I am pleased to present a summary covering the oversight activities of the Office of the Inspector General (OIG) for the Defense Intelligence Agency (DIA) from October 1, 2019, to March 31, 2020. In mid-March, I directed most of our employees to telework from home to promote social distancing consistent with national, Intelligence Community (IC), Department of Defense (DoD), and Agency guidelines. We uphold a small oversight presence onsite to cover our most essential functions—all other activities are maintained through teleworking.
Much of our work relies on access to classified information and systems and through engagement with Agency and community counterparts. Teleworking severely limits or restricts our access and engagement. As a result, we are unable to publish a comprehensive Semiannual Report (SAR) to Congress; however, we have produced work that has benefited DIA, DoD, IC, and the American public.
Despite production for this reporting period halting due to the pandemic, we issued one audit and one inspection report, outlining insights and recommendations accepted by management. Additionally, we completed 15 investigations and eight management referral reports identifying management actions, and estimated $152,995 losses due to fraud, waste, and abuse. Much of our work during this reporting period focused on the top management and performance challenges facing the Agency, including financial management and oversight of contracts. We also worked with management to close several recommendations. The following are additional details regarding our oversight work.
Audits: We engaged an independent public accounting firm to audit DIA’s FY 2019 financial statements. The report was issued in November 2019. The firm identified four material weaknesses and two significant deficiencies in the Internal Control report, and one instance in which DIA did not comply with Public Law 104-208, “Federal Financial Management Improvement Act of 1996,” September 30, 1996. We oversaw this work based on standards and supported the DoD OIG department-wide audit. We currently have five ongoing audits including IT Service Contracts, Access Removal, Unplanned Price Changes, Emergency and Extraordinary Expenses, and an Improper Payments Elimination and Recovery Act (IPERA) evaluation. In addition, we have one other audit in pre-announcement planning. During this reporting period, we closed the audit of Other Direct Costs; we also closed five audit recommendations and 14 remain open. In addition, we are also conducting a peer review of the National Reconnaissance Office. We plan to include the results of the IT Services Contracts audit, Access Removal audit, and the peer review in our fall SAR.
Inspections and Evaluations: We evaluated DIA’s compliance with the Federal Information Security Modernization Act—reissuing three recommendations and issuing five new recommendations. We also have five ongoing projects. We issued a draft evaluation of Special Access Program Central Office for management comment. We also announced evaluations of Foreign Disclosure and Classification Management. We fully expect to finish all three projects by the end of FY 2020 for reporting in the fall SAR. In addition, we have two other projects in pre-announcement planning that will be included in future SARs. We have 25 open recommendations. During the reporting period, we added five new recommendations and closed two.
Investigations: During the reporting period, we published 15 investigations. Four cases involved unsubstantiated allegations of reprisal. In three cases, we substantiated time and labor fraud allegations with an estimated loss of $24,331 to the Government. One case, regarding allegations of contractor cost mischarging, was substantiated with an estimated $88,120 loss to the Government. We also substantiated one case involving misuse of Government resources and another case involving abuse of authority coupled with prohibited personnel practices. Further, we investigated a case involving the use of public office for personal gain, in which we determined evidence was insufficient to conclude a violation occurred. Four other unsubstantiated cases involved allegations of misconduct by a senior military official, misuse of intelligence information for administrative actions against an employee, abuse of authority by a senior official, and violations of the Privacy Act of 1974. Lastly, in other investigative activity, we issued eight management referral reports. In one referral, we recommended management take action to recoup $40,544 in incentive pay to four DIA employees; the employees were approved for and received incentive pay but did not execute the incentive pay action.
I would also like to highlight our ongoing efforts to improve our oversight processes and enhance data management and security. We continue to expand our proactive fraud investigative resources and data analytic capabilities. Additionally, we are still on track to deploy our new Case Management and Tracking System, and we initiated planning for an OIG enterprise risk management program. Through risk management, we will identify and examine specific internal risks that affect our organization, and we will plan and execute strategies to mitigate these risks. Equally important, the program will also help us analyze and make recommendations to address internal enterprise risk management on a permanent basis.
Our accomplishments reflected in this summary are a credit to the talented and dedicated staff that I have the privilege to lead. We are committed and look forward to delivering the SAR with classified annex, as required by statute, upon resuming normal operations.
Kristi M. Waschull