05-729T. Washington, D.C.: June 7, 2005. DOD Excess Property: Management Control Breakdowns Result in Substantial Waste and Inefficiency. GAO-05-277. Washington, D.C.: May 13, 2005. Defense Inventory: Control Weaknesses Leave Restricted and Hazardous Excess Property Vulnerable to Improper Use, Loss, and Theft. GAO-02-75. Washington, D.C.: January 25, 2002.

Summary: Since 1991, DOD has reported transferring more than $6 billion worth of its excess controlled and non-controlled personal property to more than 8,600 federal, state, and local law enforcement agencies through the LESO program, which is managed by DLA. According to DOD, about 4 to 7 percent of the total excess property transferred is controlled property, which typically involves sensitive equipment and items that cannot be released to the public. The National Defense Authorization Act of 2016 included a provision that GAO conduct an assessment of DOD's excess property program. This report addresses the extent to which (1) DLA has taken actions to enhance processes, including internal controls, related to its transfers of excess controlled property; and (2) DLA has addressed the statutory requirement to maintain a public Internet site that provides transparency about controlled property transfers and about the recipients of such property. GAO reviewed DOD policies and procedures, interviewed cognizant officials, and conducted independent testing of LESO's application and DLA's transfer process. The Defense Logistics Agency (DLA) has taken some actions and is planning additional actions to address identified weaknesses in its excess controlled property program. However, internal control deficiencies exist for, among other things, ensuring that only eligible applicants are approved to participate in the Law Enforcement Support Office (LESO) program and receive transfers of excess controlled property. DLA is establishing memorandums of understanding with participating federal agencies intended to, among other things, establish general terms and conditions for participation, revise its program application to require additional prospective participant information, and plans to provide additional online training for participating agencies that is expected to begin in late 2017. However, GAO created a fictitious federal agency to conduct independent testing of the LESO program's internal controls and DLA's transfer of controlled property to law enforcement agencies. Through the testing, GAO gained access to the LESO program and obtained over 100 controlled items with an estimated value of $1.2 million, including night-vision goggles, simulated rifles, and simulated pipe bombs, which could be potentially lethal items if modified with commercially available items (see photos). GAO's testing identified that DLA has deficiencies in the processes for verification and approval of federal law enforcement agency applications and in the transfer of controlled property, such as DLA personnel not routinely requesting and verifying identification of individuals picking up controlled property or verifying the quantity of approved items prior to transfer. Further, GAO found that DLA has not conducted a fraud risk assessment on the LESO program, including the application process. Without strengthening DLA and LESO program internal controls over the approval and transfer of controlled property to law enforcement agencies, such as reviewing and revising policy or procedures for verifying and approving federal agency applications and enrollment, DLA lacks reasonable assurance that it has the ability to prevent, detect, and respond to potential fraud and minimize associated security risks. Examples of Controlled Property Items Obtained DLA maintains a public Internet site to address statutory requirements to provide information on all property transfers to law enforcement agencies. DLA's public Internet site shows all transferred property, and, as of April 2017, in response to GAO's findings, has included a definition of controlled property to distinguish for the general public what items are considered controlled. GAO is making four recommendations to DLA, including strengthening internal controls over the approval and transfer of DOD excess controlled property to law enforcement agencies, and conducting a fraud risk assessment to institute comprehensive fraud prevention and mitigation measures. DOD concurred with all four recommendations and highlighted actions to address each one.