DOD Personnel Clearances: Delays and Inadequate Documentation Found for Industry Personnel

DOD Personnel Clearances: Delays and Inadequate Documentation
Found for Industry Personnel (17-MAY-07, GAO-07-842T).

Individuals working for the private industry are playing a larger
role in national security work conducted by Department of Defense
(DOD) and other federal agencies. As of May 2006, industry
personnel held about 34 percent of DOD-maintained personnel
security clearances. The damage that the unauthorized disclosure
of classified information can cause to national security
necessitates the prompt and careful consideration of who is
granted a security clearance. Long-standing delays in determining
clearance eligibility and other challenges led GAO to designate
the DOD personnel security clearance program as a high-risk area
in January 2005 and again in GAO's January 2007 update of the
high-risk areas. In February 2005, DOD transferred its security
clearance investigations functions to the Office of Personnel
Management (OPM) and now obtains almost all of its clearance
investigations from OPM. The Office of Management and Budget
(OMB) is responsible for effective implementation of policy
relating to determinations of eligibility for access to
classified information. This testimony addresses the timeliness
of the process and completeness of documentation used to
determine eligibility of industry personnel for top secret
clearances in January and February 2006. This statement relies
primarily on GAO's September 2006 report (GAO-06-1070).
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-842T
ACCNO: A69736
TITLE: DOD Personnel Clearances: Delays and Inadequate
Documentation Found for Industry Personnel
DATE: 05/17/2007
SUBJECT: Background investigations
Classified defense information
Classified information
Department of Defense contractors
Documentation
Eligibility determinations
Employees
Policy evaluation
Program evaluation
Regulatory agencies
Reporting requirements
Security clearances
Government delays
Timeliness
GAO High Risk Series

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GAO-07-842T

* [1]Summary
* [2]Background
* [3]Determining Top Secret Clearances for Industry Personnel Ave

* [4]Delays in Determining Eligibility Are Caused by Many Factors
* [5]OMB's and OPM's Timeliness Reporting Does Not Convey Full Ma

* [6]OPM Delivered Incomplete Investigative Reports, and DISCO-Ad

* [7]Almost All of the Sampled Investigative Reports Were Incompl
* [8]DISCO Adjudicators Granted Top Secret Clearance Eligibility
* [9]Delivery and Use of Incomplete Investigations Increase Risks

* [10]Concluding Observations
* [11]Contact and Acknowledgments
* [12]GAO's Mission
* [13]Obtaining Copies of GAO Reports and Testimony

* [14]Order by Mail or Phone

* [15]To Report Fraud, Waste, and Abuse in Federal Programs
* [16]Congressional Relations
* [17]Public Affairs

Testimony

Before the Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia, Committee on Homeland Security
and Governmental Affairs, U.S. Senate

United States Government Accountability Office

GAO

For Release on Delivery
Expected at 9:30 a.m. EDT
Thursday, May 17, 2007

DOD PERSONNEL CLEARANCES

Delays and Inadequate Documentation Found for Industry Personnel

Statement of Derek B. Stewart, Director
Defense Capabilities and Management

GAO-07-842T

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss the Department of Defense's (DOD)
personnel security clearance program and problems that continue to
negatively affect that program. We have testified on clearance-related
issues in three prior hearings that this Subcommittee has held since
January 2005 when we first placed DOD's security clearance program on our
list of high-risk government programs and operations.1 To facilitate an
understanding of our recent findings on private industry personnel who
applied for top secret clearances,2 I would like to first provide some
information about the clearance process and events that have occurred
since we placed DOD's program on our high-risk list.

DOD is responsible for about 2.5 million security clearances issued to
servicemembers, DOD civilians, and industry personnel who work on
contracts for DOD and 23 other federal agencies. Individuals working for
the private industry are playing an increasingly larger role in national
security work conducted by DOD and other federal agencies as a result of
an increased awareness of threats to our national security stemming from
the September 11, 2001, terrorist attacks and increased efforts over the
past decade to privatize federal jobs. As of May 2006, industry personnel
held about 34 percent of DOD-maintained personnel security clearances.

As with servicemembers and federal workers, industry personnel must obtain
security clearances to gain access to classified information, which is
categorized into three levels: top secret, secret, and confidential. The
level of classification denotes the degree of protection required for
information and the amount of damage that unauthorized disclosure could
reasonably be expected to cause to national defense or foreign relations.
For top secret information, the expected damage that unauthorized
disclosure could reasonably be expected to cause is "exceptionally grave
damage;" for secret information, it is "serious damage;" and for
confidential information, it is "damage."3

1 GAO, DOD Personnel Clearances: New Concerns Slow Processing of
Clearances for Industry Personnel, [18]GAO-06-748T (Washington, D.C.: May
17, 2006); DOD Personnel Clearances: Government Plan Addresses Some
Long-standing Problems with DOD's Program, But Concerns Remain,
[19]GAO-06-233T (Washington, D.C.: Nov. 9, 2005); and DOD Personnel
Clearances: Some Progress Has Been Made but Hurdles Remain to Overcome the
Challenges That Led to GAO's High-Risk Designation, [20]GAO-05-842T
(Washington, D.C.: June 28, 2005). Since January 2005, we have provided
the Subcommittee with additional information in our answers to sets of
questions for the records: GAO, DOD Personnel Clearances: Questions and
Answers for the Record Following the Second in a Series of Hearings on
Fixing the Security Clearance Process, [21]GAO-06-693R (Washington, D.C.:
June 14, 2006), and Questions for the Record Related to DOD's Personnel
Security Clearance Program and the Government Plan for Improving the
Clearance Process, [22]GAO-06-323R (Washington, D.C.: Jan. 17, 2006).

2 GAO, DOD Personnel Clearances: Additional OMB Actions Are Needed to
Improve the Security Clearance Process, [23]GAO-06-1070 (Washington, D.C.:
Sept. 28, 2006).

DOD's Office of the Under Secretary of Defense for Intelligence (OUSD(I))
has overall responsibility for DOD clearances. Two offices are responsible
for adjudication (eligibility determination to hold a clearance) for
industry personnel. The Defense Industrial Security Clearance Office
(DISCO) within OUSD(I) is responsible for adjudicating cases that contain
only favorable information or minor issues regarding security concerns
(e.g., some overseas travel by the individual). The Defense Office of
Hearings and Appeals (DOHA) within the Defense Legal Agency is responsible
for adjudicating cases that contain major security issues (e.g., an
individual's unexplained affluence or criminal history), which could
result in the denial of clearance eligibility.

Long-standing delays in determining clearance eligibility and other
clearance challenges led us to designate DOD's personnel security
clearance program as a high-risk area in January 2005 and continue that
designation in the updated list of high-risk areas that we published in
2007.4 In February 2005, DOD transferred its security clearance
investigations functions to the Office of Personnel Management (OPM) and
now obtains almost all of its clearance investigations from OPM, which
conducts about 90 percent of all federal clearance investigations. Other
recent significant events affecting DOD's clearance program have been the
passage of the Intelligence Reform and Terrorism Prevention Act of 2004
(IRTPA)5 and the June 2005 issuance of Executive Order No. 13381,6
Strengthening Processes Relating to Determining Eligibility for Access to
Classified National Security Information. IRTPA included milestones for
reducing the time to complete clearances, general specifications for a
database on security clearances, and requirements for reciprocity of
clearances (the acceptance of a clearance and access granted by another
department, agency, or military service). Executive Order No. 13381
assigned the Office of Management and Budget (OMB) responsibility for the
effective implementation of a uniform, efficient, effective, timely, and
reciprocal policy related to determinations of personnel eligibility for
access to classified information.

3 5 C.F.R. S 1312.4, Classification of National Security Information
(2006).

4 GAO, High-Risk Series: An Update, [24]GAO-05-207 (Washington, D.C.:
January 2005), and High-Risk Series: An Update, [25]GAO-07-310
(Washington, D.C.: January 2007).

5 Pub. L. No. 108-458.

6 The White House, Exec. Order No. 13381, (June 27, 2005). On June 29,
2006, the executive order was extended until July 1, 2007.

In June 2005, OMB's Deputy Director of Management was designated as the
OMB official responsible for improving the process by which the government
determines eligibility for access to classified national security
information. One of OMB's efforts to improve the security clearance
process involved taking a lead in preparing a November 2005 strategic plan
to improve personnel security clearance processes governmentwide. In its
February 2007 annual IRTPA-mandated report to Congress,7 OMB noted
additional improvements that had been made to the clearance process
governmentwide. For example, OMB indicated that it had issued reciprocity
standards, OPM had increased its investigative workforce to an estimated
9,367 total staff in efforts to reach an earlier goal of having 8,000
full-time staff, and agencies had dramatically increased the use of OPM's
Electronic Questionnaires for Investigations Processing (eQIP) system to
reduce the time required to get a clearance by 2 to 3 weeks. The report
also identified several challenges associated with accessing records
repositories.

In requesting our past work, you have expressed concern about the negative
consequences of untimely, inadequate, or inconsistent investigations and
adjudications. This testimony summarizes our earlier work that examined
those issues and supplements other clearance-related reports that we have
issued since originally placing DOD's personnel security clearance program
on our high-risk list (see the list of Related GAO Products at the end of
this statement). It addresses two questions: (1) How timely are the
processes used to determine whether industry personnel are eligible for
top secret clearances? and (2) How complete is the documentation of the
processes used to determine whether industry personnel are eligible for
top secret clearances?

7 Office of Management and Budget, Report of the Security Clearance
Oversight Group Consistent with Title III of the Intelligence Reform and
Terrorism Prevention Act of 2004 (February 2007).

This statement relies primarily on GAO's September 2006 report.8 In
conducting our prior work on these two key questions, we reviewed laws,
executive orders, policies, and reports related to the timeliness and
completeness of security clearance investigations and adjudications for
industry personnel as well as servicemembers and civilian government
employees. Those sources provided the criteria used for assessing
timeliness and documentation completeness, and identified causes for and
effects from delayed clearances and incomplete investigative and
adjudicative reports. Additional insights about causes of and effects from
delayed clearances and incomplete investigative and adjudicative reports
were obtained from interviews with and documentary evidence from personnel
associated with a variety of government offices: OUSD(I), DISCO, DOHA,
other DOD adjudication facilities that make clearance determinations for
servicemembers and DOD civilians; DOD's Defense Personnel Security
Research Center; the Defense Security Service's Training Academy that
offers adjudicator training; and OPM. Nongovernmental organizations
supplying information on conditions, causes, and effects included
officials representing two of OPM's investigations contractors and
technology associations whose member organizations require clearances for
their industry personnel. We also reviewed the February 2007 annual
IRPTA-mandated report to Congress by the Security Clearance Oversight
Group. For the timeliness question, our analyses of conditions included a
review of computerized data abstracted from DOD's Joint Personnel
Adjudication System (JPAS) and statistical reports on timeliness that OPM
produced for DOD. The abstract was for the population of 1,685 industry
personnel granted initial top secret clearances and 574 industry personnel
granted top secret clearance updates by DISCO during January and February
2006. The clearance investigations for those 2,259 industry personnel were
started at various times prior to the adjudications. While we found
problems with the accuracy of some of the JPAS data, we determined they
were sufficiently reliable for the purposes of our September 2006 report.
DOD and OPM also supplied timeliness statistics for other periods, levels
of clearances, types of personnel, and agencies to provide us with a
broader context with which to interpret the timeliness statistics that we
computed from the JPAS database abstract. We addressed the completeness
question with a multiple-step process. We (1) randomly selected 50 cases
from the previously described population of 1,685 initially cleared
industry personnel, (2) obtained paper files of the 50 investigative and
adjudicative reports, (3) created a data collection instrument using
federal investigative standards and adjudicative guidelines to standardize
our data gathering, (4) sought experts' comments to refine our instrument
and process, (5) coded data from the paper files, (6) had a second team
member independently verify the information that another team member had
coded, and (7) computed statistics to indicate the numbers of
investigative and adjudicative reports with various types of missing
documentation. In addition, two team members attended OPM's basic special
agent training course to obtain an understanding of the investigative
requirements as promulgated by OPM, and two other members of our team took
about 40 hours of online adjudication training. We performed our original
work from September 2005 through August 2006 in accordance with generally
accepted government auditing standards.

8 [26]GAO-06-1070 .

Summary

At the time we issued our report in September 2006, our analysis of
timeliness data showed that industry personnel contracted to work for the
federal government waited more than 1 year on average to receive top
secret security clearances and that timeliness statistics reported to
Congress by OMB and OPM do not convey the full magnitude of the delays.
Industry personnel granted eligibility for top secret clearance from DISCO
from January to February 2006 waited an average of 446 days for their
initial clearances and 545 days for their clearance updates. Delays were
found in each phase of the clearance process that we examined. First, the
application submission phase took an average of 111 days, nearly 100 days
more than the government's goal. Inaccurate data that the employee
provided in the application, multiple reviews of the application, and
manual entry of some application forms are some of the causes for the
extended application-submission phase. Second, the investigation phase
took an average of 286 days for initial top secret clearances, well in
excess of the 180-day goal. In addition, it took 419 days for top secret
clearance updates (no goal is given for clearance update investigations).
Factors contributing to the slowness of completing the investigation phase
include an inexperienced investigative workforce and problems accessing
national, state, and local records. Finally, it took DISCO adjudicators an
average of 39 days to grant initial clearance eligibility to the industry
personnel in our study population, compared to IRTPA's December 2006
requirement that 80 percent of all adjudication cases be completed in 30
days. Regardless of when in the process the delays occur, the outcome is
the same--the government may incur additional costs from new industry
employees being unable to begin work promptly and increased risks to
national security because previously cleared industry employees are likely
to continue working with critical information while it is determined
whether they should still be eligible to hold a clearance. Moreover, the
statistics that OMB and OPM report to Congress on the timeliness of the
clearance process do not portray the full length of time it takes many
applicants to receive clearances. We found several issues with the
statistics, including limited information on reinvestigations for
clearance updating and failure to measure the total time it took to
complete the various phases of the clearance process. Statistics that
underrepresent the time that it takes for investigations to be completed
prevent Congress from having a full understanding of the government's
efforts to decrease delays in the clearance process and determining if
legislative actions are necessary.

In addition to delays in the clearance process, we found that that OPM
provided incomplete investigative reports to DISCO adjudicators, which
they used to determine top secret clearance eligibility. In our review of
50 initial investigations for top secret clearances randomly sampled from
the population used in our timeliness analyses, we found that almost all
(47 of 50) of the sampled investigative reports were missing documentation
required by federal investigative standards. The missing data were of two
general types: (1) the absence of documentation showing that an
investigator had gathered all required information and (2) the absence of
information to help resolve issues (such as conflicting information on
indebtedness) that were raised in other parts of the investigative report.
The federal standards indicate that investigations may be expanded as
necessary to resolve issues. However, we found a total of 36 unresolved
issues in 27 of the investigative reports. The most common unresolved
issues pertained to financial consideration, foreign influence, and
personal conduct. OPM officials suggested that the need to rapidly
increase the size of the investigative workforce and prior quality control
procedures that have since been replaced were some of the causes for the
delivery of incomplete investigative reports to DISCO. Our review also
found that DISCO adjudicators granted top secret eligibility to all 27
industry personnel whose investigative reports contained unresolved
issues. In our November 2005 assessment of the government plan for
improving the clearance process, we raised concerns about the limited
attention devoted to assessing quality in the clearance process, but the
plan has not been revised to address the shortcoming we identified.9 The
use of incomplete investigations and adjudications in the granting of top
secret clearance eligibility increases the risk of unauthorized disclosure
of classified information. Also, it could negatively affect the
government's efforts to move toward greater reciprocity. To improve the
timeliness and completeness of investigations and adjudications, our
report contained several recommendations to OMB.

9 [27]GAO-06-233T .

Background

To ensure the trustworthiness, reliability, and character of personnel in
positions with access to classified information, DOD relies on a
multiphased personnel security clearance process.10 Figure 1 shows six
phases that could be involved in determining whether to grant an actual or
a potential job incumbent a clearance. The three phases shown in gray are
those that are most transparent to individuals requesting an initial
clearance, and they are the three phases that were the primary focus of
the findings in this testimony.

10 DOD Directive 5200.2, DOD Personnel Security Program (Apr. 9, 1999),
establishes policy and procedures for granting DOD military, civilian, and
industry personnel access to classified information. Additionally, DOD
Regulation 5200.2-R, DOD Personnel Security Program (January 1987),
establishes DOD personnel security policies and procedures; sets forth
standards, criteria, and guidelines upon which personnel security
determinations shall be based; prescribes the types and scopes of
personnel security investigations required; details the evaluation and
adverse action procedures by which personnel security determinations shall
be made; and assigns overall program management responsibilities. The
policies and procedures for granting industry personnel security
clearances and adjudicative procedural guidance for appealing cases if an
unfavorable clearance decision is reached also are contained in DOD
Directive 5220.6, Defense Industrial Personnel Security Clearance Review
Program (Apr. 20, 1999).

Figure 1: Six Phases in the Personnel Security Clearance Process

Determining Top Secret Clearances for Industry Personnel Averaged More Than a
Year, and Government Statistics Did Not Portray All Delays

At the time of our September 2006 report, our independent analysis of
timeliness data showed that industry personnel contracted to work for the
federal government waited more than 1 year on average to receive top
secret security clearances, and government statistics did not portray the
full length of time it takes many applicants to obtain clearances. We
found delays in all phases of the clearance process that we examined, and
government statistics did not account for the full extent of the delays.
Delays in the clearance process may cost money and pose threats to
national security (see table 1).

Table 1: Time Required to Grant Eligibility for a Top Secret Clearance to
Industry Personnel--Cases Adjudicated in January and February 2006

Phases of security clearance process a
Total clearance 2. Application 3. Investigation 4. Adjudication
process submission
Clearance Average Average days 111 Average days 286 Averagedays393638
type daysb 81 103 419 320
Initial 446 545
Update 471
All
Example tasks and o Subject o If o OPM prints a o DISCO
decisions signs and application is paper copy of adjudicator
required in each dates the not submitted the reviews the
phase. application. via eQIP, OPM investigative information
o Facility key enters report. in the
security information o OPM ships the investigative
officer checks for the paper copy of report.
application application the report to o DISCO
materials for into its the adjudication adjudicator
completeness investigative facility if the determines if
and accuracy, database. agency chose industry
and forwards o OPM that format or employee is
them to DISCO schedules the cannot get it eligible for
after any investigation, electronically.c a clearance.
applicable assigning the d
changes. investigation
o DISCO to its federal
adjudicator investigative
reviews workforce or
materials for one of its
completeness investigations
and other contractors.
concerns, and o
returns Investigators
deficient gather
materials to information on
the facility the individual
security in order to
officer for produce an
further work. investigative
o If the report.
application o OPM's PIPS
materials are database
approved, obtains a
DISCO variety of
adjudicators electronic
determine information
whether the that is
applicant is available via
eligible for government
an interim databases.
clearance. o Once the
o DISCO then investigative
forwards the work has been
completed completed, OPM
application to checks the
OPM to begin investigative
the report for
investigation. completeness
o OPM reviews before sending
the the report to
application an
for adjudication
completeness facility.
and other
concerns and
returns
deficient
materials to
DISCO for
further work.

Source: GAO analysis of OPM and DOD information.

Legend: PIPS = OPM's Personnel Investigations Processing System.

aThe phases referred to here are based on those in figure 1.

bThe average days for the phases do not sum to the average days for the
total clearance process because the number of applicable cases varies for
each calculation.

cAccording to OPM, the requesting agency has the option to request that
the investigation be delivered through PIPS, eliminating the mail time,
for all completed investigations that do not contain hard-copy third-party
information.

dAdditional time may be needed in this phase if DISCO adjudicators
identify major security issues in the investigative report. Such cases may
be submitted to DOHA for the clearance eligibility determination.

Delays in Determining Eligibility Are Caused by Many Factors

As table 1 shows, industry personnel granted eligibility for top secret
clearances from DISCO from January to February 2006 waited an average of
446 days for their initial clearances or 545 days for their clearance
updates. DOD may, however, have issued interim clearances to some of these
industry personnel, which might have allowed them to begin work before
they received their final clearances. IRTPA requires that beginning in
December 2006, 80 percent of clearances be completed in an average of 120
days. Delays were found in each phase of the clearance process that we
examined:

o Application submission. The application-submission phase of the
clearance process took an average of 111 days for the initial
clearances that DISCO adjudicated in January and February 2006
(see table 1). The starting point for our measurement of this
phase was the date when the application was submitted by the
facility security officer. Our end point for this phase was the
date that OPM scheduled the investigation into its Personnel
Investigations Processing System. We used this starting date
because the government can begin to incur an economic cost if an
industry employee cannot begin work on a classified contract
because of delays in obtaining a security clearance and this end
date because OPM currently uses this date as its start point for
the next phase in the clearance process. The government plan for
improving the clearance process noted that "investigation
submission" (i.e., application submission) is to be completed
within an average of 14 calendar days or less. Therefore, the 111
days taken for the application-submission phase was nearly 100
more days on average than allocated. Several factors contributed
to the amount of time we observed in the application-submission
phase, including rejecting applications multiple times because of
inaccurate information (as reported in an April 2006 DOD Office of
Inspector General report); multiple completeness reviews--the
corporate facility security officer, DISCO adjudicators, and OPM
staff; and manually entering data from paper applications if eQIP
was not used.

o Investigation. Investigations for the initial top secret
clearances of industry personnel adjudicated in January and
February 2006 took an average of 286 days, compared to OMB's
180-day goal for that period (see table 1). During the same
period, investigations for top secret clearance updates or
"reinvestigations" took an average of 419 days, almost one and a
half times as long as the initial investigations (no goal is given
for clearance updates or reinvestigations). The mandated February
2007 OMB report to Congress noted that "Reinvestigation timeliness
has not been addressed, because the improvement effort focused on
individuals for whom initial security clearances are required to
perform work." Our September 2006 report identified many factors
that inhibited the speed with which OPM can deliver investigative
reports to DISCO and other adjudication facilities. Those causes
included backlogged cases that prevent the prompt start of work on
new cases, the relative inexperience of the investigative
workforce, slowness in developing the capability to investigate
overseas leads, and difficulty obtaining access to data in
governmental records.

o Adjudication. DISCO adjudicators took an average of 39 days to
grant initial clearance eligibility to the industry personnel in
our population (see table 1). The measurement of this phase for
our analysis used the same start and stop dates that OPM uses in
its reports, starting on the date that OPM closed the report and
continuing through the date that DISCO adjudicators decided
clearance eligibility. IRTPA requires that at least 80 percent of
the adjudications made from December 2006 through December 2009 be
completed within an average of 30 days. As of June 2006, DISCO
reported that it had adjudicated 82 percent of its initial top
secret clearances within 30 days.

Delays in any phase of the clearance process cost money and
threaten national security. Delays in completing initial security
clearances may have a negative economic impact on the costs of
performing classified work within or for the U.S. government. For
example, in a May 2006 congressional hearing, a representative of
a technology association testified that retaining qualified
personnel resulted in salary premiums as high as 25 percent for
current clearance holders.11 Delays in completing clearance
updates can have serious but different negative consequences than
those stemming from delays in completing initial
clearance-eligibility determinations. In 1999, the Joint Security
Commission reported that delays in initiating reinvestigations for
clearance updates create risks to national security because the
longer individuals hold clearances the more likely they are to be
working with critical information.

11 Doug Wagoner, statement for the record, hearing before the Committee on
Government Reform, U.S. House of Representatives (May 17, 2006).

OMB's and OPM's Timeliness Reporting Does Not Convey Full Magnitude
of Delays

The statistics that OMB and OPM have provided to Congress on the
timeliness of the personnel security clearance process do not
convey the full magnitude of the investigation-related delays
facing the government. While our September 2006 report noted
additional problems with the transparency of the timeliness
statistics, I will review our concerns about five such issues: (1)
limited information on reinvestigations for clearance updating,
(2) not counting the total number of days to finish the
application-submission phase, (3) shifting some
investigation-related days to the adjudication phase or not
counting them, (4) not counting the total number of days to
complete closed pending cases, and (5) not counting the total
number of days to complete investigations sent back for rework.

Limited information on reinvestigations for clearance updating. In
its mandated February 2007 report to Congress, OMB acknowledged
that "reinvestigation timeliness has not been addressed," but the
findings from our population of industry personnel (obtained using
DOD's, instead of OPM's, database to assess timeliness) indicated
that clearance update reinvestigations took about one and a half
times as long as the initial investigations. The absence of
timeliness information on clearance update reinvestigations does
not provide all stakeholders--Congress, agencies, contractors
attempting to fulfill their contracts, and employees awaiting
their clearances--with a complete picture of clearance delays. We
have noted in the past that focusing on completing initial
clearance investigations could negatively affect the completion of
clearance update reinvestigations and thereby increase the risk of
unauthorized disclosure of classified information.

Not counting all days to finish the application-submission phase.
OMB's February 2007 report noted that its statistics do not
include "the time to hand-off applications to the investigative
agency." The gray section of the application-submission phase in
table 1 shows some of the activities that were not counted when we
examined January and February 2006 clearance documentation for
industry personnel. These activities could be included in
timeliness measurements depending on the interpretation of what
constitutes "receipt of the application for a security clearance
by an authorized investigative agency"--IRTPA's start date for the
investigation phase.

Shifting some investigation-related days to the adjudication phase
or not counting them. In our September 2006 report, we raised
concerns about how the time to complete the adjudication phase was
measured. The activities in the gray section of the adjudication
phase in table 1 show that the government's procedures for
measuring the time required for the adjudication phase include
tasks that occur before adjudicators actually receive the
investigative reports from OPM. More recently, OMB's February 2007
report to Congress noted that its timeliness statistics do not
include "the time to ... hand-off investigation files to the
adjudicative agency" and estimated this handling and mailing time
at up to 15 days.

Not counting all days for closed pending cases. OPM's May 2006
testimony before Congress did not indicate whether the timeliness
statistics on complete investigations included a type of
incomplete investigation that OPM sometimes treats as being
complete. In our February 2004 report, we noted that OPM's
issuance of "closed pending" investigations--investigative reports
sent to adjudication facilities without one or more types of
source data required by the federal investigative
standards--causes ambiguity in defining and accurately estimating
the backlog of overdue investigations. In our February 2004
report, we also noted that cases that are closed pending the
provision of additional information should continue to be tracked
separately in the investigation phase of the clearance process.
According to OPM, from February 20, 2005, through July 1, 2006,
the number of initial top secret clearance investigative reports
that were closed pending the provision of additional information
increased from 14,841 to 18,849, a 27 percent increase. DISCO
officials and representatives from some other DOD adjudication
facilities have indicated that they will not adjudicate closed
pending cases since critical information is missing. OPM, however,
has stated that other federal agencies review the investigative
reports from closed pending cases and may determine that they have
enough information for adjudication. Combining partially completed
investigations with fully completed investigations overstates how
quickly OPM is supplying adjudication facilities with the
information they require to make their clearance-eligibility
determinations.

Not counting all days when inadequate investigations are returned.
OMB's February 2007 report stated that its statistics do not
include the time incurred to "return the files to the
investigative agency for further information." OPM's procedure is
to restart the measurement of investigation time for the 1 to 2
percent of investigative reports that are sent back for quality
control reasons, which does not hold OPM fully accountable for
total investigative time when deficient products are delivered to
its customers. In fact, restarting the time measurement for
reworked investigations could positively affect OPM's statistics
if the reworked sections of the investigation take less time than
did the earlier effort to complete the large portion of the
investigative report.

IRTPA establishes timeliness requirements for the security
clearance process. Specifically, it states that "each authorized
adjudicative agency shall make a determination on at least 80
percent of all applications for a personnel security clearance
pursuant to this section within an average of 120 days after the
date of receipt of the application for a security clearance by an
authorized investigative agency." IRTPA did not identify
situations that could be excluded from mandated timeliness
assessments. Without fully accounting for the total time needed to
complete the clearance process, Congress will not be able to
accurately determine whether agencies have met IRTPA-mandated
requirements or determine if legislative actions are necessary.

OPM Delivered Incomplete Investigative Reports, and DISCO-
Adjudicated Cases Did Not Document All Clearance-Determination
Considerations

OPM provided incomplete investigative reports to DOD adjudicators,
which they used to determine top secret clearance eligibility.
Almost all (47 of 50) of the sampled investigative reports we
reviewed were incomplete based on requirements in the federal
investigative standards. In addition, DISCO adjudicators granted
clearance eligibility without requesting additional information
for any of the incomplete investigative reports and did not
document that they considered some adjudicative guidelines when
adverse information was present in some reports. Granting
clearances based on incomplete investigative reports increases
risks to national security. In addition, use of incomplete
investigative reports and not fully documenting adjudicative
considerations may undermine the government's efforts to increase
the acceptance of security clearances granted by other federal
agencies.

Almost All of the Sampled Investigative Reports Were Incomplete

In our review of 50 initial investigations randomly sampled from
the population used in our timeliness analyses, we found that 47
of 50 of the investigative reports were missing documentation
required by the federal investigative standards. The missing data
were of two general types: (1) the absence of documentation
showing that an investigator gathered the prescribed information
in each of the applicable 13 investigative areas and included
requisite forms in the investigative report and (2) the absence of
information to help resolve issues (such as conflicting
information on indebtedness) that were raised in other parts of
the investigative report. The requirements for gathering these
types of information were identified in federal investigative
standards published about a decade ago.

At least half of the 50 reports did not contain the required
documentation in 3 investigative areas: residence (33 of 50),
employment (32), and education (27). In addition, many
investigative reports contained multiple deficiencies within each
of these areas. For example, multiple deficiencies might be
present in the residence area because investigators did not
document a rental record check and an interview with a
neighborhood reference. Moreover, 44 of the 50 investigative
reports had 2 to 6 investigative areas out of a total of 13 areas
with at least one piece of missing documentation.

We also found a total of 36 unresolved issues in 27 of the
investigative reports. The three investigative areas with the most
unresolved issues were financial consideration (11 of 50 cases),
foreign influence (11), and personal conduct (7). Federal
standards indicate that investigations may be expanded as
necessary to resolve issues. According to OPM, (1) issue
resolution is a standard part of all initial investigations and
periodic reinvestigations for top secret clearances and (2) all
issues developed during the course of an investigation should be
fully resolved in the final investigative report provided to DOD.

One investigative report we examined serves as an example of the
types of documentation issues we found during our review. During
the course of this particular investigation, the subject reported
having extramarital affairs; however, there was no documentation
to show that these affairs had been investigated further. Also,
the subject's clearance application indicated cohabitation with an
individual with whom the subject had previously had a romantic
relationship, but there was no documentation that record checks
were performed on the cohabitant. Moreover, information in the
investigative report indicated that the subject had defaulted on a
loan with a balance of several thousand dollars; however, no other
documentation suggested that this issue was explored further. When
we reviewed this and other deficient investigative reports with
OPM Quality Management officials, they agreed that the
investigators should have included documentation to resolve the
issues.

While we found that the interview narratives in some of the 50 OPM
investigative reports were limited in content, we did not identify
them as being deficient for the purposes of our analysis because
such an evaluation would have required a subjective assessment
that we were not willing to make. For example, in our assessment
of the presence or absence of documentation, we found a 35-word
narrative for a subject interview of a naturalized citizen from an
Asian country. It stated only that the subject did not have any
foreign contacts in his birth country and that he spent his time
with family and participated in sports. Nevertheless, others with
more adjudicative expertise voiced concern about the issue of
documentation adequacy. Top officials representing DOD's
adjudication facilities with whom we consulted were in agreement
that OPM-provided investigative summaries had been inadequate.

When we reviewed our findings in meetings with the Associate
Director of OPM's investigations unit and her quality management
officials they cited the inexperience of the rapidly expanded
investigative workforce and variations in training provided to
federal and contractor investigative staff as possible causes for
the incomplete investigative reports we reviewed. Later, in
official agency comments to our September 2006 report, OPM's
Director indicated that some of the problems that we reported were
the result of transferred staff and cases when OPM accepted DOD
investigative functions and personnel. However, OPM had had 2
years to prepare for the transfer between the announced transfer
agreement in February 2003 and its occurrence in February 2005.
Furthermore, the staff and cases were under OPM control until the
investigative reports were subsequently transferred to OPM for
adjudication in January or February of 2006. In addition, 47 of
the 50 investigative reports that we reviewed were missing
documentation even though OPM had quality control procedures for
reviewing the reports before they were sent to DOD.

In our November 2005 testimony evaluating the government plan for
improving the personnel security clearance process, we stated that
developers of the plan may wish to consider adding other
indicators of the quality of investigations. During our review, we
asked the Associate Director of OPM's Investigations Unit if OMB
and OPM had made changes to the government plan to address quality
measurement and other shortcomings we identified. OPM's Associate
Director said that the plan had not been modified to address our
concerns but that implementation of the plan was continuing.

DISCO Adjudicators Granted Top Secret Clearance Eligibility for
Cases with Missing Information

Our review found that DISCO adjudicators granted top secret
clearance eligibility for all 47 of the 50 industry personnel
whose investigative reports did not have full documentation. In
making clearance-eligibility determinations, the federal
guidelines require adjudicators to consider (1) guidelines
covering 13 specific areas, such as foreign influence and
financial considerations; (2) adverse conditions or conduct that
could raise security concerns and factors that might mitigate
(alleviate) the condition for each guideline; and (3) general
factors related to the whole person. According to a DISCO
official, DISCO and other DOD adjudicators are to record
information relevant to each of their eligibility determinations
in JPAS. They do this by selecting applicable guidelines and
mitigating factors from prelisted responses and may type up to
3,000 characters of additional information.

The adjudicators granted eligibility for the 27 industry personnel
whose investigative reports (discussed in the prior section)
contained unresolved issues without requesting additional
information or documenting in the adjudicative report that the
information was missing. The following is an example of an
unresolved foreign influence issue, which was not documented in
the adjudicative report, although DISCO officials agreed that
additional information should have been obtained to resolve the
issue before the individual was granted a top secret clearance. A
state-level record check on an industry employee indicated that
the subject was part owner of a foreign-owned corporation.
Although the DISCO adjudicator applied the foreign influence
guideline for the subject's foreign travel and mitigated that
foreign influence issue, there was no documentation in the
adjudicative report to acknowledge or mitigate the foreign-owned
business. When we asked why adjudicators did not provide the
required documentation in JPAS, the DISCO officials as well as
adjudication trainers said that adjudicators review the
investigative reports for sufficient documentation to resolve
issues and make judgment calls about the amount of risk associated
with each case by weighing a variety of past and present,
favorable and unfavorable information about the person to reach an
eligibility determination.

Seventeen of the 50 adjudicative reports were missing
documentation on a total of 22 guidelines for which issues were
present in the investigative reports. The missing guideline
documentation was for foreign influence (11), financial
considerations (5), alcohol consumption (2), personal conduct
issues (2), drug involvement (1), and foreign influence (1). DISCO
officials stated that procedural changes associated with JPAS
implementation contributed to the missing documentation. DISCO
began using JPAS in February 2003, and it became the official
system for all of DOD in February 2005. Before February 2005,
DISCO adjudicators were not required to document the consideration
of a guideline issue unless the adverse information could
disqualify an individual from being granted a clearance
eligibility. After JPAS implementation, DISCO adjudicators were
trained to document in JPAS their rationale for the clearance
determination and any adverse information from the investigative
report, regardless of whether an adjudicative guideline issue
could disqualify an individual from obtaining a clearance. The
administrators also attributed the missing guideline documentation
to a few adjudicators attempting to produce more adjudication
determinations.

Delivery and Use of Incomplete Investigations Increase Risks to
National Security and Reciprocity

Decisions to grant clearances based on incomplete investigations
increase risks to national security because individuals can gain
access to classified information without being vetted against the
full federal standards and guidelines. Furthermore, if
adjudication facilities send the incomplete investigations back to
OPM for more work, the adjudication facilities must use
adjudicator time to review cases more than once and then use
additional time to document problems with the incomplete
investigative reports.

Concluding Observations

Incomplete investigations and adjudications undermine the
government's efforts to move toward greater clearance and access
reciprocity. An interagency working group, the Security Clearance
Oversight Steering Committee, noted that agencies are reluctant to
be accountable for poor quality investigations, adjudications
conducted by other agencies or organizations, or both. To achieve
fuller reciprocity, clearance-granting agencies need to have
confidence in the quality of the clearance process. Without full
documentation of investigative actions, information obtained, and
adjudicative decisions, agencies could continue to require
duplicative investigations and adjudications.

Incomplete timeliness data limit the visibility of stakeholders
and decision makers in their efforts to address long-standing
delays in the personnel security clearance process. For example,
not accounting for all of the time used when personnel submit an
application multiple times before it is accepted limits the
government's ability to (1) accurately monitor the time required
for each step in the application-submission phase and (2) identify
positive steps that facility security officers, DISCO
adjudicators, OPM investigative staff, and other stakeholders can
take to speed the process. The timeliness-related concerns
identified in my testimony show the fragmented approach that the
government has taken to addressing clearance problems. When I
testified before this Subcommittee in November 2005, we were
optimistic that the government plan for improving the clearance
process prepared under the direction of OMB's Deputy Director for
Management would be a living document that would provide the
strategic vision for correcting long-standing problems in the
personnel security clearance process. However, nearly 2 years
after first commenting on the plan, we have not been provided with
a revised plan that lays out how the government intends to address
the shortcomings that we identified in the plan during our
November 2005 testimony. Continued failure to address the
shortcomings we have cited could significantly limit the positive
impact that the government has made in other portions of the
clearance process through improvements such as hiring more
investigators and promoting reciprocity.

While eliminating delays in the clearance process is an important
goal, the government cannot afford to achieve that goal by
providing investigative and adjudicative reports that are
incomplete in the key areas required by federal investigative
standards and adjudicative guidelines. Also, the incomplete
investigative and adjudicative reports could suggest to some
security managers that there is at least some evidence to support
agencies' concerns about the risks that may come from accepting
the clearances issued by other federal agencies, and thereby
negatively affect OMB's efforts toward achieving greater
reciprocity. Further, as we pointed out in November 2005, the
almost total absence of quality metrics in the governmentwide plan
for improving the clearance process hinders Congress's oversight
of these important issues. Finally, the missing documentation
could have longer-term negative effects, such as requiring future
investigators and adjudicators to devote time to obtaining the
documentation missing from current reviews when it is time to
update the clearances currently being issued.

Mr. Chairman and Members of the Subcommittee, this concludes my
prepared statement. I would be happy to answer any questions you
may have at this time.

Contact and Acknowledgments

For further information regarding this testimony please contact me
at (202)512-5559 or [email protected]. Contact points for our
Offices of Congressional Relations and Public Affairs may be found
on the last page of this statement. Individuals who made key
contributions to this testimony are Jack E. Edwards, Assistant
Director; Kurt A. Burgeson; Nicolaas C. Cornelisse; Alissa H.
Czyz; Ronald La Due Lake; Beverly C. Schladt; and Karen D.
Thornton.

Related GAO Products

DOD Personnel Clearances: Questions and Answers for the Record
Following the Second in a Series of Hearings on Fixing the
Security Clearance Process. [28]GAO-06-693R . Washington, D.C.:
June 14, 2006.

DOD Personnel Clearances: New Concerns Slow Processing of
Clearances for Industry Personnel. [29]GAO-06-748T . Washington,
D.C.: May 17, 2006.

DOD Personnel Clearances: Funding Challenges and Other Impediments
Slow Clearances for Industry Personnel. [30]GAO-06-747T .
Washington, D.C.: May 17, 2006.

GAO's High-Risk Program. [31]GAO-06-497T . Washington, D.C.: March
15, 2006.

Questions for the Record Related to DOD's Personnel Security
Clearance Program and the Government Plan for Improving the
Clearance Process. [32]GAO-06-323R . Washington, D.C.: January 17,
2006.

DOD Personnel Clearances: Government Plan Addresses Some
Long-standing Problems with DOD's Program, But Concerns Remain.
[33]GAO-06-233T . Washington, D.C.: November 9, 2005.

Defense Management: Better Review Needed of Program Protection
Issues Associated with Manufacturing Presidential Helicopters.
[34]GAO-06-71SU . Washington, D.C.: November 4, 2005.

Questions for the Record Related to DOD's Personnel Security
Clearance Program. [35]GAO-05-988R . Washington, D.C.: August 19,
2005.

DOD Personnel Clearances: Some Progress Has Been Made but Hurdles
Remain to Overcome the Challenges That Led to GAO's High-Risk
Designation. [36]GAO-05-842T . Washington, D.C.: June 28, 2005.

DOD's High-Risk Areas: Successful Business Transformation Requires
Sound Strategic Planning and Sustained Leadership. [37]GAO-05-520T
. Washington, D.C.: April 13, 2005.

High-Risk Series: An Update. [38]GAO-05-207 . Washington, D.C.:
January 2005.

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Highlights of [46]GAO-07-842T , a testimony before the Subcommittee on
Oversight of Government Management, the Federal Workforce, and the
District of Columbia, Committee on Homeland Security and Governmental
Affairs, U.S. Senate

May 17, 2007

DOD PERSONNEL CLEARANCES

Delays and Inadequate Documentation Found for Industry Personnel

This testimony addresses the timeliness of the process and completeness of
documentation used to determine eligibility of industry personnel for top
secret clearances in January and February 2006. This statement relies
primarily on GAO's September 2006 report (GAO-06-1070).

GAO's analysis of timeliness data showed that industry personnel
contracted to work for the federal government waited more than 1 year on
average to receive top secret clearances, longer than OMB- and
OPM-produced statistics would suggest. GAO's analysis of 2,259 cases in
its population showed the process took an average of 446 days for initial
clearances and 545 days for clearance updates. While the government plan
has a goal for the application-submission phase of the process to take 14
days or less, it took an average of 111 days. In addition, GAO's analyses
showed that OPM used an average of 286 days to complete initial
investigations for top secret clearances, well in excess of the 180-day
goal specified in the plan that OMB and others developed for improving the
clearance process. Finally, the average time for adjudication
(determination of clearance eligibility) was 39 days, compared to the
30-day requirement that began in December 2006. An inexperienced
investigative workforce, not fully using technology, and other causes
underlie these delays. Delays may increase costs for contracts and risks
to national security. In addition, statistics that OMB and OPM report to
Congress on the timeliness of the clearance process do not portray the
full length of time it takes many applicants to receive a clearance. GAO
found several issues with the statistics, including limited information on
reinvestigations for clearance updating and failure to measure the total
time it took to complete the various phases of the clearance process. Not
fully accounting for all the time used in the process hinders
congressional oversight of the efforts to address the delays.

OPM provided incomplete investigative reports to DOD, and DOD personnel
who review the reports to determine a person's eligibility to hold a
clearance (adjudicators) granted eligibility for industry personnel whose
investigative reports contained unresolved issues, such as unexplained
affluence and potential foreign influence. In its review of 50
investigative reports for initial clearances, GAO found that that almost
all (47 of 50) cases were missing documentation required by federal
investigative standards. Moreover, federal standards indicate expansion of
investigations may be necessary to resolve issues, but GAO found at least
one unresolved issue in 27 of the reports. GAO also found that the DOD
adjudicators granted top secret clearance eligibility for all 27 industry
personnel whose investigative reports contained unresolved issues without
requesting additional information or documenting in the adjudicative
report that the information was missing. In its November 2005 assessment
of the government plan for improving the clearance process, GAO raised
concerns about the limited attention devoted to assessing quality in the
clearance process, but the plan has not been revised to address the
shortcomings GAO identified. The use of incomplete investigations and
adjudications in granting top secret clearance eligibility increases the
risk of unauthorized disclosure of classified information. Also, it could
negatively affect efforts to promote reciprocity (an agency's acceptance
of a clearance issued by another agency) being developed by an interagency
working group headed by OMB's Deputy Director.

References

Visible links
18. http://www.gao.gov/cgi-bin/getrpt?GAO-06-748T
19. http://www.gao.gov/cgi-bin/getrpt?GAO-06-233T
20. http://www.gao.gov/cgi-bin/getrpt?GAO-05-842T
21. http://www.gao.gov/cgi-bin/getrpt?GAO-06-693R
22. http://www.gao.gov/cgi-bin/getrpt?GAO-06-323R
23. http://www.gao.gov/cgi-bin/getrpt?GAO-06-1070
24. http://www.gao.gov/cgi-bin/getrpt?GAO-05-207
25. http://www.gao.gov/cgi-bin/getrpt?GAO-07-310
26. http://www.gao.gov/cgi-bin/getrpt?GAO-06-1070
27. http://www.gao.gov/cgi-bin/getrpt?GAO-06-233T
28. http://www.gao.gov/cgi-bin/getrpt?GAO-06-693R
29. http://www.gao.gov/cgi-bin/getrpt?GAO-06-748T
30. http://www.gao.gov/cgi-bin/getrpt?GAO-06-747T
31. http://www.gao.gov/cgi-bin/getrpt?GAO-06-497T
32. http://www.gao.gov/cgi-bin/getrpt?GAO-06-323R
33. http://www.gao.gov/cgi-bin/getrpt?GAO-06-233T
34. http://www.gao.gov/cgi-bin/getrpt?GAO-06-71SU
35. http://www.gao.gov/cgi-bin/getrpt?GAO-05-988R
36. http://www.gao.gov/cgi-bin/getrpt?GAO-05-842T
37. http://www.gao.gov/cgi-bin/getrpt?GAO-05-520T
38. http://www.gao.gov/cgi-bin/getrpt?GAO-05-207
39. http://www.gao.gov/
46. http://www.gao.gov/cgi-bin/getrpt?GAO-07-842T
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