Defense Management: More Transparency Needed over the Financial and Human Capital Operations of the Joint Improvised Explosive Device Defeat Organization

DOD concurred with this recommendation, responding as of 6/5/2008 that it had completed its planned action. DOD stated that JIEDDO had worked to formalize and document its processes to emplace internal controls in JIEDDO. Subsequent JIEDDO actions demonstrated an improved understanding of internal controls and evidenced compliance with DOD criteria for identification and disclosure of weaknesses. Specifically, JIEDDO (1) developed a Financial Management Standard Operating Procedure; (2) implemented controls to correct its material weaknesses, and; (3) published Program Budget Advisory Council instructions that outline the use of appropriated funds against a master spending plan. JIEDDO accomplished this with the help of an experienced, independent public accounting firm. According to JIEDDO officials, the engagement of an experienced accounting firm, and the initial steps taken thus far, directly resulted from GAO's work, findings, and recommendations. As a result, use of funds is better scrutinized by JIEDDO based on associated risks to the organization and accordingly we are closing this recommendation as being implemented.

DOD concurred with this recommendation, responding that as of 6/5/2008 it had completed its planned action and that JIEDDO now releases funding documents only after proper authorization is received and documented by either a JIEDDO funding memorandum (for initiatives less than $25M) or after Deputy Secretary of Defense approval (for initiatives in excess of $25M). JIEDDO acknowledged that in the past, there has been some confusion regarding the actual definition of the $25M. The new process requires that as soon as it is determined that an initiative will exceed the $25M threshold, DEPSECDEF approval is obtained. In another effort to ensure adequate internal controls are included in its processes, JIEDDO developed mandatory minimal transaction documentation that is required to be completed and kept on file. In GAO's subsequent work at JIEDDO, our objectives included assessing the efficacy of actions JIEDDO has taken to address our original findings and recommendations. We have noted a marked increased in JIEDDO's attention and efforts to improve its resource management to address this recommendation. For example, in December 2010, JIEDDO revised its Approval and Acquisition Management Process by creating a new mechanism for review and management of requests for funding. Specifically, JIEDDO created a new requirements assessment board that is independent of its technology acquisition directorate, thereby segregating key funding decisions from the entity that nominates/proposes JIEDDO counter-IED initiatives--the technology acquisition directorate. The board reviews and scrutinizes requests for funding and must validate all requirements before funding actions are executed. Accordingly, we are closing this recommendation as implemented.

DOD concurred with this recommendation and has undertaken actions to: (1) develop guidance for accounting and budget personnel to ensure that correct cost categories are used in the recording of accounting data; (2) fully staffed the division responsible for financial management and; (3) develop management directives, administrative policies, standard operating procedures, and other documentation that describe specific organizational responsibilities. JIEDDO has improved its financial management system--the Comprehensive Costs and Requirements System--by implementing and strengthening embedded transaction control and improved proper classification of transactions through its quality assurance program and staff training. JIEDDO has also developed and implemented a processing checklist to ensure that all transactions are properly coded for accounting classifications before executing funding transaction and has continued to revise controls as needed. For example, JIEDDO's Financial Management division revised its standard operating procedure to include a process for classifying expenditures and to correct misclassification's when identified. This included comprehensive review by appropriate budget analysts prior to the dispersal of funds. Moreover, JIEDDO's Financial Management division redesigned templates within its Comprehensive Costs and Requirements System workflow in an effort to capture obligation entries for supervisor review and supporting documentation. The revision and implementation of the JIEDDO Financial Management division's standard operating procedure is necessary to ensure that JIEDDO transactions are properly classified by lines of operation and other expenditure categories used by JIEDDO, and to promptly and properly correct misclassifications when identified. Accordingly, we are closing this recommendation as implemented.

DOD concurred with this recommendation and stated that JIEDDO has developed a Five-Year management Control Plan. JIEDDO provided additional training and instructions to all of its personnel and developed key checklists, which are an integral piece of the Management Control Program. JIEDDO also identified Management Control Administrators and Assessable Unit Managers and provided targeted training to ensure that checklists are not just completed, but that actual testing of key controls was accomplished. JIEDDO has taken several other actions to improve its Management Internal Control program. For example: (1) in August 2010 JIEDDO hired and experienced Management Control Administrator to build a strong internal control program and in September 2010, published an Internal Assessments Plan Standard Operating Procedure which defines roles and responsibilities for senior leadership, Assessable Unit Managers, and the Management Control Administrator for the Management Internal Control program; (2) in February 2011 JIEDDO published a desk-side guide for Management Control Administrators and Assessable Unit Managers; (3) in February 2011 JIEDDO implemented Management Internal Control program training at various levels and points in JIEDDO; and (4) in June 2011 updated an organization-wide risk assessment. In addition, JIEDDO has taken several steps to identify and correct its weaknesses. In its July 2009 Statement of Assurance for management controls to DOD, JIEDDO identified and reported its funds control process as a material weakness. JIEDDO's self-disclosure of a material weakness demonstrates a willingness to acknowledge its serious shortfalls to external parties and address remediation transparently. Further, in 2011, the steps JIEDDO has taken to remedy weaknesses in its Managers' Internal Control Program were corroborated and validated by the Office of the Secretary of Defense's Office of Financial Improvement Audit Readiness, concluding in June 2012 that JIEDDO's Managers' Internal Control Program material weaknesses previously reported in its Statement of Assurance had been successfully remedied. Accordingly, we are closing this recommendation as implemented.

DOD concurred with this recommendation and JIEDDO has instituted an improved process for routinely identifying, categorizing, and reporting government and contractor personnel employed in the work of JIEDDO. This system, the Personnel Statistics (PERSTAT) and Manpower Accountability Report system, accounts for and reports the status of all personnel and positions assigned on a daily basis, including all contractors employed by JIEDDO on counter-IED initiatives. JIEDDO completed the last phase of its PERSTAT system in its October 26, 2010 issuance of a written detailed operating procedure documenting JIEDDO staff's responsibilities under the system. By adopting and implementing the use of PERSTAT, JIEDDO is in a better position to readily provide accurate and reliable information to internal and external decision makers on its staffing levels, as well as to effectively plan for its future workforce needs. Accordingly, we are closing this recommendation as implemented.