JIEDDO was created by the Deputy Secretary of Defense in January 2006 and is responsible for leading, advocating, and coordinating all DOD efforts to defeat IEDs. Prior DOD efforts to defeat IEDs included various process teams and task forces. For example, DOD established the Joint IED Defeat Task Force in June 2005 for which the Army provided primary administrative support. This task force replaced the Army IED Task Force, the Joint IED Task Force, and the Under Secretary of Defense, Force Protection Working Group. To focus all of DOD’s efforts and minimize duplication, DOD published new IED policy in February 2006 through DOD Directive 2000.19E, which changed the name of the Joint IED Defeat Task Force to JIEDDO and established it as a joint entity and jointly manned organization within DOD, reporting to the Deputy Secretary of Defense. The directive states that JIEDDO shall “focus (lead, advocate, and coordinate) all Department of Defense actions in support of the Combatant Commanders’ and their respective Joint Task Forces’ efforts to defeat Improvised Explosive Devices as weapons of strategic influence.” The organization is directed to identify, assess, and fund initiatives that provide specific counter-IED solutions, and is granted the authority to approve joint IED defeat initiatives valued up to $25 million and make recommendations to the Deputy Secretary of Defense for initiatives valued over $25 million. Under the directive, the Army remains the organization’s executive agent and is responsible for providing primary administrative support to JIEDDO. JIEDDO’s primary role is to provide funding to the military services and DOD agencies to rapidly develop and field counter-IED solutions. Prior to fiscal year 2007, JIEDDO did this by working with the DOD Comptroller to transfer its appropriated funds into a standard DOD appropriation account, such as one for procurement or one for research, development, testing, and evaluation. JIEDDO would then send these transferred funds to the military service that is designated to sponsor the initiatives using a Military Interdepartmental Purchase Request (MIPR). Beginning in fiscal year 2007, Congress provided JIEDDO with its own separate direct appropriation, but it still must transfer funds to the military services using a duly authorized and signed MIPR, which the Defense Federal Acquisition Regulation Supplement (DFARS) Subpart 208.7004 (Procedures, Guidance, and Information (PGI) 208.7004) states is the acquiring department’s authority for acquiring the goods or services on the requiring department’s behalf. DFARS PGI 208.7004 also states that the acquiring department, or military service, is then authorized to create obligations against the funding without further referral to the requiring department—JIEDDO— and that the military service has no responsibility to determine the validity of an approved MIPR. Therefore, after JIEDDO provides funding authority to the military service and the designated program manager for a specific initiative, the service program manager, not JIEDDO, is responsible for managing the initiatives for which JIEDDO has provided funds. JIEDDO’s efforts to counter the use of IEDs and subsequent funding for those efforts are organized according to three primary lines of operation: (1) attack the network that enables the use of IEDs, (2) defeat the IED itself once emplaced, and (3) train the military forces in counter-IED techniques. JIEDDO assigns all funds used to one of these lines of operation—or to a fourth line of operation called staff and infrastructure for miscellaneous expenditures not directly related to the three lines of operation. When JIEDDO undertakes any effort requiring funds, it assigns the funds for the effort to one of the lines of operations. JIEDDO further breaks down its expenditures into more detailed subsets, which it designates as initiatives, assigning a name and a unique number to track expenditures related to each initiative. JIEDDO manages and reports on all funds expended by line of operation and by initiative. Office of Management and Budget (OMB) Circular A-123 specifies that federal agencies have a fundamental responsibility to develop and maintain effective internal control that ensures the prevention or detection of significant weaknesses—that is, weaknesses that could adversely affect the agency’s ability to meet its objectives. According to OMB, the importance of management controls is addressed in many statutes and executive documents. A memorandum from the OMB Director to the heads of the executive departments accompanying OMB Circular A-123 as an attachment requires agencies and individual federal managers to take systematic and proactive measures to develop and implement appropriate, cost-effective internal controls for results-oriented management. FMFIA establishes the overall requirements with regard to internal control. Accordingly, an agency head must establish controls that reasonably ensure that (1) obligations and costs are in compliance with applicable law; (2) funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or misappropriation; and (3) revenues and expenditures applicable to agency operations are properly recorded and accounted for to permit the preparation of accounts and reliable financial and statistical reports and to maintain accountability over the assets. Specific internal control standards underlying the internal controls concept in the federal government are promulgated by GAO and are referred to as the Green Book. In March 2007, the Senate Appropriations Committee directed JIEDDO to identify and track all civilian, military, and contractor personnel in the organization. In addition, DOD Directive 1100.4, “Guidance for Manpower Management,” provides that DOD components shall designate an individual with the authority to establish and maintain a manpower data system that accounts for all manpower resources, to include active military, DOD civilian, reserve component, contract, and host-nation support. The Senate Appropriations Committee, in its report on emergency supplemental appropriations, expressed concern over JIEDDO’s exponential personnel growth and ability to track this growth. The report stated that the committee has limited visibility into current staffing and future staffing requirements and is concerned that JIEDDO is not accounting for certain contractor support properly. As a result of these concerns, the committee directed JIEDDO to provide a report to the congressional defense committees on current staffing levels and future staffing requirements, broken down by function, contractor, civilian, military, and detailed from other agencies, and should include all contractor support that is provided through various contracts. The committee further directed JIEDDO to update this report whenever JIEDDO personnel authorizations change. In response to the committee’s direction, JIEDDO officials developed the JIEDDO Manning Description in May 2007 identifying and accounting for civilian, military, and contractor personnel working for JIEDDO. JIEDDO has made progress in improving its financial management processes but has not yet reached a point where its processes contain a system of internal control that ensures the accuracy of its financial data related to resources it has used in its operations. According to federal standards, internal control comprises the plans, methods, and procedures used to meet missions, goals, and objectives of an organization and help it to achieve desired results through effective stewardship of public resources. In addition, our prior work has stated the importance of organizations addressing internal control weaknesses. Otherwise, organizations may not achieve their objectives or may not use their resources to best advantage in achieving their objectives. Before beginning fiscal year 2007 operations, JIEDDO took several steps to improve its processes for managing and controlling its financial resources, and JIEDDO has been proactive in responding to financial management issues we raised during this audit by pursuing additional financial management process improvements. Nonetheless, JIEDDO is lacking an effective system of internal control that will provide adequate assurances of financial data accuracy and operations transparency. Although JIEDDO added changes toward the end of our review that are expected to address internal control weaknesses, their implementation occurred too late for us to determine their effectiveness. Nonetheless, in the absence of an adequate system of internal controls, inaccurate financial data and reports may negatively affect the internal and external decision-making process. JIEDDO has taken several steps to improve its financial management processes. JIEDDO’s actions are divided into (1) those taken in preparation for the beginning of fiscal year 2007 operations and (2) those taken to develop and continually improve on its operations. JIEDDO’s approach for fiscal year 2007 included three changes aimed at streamlining and reducing data processing and analysis. The first of these changes was that JIEDDO took direct control of accounting functions previously performed by Army activities in support of JIEDDO. This allowed JIEDDO to directly execute and oversee funds budgeted and made available to JIEDDO. Second, JIEDDO requested and received a separate appropriation exclusively for its efforts, without having to obtain approval for funds through other DOD funding streams. Third, JIEDDO developed a procedure for assigning distinct numbers to specific initiatives because some initiatives were referred to by more than one name. The assignment of numbers eliminated confusion over the name of the initiative and facilitated the automated transfer of data, which was not possible using only a descriptive name. JIEDDO’s more recent actions were taken as part of its efforts to fully establish its organizational framework as the organization evolves and to continually improve its processes. These actions include issuing an internal written instruction describing the roles and responsibilities of JIEDDO subdivisions in greater detail; developing internal controls imbedded in a new automated document management and storage system; and establishing a new internal control audit function to be staffed by three persons, reporting directly to the JIEDDO Director. While these actions could address JIEDDO’s internal control weaknesses, they have not yet been fully implemented and occurred too late for us to determine their effectiveness. JIEDDO does not have an effective internal control system in place to ensure that its financial data are accurate, and without such assurances, JIEDDO is unable to provide adequate transparency over the cost of its operations.