DOD Financial Management:

Improvements Are Needed in Antideficiency Act Controls and Investigations

GAO-08-1063: Published: Sep 26, 2008. Publicly Released: Sep 26, 2008.

Additional Materials:

Contact:

Paula M. Rascona
(202) 512-9816
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Senate Report No. 110-77 directed GAO to review the Department of Defense's (DOD) procedures for Antideficiency Act (ADA) violations. GAO focused on whether (1) existing DOD funds control systems, processes, and internal controls provide reasonable assurance that ADA violations will be prevented or detected and whether key funds control personnel are trained; (2) investigations of ADA violations are processed in accordance with applicable DOD regulations; and (3) DOD tracks and reports metrics pertaining to its ADA investigations and what disciplinary actions are taken when ADA violations have occurred. GAO's review included all 54 ADA military service case files closed in fiscal years 2006 and 2007. GAO did not assess the appropriateness of the conclusions reached or of the disciplinary actions taken for the ADA cases.

DOD's complex and inefficient payment processes, nonintegrated business systems, and weak internal controls impair its ability to maintain proper funds control, leaving the department at risk of overobligating or overspending its appropriations in violation of the ADA. DOD Comptroller and military service financial management and comptroller officials responsible for the department's ADA programs have stated that because of weaknesses in DOD's business operations, knowledgeable personnel are critical to improving the department's funds control, and these officials have or are developing training courses. However, only the Army has attempted to identify and determine whether key funds control personnel have received appropriate training to provide them with the knowledge and skills to fulfill their responsibilities, including the ADA, required by DOD regulations. GAO's analysis of the 54 ADA cases and other documentation provided by the military services disclosed that the military services did not fully comply with DOD regulations intended to ensure that ADA reviews and investigations were conducted by qualified and independent personnel and were completed in a timely manner. More specifically, GAO found the following: (1) Only 6 of the 66 investigating officers assigned to the 54 ADA cases reviewed had received all of the required training. (2) Nineteen of the 54 ADA cases lacked documentation needed to determine whether the investigating officer was organizationally independent. Further, because the military services focused on organizational independence, they could not be assured that investigating officers were free of personal or external impairments to independence. ? ADA investigations were generally not completed within the 15 months and 25 days set forth by DOD. Of the 54 ADA cases reviewed, 22 cases took over 30 months to complete and only 16 were completed on time. GAO also noted that DOD, as required, reported the 34 cases in which it had concluded that an ADA violation had occurred to the President and the Congress, with a copy to GAO. For the remaining 20 cases, DOD concluded that an ADA violation had not occurred and therefore external reporting was not required. Further, DOD has taken steps to improve transparency over the ADA investigation process by requiring DOD components to report status information when an ADA investigation is initiated. Additionally, for the 34 ADA cases in which DOD concluded that an ADA violation had occurred, the nature of the disciplinary actions taken and reported to the President and the Congress was consistent with the criteria set forth in the DOD regulations. The ADA requires that employees who are responsible for ADA violations be subject to appropriate administrative discipline. The DOD regulations specify that administrative discipline can range from no action to the termination of the individual's employment.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: 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.

    Recommendation: The Secretary of Defense should 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 FMR requirements for investigating officer training.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: 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.

    Recommendation: The Secretary of Defense should 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 DOD FMR provisions requiring the maintenance and use of a roster for selecting qualified ADA investigating officers.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: 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.

    Recommendation: The Secretary of Defense should 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 ADA violations;

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: 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).

    Recommendation: To improve management and oversight of preliminary reviews and formal investigations of potential ADA violations, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller) to to update the department's 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 ADA reviews and investigations.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: 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).

    Recommendation: To improve management and oversight of preliminary reviews and formal investigations of potential ADA violations, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller) to to update the department's Financial Management Regulation (FMR) to require that ADA case files document that the investigating officer(s) selected to conduct a preliminary review or formal investigation is(are) free of personal, external, and organizational impairments.

    Agency Affected: Department of Defense

  6. Status: Closed - Implemented

    Comments: 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.

    Recommendation: The Secretary of Defense should 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 FMR requirements for investigating officer independence.

    Agency Affected: Department of Defense

 

Explore the full database of GAO's Open Recommendations »

Nov 20, 2014

Nov 17, 2014

Nov 12, 2014

Nov 10, 2014

Nov 7, 2014

Nov 6, 2014

Sep 22, 2014

Looking for more? Browse all our products here