DOD Financial Management: Improvements Are Needed in Antideficiency Act Controls and Investigations

The Department of Defense (DOD) concurred with our recommendation. DOD officials stated that the Office of the Under Secretary of Defense (Comptroller) updated the department's Financial Management Regulation (FMR) to require that Antideficiency Act (ADA) case files document that the investigating officers selected to conduct a preliminary review or formal investigation are free of personal, external, and organizational impairments. DOD officials also provided us a copy of the update FMR (volume 14 chapter 4).

The Department of Defense (DOD) concurred with our recommendation. DOD officials stated that the Office of the Under Secretary of Defense (Comptroller) updated the DOD Financial Management Regulation (FMR) to require that DOD components maintain documentation of the date by which an investigating officer must receive refresher training in order to remain qualified to perform Antideficiency Act reviews and investigations. DOD officials also provided us a copy of the update FMR (volume 14 chapter 8).

In September 2008, we reported the DOD Financial Management Regulation requires DOD components to ensure that appropriate training programs are in place to provide personnel with the knowledge, skills, and abilities needed to perform their funds control duties. However, we found that there was no DOD-wide requirement for DOD components to establish and document that key employees within their funds control processes, such as fund certifying officials, certifying officials, and departmental accountable officers, are identified and have received the appropriate training. We recommended that the Secretary of Defense direct the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force to implement and document processes, procedures, and controls to identify and help ensure that key funds control personnel, including funds certifying officials, are properly trained so that they can fulfill their responsibilities to prevent, identify, and report potential Antideficiency Act violations. In addressing our recommendation, the Army reported in December 2009 that for fiscal year 2009, 94 percent of the personnel authorized to certify funds had been properly trained. In September 2009, the Navy reported that 86 percent of its key funds control personnel had received the appropriate appropriations law training requirement. In February 2009, the Navy reported that only 59 percent of its key funds control personnel had received that appropriate training. The Navy also noted that they will always be below 100 percent because of turnover and the hiring of new personnel. In regard to the Air Force, they reported in March 2009 that they (1) identified all key funds control personnel who were required to take the appropriations law training course, (2) identified the personnel who received and did not receive the appropriate training within the past 5 years, (3) directed that inadequately trained personnel complete the required training, and (4) required all funds control personnel to report their fiscal law training status annually. The actions taken by the military departments meet the intent of our recommendation.

In September 2008, we reported that the military services did not consistently follow requirements for the use of a roster of predetermined qualified individuals to select individuals to investigate Antideficiency Act (ADA) violations. Further, the DOD Financial Management Regulation requires that the roster contain data such as investigating officers name, rank/grade, date initial training was received, organization to which assigned, functional specialties, and the number of investigations previously conducted. Collectively, these attributes help substantiate the qualifications, including training and organizational independence, of ADA investigating officers. We recommended the Secretary of Defense direct the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force to implement and document processes, procedures, and controls to oversee and monitor compliance with the DOD Financial Management Regulation requiring the maintenance and use of a roster for selecting qualified ADA investigating officers. In December 2009, the Navy reported using a roster to select qualified reviewers and the roster (updated annually) is to include such information such as rank/grade of the individual, the date of the initial appropriations law training and the date when the refresher training is supposed to be received. Air Force completed action in December 2009 directing that all major commands submit and update their roster of qualified investigating officers, to include identifying the rank/grade of the individual, the date of the initial appropriations law training and when other investigating training courses were completed. Army issued a memorandum in October 2008 requiring (1) the appointing official certify the investigating officer's independence and qualifications in the appointment letter and (2) the appointment letter be submitted to the Office of the Assistant Secretary of the Army, Financial Management and Comptroller. These actions by the military departments should help DOD better assure quality reviews of potential ADA violations.

Training requirements for Antideficiency Act (ADA) investigating officers are outlined in the DOD Financial Management Regulation (FMR), including a fiscal law, or equivalent, course; a refresher course within 5 years of initial training; and training in interviewing, gathering evidence, developing facts, documenting findings and recommendations, preparing reports of violation, recommending appropriate disciplinary action, meeting time frames established for the completion of an investigation, and recommending corrective actions. The FMR also requires DOD military services to (1) once an individual completes the required training, issue a certificate indicating that all of the required courses have been taken, and (2) add the individual's name to the roster of individuals qualified to be ADA investigating officers. However, in September 2008, we reported that the military services did not maintain adequate documentation that investigating officers selected to perform ADA reviews and investigations were properly trained. We recommended that the Secretary of Defense direct the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force to develop, implement, and document policies and procedures to help ensure compliance with the DOD Financial Management Regulation requirements for investigating officer training. To address our recommendation, the Army in an October 2008 memorandum emphasized the importance of the investigating officers' completion of fiscal law training. In December 2009, the Navy provided that investigating officers appointed to conduct an investigation into an apparent ADA violation, were to provide documentation that they have received appropriate training within the last 5 years. In a January 2010 memorandum, the Air Force required all investigating officers to complete a fiscal law and investigating officers' training course and provide a record of the completed training to the Air Force Comptroller prior to an individual commencing an ADA investigation. As a result of these actions, DOD should have greater assurance that potential ADA violations are properly reviewed and investigated.

In September 2008, we reported that the DOD military services did not have an established procedure for ensuring and documenting that Antideficiency Act (ADA) investigating officers do not have any personal or external independence or impairment that would affect their objectivity in conducting ADA reviews and investigations. The DOD Financial Management Regulation provides that only individuals with no vested interest in the outcome, and who are capable of conducting a complete, impartial, unbiased investigation are to conduct investigations of potential ADA violations. Additionally, the regulation provides that investigating officers be chosen from an organization external to the organization being investigated. We recommended that the Secretary of Defense direct the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force to develop, implement, and document procedures to help ensure compliance with the DOD Financial Management Regulation. An Army October 2008 memorandum sets out procedures for assuring all investigating officers are free of potential conflicts of interest. The Navy took action to require investigating officers to submit a form stating that they have no conflict of interest and are able to conduct an impartial investigation in accordance with the criteria set forth in the DOD Financial Management Regulation. A copy of the certification is to be maintained in the case file. The Navy also provided examples of the statement to be provided by investigating officers regarding their independence. The Air Force fiscal year 2009 annual report on the evaluation of its administrative fund control process found that the Office of the Air Force Financial Management and Comptroller had responsibility for ensuring that investigating officers have no invested interest in the results of their investigations. Further, the office is to review the investigating officer's appointment letter to verify that the officer has no conflict of interest or an appearance of a compromised independence in performing the investigation. The actions taken by the military departments should help DOD better assure that all reviews of potential ADA violations are impartial and unbiased.