FBI Trilogy: Responses to Posthearing Questions (09-JUN-06,	 
GAO-06-853R).							 
                                                                 
This report responds to a Congressional request for additional	 
information related to the May 2, 2006 Congressional hearing	 
entitled FBI Oversight. 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.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-853R					        
    ACCNO:   A55419						        
  TITLE:     FBI Trilogy: Responses to Posthearing Questions	      
     DATE:   06/09/2006 
  SUBJECT:   Accountability					 
	     Computer equipment contracts			 
	     Contract oversight 				 
	     Contractor payments				 
	     Internal controls					 
	     Questionable payments				 
	     FBI Sentinel Project				 
	     FBI Trilogy Project				 

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GAO-06-853R

     

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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,

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

           1. 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, 2006.1 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?

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

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 assets2 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.

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.

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)

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