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United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Committee on the Judiciary, U.S. Senate: 

September 2011: 

Federal Bureau of Investigation: 

Actions Taken to Address Most Procurement Recommendations: 

GAO-11-794: 

GAO Highlights: 

Highlights of GAO-11-794, a report to the Ranking Member, Committee on 
the Judiciary, U.S. Senate. 

Why GAO Did This Study: 

The FBI has spent over $900 million on the Trilogy and Sentinel 
information technology (IT) projects intended to provide FBI with an 
upgraded IT infrastructure and an automated case management system to 
support FBI agents and analysts. In February 2006 and July 2008, GAO 
reported on significant internal control weaknesses related to FBI’s 
contract administration, processing of contractor invoices, and 
accountability for equipment acquired for these projects. GAO made 27 
recommendations to the FBI to address these deficiencies. The FBI 
concurred with all 27 recommendations. This report provides an 
assessment of (1) the FBI’s corrective actions to address GAO’s 27 
recommendations and (2) whether there were any indications of 
implementation issues related to the policies and procedures the FBI 
developed to address 17 of the 27 recommendations. GAO reviewed FBI 
policies and procedures, performed walk-throughs, and conducted 
detailed tests on statistically and nonstatistically selected samples 
of transactions. 

What GAO Found: 

The corrective actions developed by FBI were sufficient to address 21 
of the 22 Trilogy recommendations and all 5 Sentinel recommendations. 
The FBI substantially addressed: 17 Trilogy recommendations related to 
contract administration, invoice processing, and property 
accountability by establishing or revising policies and procedures; 4 
by contracting for follow-up audits of the Trilogy costs; and the 5 
Sentinel recommendations by revising Sentinel policies and procedures. 
The one Trilogy recommendation that FBI did not address completely was 
related to 1,205 missing, lost, or stolen Trilogy assets. As of 
February 2011, the FBI had researched and determined the status of all 
but 134 of these assets. FBI officials stated that almost all of these 
assets had a useful life of 7 years, and if they were not already 
returned or destroyed, they are now obsolete. There are diminishing 
returns to continue to pursue these assets, which included several 
information technology items that could potentially contain sensitive 
information. However, if the FBI is able to determine the status of 
any of these assets in the future, officials stated that they will 
make the entries to properly record them in FBI’s property management 
application (PMA). 

In assessing implementation of the policies and procedures developed 
in response to GAO’s 17 Trilogy recommendations related to contract 
administration, invoice processing, and property accountability, GAO 
found that policies and procedures related to the 4 recommendations 
dealing with contract administration, including interagency 
agreements, were effectively implemented but also identified a new 
issue. Specifically, GAO found that forms—required by the Federal 
Acquisition Regulation to support the use of interagency agreements to 
conveniently or economically obtain supplies and services—were not 
timely completed for 15 of 54 statistically selected interagency 
agreements tested, and found that FBI’s monitoring did not identify 
this deficiency. GAO estimates that as much as 39.5 percent of FBI’s 
fiscal year 2009 interagency agreements did not meet this requirement, 
increasing the risk that funds may have been disbursed for goods or 
services that were not in the best interest of the government. 

In addition, GAO’s testing of FBI’s implementation of polices and 
procedures for the remaining 13 recommendations that were related to 
invoice processing and property accountability found indications of 
implementation issues in 3 areas. 

* Regarding the review of contractors’ invoices, 5 invoices (of the 37 
tested) that had been reviewed and approved by FBI officials included 
labor rates that were not fully supported by the contract 
documentation. Without verifying labor charges against the 
contractor’s proposal as required by FBI policy, there is an increased 
risk of disbursing funds for unallowable charges. 

* For property accountability, GAO found instances in which FBI (1) 
did not record accountable property items in its system in a timely 
manner and (2) did not accurately record key accountability 
information, such as location and serial numbers, as required by FBI’s 
policies. These shortcomings increase the risk that assets could be 
lost or stolen and not be detected and investigated in a timely manner. 

What GAO Recommends: 

GAO makes three new recommendations to improve interagency agreement 
controls and determine if additional actions are necessary to improve 
controls for invoice processing and property accountability. The FBI 
concurred with all three recommendations and discussed actions it has 
initiated to address GAO’s recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-11-794]. For more 
information, contact Jeanette M. Franzel at (202) 512-9471 or 
franzelj@gao.gov. 

Contents: 

Letter: 

Background: 

FBI Developed Policies and Procedures and Took Other Specific 
Corrective Actions Sufficient to Address 26 of 27 Prior 
Recommendations: 

Potential Issues Identified in Certain Areas Related to Implementation 
of FBI-Wide Policies and Procedures: 

Conclusions: 

Recommendations: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Status of Trilogy and Sentinel Recommendations and 
Actions Taken by the FBI: 

Appendix III: Comments from the Federal Bureau of Investigation: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Summary of Interagency Agreement and Contract Testing Results: 

Table 2: Summary of Testing Results for Other Selected Transactions: 

Abbreviations: 

CSC: Computer Sciences Corporation: 

DCAA: Defense Contract Audit Agency: 

FAR: Federal Acquisition Regulation: 

FASAB: Federal Accounting Standards Advisory Board: 

FBI: Federal Bureau of Investigation: 

IPC: Information Presentation Component: 

IT: Information Technology: 

OMB: Office of Management and Budget: 

PMA: Property Management Application: 

PMO: Project Management Office: 

SAIC: Science Applications International Corporation: 

TNC: Transportation Network Component: 

UAC: User Application Component: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 6, 2011: 

The Honorable Charles E. Grassley:
Ranking Member:
Committee on the Judiciary:
United States Senate: 

Dear Senator Grassley: 

Since 2001, the Federal Bureau of Investigation (FBI), an agency of 
the United States Department of Justice, has spent more than $700 
million, as of August 2010, on two projects to develop an automated 
investigative case management system to support FBI agents, analysts, 
and other management officials, and more than $200 million on 
upgrading its information technology (IT) infrastructure. Our February 
2006 report on the FBI's Trilogy project and July 2008 report on its 
subsequent Sentinel project focused on whether the FBI's internal 
controls provided reasonable assurance that payments to the Trilogy 
and Sentinel contractors were for allowable costs and properly 
supported, and that accountability was maintained over equipment 
purchased for the projects.[Footnote 1] [Footnote 2] We identified 
internal control weaknesses, some significant, related to the FBI's 
contract administration, processing of contractor invoices, and 
accountability for equipment acquired during these projects. We made 
27 recommendations to the FBI to address the identified deficiencies. 
Many of these recommendations focused on developing or revising 
policies and procedures, which had broad applicability to the FBI's 
procurement processes, while others focused on specific Trilogy or 
Sentinel project weaknesses. 

Because the FBI continues to enter into contracts to acquire goods and 
services and disburses millions annually related to these contracts, 
it is critical that the FBI fully address the internal control 
deficiencies identified in our Trilogy and Sentinel reports. In 
accordance with your request and as agreed to with your staff, our 
objectives are to assess whether: 

(1) the FBI's new or revised policies and procedures and other 
specific corrective actions were sufficient to address the 
recommendations we made in our Trilogy and Sentinel reports and: 

(2) there were any indications of implementation issues related to the 
policies and procedures FBI developed to address 17 of the 27 
recommendations. 

To assess if the FBI's new or revised policies and procedures and 
other corrective actions were sufficient to address the 
recommendations in our prior reports, we (1) reviewed the FBI's 
documented corrective actions for each recommendation and supporting 
documentation; (2) held interviews with FBI personnel responsible for 
the development of the corrective actions; (3) reviewed documentation 
related to new or revised policies and procedures as well as related 
training materials; and (4) requested and reviewed additional relevant 
documentation identified during our interviews. 

To assess whether there were any indications of FBI-wide 
implementation issues related to the policies and procedures that FBI 
developed in response to 17 of our 27 recommendations, we performed 
several types of procedures. Depending on the nature of the policy and 
procedure being implemented, or other corrective action being taken, 
our follow-up work consisted of detailed testing of certain 
statistically and nonstatistically selected transactions, walk-
throughs, document reviews, and interviews. For example, we performed 
detailed testing of interagency agreements and contracts statistically 
selected from the universe of interagency agreements and contracts 
executed by the FBI during fiscal year 2009. We then nonstatistically 
selected purchase orders, invoices, and accountable property 
associated with the selected contracts and performed detailed testing 
to determine whether there were any indications that the FBI did not 
fully or consistently perform the activities prescribed in its new or 
revised policies and procedures. We evaluated these selected 
transactions against the FBI's documented policies and procedures and 
considered the Federal Acquisition Regulation (FAR), Office of 
Management and Budget's (OMB) guidance for interagency agreements, our 
Standards for Internal Control in the Federal Government, and the 
Federal Accounting Standards Advisory Board's (FASAB) accounting 
standards for accountable property.[Footnote 3] [Footnote 4] [Footnote 
5] Further details on our scope and methodology are included in 
appendix I. 

We provided the FBI with a draft of this report for review and 
comment. The FBI provided written comments, which are reprinted in 
appendix III. The FBI also provided technical comments, which we have 
incorporated as appropriate. We conducted this performance audit from 
February 2010 through September 2011 in accordance with generally 
accepted government auditing standards. Those standards require that 
we plan and perform our audits 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. 

Background: 

In May 2001, the FBI initiated a major IT upgrade project known as 
Trilogy. Trilogy consisted of three parts: (1) the Information 
Presentation Component (IPC) to upgrade FBI's computer hardware and 
software, (2) the Transportation Network Component (TNC) to upgrade 
the FBI's communication network, and (3) the User Application 
Component (UAC) to upgrade and consolidate the FBI's five most 
important investigative applications. 

The IPC component provided for new desktop computers, servers, and 
commercial-off-the-shelf automation software, including Web-browser 
and e-mail software to enhance usability by the agents. The TNC 
component called for upgrading the complete communication 
infrastructure. These upgrades were expected to provide the physical 
infrastructure that would run the applications that were to be 
developed under the UAC component of the Trilogy project to replace 
the FBI's paper case files with electronic files and improve 
efficiency and replace the obsolete Automated Case Support system, the 
FBI's primary investigative application that uploads and stores case 
files electronically. 

Our 2006 audit of the project's costs identified significant internal 
control deficiencies over administration of contracts and interagency 
agreements, the processing (review, approval, and payment) of 
invoices, and the accountability over assets purchased under the 
project.[Footnote 6] More specifically, we reported that the FBI's 
review and approval process for contractor invoices did not provide an 
adequate basis for verifying that goods and services billed were 
actually received by the FBI or that payments were for allowable 
costs. This occurred in part because responsibility for the review and 
approval of invoices was not clearly defined in the interagency 
agreements related to the Trilogy project and because contractors' 
invoices frequently lacked the detailed supporting documentation 
necessary for an adequate review of invoice charges. During our audit, 
we identified more than $10 million in questionable contractor costs 
paid by the FBI for the Trilogy project. With respect to property, we 
reported that the FBI: (1) did not adequately maintain accountability 
for purchased computer equipment; (2) relied extensively on 
contractors to account for Trilogy assets while they were being 
purchased, warehoused, and installed; (3) did not establish controls 
to verify the accuracy and completeness of contractors' records on 
which the FBI was relying; (4) did not ensure that only the items 
approved for purchase were acquired by the contractors, and that the 
bureau received all those items; and (5) did not establish adequate 
physical control over the assets. As a result of these deficiencies, 
we identified more than 1,200 pieces of missing equipment that we 
estimated to be worth more than $7.5 million. 

We made 22 recommendations to the FBI in our 2006 report on Trilogy. 
[Footnote 7] Of the 22 recommendations, 17 were focused on developing 
agencywide policies and procedures to address internal control 
weaknesses in the FBI's procurement and contract administration 
processes. The remaining five recommendations were specific to the 
Trilogy project and were related to contractor overpayments and 
accountable property. 

The FBI discontinued the virtual case file component of its Trilogy 
project in March 2005, after it was determined to be infeasible and 
cost prohibitive to implement as originally envisioned. FBI's Sentinel 
project was approved in July 2005 and was to succeed and expand on 
elements of the Trilogy project, namely to provide the FBI with a 
modern, automated investigative case-management system. The Sentinel 
project management office (PMO) had designed and implemented policies 
and procedures that assigned specific invoice-review responsibilities 
and required Sentinel contractors to provide detailed support for all 
invoiced amounts and to obtain advance approval from the Sentinel PMO 
for travel, overtime, and other direct costs. 

With respect to Sentinel equipment, we reported that the Sentinel PMO 
had established policies and procedures specific to the Sentinel 
project to ensure Sentinel's equipment purchases were properly 
authorized and that received property was timely inspected and entered 
into the FBI's Property Management Application (PMA). However, we did 
identify some additional opportunities for the Sentinel PMO to improve 
controls over purchased equipment for the Sentinel project. We made 
five recommendations to the FBI related to Sentinel. 

FBI Developed Policies and Procedures and Took Other Specific 
Corrective Actions Sufficient to Address 26 of 27 Prior 
Recommendations: 

The corrective actions developed by the FBI were sufficient to address 
21 of the 22 Trilogy recommendations and all 5 of the Sentinel 
recommendations we made in our prior reports.[Footnote 8] The FBI 
substantially addressed 17 Trilogy recommendations related to contract 
administration, invoice processing, and property accountability by 
establishing or revising policies and procedures, 4 by contracting for 
follow-up audits of the Trilogy costs, and the 5 Sentinel 
recommendations by revising Sentinel policies and procedures. Of the 
27 prior recommendations, 17 focused on establishing, revising, or 
reinforcing policies and procedures with FBI-wide applicability. We 
found that the FBI had sufficiently developed, revised, or updated 
these policies and procedures as we recommended. For example, in 
response to our recommendation that the FBI revise its policies and 
procedures to require that accountable assets be entered into PMA 
immediately upon receipt rather than within the prior 30-day time 
frame, the FBI issued a new policy that required that accountable 
property be recorded in PMA within 48 hours of being received. 
Appendix II provides information on each of the 27 Trilogy and 
Sentinel recommendations and the specific corrective actions developed 
by the FBI. 

We also made four recommendations in our Trilogy report related to the 
recovery of overpayments and reimbursement of questionable costs from 
Trilogy contractors. In response to these recommendations, the Defense 
Contract Audit Agency (DCAA), an independent third party, was engaged 
to perform post audit reviews of contractor billings for the Trilogy 
project. DCAA conducted separate audits of the billings submitted by 
the two prime contractors, Computer Sciences Corporation (CSC) and 
Science Applications International Corporation (SAIC), as well as the 
billings submitted by the numerous subcontractors, and identified over 
$18 million in questioned costs. [Footnote 9] DCAA defines questioned 
costs as those costs that are not acceptable for negotiating a fair 
and reasonable contract price. DCAA's audits included reviewing the 
areas with potential overpayments we had identified as well as 
assessing if other identified questionable costs should be reimbursed. 
The most significant questioned costs were costs incurred outside the 
effective dates of temporary labor agreements, missing supporting 
documentation, application of incorrect billing rates, unapproved 
timesheets, unapproved overtime, and subcontractor overbillings. 

The one recommendation that the FBI had not fully addressed from our 
Trilogy report recommended that the FBI investigate the 1,205 assets 
that we identified as missing, lost, or stolen and determine whether 
any confidential or sensitive information may be exposed to 
unauthorized users, and identify any patterns related to the equipment 
that could necessitate a change in FBI policies and procedures. 
[Footnote 10] These assets consisted of a variety of information 
technology items, including desktop computers, servers, and laptops 
that could potentially contain confidential or sensitive information 
that could be exposed to unauthorized users. 

In February 2011, FBI officials provided documentation accounting for 
the status of all but 134 assets, including desktop computers, 
laptops, and servers that could contain sensitive information. With 
regard to the 134 assets, the FBI stated that all of these assets had 
a useful life of 7 years or less and that if they were not already 
returned or destroyed, they are now obsolete and that spending more 
time or resources to search for the obsolete equipment would be 
wasteful. Instead the FBI is focused on implementing a new property 
management system, and incorporating property management lessons 
learned from the Trilogy project. However, FBI officials also stated 
they would make the necessary entries to properly record any of the 
remaining 134 assets for which they subsequently determine the status. 

Potential Issues Identified in Certain Areas Related to Implementation 
of FBI-Wide Policies and Procedures: 

Although the FBI developed or revised policies and procedures in 
response to 17 of our prior recommendations, our testing to assess 
their implementation FBI-wide identified possible issues in certain 
areas. In our testing of the four recommendations dealing with 
interagency agreements and contracts, we found that they were 
effectively implemented, but we identified a new issue unrelated to 
our prior recommendations. In our implementation testing for the 
remaining 13 corrective actions, we identified indications of 
implementation issues for 3 of them. 

Tests Show Effective Implementation of Actions Related to Interagency 
Agreements and Contracts, but One New Issue Identified: 

As shown in table 1, our tests related to policies and procedures over 
interagency agreements and contracts indicated that the FBI had 
effectively implemented these corrective actions. 

Table 1: Summary of Interagency Agreement and Contract Testing Results: 

Recommendation: Establish policies and procedures so that future 
interagency agreements establish clear and well-defined roles and 
responsibilities for all parties included in the contract 
administration process; 
Summary of test results: Roles and responsibilities were clearly 
defined for the statistical sample of 55 interagency agreements 
reviewed.[A] 

Recommendation: Establish policies and procedures so that labor rates, 
ceiling prices, treatment of overtime hours, and other key terms for 
cost determination are clearly specified and documented for all 
contracts, task orders, and related agreements; 
Summary of test results: Contract documentation (contracts, proposals, 
and other supporting documentation) for the 32 statistically selected 
contracts we reviewed included specific rates for goods and services 
to be provided such as labor rates, overtime hours and ceiling prices. 
The contract documentation also included Federal Acquisition 
Regulation clauses for areas such as travel or review of subcontractor 
charges.[B] 

Recommendation: Establish policies and procedures so that an 
appropriate process is in place to assess the adequacy of contractor's 
review and documentation of submitted subcontractor charges before 
such charges are paid by FBI; 
Summary of test results: Contract documentation (contracts, proposals, 
and other supporting documentation) for the 32 statistically selected 
contracts we reviewed included specific rates for goods and services 
to be provided such as labor rates, overtime hours and ceiling prices. 
The contract documentation also included Federal Acquisition 
Regulation clauses for areas such as travel or review of subcontractor 
charges.[B] 

Recommendation: Establish policies and procedures so that future 
contracts clearly reflect the appropriate Federal Acquisition 
Regulation travel cost requirements, including the purchase of the 
lowest standard, coach, or equivalent airfare; 
Summary of test results: Contract documentation (contracts, proposals, 
and other supporting documentation) for the 32 statistically selected 
contracts we reviewed included specific rates for goods and services 
to be provided such as labor rates, overtime hours and ceiling prices. 
The contract documentation also included Federal Acquisition 
Regulation clauses for areas such as travel or review of subcontractor 
charges.[B] 

Source: GAO analysis of test results. 

[A] We did not find any exceptions during our test of 55 interagency 
agreements randomly selected from a population of 494 interagency 
agreements. (See appendix I for additional details related to the 
interagency agreement population.) Based on the results of our review, 
we are 95 percent confident that the actual error rate associated with 
sampling error inherent in statistical sampling for this sample is not 
more than 4.86 percent. 

[B] We did not find any exceptions during our test of 32 contracts 
randomly selected from a population of 51 contracts. (See appendix I 
for additional details related to the contracts population.) We are 95 
percent confident that the actual error rate associated with sampling 
error inherent in statistical sampling for this sample is not more 
than 3.92 percent. 

[End of table] 

In the course of testing the interagency agreement sample 
transactions, we identified a new issue unrelated to our prior 
recommendations. Specifically, the Federal Acquisition Regulation 
(FAR) requires that any interagency agreement entered into under the 
authority of the Economy Act, 31 U.S.C. § 1535, be supported by a 
Determination and Findings document.[Footnote 11] The Determination 
and Findings form identifies the responsible agencies to the agreement 
(requesting agency and servicing agency), is prepared by the 
requesting agency, and identifies the goods or services that are to be 
provided by the servicing agency. In addition, it documents the 
requesting agency's determination that, among other things, the use of 
an interagency acquisition is in the best interest of the government, 
and the supplies or services cannot be obtained as conveniently or 
economically by contracting directly with a private source. The FAR 
also requires that the requesting agency complete the Determination 
and Findings form before placing an order for supplies or services 
with another government agency. 

In reviewing our statistical sample of 55 interagency agreements 
[Footnote 12] with regard to implementation of our prior 
recommendations, we identified 54 interagency agreements that were 
required to comply with FAR requirements related to Determination and 
Findings and found that 15 of them did not comply with these FAR 
requirements. For these 15 cases, the required Determination and 
Findings forms supporting the execution of interagency agreements 
between the FBI and other federal entities were prepared and signed 
after the interagency agreements were executed--in some cases more 
than a year later. 

* Three Determination and Findings forms were signed less than 3 
months after the date of the related purchase orders were issued. 

* One Determination and Findings form was signed between 3 months and 
6 months after the date of the related purchase order was issued. 

* Seven Determination and Findings forms were signed between 6 months 
and 1 year later. 

* Four Determination and Findings forms were signed more than a year 
after the date of the related purchase orders. 

Based on the results of our review, we are 95 percent confident that 
the total percentage of interagency agreements executed by the FBI in 
fiscal year 2009 that lacked a required Determination and Findings 
form prior to the FBI placing the order could be as much as 39.5 
percent. 

FBI officials acknowledged that the Determination and Findings forms 
were not completed prior to placing orders for goods and services and 
provided two explanations. The interagency agreements and related 
documentation for some of them were executed by a new employee who was 
instructed to prepare and include the Determination and Findings forms 
after the files had been reviewed by the Unit Chief, and a contracting 
officer did not prepare and submit the interagency agreement 
documentation to the Unit Chief in a timely manner for the others. The 
FBI's monitoring of the interagency agreement process did not identify 
that the Determination and Findings forms were not properly prepared 
as required. Internal controls should be designed to assure that 
ongoing monitoring occurs in the course of normal operations. By not 
completing a required Determination and Findings form prior to issuing 
a purchase order, obligating the agency for the purchase order amount, 
the requesting agency risks obligating funds for supplies and services 
or both that are not in the best interest of the government, and 
executing a contract that is not in compliance with federal laws or 
regulations. 

Other Tests Identified Issues with Implementation of Certain FBI-wide 
Policies and Procedures: 

Of the remaining 13 corrective actions that involved the 
implementation of FBI-wide policies and procedures, our testing found 
indications that 3 of them may not have been fully or consistently 
implemented. As shown in table 2, our tests of non-statistically 
selected transactions identified implementation issues primarily in 
policies and procedures related to review of contractor invoices and 
accountability for purchased assets. 

Table 2: Summary of Testing Results for Other Selected Transactions: 

Recommendation: Establish policies and procedures so that appropriate 
steps are taken during the invoice review and approval process for 
every invoice cost category (i.e., labor, travel, other direct costs, 
equipment, etc.) to verify that the (1) invoices provide the 
information required in the contract to support the charges, (2) goods 
and services billed on invoices have been received, and (3) amounts 
are appropriate and in accordance with contract terms; 
Summary of test results: We reviewed a non-statistical selection of 37 
contractor invoices and found documented evidence that a detailed 
review of the invoices had been performed by the FBI contracting 
officer's technical representative (COTR) and contracting officer and 
that the goods or services had been received. However, we found 5 
invoices that included labor rates billed by the contractors and 
subcontractors that were not included in the contract documentation. 
FBI's review of these invoices failed to detect these issues. 

Recommendation: Revise FBI policies and procedures to require that 
accountable assets be entered into PMA immediately upon receipt rather 
than within the current 30-day time frame; 
Summary of test results: In our testing of accountable property, 
selected on a non-statistical basis, we found that 406 of the 674 
property items tested had not been recorded in the property management 
system within 48 hours, as required by the FBI's revised policies and 
procedures. 

Recommendation: Require officials inputting data into PMA to enter (1) 
the actual purchase order number related to each accountable equipment 
item bought, (2) asset descriptions that are consistent with the 
purchase order description, and (3) the physical location of the 
property; 
Summary of test results: Our testing of the 674 accountable property 
items showed that the FBI did not always properly record property 
information, including location and serial number, in PMA. 

Source: GAO analysis of testing results. 

[End of table] 

Review and Approval of Contractor Invoices: 

As shown in table 2, our detailed testing found instances in which the 
FBI had not fully implemented the policies and procedures established 
in response to our prior recommendations in this area. Internal 
control standards require agencies to establish controls that 
reasonably ensure, among other things, that funds, property, and other 
assets are safeguarded against waste, loss, or unauthorized use. The 
FBI requires contractors bidding on contracts to submit proposals that 
include direct labor categories and rates, subcontractor labor 
categories and rates, and other direct costs used to calculate the 
total cost of their proposal. Contractor invoices must include key 
information such as employee name, labor classification, rate of pay, 
hours worked for billed labor charges and support for other charges. 
FBI guidance states that staff performing invoice reviews should 
compare the key data to the contractor proposal to verify the accuracy 
of amounts charged. 

During our review of a non-statistical sample of 37 contractor 
invoices, we found unsupported charges of $292,684 on five invoices 
submitted by three contractors for three separate contracts that 
totaled $6,293,046 for prime contractor and subcontractor direct 
labor, materials, and other direct costs. Specifically, these totals 
include: 

* We reviewed an invoice, dated October 5, 2009, submitted by one 
contractor that included direct labor charges of $16,963 for one labor 
group that was not included in the contractor's cost proposal. 
[Footnote 13] The FBI acknowledged that the labor group was not listed 
in the original proposal by the contractor but stated that during the 
course of the contractual effort, the contractor determined there was 
a need for labor to be performed on the contract that required the 
skill set of a labor group that had not been included in the 
contractor's cost proposal. In addition, the FBI stated that the rate 
charged resulted in a savings to the FBI under this contract without 
affecting the contract schedule or deliverables. However, the FBI did 
not provide us with documentation supporting the FBI's approval of the 
new labor rate for the contract prior to the period billed on the 
invoice. In addition, the invoice included $50,000 for the work of a 
subcontractor. In our review of the contractor's proposal related to 
subcontractor labor, we noted that it included, for this specific 
subcontractor, a proposed labor rate of $184.84 for 610 hours for a 
total of $112,752. However, the invoice documentation did not include 
any information such as the name of the subcontractor employee(s), the 
labor category, the hours worked, or the rate of pay under other 
direct costs that would allow the FBI to verify the accuracy and 
validity of the charges. 

* In our review of two invoices submitted by another contractor, we 
found that the contractor had billed the FBI $97,851 for direct labor 
and subcontractor labor at rates, six for the contractor and three for 
a subcontractor, which were not included in the contractor's proposal. 

* Similarly, in our review of two invoices submitted by a contractor 
for a third contract we found that they included labor charges of 
$127,870 at hourly labor rates, for four contractors and two 
subcontractors, which were not supported by the contractor's proposal. 

We also discussed our findings related to the second and third 
contractor's invoices with FBI officials, and they explained that in 
reviewing the invoices they focus on the status of the project and its 
various components or tasks. They also stated that both contractors 
submitted monthly reports to the FBI that included the actual costs of 
the project for each current month as well as the costs of the project 
to date and compared the costs to project's budget. However, the FBI 
also stated that it did not require the contractors to provide 
analyses for cost variances except when variances exceed thresholds 
set for the two contracts. Without verifying labor groups and labor 
rates billed on contractor invoices against the contractor's proposal 
as required by FBI policy, the FBI is at increased risk that it will 
not identify erroneous or improper billings and will disburse 
government funds for unallowable contractor charges. 

Accountability for Purchased Assets: 

As shown in table 2, we also found instances in which the FBI did not 
record accountable property items in its system in a timely manner and 
did not accurately record key accountability information such as 
location and serial numbers as required by the FBI's policies and 
procedures. 

* The FBI's revised policy, which is in response to our prior 
recommendation, requires that accountable property be recorded into 
the Property Management Application (PMA) within 48 hours of receipt 
instead of within 30 days of receipt, which was the FBI's policy at 
the time our 2006 report. Internal control standards require agencies 
to establish controls that reasonably ensure, among other things, that 
funds, property, and other assets are safeguarded against waste, loss, 
or unauthorized use. In our review, we found 406 pieces of accountable 
property out of the 674 we tested had not been recorded in PMA within 
48 hours of being received as now required and that some had not been 
recorded until more than a month after being received.[Footnote 14] 
However, we also noted that the FBI, while not adhering to its more 
stringent current policy, had recorded 90.7 percent of the accountable 
property we tested within 30 days of receipt. This represents an 
improvement from the situation that existed at the time of our Trilogy 
work. During its agencywide upgrade of hardware and software under the 
Trilogy project, the FBI only recorded 28.4 percent of accountable 
property that we reviewed, within 30 days of receipt, as reported in 
our 2006 report. 

FBI management acknowledged that property was not being recorded in 
compliance with its policy. FBI management officials explained that 
this condition was due to property being ordered and received by 
numerous FBI divisions and field offices and that some of these 
divisions and field offices, did not have dedicated staff for 
recording purchased assets in PMA immediately upon receipt of the 
property. This situation serves to delay the recording of the assets 
in PMA. In addition, they explained that some accountable property 
ordered by the various FBI offices is delivered to FBI storage 
facilities and held for security reasons before being delivered to the 
end user and that these properties are not recorded in PMA until 
received by the end user. Recording of property in PMA is critical in 
establishing accountability. The longer it takes to record property in 
PMA, the greater the risk that property may be stolen or lost without 
detection by the FBI. 

* In 2006, the FBI issued a policy to all FBI divisions that made 
recording the location field when accountable property is added to PMA 
or when corrections to records are made, mandatory. In addition, the 
policy stated that the information recorded in the location data field 
is the location of the property within the division or "legat." 
[Footnote 15] In reviewing the data entry screens for recording assets 
in the FBI's property management application we noted that there are 
fields that can be utilized by the property custodian to provide a 
location within the division or legat. In our review of the PMA 
screens for the selected property items we found that the information 
recorded in PMA for 80 of the 674 records did not provide sufficient 
information on the location of the property within the division as 
required. 

In addition, we found that the serial number field was either blank, 
incomplete, or had the entry "719TOBEADDED" in the PMA records for 14 
of the 674 tested assets. In addition, the five records that had 
"719TOBEADDED" recorded, had not been updated for more than a year. We 
also found 45 PMA records in which the model description was entered 
as "TO BE ADDED." The model description was missing for all 45 assets 
for more than a year, with 6 of these assets lacking this information 
for almost 2 years since they were first entered in PMA. 

* We brought these findings above to the attention of FBI officials. 
With regard to the location information, the FBI stated that while the 
location field is mandatory, there is no requirement on the amount of 
detail to be listed. However, as mentioned previously, the 2006 policy 
issued by the Asset Management Unit clearly states that the 
information recorded in the location data field is the location of the 
property within the division or legat. The lack of key information 
such as model, manufacturer, description, serial number, and specific 
location information in PMA as required by FBI policy would limit its 
ability to investigate assets reported as missing during physical 
inventories. In addition, inadequate location information results in 
the lack of a systematic means of identifying where an asset is 
located or when it is moved, transferred, or disposed of. 

Conclusions: 

The FBI has taken action to address 26 of the 27 recommendations we 
made in our prior Trilogy and Sentinel reports. Many of these actions 
involved developing policies and procedures. Developing and 
communicating policies and procedures, while critical, is only the 
first step that the FBI must take to address the identified internal 
control weaknesses. Management must also ensure that the policies and 
procedures are effectively implemented throughout the agency. Although 
we found that the FBI had effectively implemented policies and 
procedures related to interagency agreements and contracts, our tests 
on the statistical selected transactions showed that additional action 
is needed to ensure that Determination and Findings forms are properly 
completed before the FBI enters into interagency agreements. With an 
estimated 40 percent of its interagency agreements lacking a properly 
completed Determination and Findings form, the FBI increases the risk 
that it is obligating funds for supplies and/or services that are not 
in the best interest of the government or executing a contract that is 
inconsistent with federal laws or regulations. Further, we identified 
several other areas where the implementation of policies and 
procedures, primarily related to review of contractor invoices and 
accountability for purchased assets, may need to be strengthened. Our 
testing of selected invoice transactions identified unsupported labor 
categories and rates billed by contractors. This situation points to a 
lack of thorough review of contractor invoices. This weakness puts the 
FBI at risk of making payments to contractors for questionable or 
improper charges. Additionally, our testing of selected accountable 
property items identified property items that were not timely or 
accurately recorded. This problem decreases the FBI's ability to 
adequately safeguard its accountable property. Identifying and 
correcting any systemic weaknesses in these areas will be critical to 
achieving sustainable improvements in the FBI's agencywide controls 
over its procurement activities. 

Recommendations: 

We recommend that the Director of the FBI direct the Chief Financial 
Officer take the following three actions. 

* Enhance the monitoring of the interagency agreements process to 
ensure that Determination and Findings forms are prepared, when 
applicable, in accordance with federal and agency requirements. 

* In the area of contractor invoice review and approval, we recommend 
the Director of the FBI to direct the Chief Financial Officer to: 

- review agencywide implementation of the new or revised policies and 
procedures related to our prior recommendations to verify that invoice 
costs are in accordance with contract terms to determine if the 
indications of issues we identified in this report represent systemic, 
agencywide implementation deficiencies, and: 

- take appropriate, cost-effective actions to better ensure agencywide 
compliance with the applicable policies and procedures. 

* In the area of property accountability, we recommend the Chief 
Financial Officer be directed to: 

- review agencywide implementation of the new or revised policies and 
procedures related to our prior recommendations to record specific 
data for acquired assets within specified time frames to determine if 
indications of issues we identified in this report represent systemic, 
agencywide implementation deficiencies, and: 

- take appropriate, cost-effective actions to better ensure agencywide 
compliance with the applicable policies and procedures. 

Agency Comments: 

In its written comments, FBI concurred with our recommendations and 
stated that it has already initiated changes to its processes and 
procedures to address our recommendations. FBI stated that it provided 
interagency agreement training to its contract specialists and is now 
testing an application to monitor, collect, and document information 
for all FBI interagency agreements. The FBI further stated that it is 
taking steps to ensure that invoices are properly reviewed, including 
strengthening its procurement training curriculum and modifying the 
current contract specialist file review checklist to include comparing 
invoiced labor categories and costs to labor categories and costs in 
supporting contracts. Additionally, the FBI stated that it has 
developed an accountable property officer training course intended to 
help ensure that its divisions have an effective and efficient 
property management program, and that actions are under way to 
configure a new property management application to include additional 
controls to better track physical location of purchased assets. If 
properly implemented, the activities outlined in FBI's letter should 
help further improve FBI's accountability for future interagency 
acquisitions and accountable property. FBI's comments are reprinted in 
their entirety in appendix III. FBI also provided technical comments, 
which we have incorporated as appropriate. 

As we agreed with your office, unless you publicly announce the 
contents of this report earlier, we plan no further distribution of it 
until 30 days from the report date. At that time, we will send copies 
to interested congressional committees. We will also send copies to 
the Attorney General, the Director of the Federal Bureau of 
Investigation, and other interested parties. The report will also be 
available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-9471 or franzelj@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix IV. 

Sincerely yours, 

Signed by: 

Jeanette M. Franzel: 
Managing Director, Financial Management and Assurance: 

[End of section] 

Appendix I: Scope and Methodology: 

[End of section] 

To address our first objective to determine whether the FBI's new or 
revised policies and procedures and other specific corrective actions 
were sufficient to address the 27 recommendations we made in our 
Trilogy and Sentinel reports, we performed an assessment of the FBI's 
corrective action plans and reviewed additional supporting 
documentations received from the FBI. Specifically, in its required 60-
day letter to Congress, the FBI explained the corrective actions it 
had taken or planned to take to address the issues we identified in 
our report.[Footnote 16] In addition, in mid-2006, the FBI submitted 
additional documentation to GAO which included revised or updated 
corrective action plans for each recommendation. Also, in the third 
quarter of 2009, the FBI submitted additional documentation to GAO for 
selected recommendations to support additional corrective action steps 
taken since 2006. We also identified key operations and management 
officials at the FBI responsible for the development of the corrective 
actions and conducted interviews and walk-throughs to ensure that we 
fully understood the corrective actions. We reviewed additional 
information and documentation identified during our interviews, as 
well as new and revised policies and procedures and training materials 
received from the FBI, and utilized this information to make a 
determination of whether the corrective actions were adequately 
designed to address our recommendations. 

To address our second objective to determine whether there were any 
indications of implementation issues related to the policies and 
procedures that the FBI developed to address 17 of the 27 
recommendations, we selected statistical samples of interagency 
agreements and contracts. We then non-statistically selected purchase 
orders, invoices, and accountable property from the contracts selected 
in the statistical samples and performed a variety of detailed tests. 
In our review of the FBI's corrective action plans, we determined that 
the agency had continued to take corrective actions to address our 
recommendations through fiscal year 2008. Therefore, in order to 
obtain a more representative population of transactions that had 
occurred after the last corrective actions had been put in place, we 
decided to select statistical samples from a population of 
transactions that occurred in fiscal year 2009. 

Because we selected statistical samples for testing implementation of 
certain new or revised policies and procedures, we assessed the 
reliability of the FBI's contracting, interagency-agreement, and 
property-data files by first identifying and documenting the controls 
in place at the FBI for ensuring accurate and complete data is 
recorded into information systems during the FBI's contracting, 
interagency-agreement, and property-acquisition processes and then 
assessing whether these controls appeared adequate. We inquired about 
the processes by which interagency agreements, contracts, and purchase 
orders are completed and recorded and developed an understanding of 
the controls designed to ensure data entered into FMS for interagency 
agreements and contracts is accurate and complete. In addition, we 
reviewed DOJ's annual financial statement internal control reports for 
fiscal years 2007, 2008, and 2009 to identify any material weaknesses 
or reportable conditions related to the information systems identified 
in the step above. We also analyzed data listings to identify any 
anomalies in the data fields such as blank cells or inconsistent 
naming conventions for contracts and interagency agreements and 
obtained explanations for any anomalies noted. Based on these steps, 
we determined the FBI's contract, interagency-agreement, and property- 
data files were sufficiently reliable to address the objectives of 
this report. 

We selected a statistical sample of 55 interagency agreements from a 
total population of 494 interagency agreements executed by the FBI 
during fiscal year 2009. In our testing of interagency agreements, we 
verified that all agreements clearly defined the roles and 
responsibilities relative to contract administration including invoice 
submission for both parties. During our testing, we also considered 
new guidance on interagency agreements issued by the Office of 
Management and Budget's (OMB) Office of Federal Procurement Policy 
that the FBI disseminated to all of its procurement chiefs.[Footnote 
17] 

We selected a statistical sample of 32 contracts from a population of 
51 contracts executed in fiscal year 2009. In addition, for each of 
the 32 contracts in the sample, we selected all related purchase 
orders for testing. The total number of purchase orders selected for 
testing was 34. Our contract and purchase-order testing consisted of 
determining whether the contracts and/or purchase orders (1) clearly 
specified key cost determination provisions; (2) clearly reflected the 
appropriate Federal Acquisition Regulation travel cost requirements; 
and (3) contained provisions regarding the contractor's review of 
subcontractor charges. In addition, for purchase orders only, we 
determined whether the purchase orders were sufficiently detailed to 
verify the receipt of property and other goods and services. 

We obtained a listing of all invoices that had been submitted to the 
FBI for the purchase orders we selected noting that invoices had not 
yet been submitted to FBI for 7 of the 34 purchase orders. A total of 
110 invoices had been submitted for the other 27 purchase orders we 
selected--one invoice each had been submitted for 16 of the purchase 
orders, two invoices each for 3 of the purchase orders, and three or 
more invoices had been submitted for the remaining 8 purchase orders. 
In selecting invoices for testing, we selected all invoices for those 
purchase orders that only had either one or two invoices. For each of 
the 8 purchase orders with three or more invoices, we selected the 
invoice with the highest dollar value for testing and one other 
invoice on a non-judgmental basis. The total number of invoices 
selected for testing was 37. Our invoice testing consisted of 
determining whether the contractor's invoice and supporting 
documentation (1) provided evidence of the FBI review and approval of 
the charges by the parties designated in the contract; (2) included 
evidence that goods and services billed on the invoice were received; 
(3) provided sufficient information to support the charges; (4) 
included amounts that were appropriate and in accordance with contract 
terms; and (5) provided evidence that the FBI properly documented the 
resolution of invoice discrepancies. 

We also asked the FBI to provide a listing of all accountable property 
included in its Property Management Application (PMA) for each of the 
34 purchase orders we reviewed. According to the FBI's listing, 20 of 
the 34 purchase orders included accountable property that had been 
recorded in the FBI's PMA. There were a total of 674 individual items 
of accountable property for the 20 purchase orders. We included all 
674 items of accountable property for our property testing. Our 
property testing consisted of determining whether the FBI (1) entered 
in PMA the appropriate purchase order number, asset description, and 
physical location of the accountable property purchased; (2) entered 
all accountable property in PMA within the time frame specified in the 
FBI's policy; (3) assigned bar codes to the accountable property when 
received and annotated the assigned bar codes in the receiving reports 
and in PMA; (4) properly documented any accountable property rejected 
immediately upon delivery; and (5) properly updated the PMA records of 
all accountable property returned after being accepted. 

We requested comments on a draft of this report from the FBI. We 
received written comments from the FBI on August 11, 2011, and have 
summarized those comments in the Agency Comments section of this 
report. FBI's comments are reprinted in appendix III. We conducted 
this performance audit from February 2010 through September 2011 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform our audits 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. 

[End of section] 

Appendix II: Status of Trilogy and Sentinel Recommendations and 
Actions Taken by the FBI: 

Trilogy recommendations: 

Interagency agreements and contract Administration: 

Recommendation area/recommendations: 1. To improve FBI's controls over 
its review and approval process for cost-reimbursement type contract 
invoices, the Director of FBI should instruct the Chief Financial 
Officer to establish policies and procedures so that future 
interagency agreements establish clear and well-defined roles and 
responsibilities for all parties included in the contract 
administration process, including those involved in the invoice review 
process, such as contracting officers, technical point of contacts, 
contracting officer's technical representatives, and contractor 
personnel with oversight and administrative roles; 
Development of policies and procedures and other actions taken: In 
July 2008, FBI's Senior Procurement Executive issued Procurement 
Guidance Document 08-10 to all Bureau Procurement Chiefs that 
incorporated a memorandum from the Office of Federal Procurement 
Policy (OFPP), Office of Management and Budget (OMB), which discussed 
new guidance on interagency agreements. The new OFPP guidance, issued 
in June 2008, requires the requesting agency and the servicing agency 
to assign specific roles for each agency and is to be fully 
implemented for all interagency agreements executed after November 3, 
2008. The guidance discusses, among other things, the need for 
defining roles such as the COTR and establishing specific 
responsibilities for those roles. It further elaborates on 
responsibilities for identifying an appropriate invoice review 
official prior to submittal of the first invoice and inspecting and 
rejecting contract work as necessary; 
Status: Closed. 

Recommendation area/recommendations: 2. To improve FBI's controls over 
its review and approval process for cost-reimbursement type contract 
invoices, the Director of FBI should instruct the Chief Financial 
Officer to establish policies and procedures so that labor rates, 
ceiling prices, treatment of overtime hours, and other key terms for 
cost determination are clearly specified and documented for all 
contracts, task orders, and related agreements; 
Development of policies and procedures and other actions taken: In 
December 2008, FBI's Policy Training Unit created an intranet site, 
the Contract Specialist Corner, to provide contract 
specialists/contract officers with procurement information and 
guidance. The site includes links to procurement guidance and 
directives issued by DOJ, the FBI's Policy Training Unit, and Federal 
Acquisition Regulation (FAR) circulars issued by the FAR council, as 
well links to standard procurement forms used in the procurement 
process. The site also provides access to contract execution 
checklists for different contract types, as well as standard FAR 
clauses applicable to various types of acquisitions including clauses 
related to labor rates, ceiling prices, treatment of overtime hours, 
and other key contract terms. In addition, in 2009, the Policy 
Training Unit created a separate intranet site for contracting officer 
technical representatives (COTR) as well as one for field offices to 
provide on-line access to procurement guidance and documentation. In 
addition, since January 2009 the Policy Training Unit has held monthly 
training sessions for contract specialists/contracting officers to 
ensure that directives issued by DOJ and FBI are being implemented 
properly; 
Status: Closed. 

Recommendation area/recommendations: 3. To improve FBI's controls over 
its review and approval process for cost-reimbursement type contract 
invoices, the Director of FBI should instruct the Chief Financial 
Officer to establish policies and procedures so that an appropriate 
process is in place to assess the adequacy of contractor's review and 
documentation of submitted subcontractor charges before such charges 
are paid by FBI; 
Development of policies and procedures and other actions taken: In 
December 2008, FBI's Policy Training Unit created an intranet site, 
the Contract Specialist Corner, to provide contract 
specialist/contract officers with procurement information and 
guidance, including references (and hyperlinks) to all procurement 
guidance documents that have been issued by DOJ, the Policy Training 
Unit, and FAR circulars issued by the FAR council. In addition, the 
site includes a section, FAR Matrix of Clauses, which provides 
information on applicable FAR clauses, including guidance useful to 
contract specialists in determining whether subcontractor clauses are 
necessary. In addition, in 2009, the Policy Training Unit also created 
two other separate intranet sites for contracting officer technical 
representatives (COTR) and Field Offices. The COTR site includes links 
to procurement guidance that includes discussion of contract 
administration responsibilities related to the COTR, prime contractor 
and subcontractor, as well as provides access to the documentation 
related to the activities of the COTR. In addition, since January 
2009, the Policy Training Unit has held monthly training sessions for 
contract specialists/contracting officers to ensure that directives 
issued by DOJ and FBI are being implemented properly; 
Status: Closed. 

Recommendation area/recommendations: 4. To improve FBI's controls over 
its review and approval process for cost-reimbursement type contract 
invoices, the Director of FBI should instruct the Chief Financial 
Officer to establish policies and procedures so that future contracts 
clearly reflect the appropriate Federal Acquisition Regulation travel 
cost requirements, including the purchase of the lowest standard, 
coach, or equivalent airfare; 
Development of policies and procedures and other actions taken: In 
December 2008, FBI's Policy Training Unit created an intranet site, 
the Contract Specialist Corner, to provide contract 
specialist/contract officers with procurement information and 
guidance, including references to all procurement guidance documents 
issued by DOJ, the Policy Training Unit, and FAR circulars issued by 
the FAR council, including those related to travel cost requirements 
(i.e., using the lowest standard coach or equivalent airfare). 
Specifically, the site includes a section, FAR Matrix of Clauses, 
which provides information on applicable FAR clauses, including those 
related to travel cost requirements. In addition, since January 2009, 
the Policy Training Unit has held monthly training sessions for 
contract specialists/contracting officers to ensure that directives 
issued by DOJ and FBI are being implemented properly; 
Status: Closed. 

Review and Approval of Contractor Invoices: 

Recommendation area/recommendations: 5. To improve FBI's controls over 
its review and approval process for cost-reimbursement type contract 
invoices, the Director of FBI should instruct the Chief Financial 
Officer to establish policies and procedures so that appropriate steps 
are taken during the invoice review and approval process for every 
invoice cost category (i.e., labor, travel, other direct costs, 
equipment, etc.) to verify that the (1) invoices provide the 
information required in the contract to support the charges, (2) goods 
and services billed on invoices have been received, and (3) amounts 
are appropriate and in accordance with contract terms; 
Development of policies and procedures and other actions taken: FBI 
has established policies and procedures designed to provide guidance 
on its invoice review and approval process. Specifically, FBI issued 
two electronic communications that provided guidance on the invoice 
review and approval process. The first electronic communication, 
titled "Invoice Processing - Purchase Orders and Contracts," states 
that the Contracting Officer is responsible for ensuring that the 
requirements for a proper invoice are attached and incorporated as a 
condition of the purchase order and for contracts, ensuring that the 
applicable clause is included. The second electronic communication, 
titled "Vendor Invoice and Payment Matter," provides guidance on the 
information that constitutes a proper invoice and on the documentation 
required to support the payment of invoices. FBI incorporated these 
electronic communications in its Manual of Administrative Operations 
and Procedures (MAOP) Part 2 - Section 6-5.2, titled "Invoices under 
Purchase Orders/Contracts," issued in February 2007. The section 
states that prior to submitting an invoice to the FBI's Contracting 
Officer (CO) for approval and payment, the FBI requesting division is 
responsible for ensuring that goods and services are received in 
accordance with contract terms. Section 6-5.2 of the MAOP also states 
that the FBI CO is responsible for verifying that all required 
information is on the invoice before approving it; 
Status: Closed. 

Recommendation area/recommendations: 6. To improve FBI's controls over 
its review and approval process for cost-reimbursement type contract 
invoices, the Director of FBI should instruct the Chief Financial 
Officer to establish policies and procedures so that the resolution of 
any questionable or unsupported charges on contractor invoices 
identified during the review process is properly documented; 
Development of policies and procedures and other actions taken: FBI 
has established policies and procedures related to properly 
documenting the resolution of any questionable or unsupported charges 
on invoices identified during the invoice review process. 
Specifically, Part 2, Section 6-9.3.3 of FBI's Manual of 
Administrative Operations and Procedures (MAOP), version dated 
2/26/07, titled "Review of Invoices," and FBI's Electronic 
Communication titled "Vendor Invoice and Payment Matter" specifies 
requirements for FBI to properly document the reasons for determining 
that an invoice is improper, the date the invoice is returned to the 
vendor, and the date a corrected invoice is received from the vendor; 
Status: Closed. 

Recommendation area/recommendations: 7. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to establish policies and 
procedures so that invoices are paid only after all verified purchase 
order and receipt documentation has been received by FBI payment 
officials and reconciled to the invoice package; 
Development of policies and procedures and other actions taken: In 
November 2006 FBI issued a policy titled, "Implementation of Invoice 
Submission Form for Invoices and Intragovernmental Payment and 
Collection Process by CPCSU," 319E-HQ-A1487524-FD. This policy 
requires that all invoices sent to the commercial payment unit 
beginning in November 2006 must include a completed invoice submission 
form as the cover sheet. The new required form includes the following 
fields to be completed by the submitting division: vendor number, 
invoice date, acceptance date, purchase order number, purchase order 
line number, purchase order quantity, total amount, date the COTR and 
the contracting officer (1) received the invoice form, (2) approved 
it--with their signature, and (3) the date they sent it on to the next 
responsible party. Collectively, these actions to establish policies 
requiring confirmation of receipt of goods and services before payment 
addresses our recommendation; 
Status: Closed. 

Recovery of Contractor Payments: 

Recommendation area/recommendations: 8. To address issues on the 
Trilogy project that could represent opportunities for recovery of 
costs, the Administrator of General Services, in coordination with the 
Director of FBI, should determine whether other contractor costs 
identified as questionable in this report should be reimbursed to FBI 
by contractors; 
Development of policies and procedures and other actions taken: 
(applies to # 8, 9, 10, and 11) In January 2007 GSA requested, on 
behalf of the FBI, that Defense Contract Audit Agency (DCAA) perform 
post-award audits of direct costs incurred and billed by contractors 
under the FBI's Trilogy project. In March 2008, DCAA reported the 
results of its audit related to SAIC reporting questioned costs of 
$3.7 million. As a result of this audit, FBI recovered $3.2 million 
from SAIC. In December 2008, DCAA reported the results of its audit of 
the direct costs incurred and billed by Computer Sciences Corporation 
(CSC) reporting questioned costs of $14.95 million, $9.7 of which was 
related to labor charges. In addition to questioned costs related to 
labor rates exceeding ceiling rates, DCAA reported additional CSC 
questioned costs of $1,825,952 related to airfare costs because the 
costs were inadequately supported and exceeded the lowest customary 
standard coach or equivalent airfare, and $979,187 of labor costs 
because of lack of personnel qualifications or lack of supporting 
documentation that shows the employees' labor qualifications. DCAA's 
report also incorporated evaluations of costs incurred by the largest 
subcontractors that performed under CSC's task order. The report 
questioned costs for subcontractors CACI, DigitalNet, 
PlanetGov/Apptis, Inc. and others totaling $5.1 million. The types of 
subcontractor questioned costs reported by DCAA included 1) supporting 
timesheets that were either not certified by the consultant or not 
approved by an appropriate/approving authority 2) use of personnel 
that did not meet the minimum labor qualifications, and 3) unsupported 
or inadequately supported transactions. With regard to these 
questioned costs, in March 2009, the Department of Justice, Office of 
Inspector General, began an investigation to determine whether the 
billings were potentially fraudulent and involved criminal conduct by 
CSC and its subcontractors. In commenting on a draft of this report, 
the FBI informed GAO that the Inspector General's report on this 
matter was under review by OIG management; 
Status: Closed. 

Recommendation area/recommendations: 9. To address issues on the 
Trilogy project that could represent opportunities for recovery of 
costs, the Administrator of General Services, in coordination with the 
Director of FBI, should further investigate whether DynCorp 
Information Systems' labor rates exceeded ceiling rates and pursue 
recovery of any amounts determined to have been overpaid; 
Status: Closed. 

Recommendation area/recommendations: 10. To address issues on the 
Trilogy project that could represent opportunities for recovery of 
costs, the Administrator of General Services, in coordination with the 
Director of FBI, should confirm the Science Applications International 
Corporation's (SAIC) informal Extended Work Week policy and work with 
SAIC to determine and resolve any overpaid amounts; 
Status: Closed. 

Recommendation area/recommendations: 11. To address issues on the 
Trilogy project that could represent opportunities for recovery of 
costs, the Administrator of General Services, in coordination with the 
Director of FBI, should consider engaging an independent third party 
to conduct follow-up audit work on contractor billings, particularly 
areas of vulnerability identified in this report; 
Status: Closed. 

Accountability for purchased assets: 

Recommendation area/recommendations: 12. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to reinforce existing policies 
and procedures so that when assets are delivered to FBI sites, they 
are verified against purchase orders and receiving reports. Copies of 
these documents should be forwarded to FBI officials responsible for 
reviewing invoices as support for payment; 
Development of policies and procedures and other actions taken: The 
FBI has reinforced policies and procedures related to verifying assets 
received to purchase orders and receiving reports. Specifically, FBI 
issued an Electric Communication to all divisions in November 2005 to 
reinforce FBI's policy that all accountable property be entered in the 
Property Management Application (PMA) immediately upon receipt and 
that data recorded in FBI's financial management system must include 
the purchase order number and the destination division. The 
information entered into the financial management system is to be 
immediately uploaded to PMA for verification of the accuracy of 
property being recorded in PMA with specific purchase orders. In 
addition, the FBI issued an electronic communication to all divisions 
in November 2006 to implement a new invoice submission form to be used 
with all commercial invoices to improve the information provided to 
the payment unit for invoices. The electronic communication required 
that the invoice submission form include various fields, including, 
purchase order line number - purchase order line number to charge the 
invoice, purchase order quantity - quantity to be paid for the 
invoice, and Total amount - total amount to be paid by purchase order 
line; 
Status: Closed. 

Recommendation area/recommendations: 13. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to establish policies and 
procedures so that (1) purchase orders are sufficiently detailed so 
that they can be used to verify receipt of equipment at FBI sites, and 
(2) contractor invoices are formatted to tie directly to purchase 
orders and facilitate easy identification of equipment received at 
each FBI site; 
Development of policies and procedures and other actions taken: The 
FBI formed the Policy Training Unit in 2007 which is responsible for 
all acquisition policy and acquisition training within the FBI, 
including implementation, updates, and training of specialized 
acquisition matters. Since January 2009, the Policy Training Unit 
holds monthly contractor specialist training sessions at which 
participants discuss new procurement guidance issued by DOJ and 
procurement directives issued by FBI and implementation. According to 
FBI, during these procurement training sessions, the Policy Training 
Unit staff have stressed the importance to contracting officers of 
generating purchase orders with a sufficient level of detail so that 
the requesting division can use the purchase order to verify equipment 
receipt. In addition, the FBI formed the Acquisition Strategy and 
Planning Unit in March 2006. The Acquisition Strategy and Planning 
Unit developed training materials for acquisition planning that 
included guidance on the FD-369, the requisition form which is also 
used in generating purchase orders, which states that equipment and 
services be on separate lines; 
Status: Closed. 

Recommendation area/recommendations: 14. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to establish a policy to require 
that upon receipt of property at FBI sites, FBI personnel immediately 
identify all accountable assets and affix bar codes to them; 
Development of policies and procedures and other actions taken: In 
order to record an asset on PMA it must have a bar code assigned. In 
November 2005, FBI issued an electric communication to reinforce 
accountable property policies and procedures by requiring that all 
divisions record accountable property in PMA within 48 hours of being 
received. If fully and effectively implemented, this policy should 
improve the FBI's accountability over purchased assets; 
Status: Closed. 

Recommendation area/recommendations: 15. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to revise FBI's policies and 
procedures to require that all bar codes are centrally issued and 
tracked through periodic reconciliation of bar codes issued to those 
used and remaining available. Assigned bar codes should also be noted 
on a copy of the receiving report and forwarded to FBI's Property 
Management Unit; 
Development of policies and procedures and other actions taken: FBI 
has taken action to strengthen controls that help ensure all 
accountable property is bar coded and properly recorded by issuing a 
March 2009 electronic communication (approved by the Chief Financial 
Officer) that requires all FBI offices to perform a weekly review of 
the On Order Report to ensure that all property that has been 
receipted in FBI's financial management system is also added to PMA. 
The On Order Report lists all property items associated with a 
particular purchase order that do not show having been recorded in the 
PMA, thus providing FBI with the ability to identify and investigate 
potentially missing and/or unrecorded property items. Also, our 
September 2010 walk-through of the process to enter assets into PMA 
found that the bar code numbers are annotated on copies of the 
receiving reports that are forwarded to the property custodian as we 
had recommended. In addition, we noted that the FBI's Asset Management 
Unit is solely responsible for issuing bar codes to FBI offices and 
the unit requires that all offices sign an FD-281 verifying receipt of 
bar codes; 
Status: Closed. 

Recommendation area/recommendations: 16. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to revise FBI policies and 
procedures to require that accountable assets be entered into PMA 
immediately upon receipt rather than within the current 30-day time 
frame; 
Development of policies and procedures and other actions taken: In 
November 2005, FBI issued an electric communication to reinforce 
accountable property policies and procedures by requiring that all 
divisions record accountable property in PMA within 48 hours of being 
received; 
Status: Closed. 

Recommendation area/recommendations: 17. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to require officials inputting 
data into PMA to enter (1) the actual purchase order number related to 
each accountable equipment item bought, (2) asset descriptions that 
are consistent with the purchase order description, and (3) the 
physical location of the property; 
Development of policies and procedures and other actions taken: The 
FBI has taken action to enhance its PMA to help ensure the accuracy 
and completeness of reporting on the status of property on order, the 
On Order Report, including installing a system edit limiting data 
entry to those transactions with valid purchase order numbers. 
Specifically, FBI issued an electric communication "Property 
Management Application Policy Change" on 02/15/2006 that provides that 
assets added to PMA must include data in the PMA location field. We 
confirmed that the FBI developed and put in place system edit checks 
that were effective in ensuring that only valid purchase order numbers 
were recorded into PMA and that related purchase order information was 
automatically and accurately uploaded from the financial management 
system into PMA; 
Status: Closed. 

Recommendation area/recommendations: 18. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to establish policies and 
procedures related to the documentation of rejected or returned 
equipment so that the (1) equipment that is rejected immediately upon 
delivery is notated on the receiving report that is forwarded to FBI 
officials responsible for invoice payment and (2) equipment that is 
returned after being accepted at an FBI site (e.g., items returned due 
to defect) is annotated in PMA, including the serial number and 
location of any replacement equipment, under the appropriate purchase 
order number; 
Development of policies and procedures and other actions taken: In 
September 2006, FBI issued an electric communication to all divisions 
requiring that the Asset Management Unit be notified of any 
accountable property returned to vendors to ensure that the return of 
the property is recorded in PMA. If a replacement is provided by the 
vendor the Asset Management Unit is to revise the PMA records to 
provide descriptive information for the new property item (serial 
number and barcode) and show it as "Active" and show the barcode of 
the returned piece of property as "Inactive." In addition, when a 
piece of accountable property delivered to FBI is returned and a 
replacement is to be provided by the vendor, the item is to remain on 
FBI's On Order Report until a replacement is received and not to be 
recorded in PMA. We also noted, during our discussions with officials 
from the FBI's commercial payment unit that FBI's financial management 
system will not allow a disbursement of funds until the property has 
been recorded as received; 
Status: Closed. 

Recommendation area/recommendations: 19. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to expand the next planned 
physical inventory to include steps to verify the accuracy of asset 
identification information included in PMA; 
Development of policies and procedures and other actions taken: FBI 
issued an electric communication "2009 Wall-to-Wall Inventory of 
Property, Plant, Equipment, and Issued Personal Property" that 
included additional directions to the inventory staff to ensure that, 
property information recorded in PMA was accurate. Specifically, the 
directive included detailed steps on how to request changes to correct 
errors in the manufacturer or model description fields in PMA for 
property identified during the inventory. The directive included as an 
attachment, a form titled "2009 INVENTORY CHANGES FOR MANUFACTURER & 
MODEL #s" to request a change or modification to these fields; 
Status: Closed. 

Recommendation area/recommendations: 20. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to reassess overall physical 
inventory procedures so that all accountable assets are properly 
inventoried and captured in the PMA system and that all unlocated 
assets are promptly investigated; 
Development of policies and procedures and other actions taken: FBI 
has reassessed its inventory procedures as reflected in changes to 
instructions provided to all divisions through electronic 
communications in advance of wall-to-wall inventories. The FBI issued 
an electronic communication in advance of the wall to wall inventory 
titled "2009 The Wall-to-Wall Inventory of Property, Plant, Equipment 
and Issued Personal Property" on 3/31/2009 for the wall-to-wall 
inventory to be held beginning 4/13/09. The electronic communication 
includes instructions that are related to findings we reported. For 
example, the 2009 electronic communication states that during the 
inventory, only the PMA custodians will have access to change only the 
serial number due to the fact that 95% of the manufacturer and/or 
model information has now been standardized on PMA. In addition, the 
2009 electronic communication included additional language that 
stressed a complete inventory, stating that all additions must be 
added to the PMA during the inventory period in order to comply with a 
"fully completed" wall-to-wall inventory because failure to comply 
with the procedure would result in an "incomplete" inventory. The 2009 
electronic communication also included new language on property issued 
to individual employees and contractors, which stated, Each office is 
to ensure that the issued personal property for each employee and 
contractor is inventoried. Discrepancies for issued personal property 
are to be forwarded to the appropriate FBIHQ Program Managers and the 
Asset Management Unit should be notified of these changes. Lastly, the 
electronic communication included a section titled "Required 
Procedures for Concluding Inventory" that included additional language 
related to lost and stolen property and additions; 
Status: Closed. 

Recommendation area/recommendations: 21. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to establish an internal review 
mechanism to periodically spot check whether the steps listed above- 
including verifications of purchase orders and receiving reports 
against received equipment, immediate identification and bar coding of 
accountable assets, maintenance of accurate asset listings, prompt 
entry of assets into PMA, documentation of rejected and returned 
equipment, and improved bar coding and inventory procedures-are being 
carried out; 
Development of policies and procedures and other actions taken: 
Beginning in 2008, the FBI's Finance Division's audit unit expanded 
its audit coverage to include conducting audits of compliance with FBI 
policies and procedures for review and approval of contractor 
invoices, government purchase card usage, and oversight for the semi- 
annual audits of property and equipment at the FBI field offices and 
divisions. Further, the Audit Unit Chief informed us that his unit 
expanded the scope of its audits to include audits of internal 
controls related to accountable property on a periodic basis as needed 
in response to significant events at FBI. For example, in fiscal year 
2009 the FBI initiated the Next-Generation Workstation Tech Refresh 
program (NGW) to purchase approximately 47,000 new computers. The 
Finance Division audit unit performed on-site reviews at the Seattle 
field office and the Portland field office to determine whether 
required controls over property accountability were in place as the 
computers from the NGW program were being distributed throughout the 
agency; 
Status: Closed. 

Recommendation area/recommendations: 22. To improve FBI's 
accountability for purchased assets, the Director of FBI should 
instruct the Chief Financial Officer to investigate all missing, lost, 
and stolen assets identified in this report to (1) determine whether 
any confidential or sensitive information and data may be exposed to 
unauthorized users and (2) identify any patterns related to the 
equipment (e.g., by location, property custodian, etc.) that 
necessitates a change in FBI policies and procedures, such as 
assignment of new property custodians or additional training; 
Development of policies and procedures and other actions taken: In 
March 2011, the FBI provided us with documentation on the results of 
its investigation into the status of the over 1,200 assets that 
acknowledged that 134 assets remained unaccounted for. The assets that 
remain unaccounted for include some that could contain sensitive 
information, such as desktop computers, laptops, and servers. The FBI 
has not provided an analysis to identify any patterns related to these 
assets that would be helpful for identifying any needed changes to FBI 
policies and procedures; 
Status: Open. 

Sentinel recommendations: 

Accountability for purchased assets: 

Recommendation area/recommendations: 23. We recommend that the 
Director of the FBI direct the Sentinel Program Manager to modify 
existing Sentinel policies and procedures to require the Sentinel 
property manager to verify for every property shipment that data in 
the Lockheed Martin database are complete and accurate before using 
these data to create or update FBI's official property records in PMA; 
Development of policies and procedures and other actions taken: FBI 
modified its existing policies and procedures to include a policy of 
verifying accuracy and completeness of data in the Lockheed Martin 
database. Specifically, Section 2.2.3 of FBI's Property Management 
Policy & Procedures, prepared by Office of IT Program Management, 
Sentinel Program and Business Management Team, version dated 9/3/2008, 
titled "Receipt of Property" policy specifies requirements of the 
Sentinel Property Manager to verify the accuracy of equipment data on 
the property list uploaded by the contractor before using this data to 
enter equipment to PMA upon receipt and verification of equipment. The 
equipment data on the property list refers to the Lockheed Martin 
database for Sentinel project; 
Status: Closed. 

Recommendation area/recommendations: 24. We recommend that the 
Director of the FBI direct the Sentinel Program Manager to modify 
existing Sentinel policies and procedures to require that the Sentinel 
property manager perform monthly reconciliations of the key property 
records (i.e., the BOM, the vendor invoices, the Lockheed Martin 
database, and PMA) throughout each subsequent phase of Sentinel rather 
than a single close-out reconciliation at the completion of a phase; 
Development of policies and procedures and other actions taken: FBI 
modified its existing policies and procedures to include periodic 
reconciliation of the key property records. Specifically, Section 3.2 
of FBI's Property Management Policy & Procedures, prepared by Office 
of IT Program Management, Sentinel Program and Business Management 
Team, version dated 9/3/2008, titled "Data Requirements" specifies 
that the Sentinel Property Manager will perform at least monthly 
reconciliations of the key property records including Bill of 
Materials, invoices, contractor property list (Lockheed Martin 
database) and PMA throughout the Sentinel Program; 
Status: Closed. 

Recommendation area/recommendations: 25. We recommend that the 
Director of the FBI direct the Sentinel Program Manager to modify 
existing Sentinel policies and procedures to require the Sentinel 
property manager to document the initial inspection of property as it 
is received, including verification that the property was properly 
barcoded; 
Development of policies and procedures and other actions taken: FBI 
modified its existing policies and procedures to include initial 
inspection of property upon receipt, including verification that the 
property was properly barcoded. Specifically, Section 2.2.3 of FBI's 
Property Management Policy & Procedures, prepared by Office of IT 
Program Management, Sentinel Program and Business Management Team, 
version dated 9/3/2008, titled "Receipt of Property" specifies that 
the Sentinel Property Manager will match quantity, manufacturer, make, 
model and serial number and barcode number on the shipping document, 
packing lists, or invoice to the physical inventory of equipment 
received, and after the verification the document will be annotated 
with receipt noted and signed by the Property Administrator and 
Sentinel Property Manager; 
Status: Closed. 

Recommendation area/recommendations: 26. We recommend that the 
Director of the FBI direct the Sentinel Program Manager to modify 
existing Sentinel policies and procedures to require the Sentinel 
property manager to record in the Lockheed Martin database the date 
Sentinel property is received to allow for assessments of whether 
Sentinel property was timely recorded into PMA; 
Development of policies and procedures and other actions taken: FBI 
modified its existing policies and procedures to require the received 
date be tracked. Specifically, Section 3.2 of FBI's Property 
Management Policy & Procedures, prepared by Office of IT Program 
Management, Sentinel Program and Business Management Team, version 
dated 9/3/2008, titled "Data Requirements" specifies that in order to 
be useful to both the PMO and contractor the key data points, 
including the date received and Shipping Document/Item Receipt 
Verification Date, should be tracked by either an electronic 
spreadsheet or listed on a locally devised inventory sheet. According 
to FBI's Sentinel team, the "Date Received" column in the Lockheed 
Martin database now tracks the received date of each property; 
Status: Closed. 

Recommendation area/recommendations: 27. We recommend that the 
Director of the FBI direct the Sentinel Program Manager to modify 
existing Sentinel policies and procedures to require the Sentinel 
property manager to follow up on and document actions taken with 
respect to the 20 property records we identified as having valuation 
discrepancies, including any adjustments to the valuations in either 
FBI's or the contractor records; 
Development of policies and procedures and other actions taken: FBI 
followed up with the 20 items identified in our report and took 
necessary corrective action to eliminate valuation discrepancies. We 
reviewed accountable property records maintained in the PMA and the 
Lockheed Martin database provided by FBI for those 20 items and 
verified that FBI has made adequate adjustments to the valuation in 
PMA and the Lockheed Martin database; 
Status: Closed. 

Source: GAO. 

[End of table] 

[End of section] 

Appendix III: Comments from the Federal Bureau of Investigation: 

U.S. Department of Justice: 
Federal Bureau of Investigation: 
Washington, D.C. 20535-0001: 

August 11, 2011: 

Ms. Kay L. Daly: 
Director, Financial Management and Assurance: 
Government Accountability Office: 
441 0 Street, N.W. 
Washington, D.C. 20548: 

Dear Ms. Daly: 

The Federal Bureau of Investigation (FBI) appreciates the opportunity 
to review and respond to your draft report entitled, "Federal Bureau 
of Investigation: Actions Taken To Address Most Procurement 
Recommendations" (hereinafter "Report"). 

We are pleased the Report found that the corrective actions developed 
by FBI were sufficient to address 26 of the 27 recommendations made in 
your prior Trilogy and Sentinel reports. In addition, through recent 
audit sampling, you determined the FBI had properly recorded 90.7 
percent of tested accountable property. As aptly stated in the Report, 
"This represents an improvement from the situation that existed at the 
time of our Trilogy work." To be certain, this is a vast improvement 
to your previous 2006 finding that the FBI had only recorded
28.4 percent of tested accountable property. 

The FBI is committed to further strengthening current internal 
controls. We continue to document procedures and develop clear 
policies. While safeguarding the nation is the FBI's first priority, 
we are also cognizant of meeting the fiduciary responsibilities of the 
public trust. To that end, thank you for the GAO's assistance, and for 
the opportunity to respond to the Report. 

Based upon a review of the Report, the FBI concurs with the three 
recommendations directed to the FBI and has already initiated changes 
to processes and procedures to fully address these issues. Please feel 
free to contact me at 202-324-1345 should you have any questions or 
need further information. 

Sincerely, 

Signed by: 

Richard Lee Haley II: 
Assistant Director: 
Finance Division: 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Jeanette M. Franzel, (202) 512-9471 or franzelj@gao.gov: 

Acknowledgments: 

Staff members who made key contributions to this report include: 
Phillip McIntyre, Assistant Director; William E. Brown; Sharon Byrd; 
Liliam Coronado; Joshua Edelman; Francine DelVecchio; Francis Dymond; 
Wendy Johnson; Galena Phillips; Lisa Reijula; and Seong Bin Park. 

[End of section] 

Footnotes: 

[1] GAO, Federal Bureau of Investigation: Weak Controls over Trilogy 
Project Led to Payment of Questionable Contractor Costs and Missing 
Assets, [hyperlink, http://www.gao.gov/products/GAO-06-306] 
(Washington D.C.: Feb. 28, 2006). 

[2] GAO, Financial Management: FBI Has Designed and Implemented 
Stronger Internal Controls over Sentinel Contractor Invoice Review and 
Equipment Purchases, but Additional Actions Are Needed, [hyperlink, 
http://www.gao.gov/products/GAO-08-716R] (Washington D.C.: July 15, 
2008). 

[3] 48 C.F.R. chp.1.; Office of Management and Budget, Office of 
Federal Procurement Policy, Interagency Agreements (June 2008). 

[4] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[5] Federal Accounting Standards Advisory Board, Statement of Federal 
Financial Accounting Standards 6, Accounting for Property, Plant, and 
Equipment ( November 1995). 

[6] [hyperlink, http://www.gao.gov/products/GAO-06-306]. 

[7] Five additional recommendations included in the Trilogy report 
were made to the General Services Administration (GSA) since GSA's 
Federal Systems Integration and Management Center (FEDSIM) and the FBI 
entered into an interagency agreement to use FEDSIM's Millennia 
governmentwide acquisition contract for the implementation of Trilogy, 
and that FEDSIM, as the contracting agency, provided contract 
administrative services necessary to support the task orders. 

[8] [hyperlink, http://www.gao.gov/products/GAO-06-306] and 
[hyperlink, http://www.gao.gov/products/GAO-08-716R]. 

[9] DCAA reported the results of its audit related to SAIC in March 
2008, reporting questioned costs of $3.7 million. As a result of the 
findings reported by DCAA, SAIC paid $3.2 million to GSA. DCAA 
reported the results of its audit related to CSC and its 
subcontractors in December 2008, reporting questioned costs of $14.95 
million. In March 2009, the Department of Justice, Office of Inspector 
General (DOJ/OIG), began an investigation into CSC's questioned 
billings to determine whether the billings were potentially fraudulent 
and involved criminal conduct by CSC and its subcontractors. As of 
August 11, 2011, the FBI informed GAO that the OIG's report on this 
matter is currently under review by OIG management before submission 
to the FBI, in accordance with normal procedure. 

[10] The IPC/TNC task order was awarded to CSC (formerly DynCorp) and 
the UAC task order was awarded to SAIC. We reported that there were 
926 CSC-purchased items, 242 SAIC-and FBI-purchased items, and 37 FBI- 
purchased IPC/TNC government-furnished equipment assets that were 
missing, lost, or stolen. 

[11] See 48 C.F.R 17.503. 

[12] See appendix I for details related to this sample. 

[13] The contractor's proposal included multiple labor groups, for 
specific skill sets, each with a related hourly rate. 

[14] See appendix I for details related to how accountable property 
was selected for testing. 

[15] The FBI has offices around the globe. These offices--called legal 
attachés or "legats"--are located in U.S. embassies. 

[16] See 31 U.S.C. § 720. 

[17] 48 C.F.R. chp.1.; Office of Management and Budget, Office of 
Federal Procurement Policy, Interagency Agreements (June 2008). 

[End of section] 

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