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June 9, 2006: 

The Honorable Arlen Specter: 
Chairman: 
Committee on the Judiciary: 
United States Senate: 

Subject: FBI Trilogy: Responses to Posthearing Questions: 

Dear Mr. Chairman: 

This report responds to your request for additional information related 
to the committee's May 2, 2006, hearing entitled FBI Oversight. 
Enclosed are our responses to the supplemental questions you submitted 
for the record. Our responses are based largely on information 
contained in our published report, entitled Federal Bureau of 
Investigation: Weak Controls over Trilogy Project Led to Payment of 
Questionable Contractor Costs and Missing Assets, GAO-06-306. As 
discussed in my statement at the hearing, unless the Federal Bureau of 
Investigation (FBI) strengthens its controls over contractor payments 
and purchased equipment, future projects, including the new Sentinel 
project, will be highly vulnerable to same types of issues that plagued 
the Trilogy project. 

If you have any further questions or would like to discuss any of the 
issues in more detail, please call me at (202) 512-8341. Contact points 
for our Offices of Congressional Relations and Public Affairs may be 
found on the last page of this report. 

Sincerely yours, 

Signed by: 

Linda M. Calbom: 
Director: 
Financial Management and Assurance: 

Enclosure - 1: 

Enclosure: 

Responses to Written Questions for the Record Submitted by Chairman 
Arlen Specter, Committee on the Judiciary, on FBI Oversight Hearing, 
May 2, 2006: 

In your February Trilogy report, you offered the FBI a number of 
recommendations to "(1) facilitate the effective management of 
interagency contracting, (2) mitigate the risks of paying potentially 
unallowable or questionable costs in connection to cost-reimbursement 
type contracts, and (3) improve FBI's accountability for and 
safeguarding of its computer equipment." Has the FBI implemented your 
recommendations? 

Answer: 

We will be following up on FBI's efforts to implement our 
recommendations as part of our normal tracking and evaluation process 
for open recommendations. This process begins with our receipt of a 
copy of FBI's formal written response to the Senate Committee on 
Homeland Security and Governmental Affairs and to the House Committee 
on Government Reform on its plans to implement our recommendations, 
which is due 60 days after our report is publicly released. We received 
a copy of this formal response letter on May 30, 2006.[Footnote 1] In 
addition, at the request of this committee, we will evaluate FBI's 
internal controls over contractor invoices and asset accountability for 
the Sentinel project--the FBI's new electronic information management 
system initiative--to help ensure that the internal control failures we 
identified with Trilogy are not repeated. After we have completed this 
follow-up work, we will report to you on our assessment of FBI's 
actions to implement our recommendations. 

2. In testimony before the House Appropriations Subcommittee on 
Science, State, Justice, Commerce and Related Agencies on March 28, 
2006, Director Mueller told the panel that GAO will be auditing the 
Sentinel program. What measures will you be taking to ensure that the 
same mistakes from the Trilogy debacle are not repeated? 

Answer: 

In reference to Director Mueller's comment, GAO is currently reviewing 
the Sentinel program at the request of the Chairman and Ranking 
Minority Member of the House Committee on the Judiciary. In this 
review, GAO is examining the program's (1) use of effective methods for 
acquiring commercial solutions, (2) efforts to align itself with the 
bureau's enterprise architecture, (3) basis for reliably estimating 
costs and schedules, (4) plans for applying earned value management, 
(5) provisions for adequate human capital to manage the acquisition, 
and (6) relationship to the governmentwide case management line of 
business. This work is being coordinated with the Department of Justice 
Office of Inspector General and collectively should help determine 
whether the Sentinel project is being effectively managed. This work 
and the follow-up work described in our answer to question one will 
provide information on key aspects of FBI's efforts to ensure that the 
Trilogy mistakes are not repeated with Sentinel. 

3. In the Trilogy report, you reported a number of issues that 
perplexed this Committee. For example, 1205 pieces of equipment, worth 
an estimated $7.6 million, went missing--some of which were classified 
or secured computers. The project was overbudget and overdeadline, and 
around $10 million was wasted. Which of the issues that led to the 
delinquency of the Trilogy project did you find to be the most 
alarming? Is that issue still of concern to you? How has the FBI 
addressed it? 

Answer: 

We reported on two fundamental issues that we consider to be key 
contributors to the problems we identified with the Trilogy project. 
First, the review and approval process for Trilogy contractor invoices 
did not provide an adequate basis for verifying that goods and services 
billed were actually received by FBI or that the amounts billed were 
appropriate. Second, FBI did not have an adequate process to ensure 
physical and financial accountability of assets purchased with Trilogy 
project funds. In addition, we were unable to determine if any of the 
missing assets contained confidential or sensitive information and 
data. Therefore, we recommended that FBI further investigate those 
missing assets to determine whether any confidential or sensitive 
information and data may be exposed to unauthorized users. 

We understand that FBI is taking actions to implement our 
recommendations to resolve the fundamental issues we identified. We 
will evaluate FBI's corrective actions as part of our normal 
recommendation follow-up process and during our review of the Sentinel 
project. Until corrective actions are fully implemented, both of these 
internal control issues will be a concern with Sentinel and other 
information technology projects at FBI. 

4. In your testimony, you discuss that FBI could not locate 1,404 
[pieces of equipment]; you adjusted the number to 1,205 when you were 
able to verify that the FBI had found 199 pieces of equipment. However, 
in its response to your report, FBI stated that it had accounted for 
around 800 of the remaining items [of equipment]. Are you satisfied 
with the FBI's efforts to track these assets? Has the FBI given any 
explanation for the remaining roughly 400 assets that are completely 
unaccounted for? 

Answer: 

In February 2006, FBI informed us that the approximately 800 remaining 
items, referred to above, that it believes it has now accounted for 
included (1) accountable assets[Footnote 2] not in FBI's property 
system because they were either incorrectly identified as 
nonaccountable assets or mistakenly omitted, (2) defective equipment 
that was never recorded in the property system and was subsequently 
replaced, and (3) nonaccountable assets or components of accountable 
assets that were incorrectly bar coded. However, because FBI was not 
able to provide us with any evidence, such as location information, to 
support that it had actually accounted for these 800 assets, we could 
not definitively determine whether FBI had located these items. We 
considered these same issues during our audit in an effort to determine 
if assets were missing or merely miscoded. 

The FBI also has not provided any additional explanation for the 
remaining roughly 400 missing assets. The numerous control weaknesses 
identified in our report are major factors contributing to FBI's 
continuing inability to find and definitively confirm the existence of 
these assets. Further, the fact that assets have not been properly 
accounted for to date means that they have been at risk of loss or 
misappropriation without detection since being delivered to FBI--in 
some cases, for several years. We will continue to monitor FBI's 
progress on locating these assets as part of our review of FBI's 
implementation of corrective actions to address our recommendations. 

(190150): 

FOOTNOTES 

[1] FBI's letter was dated May 12, 2006. 

[2] According to FBI policy, assets valued at $1,000 or more, as well 
as certain sensitive items, such as firearms, laptop computers, and 
central processing units, are considered "accountable" assets, 
regardless of cost, and must be accounted for individually in FBI's 
property system. 

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