    Defense Management: More Transparency Needed over the Financial
    and Human Capital Operations of the Joint Improvised Explosive
    Device Defeat Organization (06-MAR-08, GAO-08-342).

    Improvised explosive devices (IED) have been and continue to be a
    significant threat to U.S. forces. The Department of Defense
    (DOD) expanded efforts to defeat IEDs with the establishment of
    the Joint Improvised Explosive Device Defeat Organization
    (JIEDDO) in January 2006. GAO was asked to review JIEDDO's
    management and operations. For this second report in its series,
    GAO determined (1) the extent to which JIEDDO's management
    processes provide adequate assurances that its financial
    information is accurate and provides transparency over its
    operations and (2) the extent to which JIEDDO identifies,
    records, tracks, and reports numbers of all personnel, including
    contractors. GAO analyzed data for the first half of fiscal year
    2007, which included 47 funding transactions totaling $1.34
    billion for 24 initiatives to address these objectives.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-08-342
        ACCNO:   A81216
      TITLE:     Defense Management: More Transparency Needed over the
    Financial and Human Capital Operations of the Joint Improvised
    Explosive Device Defeat Organization
         DATE:   03/06/2008
      SUBJECT:   Agency evaluation
    	     Agency missions
    	     Contractors
    	     Data integrity
    	     Defense capabilities
    	     Defense cost control
    	     Explosives
    	     Financial management
    	     Financial statement audits
    	     Financial statements
    	     Funds management
    	     Internal controls
    	     Monitoring
    	     Policy evaluation
    	     Program evaluation
    	     Reporting requirements
    	     Standards
    	     Strategic planning
    	     Program goals or objectives
    	     Transparency

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    GAO-08-342

    This is a work of the U.S. government and is not subject to copyright
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    material separately.

    Report to Congressional Committees:

    United States Government Accountability Office:

    GAO:

    March 2008:

    Defense Management:

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

    Defense Management:

    GAO-08-342:

    GAO Highlights:

    Highlights of GAO-08-342, a report to congressional committees.

    Why GAO Did This Study:

    Improvised explosive devices (IED) have been and continue to be a
    significant threat to U.S. forces. The Department of Defense (DOD)
    expanded efforts to defeat IEDs with the establishment of the Joint
    Improvised Explosive Device Defeat Organization (JIEDDO) in January
    2006. GAO was asked to review JIEDDO’s management and operations. For
    this second report in its series, GAO determined (1) the extent to
    which JIEDDO’s management processes provide adequate assurances that
    its financial information is accurate and provides transparency over
    its operations and (2) the extent to which JIEDDO identifies, records,
    tracks, and reports numbers of all personnel, including contractors.

    GAO analyzed data for the first half of fiscal year 2007, which
    included 47 funding transactions totaling $1.34 billion for 24
    initiatives to address these objectives.

    What GAO Found:

    JIEDDO’s financial management processes do not provide adequate
    assurances that its financial information is accurate, and as a result,
    JIEDDO is unable to provide full transparency over the cost of its
    operations. While JIEDDO has improved its financial management
    processes, it has not yet reached a point where those processes contain
    an effective system of internal control. According to federal
    standards, internal control comprises the plans, methods, and
    procedures used to meet missions, goals, and objectives of an
    organization and help it to achieve desired results through effective
    stewardship of its resources. GAO identified four internal control
    weaknesses that affect JIEDDO’s financial management processes. First,
    JIEDDO has not comprehensively documented its administrative policies
    and operating manuals, which affects the consistency of how its
    financial management personnel perform their duties. Second, JIEDDO
    does not have adequate funds authorization controls to ensure that
    transactions are properly authorized before funds are committed. In
    reviewing funding transactions totaling $795 million, 18 of 24
    initiatives were not properly authorized in accordance with internal
    control standards. As a result, funds may be used without proper
    scrutiny and without a mechanism to detect, correct, or address this
    control failure. Third, JIEDDO does not have controls to ensure that
    transactions are properly categorized. For example, of the $1.34
    billion in fiscal year 2007 commitments reviewed, JIEDDO inaccurately
    categorized at least 83 percent of these dollars under one category
    that should have been applied to others. This could distort information
    used in assessing trends and prioritizing funds. Fourth, JIEDDO does
    not have an adequate internal process to monitor and review the
    efficacy of its internal controls. In the absence of an adequate system
    of internal control, the agency may not achieve all of its objectives
    and its use of resources may not be consistent with DOD priorities.
    Furthermore, decision makers may be basing their decisions on
    inaccurate financial data and reports. At the end of this review,
    JIEDDO managers said that they had corrected these weaknesses; however,
    because these actions occurred after audit completion, GAO could not
    determine their effectiveness.

    JIEDDO does not fully identify, track, and report all government and
    contractor personnel as provided for in DOD Directive 1100.4.
    Identifying all government and contractor personnel is important to
    JIEDDO’s management and oversight responsibilities and contributes to
    its ability to effectively plan for its future workforce needs. While
    JIEDDO has a system in place for routinely tracking and reporting
    numbers of personnel JIEDDO regards as staff, this system is limited
    because it does not track all government and contractor personnel
    performing work for JIEDDO. However, since its creation in February
    2006, JIEDDO has relied heavily on contractor support to accomplish its
    mission, which is not fully reflected in JIEDDO’s system. When the
    Senate Appropriations Committee directed that JIEDDO provide a
    comprehensive accounting of all of its personnel, including
    contractors, by May 2007, JIEDDO had to rely on an ad hoc process to
    develop the report, which resulted in several inaccuracies and
    inconsistencies.

    What GAO Recommends:

    To help ensure that JIEDDO provides adequate transparency over its
    resource use and addresses specific internal control weaknesses, GAO
    recommends that JIEDDO develop an effective internal control system and
    establish a means to identify, track, and report all personnel,
    including its contractor support. DOD agreed with the thrust of all of
    the GAO recommendations.

    To view the full product, including the scope and methodology, click on
    [hyperlink, http://www.GAO-08-342]. For more information, contact
    William M. Solis at (202) 512-8365 or solisw@gao.gov.

    [End of section]

    Contents:

    Letter:

    Results in Brief:

    Background:

    JIEDDO Has Taken Steps to Improve Financial Management Processes but
    Lacks Effective Internal Controls to Provide Assurances That Its
    Financial Data Are Accurate and Provide Transparency over Its
    Operations:

    JIEDDO Does Not Comprehensively Identify, Track, and Report All
    Government and Contractor Personnel as Described by DOD:

    Conclusions:

    Recommendations for Executive Action:

    Agency Comments and Our Evaluation:

    Appendix I: Scope and Methodology:

    Appendix II: Comments from the Department of Defense:

    Appendix III: GAO Contact and Staff Acknowledgments:

    Table:

    Table 1: JIEDDO Descriptions of How to Calculate Initiative Value:

    Abbreviations:

    COIC: Counter-IED Operations Integration Center:

    DFARS: Defense Federal Acquisition Regulation Supplement:

    DOD: Department of Defense:

    FMFIA: Federal Managers' Financial Integrity Act of 1982:

    IED: improvised explosive device:

    JCAAMP: Joint Improvised Explosive Device Defeat Capability Approval
    and Acquisition Management Process:

    JIEDDO: Joint Improvised Explosive Device Defeat Organization:

    MIPR: Military Interdepartmental Purchase Request:

    OMB: Office of Management and Budget:

    PGI: Procedures, Guidance, and Information:

    United States Government Accountability Office:

    Washington, DC 20548:

    March 6, 2008:

    Congressional Committees:

    When major combat operations for Operation Iraqi Freedom ceased in May
    2003, U.S. and coalition forces transitioned to stabilization
    operations. Since that time, U.S. forces have come under frequent and
    deadly attacks from insurgents using such weapons as improvised
    explosive devices (IED), mortars, and rocket launchers. IEDs also have
    been a significant threat to U.S. forces operating in Afghanistan. The
    Congressional Research Service recently reported that IEDs have caused
    60 percent of all American combat casualties both killed and wounded in
    Iraq and 50 percent of casualties in Afghanistan.[Footnote 1] The
    Department of Defense (DOD) has described IEDs as the number one weapon
    of strategic influence in the Iraq war and consequently has dedicated a
    high level of resources toward countering the impact of IEDs and their
    use by enemy forces.

    In response to the threat posed by IEDs, DOD and Congress have provided
    resources to fund efforts to defeat IEDs. From fiscal year 2004 through
    the end of fiscal year 2007, $11.25 billion has been provided to
    various DOD organizations to address the IED threat. For example, in
    June 2005, the Deputy Secretary of Defense established the Joint IED
    Task Force to lead DOD's efforts in fighting the IED threat with the
    intent to establish a holistic approach to defeating IEDs, streamline
    the processes for supporting the warfighter's efforts to counter IEDs,
    and build a dedicated staff with an IED-defeat knowledge base. In
    January 2006, the Deputy Secretary of Defense established the Joint
    Improvised Explosive Device Defeat Organization (JIEDDO) to expand the
    task force's scope by establishing a permanent organizational structure
    to execute the IED defeat mission. In fiscal year 2007, Congress
    appropriated about $4.35 billion for JIEDDO, and JIEDDO expects to
    continue to receive additional funding through subsequent supplemental
    appropriations to complete its fiscal year projects and begin new
    projects.

    Insurgents have adapted to U.S. countermeasures thus requiring JIEDDO
    to continue to evaluate and analyze efforts to defeat them. Given long-
    term fiscal challenges, congressional committees have expressed
    concerns regarding JIEDDO's rapid growth in structure, scope, and
    funding, and the extent to which DOD manages its resources to
    efficiently and effectively defeat IEDs. In a series of reviews in
    response to direction in Senate Report 109-292,[Footnote 2] we first
    reported in March 2007 on several issues related to JIEDDO's management
    and operations, including JIEDDO's lack of a strategic plan and the
    resulting effects on the development of its financial and human capital
    management programs.[Footnote 3] We made several recommendations to the
    Secretary of Defense to improve the management of JIEDDO operations,
    stressing the development of JIEDDO's detailed strategic plan. In this
    second review, we determined to what extent (1) JIEDDO's financial
    management processes provide adequate assurances that its financial
    information is accurate and provides transparency over its operations
    and (2) JIEDDO identifies, records, tracks, and reports numbers of all
    personnel, including contractors. We are also conducting a third review
    that examines JIEDDO's processes for coordinating counter-IED
    intelligence support across DOD, which we will report on separately.

    To address our objectives, we met with JIEDDO officials to gain a
    general understanding of JIEDDO's management of financial resources and
    personnel. To assess JIEDDO's financial management processes, controls,
    and data, we analyzed 47 funding actions totaling $1.34 billion for 24
    of the 301 initiatives JIEDDO had approved at the time we collected our
    data. Nineteen of the 24 initiatives were those with the highest fund
    commitments in JIEDDO's defeat-the-device and attack-the-network
    initiatives based on the financial transaction data we collected. The 5
    additional initiatives were those receiving Deputy Secretary of Defense
    approval after our initial data collection date. We also identified
    required approval controls over use of funds, reviewed these selected
    transactions for adherence to these controls, and assessed whether the
    data recorded in the accounting and managerial systems accurately
    reflected JIEDDO's activities. However, we did not perform a
    comprehensive assessment of all of JIEDDO's internal controls. To
    assess JIEDDO's efforts to identify, record, track, and report numbers
    of all personnel, including contractors, we collected and reviewed
    JIEDDO staff reports and selectively compared the associated data with
    corroborating sources to determine whether the reported figures were
    comprehensive and accurate. We conducted this performance audit from
    April 2007 to December 2007 in accordance with generally accepted
    government auditing standards. Those standards require that we plan and
    perform the audit to obtain sufficient, appropriate evidence to provide
    a reasonable basis for our findings and conclusions based on our audit
    objectives. We believe that the evidence obtained provides a reasonable
    basis for our findings and conclusions based on our audit objectives.
    Appendix I provides additional details on our scope and methodology.

    Results in Brief:

    JIEDDO's financial management processes do not provide adequate
    assurances that its financial information is accurate, and as a result,
    JIEDDO is unable to provide full transparency over the cost of its
    operations. While JIEDDO has made progress in improving its financial
    management processes, it has not yet reached a point where those
    processes contain an effective system of internal control. Such a
    system is required by federal laws and regulations and enables
    organizations to provide accurate financial information for both
    internal and external decision makers. According to federal standards,
    internal control comprises the plans, methods, and procedures used to
    meet missions, goals, and objectives of an organization and help it to
    achieve desired results through effective stewardship of public
    resources. We found that JIEDDO has four internal control weaknesses.
    First, JIEDDO has not comprehensively documented its administrative
    policies and operating manuals, which affects the consistency of how
    its financial management personnel perform their duties. As a result,
    we found inconsistent financial management control processes among
    staff and managers. Second, JIEDDO does not have adequate funds
    authorization controls to ensure that transactions are properly
    authorized before funds are committed. Thus, JIEDDO made funding
    commitments prior to obtaining required approvals, which underscores
    the possibility that funds are used without the proper scrutiny of
    authorizing agents and without a mechanism in place to detect, correct,
    or address this control failure. For example, funding transactions--
    totaling $795 million--for 18 of 24 initiatives we reviewed were not
    properly authorized in accordance with internal control standards.
    Third, JIEDDO does not have controls to ensure that transactions are
    properly categorized. For example, of the $1.34 billion in fiscal year
    2007 commitments we reviewed, JIEDDO inaccurately categorized at least
    83 percent of these dollars under one category that should have been
    applied to others. This could distort information provided in JIEDDO's
    financial reports and affects its ability to accurately determine
    trends in the use of funds in conjunction with its priorities. Fourth,
    JIEDDO does not have an adequate internal process to monitor and review
    the efficacy of its internal controls. For example, JIEDDO's process
    used to assess its internal controls for its May 2007 annual statement
    of assurance, submitted to DOD as required by the Federal Managers'
    Financial Integrity Act of 1982 (FMFIA), resulted in several inaccurate
    statements that were used as the basis for an unqualified statement
    that JIEDDO's internal control system met federal standards. In the
    absence of an adequate system of internal control, the agency may not
    achieve all of its objectives, and its use of resources may not be
    consistent with DOD priorities. Furthermore, decision makers may be
    basing their decisions on inaccurate financial data and reports. JIEDDO
    officials stated that their efforts to develop an effective financial
    management program have been significantly challenged by turnover in
    key financial positions and difficulties hiring adequate numbers of
    qualified staff. They also said that JIEDDO has recently taken several
    actions to address and correct these weaknesses. However, because these
    changes have recently occurred and have not yet been fully implemented,
    we have not been able to evaluate their effectiveness in improving
    JIEDDO's internal control system. Therefore, we are recommending that
    JIEDDO develop and document a comprehensive system of internal control
    for its financial management processes that fully complies with federal
    internal control standards, and routinely monitor its effectiveness
    using internal audit staff. We are also recommending that JIEDDO report
    to Congress on the status of its efforts to implement a comprehensive
    system of internal control.

    JIEDDO does not fully identify, track, and report all personnel,
    including contractors, as described by DOD Directive 1100.4. This
    directive provides that each DOD organization shall designate an
    individual with the authority to maintain a manpower data system that
    accounts for all manpower resources--including military, civilian, and
    contractor.[Footnote 4] Furthermore, such an accounting helps internal
    and external decision makers conduct effective oversight of personnel.
    While JIEDDO has a system in place for tracking and reporting numbers
    of personnel, this system does not track all government and contractor
    personnel performing work for JIEDDO. For example, JIEDDO does not
    track field service representatives, who are contractors providing
    support for deployed counter-IED systems. From this limited system,
    JIEDDO routinely accounted for personnel filling about 418 authorized
    positions. In Senate Report 110-37, the Senate Appropriations Committee
    directed JIEDDO to provide a comprehensive report of all of its
    personnel, including all contractors, by May 2007.[Footnote 5] Because
    JIEDDO does not have a comprehensive process to track all personnel, it
    relied on an ad hoc process to develop the report. The results
    identified a total of 1,466 personnel working for JIEDDO. However, we
    were not assured of the accuracy of those figures in the congressional
    report given the lack of guidance or evidence of a process that would
    help to ensure reasonable accuracy in identifying and reporting all
    categories of government and contractor personnel. When we reviewed the
    report, we discovered inaccuracies in the data that led us to conclude
    that at about 114 personnel had been omitted from the report. In
    addition, we also noted that as it collected data for the report,
    JIEDDO applied inconsistent criteria. For example, JIEDDO reported some
    field service representatives as individuals and others as full-time
    equivalents, which could account for more than one individual. Although
    JIEDDO officials said that they do not consider all contractors as
    staff, since its creation in February 2006, JIEDDO has relied heavily
    on contractor support to accomplish its mission. For example, JIEDDO
    has employed contractors to perform such tasks as evaluating initiative
    proposals from outside contractors and operating unmanned aerial
    vehicles. DOD Directive 1100.4 states that it is DOD policy that
    manpower requirements be established at the minimum levels necessary to
    accomplish mission and performance objectives. It follows that a
    manpower data system that accurately accounts for all personnel,
    including contractors, enables manpower management that promotes
    efficient and effective use of manpower resources. Furthermore, such
    accounting helps congressional decision makers and JIEDDO management
    conduct effective oversight of personnel. Therefore, we are
    recommending that JIEDDO establish a method or system to
    comprehensively identify, track, and report on a routine basis all
    personnel, including all levels of contractor support.

    In written comments on a draft of this report, DOD concurred with our
    findings and the thrust of our six recommendations. With respect to our
    fifth recommendation as originally stated in our draft report, which
    was to report on JIEDDO's efforts to implement internal control
    improvements as part of JIEDDO's recurring quarterly congressional
    reports, DOD instead proposed a report that provides this information
    to the Armed Services and Appropriations Committees 1 year after the
    issuance of our report, which satisfies the intent of our
    recommendation. Consequently, we modified our original recommendation
    to reflect this change. DOD also provided additional information on
    several activities it has undertaken to date. DOD's written comments
    are reprinted in appendix II.

    Background:

    JIEDDO was created by the Deputy Secretary of Defense in January 2006
    and is responsible for leading, advocating, and coordinating all DOD
    efforts to defeat IEDs. Prior DOD efforts to defeat IEDs included
    various process teams and task forces. For example, DOD established the
    Joint IED Defeat Task Force in June 2005 for which the Army provided
    primary administrative support. This task force replaced the Army IED
    Task Force, the Joint IED Task Force, and the Under Secretary of
    Defense, Force Protection Working Group. To focus all of DOD's efforts
    and minimize duplication, DOD published new IED policy in February 2006
    through DOD Directive 2000.19E, which changed the name of the Joint IED
    Defeat Task Force to JIEDDO and established it as a joint entity and
    jointly manned organization within DOD, reporting to the Deputy
    Secretary of Defense. The directive states that JIEDDO shall "focus
    (lead, advocate, and coordinate) all Department of Defense actions in
    support of the Combatant Commanders' and their respective Joint Task
    Forces' efforts to defeat Improvised Explosive Devices as weapons of
    strategic influence." The organization is directed to identify, assess,
    and fund initiatives that provide specific counter-IED solutions, and
    is granted the authority to approve joint IED defeat initiatives valued
    up to $25 million and make recommendations to the Deputy Secretary of
    Defense for initiatives valued over $25 million. Under the directive,
    the Army remains the organization's executive agent and is responsible
    for providing primary administrative support to JIEDDO.

    JIEDDO's primary role is to provide funding to the military services
    and DOD agencies to rapidly develop and field counter-IED solutions.
    Prior to fiscal year 2007, JIEDDO did this by working with the DOD
    Comptroller to transfer its appropriated funds into a standard DOD
    appropriation account, such as one for procurement or one for research,
    development, testing, and evaluation. JIEDDO would then send these
    transferred funds to the military service that is designated to sponsor
    the initiatives using a Military Interdepartmental Purchase Request
    (MIPR).[Footnote 6] Beginning in fiscal year 2007, Congress provided
    JIEDDO with its own separate direct appropriation, but it still must
    transfer funds to the military services using a duly authorized and
    signed MIPR, which the Defense Federal Acquisition Regulation
    Supplement (DFARS) Subpart 208.7004 (Procedures, Guidance, and
    Information (PGI) 208.7004) states is the acquiring department's
    authority for acquiring the goods or services on the requiring
    department's behalf.[Footnote 7] DFARS PGI 208.7004 also states that
    the acquiring department, or military service, is then authorized to
    create obligations against the funding without further referral to the
    requiring department--JIEDDO--and that the military service has no
    responsibility to determine the validity of an approved MIPR.
    Therefore, after JIEDDO provides funding authority to the military
    service and the designated program manager for a specific initiative,
    the service program manager, not JIEDDO, is responsible for managing
    the initiatives for which JIEDDO has provided funds.

    JIEDDO's efforts to counter the use of IEDs and subsequent funding for
    those efforts are organized according to three primary lines of
    operation: (1) attack the network that enables the use of IEDs, (2)
    defeat the IED itself once emplaced, and (3) train the military forces
    in counter-IED techniques. JIEDDO assigns all funds used to one of
    these lines of operation--or to a fourth line of operation called staff
    and infrastructure for miscellaneous expenditures not directly related
    to the three lines of operation. When JIEDDO undertakes any effort
    requiring funds, it assigns the funds for the effort to one of the
    lines of operations. JIEDDO further breaks down its expenditures into
    more detailed subsets, which it designates as initiatives, assigning a
    name and a unique number to track expenditures related to each
    initiative. JIEDDO manages and reports on all funds expended by line of
    operation and by initiative.

    Office of Management and Budget (OMB) Circular A-123 specifies that
    federal agencies have a fundamental responsibility to develop and
    maintain effective internal control that ensures the prevention or
    detection of significant weaknesses--that is, weaknesses that could
    adversely affect the agency's ability to meet its objectives.[Footnote
    8] According to OMB, the importance of management controls is addressed
    in many statutes and executive documents. A memorandum from the OMB
    Director to the heads of the executive departments accompanying OMB
    Circular A-123 as an attachment requires agencies and individual
    federal managers to take systematic and proactive measures to develop
    and implement appropriate, cost-effective internal controls for results-
    oriented management. FMFIA establishes the overall requirements with
    regard to internal control. Accordingly, an agency head must establish
    controls that reasonably ensure that (1) obligations and costs are in
    compliance with applicable law; (2) funds, property, and other assets
    are safeguarded against waste, loss, unauthorized use, or
    misappropriation; and (3) revenues and expenditures applicable to
    agency operations are properly recorded and accounted for to permit the
    preparation of accounts and reliable financial and statistical reports
    and to maintain accountability over the assets.[Footnote 9] Specific
    internal control standards underlying the internal controls concept in
    the federal government are promulgated by GAO and are referred to as
    the Green Book.[Footnote 10]

    In March 2007, the Senate Appropriations Committee directed JIEDDO to
    identify and track all civilian, military, and contractor personnel in
    the organization.[Footnote 11] In addition, DOD Directive 1100.4,
    "Guidance for Manpower Management," provides that DOD components shall
    designate an individual with the authority to establish and maintain a
    manpower data system that accounts for all manpower resources, to
    include active military, DOD civilian, reserve component, contract, and
    host-nation support.[Footnote 12] The Senate Appropriations Committee,
    in its report on emergency supplemental appropriations, expressed
    concern over JIEDDO's exponential personnel growth and ability to track
    this growth.[Footnote 13] The report stated that the committee has
    limited visibility into current staffing and future staffing
    requirements and is concerned that JIEDDO is not accounting for certain
    contractor support properly. As a result of these concerns, the
    committee directed JIEDDO to provide a report to the congressional
    defense committees on current staffing levels and future staffing
    requirements, broken down by function, contractor, civilian, military,
    and detailed from other agencies, and should include all contractor
    support that is provided through various contracts. The committee
    further directed JIEDDO to update this report whenever JIEDDO personnel
    authorizations change. In response to the committee's direction, JIEDDO
    officials developed the JIEDDO Manning Description in May 2007
    identifying and accounting for civilian, military, and contractor
    personnel working for JIEDDO.

    JIEDDO Has Taken Steps to Improve Financial Management Processes but
    Lacks Effective Internal Controls to Provide Assurances That Its
    Financial Data Are Accurate and Provide Transparency over Its
    Operations:

    JIEDDO has made progress in improving its financial management
    processes but has not yet reached a point where its processes contain a
    system of internal control that ensures the accuracy of its financial
    data related to resources it has used in its operations. According to
    federal standards, internal control comprises the plans, methods, and
    procedures used to meet missions, goals, and objectives of an
    organization and help it to achieve desired results through effective
    stewardship of public resources.[Footnote 14] In addition, our prior
    work has stated the importance of organizations addressing internal
    control weaknesses.[Footnote 15] Otherwise, organizations may not
    achieve their objectives or may not use their resources to best
    advantage in achieving their objectives. Before beginning fiscal year
    2007 operations, JIEDDO took several steps to improve its processes for
    managing and controlling its financial resources, and JIEDDO has been
    proactive in responding to financial management issues we raised during
    this audit by pursuing additional financial management process
    improvements. Nonetheless, JIEDDO is lacking an effective system of
    internal control that will provide adequate assurances of financial
    data accuracy and operations transparency. Although JIEDDO added
    changes toward the end of our review that are expected to address
    internal control weaknesses, their implementation occurred too late for
    us to determine their effectiveness. Nonetheless, in the absence of an
    adequate system of internal controls, inaccurate financial data and
    reports may negatively affect the internal and external decision-making
    process.

    JIEDDO Has Taken Steps to Improve Its Financial Management Processes:

    JIEDDO has taken several steps to improve its financial management
    processes. JIEDDO's actions are divided into (1) those taken in
    preparation for the beginning of fiscal year 2007 operations and (2)
    those taken to develop and continually improve on its operations.

    JIEDDO's approach for fiscal year 2007 included three changes aimed at
    streamlining and reducing data processing and analysis. The first of
    these changes was that JIEDDO took direct control of accounting
    functions previously performed by Army activities in support of JIEDDO.
    This allowed JIEDDO to directly execute and oversee funds budgeted and
    made available to JIEDDO. Second, JIEDDO requested and received a
    separate appropriation exclusively for its efforts, without having to
    obtain approval for funds through other DOD funding streams. Third,
    JIEDDO developed a procedure for assigning distinct numbers to specific
    initiatives because some initiatives were referred to by more than one
    name. The assignment of numbers eliminated confusion over the name of
    the initiative and facilitated the automated transfer of data, which
    was not possible using only a descriptive name.

    JIEDDO's more recent actions were taken as part of its efforts to fully
    establish its organizational framework as the organization evolves and
    to continually improve its processes. These actions include issuing an
    internal written instruction describing the roles and responsibilities
    of JIEDDO subdivisions in greater detail; developing internal controls
    imbedded in a new automated document management and storage system; and
    establishing a new internal control audit function to be staffed by
    three persons, reporting directly to the JIEDDO Director. While these
    actions could address JIEDDO's internal control weaknesses, they have
    not yet been fully implemented and occurred too late for us to
    determine their effectiveness.

    JIEDDO Lacks Effective Internal Controls to Provide Assurances That Its
    Financial Data Are Accurate, and JIEDDO Is Unable to Provide
    Transparency over Its Operations:

    JIEDDO does not have an effective internal control system in place to
    ensure that its financial data are accurate, and without such
    assurances, JIEDDO is unable to provide adequate transparency over the
    cost of its operations. The ability of JIEDDO to provide accurate
    financial information for internal and external decision makers depends
    on management accountability and an effective system of internal
    control. Consistent with federal standards, JIEDDO would need to
    adequately document its financial management processes and procedures,
    including related internal controls, and the internal control system
    would contain basic elements providing assurance that proper
    authorization is obtained before using funds and that once a
    transaction occurs it is accurately and promptly recorded. Furthermore,
    developing adequate oversight mechanisms within JIEDDO is a key factor
    in developing the conscientious control environment required by federal
    standards. However, although our review was not designed to identify
    all significant deficiencies in internal control, we identified four
    weak control areas at JIEDDO, which individually and collectively
    precluded adequate assurances of accuracy and usefulness of financial
    data produced by JIEDDO's financial management operations. JIEDDO does
    not have (1) comprehensive documentation of its internal controls, (2)
    adequate funds authorization controls, (3) sufficient controls to
    ensure accurate categorization of transactions, and (4) an adequate
    process to monitor and review its internal control program.

    First, JIEDDO's internal control processes related to its financial
    management are not adequately documented as required by government
    internal control standards.[Footnote 16] Specifically, JIEDDO has not
    developed management directives, administrative policies, or operating
    manuals that comprehensively describe how JIEDDO financial management
    personnel should perform their duties and the internal control
    activities designed to assure management that those duties are timely
    and accurately performed. As a result, we found inconsistent financial
    management control processes among JIEDDO staff and managers. For
    example, while DOD's JIEDDO directive divides approval authority for
    JIEDDO initiatives between the Deputy Secretary of Defense--initiatives
    valued at greater than $25 million--and JIEDDO itself--initiatives
    valued up to $25 million, DOD did not adequately define in its
    directive the terms initiative or value with respect to which
    initiatives measure over or below $25 million. Not defining terms would
    affect interpretation for both those with approval authority and those
    making processing and authorization control decisions. As a result,
    when determining whether an initiative should be forwarded to the
    Deputy Secretary of Defense for approval--a key external authorization
    control--or whether the authority rests within JIEDDO itself because
    the value does not exceed $25 million, various JIEDDO officials and
    contractors provided us with varying descriptions for value
    determination (see table 1 for a listing of varying descriptions).
    However, any of these approaches could significantly change an
    initiative's value calculations and consequently affect JIEDDO's
    approval control decision process. In November 2007, JIEDDO issued an
    instruction that included further guidance on how to determine what
    constitutes an initiative for the purposes of requiring approval by the
    Deputy Secretary of Defense.[Footnote 17] However, this instruction has
    not yet been incorporated into financial management operating
    procedures to ensure that staff understand the definition and apply it
    consistently when processing transactions. According to JIEDDO
    officials, the instruction, while better documenting the initiative
    determination and approval processes, does not provide adequate detail
    to constitute sufficient standard operating procedures for the
    components of JIEDDO. JIEDDO officials added that they have planned to
    form internal teams in the upcoming months to develop the more detailed
    operating procedures JIEDDO components need to implement this
    instruction.

    Table 1: JIEDDO Descriptions of How to Calculate Initiative Value:

    * Only costs[A] included on individual purchase request to a military
    service.

    * Only costs associated with an individual activity or program office.

    * Only costs to be incurred by JIEDDO within 1 fiscal year.

    * Only costs to be incurred within the fisca1 year, regardless of which
    organization funds the initiative.

    * All costs to be incurred by JIEDDO over the life of the initiative,
    until termination or management transfer to one of the military
    services.

    * All costs incurred over multiple years, regardless of which
    organization funds the initiative.

    Source: GAO analysis of JIEDDO descriptions.

    [A] Costs include goods and services to develop, purchase, field,
    maintain, and sustain the initiative.

    [End of table]

    Second, JIEDDO's internal control system does not have adequate funds
    authorization controls to ensure that transactions are properly
    authorized before committing funds, which is a fundamental control
    activity required by government internal control standards.[Footnote
    18] We reviewed 24 initiatives of which 18 had funding transactions
    totaling $795 million that were not authorized in accordance with the
    process that JIEDDO officials said should take place in advance of the
    commitment of funds on initiatives valued at greater than $25 million.
    JIEDDO officials stated that approval of the Deputy Secretary of
    Defense had to be obtained before funds could be committed on
    initiatives valued at greater than $25 million. Fourteen of the 18
    initiatives received the required Deputy Secretary of Defense
    authorization after JIEDDO financial management personnel committed
    funds by approving the MIPR to transfer funds from JIEDDO to the
    external program manager for the initiative. For example, JIEDDO spent
    about $8 million in the first quarter of fiscal year 2007 for an
    initiative that it expected would, overall, require $57 million for
    that fiscal year. Since that overall amount exceeded the $25 million
    value determination that requires the approval of the Deputy Secretary
    of Defense, JIEDDO acted before obtaining required authorization.
    JIEDDO did obtain Deputy Secretary of Defense approval for this
    initiative, but it was approximately 3 months after JIEDDO had
    committed funds for this initiative. In another case, the financial
    management division initially refused to commit funds for one
    initiative exceeding $25 million until JIEDDO management obtained
    approval from the Deputy Secretary of Defense. However, JIEDDO
    management's response was to request funds for only one quarter's
    expenses, thus reducing the amount to under $25 million. According to
    documentation in the file, the financial management division then
    agreed to fund the amount and commit the funds, even though it was
    aware that total program costs exceeded $25 million for the fiscal
    year. Subsequently, JIEDDO's legal advisor determined that the project
    was not an initiative because it was considered part of JIEDDO's
    infrastructure costs and thus did not require approval by the Deputy
    Secretary of Defense. Nevertheless, although JIEDDO eventually decided
    approval was not required, the process for approving funds for this
    project demonstrates a breakdown in the internal control structure
    necessary to ensure proper authorization before funds are spent, since
    JIEDDO officials avoided obtaining approval even though they thought
    prior approval was required. Additionally, it is not clear whether 4 of
    the 18 initiatives were authorized prior to commitment of funds because
    authorization letters were not dated, making the time of authorization
    unverifiable. It is clear, however, that inconsistent with JIEDDO
    processes, officials within JIEDDO made several funding commitments
    prior to obtaining the approvals required by JIEDDO processes. This
    underscores that JIEDDO's system of internal control allowed funds to
    be committed without the scrutiny of authorizing agents. Furthermore,
    the system did not detect, correct, or address this control failure.

    Third, JIEDDO internal controls do not ensure that its transactions are
    properly categorized, in spite of federal internal control standards
    requiring that accurate transaction recording be ensured by an entity's
    internal control system.[Footnote 19] For example, JIEDDO used about
    $216 million on an initiative titled "CREW --USMC - Program Management
    Support (Contractor Salaries, Travel & Infrastructure)," recording the
    expenditure as management and professional support services. However,
    the $216 million actually funded the purchase of tangible equipment--
    IED jammers--and therefore should have been recorded as procurement of
    equipment instead. Overall, of the $1.34 billion in fiscal year 2007
    commitments we reviewed, JIEDDO inaccurately recorded at least 83
    percent of the dollars committed--involving 15 of the 24 initiatives we
    reviewed--as management and professional support services, when other
    categorizations should have been applied by JIEDDO financial managers.

    JIEDDO's system of internal control also does not ensure that all
    transactions are accurately recorded in the proper JIEDDO lines of
    operation, and this could distort reported expenditures on these lines
    of operation. A key part of JIEDDO's overall strategy to manage
    operations is to code various initiatives to reflect one of four JIEDDO
    lines of operation to track success in achieving the overall goal of
    increased effort to attack the IED network. According to officials,
    JIEDDO policy is to assign a single line-of-operation code to each
    initiative even when operations overlap, which may result in the
    reported funding for a given line of operation being inaccurate. For
    example, JIEDDO's initiative involving the testing of counter-IED
    devices (constituting $92 million in fiscal year 2007 funds) was coded
    as an attack-the-network effort, when our analysis indicates that the
    initiative more accurately represents JIEDDO's defeat-the-device line
    of operation. When originally established, JIEDDO coded its testing
    efforts as staff and infrastructure, which reflects general overhead
    incurred by JIEDDO, and reported the initiative as such in its second
    quarter congressional report. However, subsequently JIEDDO recoded the
    initiative and reported it as an attack-the-network initiative in its
    third quarter congressional report. We found four other instances of
    JIEDDO recoding initiatives in the attack-the-network line of
    operations that also affected the third quarter report. JIEDDO
    officials explained that the recoding was based on a JIEDDO decision to
    code or recode any nondirect overhead staff and infrastructure
    initiatives as attack-the-network initiatives. They did not have
    supporting documentation reflecting JIEDDO's decision to recode.
    Documented directions would serve to track the rationale for how this
    line of operation was coded and recoded. The blanket assignment of
    direct overhead costs to the attack-the-network line of operation,
    along with reassigning lines of operation after initial recording
    affects JIEDDO's ability to accurately determine trends in the use of
    funds in conjunction with its attack the network objective. Further, in
    the case of the testing operations, funding for attack the network is
    overstated because, according to JIEDDO officials, the majority of
    testing operations can be attributed to other lines of operation.

    Fourth, JIEDDO's internal process to monitor and review the efficacy of
    its internal controls is inadequate. The first federal government
    internal control standard, relating to an entity's control environment,
    includes having oversight mechanisms present within the agency as a key
    factor in accomplishing a conscientious control environment.[Footnote
    20] However, JIEDDO appeared to lack adequate mechanisms to monitor and
    review its internal control program during the period of our audit. In
    a May 2007 internal control report that JIEDDO prepared for the annual
    DOD internal controls assurance statement, JIEDDO described its process
    for assessing its controls and, based on that assessment, stated that
    it was able to provide an unqualified statement of reasonable assurance
    that its system of internal controls met federal internal control
    objectives.[Footnote 21] However, we found several inaccurate
    statements in the report that were used as the basis for this
    conclusion, raising questions about the adequacy of JIEDDO's process
    for assessing its internal control system and determining reasonable
    assurance. For example, the financial management section of the report
    cited four final audit reports from the Air Force Audit Agency, DOD
    Program Analysis and Evaluation, the DOD Inspector General, and GAO.
    According to JIEDDO, these reports said the organizations reviewed
    JIEDDO financial management for activity beginning in fiscal year 2004
    and did not have findings or recommendations. However, two of the
    reports cited do not exist (those for the Air Force Audit Agency and
    DOD Program Analysis and Evaluation), and the DOD Inspector General
    report focused on assessing controls over the Army's purchases from
    other government activities, not on JIEDDO's internal control system.
    Further, that report concluded that the Army did not have adequate
    internal controls over purchases from governmental sources, which
    included one JIEDDO fiscal year 2006 expenditure, because the Army did
    not ensure that expenditures were properly initiated, prepared,
    executed, and monitored.[Footnote 22] Lastly, the GAO report cited is
    the predecessor to this review, and it concluded that JIEDDO's lack of
    a strategic plan limits JIEDDO's ability to properly align its resource
    use and management to achieve JIEDDO-wide goals.[Footnote 23] The
    report, however, did not provide any assessment of JIEDDO's internal
    control system.

    Another question about the adequacy of JIEDDO's internal control
    assessment process and related assurance report concerns JIEDDO's
    statement that training of its staff has improved internal controls.
    However, some of the individuals who actually prepared feeder sections
    of the report had not received any training on internal controls or how
    to assess them. Further, some of these individuals are not familiar
    with the internal control standards and the structured internal control
    risk assessment. We did not assess JIEDDO's stated basis for reasonable
    assurance of its internal control standards in its entirety because of
    the inaccuracies found relating to resource management and training
    sections of the report and because JIEDDO's report did not identify the
    significant control weaknesses we found, such as JIEDDO's noncompliance
    with authorization controls and inaccurate classification of
    expenditures.

    As evidenced by these four weaknesses, in the absence of an adequate
    system of internal control the objectives of the agency may not be
    fully achieved and its use of resources may not be fully consistent
    with DOD priorities. Furthermore, decision makers may be basing their
    decisions on inaccurate financial data and reports. JIEDDO officials
    stated that their efforts to develop an effective financial management
    program have been significantly challenged by turnover in key financial
    positions and difficulties hiring adequate numbers of staff. In
    discussing these internal control findings at the end of our fieldwork,
    JIEDDO managers said that they have taken several actions to address
    and correct these weaknesses, which we noted previously. JIEDDO
    believes that these actions have already improved the internal control
    weaknesses found; however, the changes are still in the early
    implementation stages, and as such, we have not been able to evaluate
    their effectiveness in improving JIEDDO's internal control system.

    JIEDDO Does Not Comprehensively Identify, Track, and Report All
    Government and Contractor Personnel as Described by DOD:

    JIEDDO does not fully identify, track, and report all government and
    contractor personnel as provided for in DOD Directive 1100.4.
    Identifying all government and contractor personnel is important to
    JIEDDO's management and oversight responsibilities and contributes to
    its ability to effectively plan for its future workforce needs. DOD
    Directive 1100.4 states that it is DOD policy that manpower
    requirements be established at the minimum levels necessary to
    accomplish mission and performance objectives. It follows that a
    manpower data system that accurately accounts for all personnel, to
    include contractors, enables manpower management that promotes
    efficient and effective use of manpower resources. While JIEDDO employs
    various DOD policies to manage civilian and military personnel, these
    policies do not include accurately accounting for all of its personnel,
    as described in DOD Directive 1100.4. According to JIEDDO personnel
    officials, JIEDDO applies existing DOD policies to address
    administrative issues, such as performance, pay, and leave. JIEDDO also
    refers to the Federal Acquisition Regulation that includes personnel
    policy and procedures that are specific to the acquisition and
    management of services by contract. Additionally, JIEDDO issues policy
    letters as needed to clarify personnel management issues. For example,
    JIEDDO issued policy letter #16A that directed the division chiefs to
    be aware of the number of hours all employees, including contractor
    personnel, were working, and directed all employees to report all hours
    worked and obtain approval for their schedules from their supervisors.
    Nonetheless, these approaches do not identify, track, and report all
    military, civilian, and contractor personnel.

    JIEDDO officials track civilian, military, and some contractor
    personnel on a daily basis to identify personnel currently staffed and
    determine positions remaining to be filled; however, this effort does
    not track all personnel performing work for JIEDDO. For example, JIEDDO
    does not include some or all of personnel in the following categories:

    * contractors working as field service representatives,[Footnote 24]

    * contractors engaged as interagency liaisons,

    * contractors providing law enforcement training,

    * contractors involved in JIEDDO's interagency partnership team,

    * civilians and contractors from JIEDDO's Joint Test Board,[Footnote
    25] and:

    * contractors maintaining infrastructure at the Counter-IED Operations
    Integration Center (COIC) facilities.

    Personnel officials said that these data are collected to identify
    changes in JIEDDO's on-hand strength as personnel leave or are newly
    assigned and are not intended to be a comprehensive data collection. We
    reviewed JIEDDO's daily report from October 9, 2007, which shows that
    JIEDDO had 321, including civilian, military, and some contractor
    personnel, out of 418 authorized positions.

    The Senate Appropriations Committee directed JIEDDO to provide a
    comprehensive report of all of its personnel by May 2007, and because
    JIEDDO does not have a comprehensive process to track all personnel, it
    relied on an ad hoc process to develop the report. The results
    identified a total of 1,466 personnel working for JIEDDO, as compared
    to the 321 personnel filling 418 positions routinely tracked by the
    organization in its daily snapshots. The figures in the report to
    Congress tripled the number of personnel overall and showed a ratio
    between contractor and government personnel of nearly 5 to 1 when
    compared with the figures in the daily snapshots.

    We were not assured of the accuracy of those figures in the
    congressional report given the lack of guidance or evidence of a
    process that would indicate reasonable accuracy in identifying and
    reporting all categories of government and contractor personnel. JIEDDO
    officials also said that the organization lacked procedures for
    identifying and tracking all of its personnel. When we reviewed the
    report, we discovered inaccuracies and inconsistencies in the data that
    led us to conclude that about 114 personnel had been omitted from the
    report:

    * 25 civilian positions and about 30 contractor personnel with the
    Joint Test Board, all funded by JIEDDO since JIEDDO funds all of the
    board's operations costs, including these positions, and:

    * 59 contractor personnel working as field service representatives who
    were not included for one initiative but were reported in JIEDDO's
    funding documentation.

    In addition, we also found 67 personnel who were not reported in the
    body of the report but were reported in JIEDDO's summary schedule of
    personnel, and 9 additional authorized intern positions that were
    included in the report but were not included in JIEDDO's daily
    snapshots.

    When accounting for personnel, different divisions may have applied
    inconsistent criteria as they collected data for the May 2007
    congressional report because JIEDDO officials did not provide formal
    guidance to the divisions on how to report some personnel. For example,
    JIEDDO officials said that they could not tell whether the 474 field
    service representatives reported reflected actual individuals or full-
    time equivalents, which could represent more than one individual. At
    the conclusion of our review, JIEDDO officials were still unable to
    clarify this issue. In addition to the fact that the figure could be
    higher or lower, JIEDDO officials further explained that the reported
    field service figure of 474 was inaccurate because JIEDDO subsequently
    determined that the number for one initiative included in the data
    contained a significant error.

    JIEDDO had no means to track and verify the accuracy of its figures
    presented in the May 2007 report because officials did not maintain
    adequate supporting documentation representing how they arrived at
    their figures. For example, when JIEDDO accounted for field service
    representatives, we asked JIEDDO officials for clarification on how
    they arrived at the number of contractors they reported. However, they
    could not explain adequately because they did not document the process
    and their recollections were admittedly incomplete. Without adequate
    supporting documentation, JIEDDO cannot provide assurance that the data
    it reports are accurate. Furthermore, with change of personnel, which
    is typical within JIEDDO, new personnel would have difficulty
    determining the accuracy of figures as well as what process to follow
    to prepare subsequent reports.

    Although JIEDDO has not routinely tracked all of its contractors, it
    has relied heavily on contractor support to accomplish its mission
    since its creation in February 2006. According to JIEDDO officials,
    this reliance on contractors was attributed to the lengthy and complex
    civilian hiring process, the inability of the military services to fill
    all of the services' authorized positions, and the urgency of the
    organization's mission. Contractors have performed a broad range of
    labor and services for JIEDDO. Examples of functions contractors have
    performed include:

    * evaluating initiative proposals from outside contractors,

    * piloting unmanned aerial vehicles,

    * managing a division's efforts to develop useful metrics,

    * conducting virtually all of the day-to-day management of the various
    functions at the COIC, and:

    * providing equipment maintenance and logistics support in theater for
    new initiatives.

    In addition to playing significant roles in accomplishing JIEDDO's
    mission, contractors have also held critical positions within JIEDDO
    management and might have had a significant influence on its decision
    making. In the recent past, JIEDDO employed contractor personnel for
    positions the organization designated as inherently governmental. OMB
    defines an inherently governmental function as one involving the
    exercise of substantial discretion in applying government authority,
    making decisions for the government, or both.[Footnote 26] JIEDDO
    personnel documentation showed that the organization had staffed
    contract personnel in positions of key governmental responsibility, and
    officials stated that the organization is in the process of resolving
    this practice. In July 2007, JIEDDO officials began transitioning
    government personnel--primarily temporary military staff--into these
    positions that until recently were held by contractors. According to
    JIEDDO officials, the organization is moving toward filling these
    positions with permanent government personnel.

    JIEDDO officials said that they did not believe tracking all contractor
    personnel was necessary because they are not considered JIEDDO staff,
    and consequently, JIEDDO has not developed a comprehensive process to
    identify, track, and report all personnel in accordance with DOD
    policy. However, without a comprehensive process, JIEDDO is not in a
    position to readily provide accurate and reliable information to
    internal and external decision makers on its staffing levels. For
    example, when the Senate Appropriations Committee directed JIEDDO to
    identify and report on staffing levels of civilian, military, and
    contractor staff, JIEDDO officials used ad hoc data requests to
    divisions they receive information from in their daily reports and to
    activities that are not being captured by the current process in order
    to collect information on contractor personnel. Despite responding to
    the committee's direction for a May 2007 report and its direction to
    update this report to reflect future personnel changes, JIEDDO
    officials have not developed a policy requiring the collection of data
    accounting for all categories of personnel or provided guidance for
    doing this accurately.

    Additionally, without a comprehensive process to track all government
    and contractor personnel, JIEDDO cannot be in a position to effectively
    plan for its future workforce needs. For example, according to a JIEDDO
    official, in the case of one initiative JIEDDO needed to compare
    unmanned aerial vehicle piloting alternatives, contracted versus in-
    house, and it was critical for JIEDDO to know the quantity of and
    functions of contractor staff employed under the existing contract.
    However, because JIEDDO's manpower management system does not routinely
    capture contractor staff information, it would have been difficult for
    JIEDDO to determine whether to continue the contract without finding an
    alternative source for this information. For this initiative, JIEDDO
    was able to obtain the information needed through detailed contract
    information that happened to be available. However, according to the
    JIEDDO official, these details are not always routinely available,
    depending on the type and terms of the contract.

    Our prior work also highlights the importance of accounting for and
    providing effective oversight of contractors. A recent report
    concerning the management and oversight of contractor support for
    deployed forces addresses the issue of limited visibility over the
    number of contractors deployed with U.S. forces and potential problems
    with planning for security and logistics needs if the numbers of
    contractors are not known to military commanders in theater.[Footnote
    27] JIEDDO deploys contractor personnel in the theater to assist with
    counter-IED solutions. JIEDDO does not track the number of contractors
    it employs, and yet its May 2007 report indicates that the number can
    significantly affect how JIEDDO uses its resources and plans for future
    needs.

    Conclusions:

    As IEDs continue to pose a significant threat to U.S. forces in Iraq
    and Afghanistan, defeating the threat continues to be a high defense
    priority. This likely will require a continued significant investment
    in resources, both financial and human capital. The volume of resources
    required, coupled with the scale and span of JIEDDO's mission to focus
    all DOD counter-IED efforts, creates a challenge to achieving efficient
    and best use of funding made available to JIEDDO. However, DOD and
    JIEDDO cannot adequately manage JIEDDO's financial and human capital
    resources if it does not have an effective system of internal control
    to provide reliable data and insight into how these resources are
    invested, and external parties cannot be assured that the information
    JIEDDO reports is reasonably accurate, complete, and transparent.
    Consequently, because of the absence of adequate internal controls and
    of a comprehensive efficient method for identifying, tracking, and
    reporting JIEDDO's human capital resources, JIEDDO's systems currently
    cannot efficiently provide the data and insight needed for internal
    management. Further, Congress is limited in its oversight of JIEDDO's
    current and future requirements, the organization's substantial use of
    contractors, and the organization's use of resources to support its
    mission because of the unreliable information JIEDDO has reported.
    JIEDDO officials are not fully aware of how their personnel resources
    are being spent, and cannot fully plan for future workforce needs if
    their baseline information on current funds use and workforce
    composition is inaccurate. Although JIEDDO has taken several actions to
    improve its internal control system, as we noted in this report, these
    actions have not yet been fully implemented. As such, it is important
    that JIEDDO evaluate its recent actions to ensure that they will
    address the control weaknesses we identified and provide for a system
    of internal control that fully meets federal standards. Improving
    JIEDDO's internal controls and the quality of its financial and
    personnel data is critical to assuring Congress and the public that
    JIEDDO is focusing all of its resources and using them wisely to
    address the threat of IEDs to U.S. forces.

    Recommendations for Executive Action:

    To comply with federal internal control standards as well as improve
    the quality of JIEDDO's financial management and the reliability of
    resulting financial data and reports, we are recommending that the
    Secretary of Defense direct the Director of JIEDDO to develop and
    document a comprehensive system of internal control for its financial
    management processes. Actions to develop and implement JIEDDO's system
    of internal control to address specific control weaknesses we
    identified should, at a minimum, include the following:

    * Fully documenting all internal control processes and procedures
    related to its financial management through the development of
    management directives, administrative policies, standard operating
    procedures, or other documentation that describe how JIEDDO personnel
    should perform their duties.

    * Establishing effective controls to ensure that transactions are
    properly authorized before funding is executed, related documentation
    supporting transactions is accurately dated, and exceptions are
    properly approved and documented.

    * Establishing effective controls to ensure that all transactions are
    properly classified by lines of operation and other expenditure
    categories used by JIEDDO, and to promptly and properly correct
    misclassifications when identified.

    * Developing an internal process, to include involvement of its
    internal audit staff, to routinely monitor and review the efficacy of
    JIEDDO's system of internal control and promptly correct any weaknesses
    identified.

    We are also recommending that the Secretary of Defense direct the
    Director of JIEDDO to report to Congress on the status of its efforts
    to implement its comprehensive system of internal control 1 year from
    the date of this report.

    To improve JIEDDO personnel or manpower management and provide Congress
    with the information it needs to perform its oversight duties
    effectively, we are recommending that the Secretary of Defense direct
    the Director of JIEDDO to establish and document a method or system to
    comprehensively identify, track, and report on a routine basis all
    government and contractor personnel.

    Agency Comments and Our Evaluation:

    In written comments on a draft of this report, DOD concurred with our
    findings and the thrust of our six recommendations. However, DOD did
    not concur with our fifth recommendation as originally stated in our
    draft report, which was to report on JIEDDO's efforts to implement
    internal control improvements as part of JIEDDO's recurring quarterly
    congressional reports. In its response, DOD proposed an alternative
    means for providing this information to the Armed Services and
    Appropriations Committees. DOD said that the focus of its quarterly
    report to Congress is to describe the IED threat and associated counter-
    IED efforts, and that adding the additional information we recommended
    would blur the focus of the report. DOD stated that instead, JIEDDO can
    produce and provide a report to the oversight committees 1 year after
    the issuance of our report as to the steps JIEDDO has taken to address
    and correct the weaknesses we identified. We believe that this approach
    satisfies the intent of our original recommendation and consequently we
    modified our recommendation to reflect this change.

    In commenting on our four recommendations dealing with internal control
    and financial management, JIEDDO provided several details of the
    actions it plans or said it has already taken to address the
    recommendations. While we acknowledge that JIEDDO management recognizes
    the importance of addressing the weaknesses we identified in our
    report, we maintain that more needs to be done before the weaknesses
    are fully corrected. For example, regarding our recommendation to
    develop documented internal control processes and procedures that
    describe how JIEDDO personnel should perform their duties, JIEDDO
    responded that it has established and fully implemented an internal
    control system, identifying four specific efforts for illustration.
    However, the specific efforts listed do not fully support JIEDDO's
    statement that needed controls and operating procedures are fully
    developed. One of the efforts cited was JIEDDO's November 2007
    Capability Approval and Acquisition Management Plan instruction. While
    we agree and reported that this instruction is an important step in
    developing documented processes, it does not contain operating
    procedures developed to the level we recommended because JIEDDO
    divisions had not developed and documented roles, responsibilities, and
    specific procedures for implementing the JIEDDO Capability Approval and
    Acquisition Management Plan. As of February 2008, JIEDDO was still
    developing and documenting these roles, responsibilities, and specific
    procedures for implementing the JIEDDO Capability Approval and
    Acquisition Management Plan. Consequently, the degree to which JIEDDO
    has implemented this recommendation is unclear and additional action on
    JIEDDO's part may be needed.

    In commenting on our sixth recommendation regarding establishing and
    documenting a method to comprehensively identify, track, and report
    government and contractor personnel, JIEDDO included extensive
    background information on its existing personnel processes and
    improvement efforts it is undertaking. However, more remains to be done
    in order to fully implement our recommendation. For example, while
    JIEDDO stated that it is in the process of accounting for contractors
    maintaining COIC facilities, JIEDDO did not identify any additional
    efforts to account for the remainder of contractor personnel cited in
    our report or any specific steps it plans to take to establish and
    document a method or system to comprehensively identify and track all
    personnel. Instead, JIEDDO explained that it does not track certain
    classes of personnel working in direct support of JIEDDO because these
    persons are already accounted for by other organizations in DOD.
    Consequently, JIEDDO's insight into its human capital is limited
    because it excludes tracking certain manpower funded by the JIEDDO
    appropriation, such as personnel directly working for the Joint IED
    Defeat Test Board, whose workload is performed exclusively in support
    of testing JIEDDO initiatives. We recognize JIEDDO's comments regarding
    the responsibility of the military, DOD, and other government agencies
    in providing oversight and reporting of their staff who may be assigned
    to work in support of the JIEDDO mission. However, we believe that as
    an organization, JIEDDO has an interest and a responsibility to
    identify, track, and report all civilian, military, and contractor
    personnel working in support of JIEDDO as a matter of good resource
    stewardship and sound human capital management. Any overlapping
    manpower management interests or responsibilities between JIEDDO and
    other organizations could still be recognized and reported with the
    appropriate caveats to users of the information. In its comments
    related to this recommendation, DOD also cited ongoing efforts that do
    not directly address our recommendation as well as several new efforts
    that were not established at the time of our review, and therefore we
    could not validate or consider them for purposes of this audit. DOD's
    comments and our specific responses to them are provided in appendix
    II.

    We are sending copies of this report to the appropriate congressional
    committees and the Secretary of Defense. We will also make copies
    available to others upon request. If you or your staff have any
    questions about this report, please contact me at (202) 512-8365 or
    solisw@gao.gov. Contact points for our Offices of Congressional
    Relations and Public:

    Affairs may be found on the last page of this report. GAO staff who
    made major contributions to this report are listed in appendix III.

    Signed by:

    William M. Solis:

    Director, Defense Capabilities and Management:

    List of Committees:

    The Honorable Daniel K. Inouye:
    Chairman:
    The Honorable Ted Stevens:
    Ranking Member:
    Subcommittee on Defense:
    Committee on Appropriations:
    United States Senate:

    The Honorable Carl Levin:
    Chairman:
    The Honorable John McCain:
    Ranking Member:
    Committee on Armed Services:
    United States Senate:

    The Honorable John P. Murtha:
    Chairman:
    The Honorable C. W. Bill Young:
    Ranking Member:
    Subcommittee on Defense:
    Committee on Appropriations:
    House of Representatives:

    The Honorable Ike Skelton:
    Chairman:
    The Honorable Duncan L. Hunter:
    Ranking Member:
    Committee on Armed Services:
    House of Representatives:

    [End of section]

    Appendix I: Scope and Methodology:

    To assess the Joint Improvised Explosive Device Defeat Organization's
    (JIEDDO) financial management processes, controls, and data, we
    collected data on the $1.9 billion in funds available to JIEDDO for the
    first half of fiscal year 2007 and analyzed associated financial
    management and counter-improvised explosive device (IED) initiative
    data available for management and external reporting of JIEDDO's
    activities. We selected the initial fiscal year 2007 funding provided
    to JIEDDO because it was received after JIEDDO made significant changes
    in its resource management processes and therefore should reflect
    impacts and improvements resulting from those changes. We also
    identified required approval controls over use of funds, reviewed
    selected transactions for compliance with these controls, and assessed
    whether the data recorded in the accounting and managerial systems
    accurately reflected JIEDDO's activities. However, we did not perform a
    comprehensive assessment of all of JIEDDO's internal controls. We drew
    high-dollar initiatives during the scoping phase of the review to more
    efficiently assess the largest portion of JIEDDO's funds use in the
    relatively limited phase. Because the items initially selected included
    little in the way of attack the network initiatives, we added items
    from this line of operations to do control testing. We also reviewed
    large-dollar initiatives approved by the Deputy Secretary of Defense
    that had no recorded commitments at the time our initial data were
    collected for the first half of fiscal year 2007. Because we identified
    weaknesses in the completeness and accuracy of JIEDDO's documentation
    and controls, we did not review the full range of initiatives we had
    originally planned because it would have added no further value for
    purposes of addressing the objectives of this review. Our analysis
    included 47 funding actions totaling $1.34 billion for 24 of the 301
    initiatives JIEDDO had approved at the time we collected our data. We
    selected initiatives to review that reflected the JIEDDO defeat the
    device and attack the network activities as well as some approved most
    recently by the Deputy Secretary of Defense. The 24 initiatives we
    selected were divided into three subsets: 10 counter-IED initiatives
    JIEDDO identified as defeat the device initiatives with the highest
    fund commitments recorded as of the time we collected financial data, 9
    of the 10[Footnote 28] counter-IED initiatives JIEDDO identified as
    attack the network initiatives with the highest fund commitments
    recorded as of the time we collected financial data, and 5 additional
    initiatives that received Deputy Secretary of Defense approval after
    the date we collected our comprehensive funding data to determine
    whether conditions had changed. We also met with officials from
    JIEDDO's Counter-IED Operational Integration Center, the Joint Center
    of Excellence, the Navy Center of Excellence, the Air Force Center of
    Excellence, the Technology and Requirements Integration Division, and
    the Joint IED Defeat Test Board to gather information corroborating and
    explaining the financial activity and documentation related to JIEDDO
    initiatives we tested.

    To assess JIEDDO's efforts to identify, record, track, and report
    numbers of all personnel, including contractors, we met with officials
    from JIEDDO's Secretariat Division who are responsible for the
    organization's personnel management to discuss and obtain information
    on the numbers of JIEDDO personnel, the composition of personnel, and
    JIEDDO's processes for capturing this information. We collected
    information on the numbers of JIEDDO personnel from several personnel
    documents and reports from the Secretariat Division. We reviewed the
    information and selectively compared it with corroborating sources,
    such as interviews with JIEDDO officials and JIEDDO's financial
    documentation, to determine whether the reported figures were
    comprehensive and accurate. We also met with officials from JIEDDO's
    Counter-IED Operational Integration Center, the Joint Center of
    Excellence, the Navy Center of Excellence, the Air Force Center of
    Excellence, the Technology and Requirements Integration Division, and
    the Joint IED Defeat Test Board to gather information regarding the
    numbers of and composition of JIEDDO's personnel. In addition, we met
    with officials in the Office of the Secretary of Defense's Directorate
    for Organizational and Management Planning to discuss the origins of
    DOD Directive 2000.19E.

    We assessed the reliability of JIEDDO's financial data we reviewed by
    (1) corroborating the data with supporting information and
    documentation from physical file records at JIEDDO headquarters and
    from initiative program offices to verify the accuracy of the data, (2)
    reviewing existing information about the data and the system that
    produced them, and (3) interviewing agency officials knowledgeable
    about the data. We found problems with the reliability of the data,
    which we discuss in the report and in part form the basis for our
    recommendations.

    We conducted this performance audit from April 2007 to December 2007 in
    accordance with generally accepted government auditing standards. Those
    standards require that we plan and perform the audit to obtain
    sufficient, appropriate evidence to provide a reasonable basis for our
    findings and conclusions based on our audit objectives. We believe that
    the evidence obtained provides a reasonable basis for our findings and
    conclusions based on our audit objectives.

    [End of section]

    Appendix II: Comments from the Department of Defense:

    Joint Ied Defeat Organization:
    5000 Army Pentagon:
    Washington DC 20310-5000:

    February 14, 2008:

    Mr. William M. Solis:
    Director, Defense Capabilities and Management:
    U.S. Government Accountability Office:
    441 G Street, NW:
    Washington, DC 20548:

    Dear Mr. Solis:

    This is the Department of Defense (DoD) response to the GAO draft
    report, "Defense Management: More Transparency Needed Over the
    Financial and Human Capital Operations of the Joint Improvised
    Explosive Device Defeat Organization," dated 21 December 2007 (GAO Code
    351017).

    JIEDDO would like to thank GAO for its due diligence and thoughtfulness
    in the preparation of this report. Overall, this report provides an
    accurate description of the weaknesses identified during the audit time
    frame with regard to JIEDDO's compliance with internal control
    standards.

    JIEDDO has instituted several processes to strengthen our internal
    control standards and to ensure that financial transactions are
    properly approved and documented. Many of these processes were
    implemented during the audit time frame. Our response provides detailed
    descriptions of current processes and other planned improvements that
    will occur over the next several months. Projected completion dates are
    included in the response.

    My point of contact for this matter is Ms. Lin Malec, Internal Review,
    703-602-4807.

    Signed by:

    THOMAS F. METZ:
    LTG, U.S. Army:
    Director, JIEDDO:

    Branch IOC: 01 MAR 08:
    Branch FOC: 01 MAY 08:

    GAO Draft Report - dated December 21, 2008 GAO Code 351017 – GAO-08-342

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

    Department Of Defense Comments To The Recommendations:

    Recommendation l. The GAO recommends that the Secretary of Defense
    direct the Director of JIEDDO to develop and document a comprehensive
    system of internal control for its financial management processes by
    fully documenting all internal control processes and procedures related
    to its financial management through the development of management
    directives, administrative policies, standard operating procedures, or
    other documentation that describe how personnel should perform their
    duties.

    DOD Response: Concur.

    Before the initiation of the subject audit, JIEDDO had been and
    continues to work diligently to formalize and document processes to
    ensure that internal controls are emplaced within our organization.
    During the audit timeframe, many of these processes were finalized, but
    due to GAO reporting time constraints, they were unable to validate
    these processes. Following are samples of the procedures and processes
    we have finalized, documented and implemented:

    (See comment 1.):

    1) Formation of the Acquisition Oversight Division (AOD)

    The Acquisition Oversight Division was established to support the
    JIEDDO mission to defeat Improvised Explosive Devices (IEDs). AOD
    provides executive program management oversight of Counter-lED (C-IED)
    initiatives; develops and implements acquisition life-cycle management
    policies; and ensures effective transition and transfer of initiatives
    to the Services for sustainment and further integration.

    (See comment 2.):

    The need for an oversight division that applied scrutiny to processes
    and analysis of JIEDDO process methodology for all JIEDDO divisions
    became apparent as JIEDDO began breaking new ground in field of rapid
    acquisition. The AOD systematically reviews programs that have been
    funded by JIEDDO in an established process called (JIEDD) (Joint lED
    Defeat) System Reviews (JSRs). The AOD improves JIEDDO processes by
    offering objective analysis and review from a division reporting
    directly to the Director, JIEDDO. The monitoring of established policy
    and oversight by AOD enhances JIEDDO's overall capability to find
    Counter-IED Solutions and get those solutions quickly assessed and to
    the Warfighter. It assists in the control of documents while seeking to
    match technology gaps. The outcome is improved controls in accounting
    for the prudent spending of funds while assessing metrics and control
    measures throughout the process.

    The JIEDDO AOD maintains overall proponency for the JIEDD Capability
    Approval and Acquisition Management Process (JCAAMP); provides
    executive program management oversight and independent assessment of
    initiatives approved by the Director and Deputy Director; develops and
    publishes policies for the development, procurement, testing,
    deployment and initial sustainment of C-IED initiatives; conducts
    JIEDDO System Reviews (JSRs); chairs the JIEDDO Transition Team (JTT)
    and Transition Working Group (TWG); coordinates the transition,
    transfer, or termination of initiatives with the Military Services or
    agencies and oversees the completion of all Transition Packets (TPKs);
    produces JIEDDO future budget programmatic requirements; maintains an
    audit trail for all initiative funding; provides members to serve on
    all JIEDDO IPTs; serves on the Chief of Staff's JCAAMP Council;
    provides oversight for all test and evaluation activities; provides
    oversight of the JIEDD Test Board (JTB); produces all initiative
    funding decision memoranda; provides members to the JIEDDO Joint Urgent
    Operational Needs (JUONS) Review Board (J2RB); and the JIEDDO Special
    Access Program and Additional Compensatory Measures Review Board
    (JSARB). The AOD oversees staff actions related to initiative
    performance, interoperability, and compatibility test activities;
    provides members to the JIEDDO Initiative Evaluation Team (JET);
    establishes policies for testing in support of Initiative Evaluation
    Plans (IEPs) and coordinates test issues related to IEPs with the JTB.
    AOD coordinates with Program Managers and Service test organizations
    for testing support during initiative evaluations and coordinates the
    inclusion of subject matter experts to serve on JIETs. The AOD ensures
    an evolutionary improvement of JIEDDO processes and plans; coordinates
    and provides administrative and logistical support to the JIEDD
    Requirements, Resources and Acquisition Board (JR2AB) and JIEDD
    Integrated Process Team (JIPT); and proposes the evaluation Tier
    development for each initiative. These actions are performed in
    coordination with the ORSA Division Chief.

    Several documents are enclosed to provide more detail describing the
    Acquisition Oversight Process:

    * Acquisition Oversight Division & The Joint LED Defeat Capability
    Approval and Acquisition Management Process;

    * Memorandum for JIEDDO Personnel, Subject: Joint lED Defeat
    Requirements, Resources and Acquisition Board and Joint IED Defeat
    Integrated Process Team Scheduling;

    * JR2AB Scheduling Request Memorandum Example;

    * JR2AB Scheduling Request Memorandum Instructions;

    * Transition Packet Instructions (JR2AB);

    * JR2AB and JIPT Briefing Slides Template;

    * JIEDDO Assessment Readiness Levels;

    2) Published and Implemented JCAAMP Instruction – Joint Improvised
    Explosive Device Defeat Capability and Acquisition Management Process
    (JIEDDOI 5000.1, dated 9 November 2007):

    (See comment 3.):

    JCAAMP is JIEDDO's process to respond to urgent warfighter needs; to
    identify C-IED operational capability gaps; aggressively to seek,
    acquire, and assess potential materiel and nonmaterial solutions to
    these gaps through extensive finding networks; and to place approved C-
    lED initiatives in the hands or warfighters for operational assessment
    and deployment. JCAAMP enables a smooth transition or transfer of C-lED
    initiatives to one or more Services or agencies and provides guidance
    on the disposition of those initiatives recommended for termination.

    The JCAAMP instruction defines JCAAMP's roles, responsibilities, and
    oversight requirements as applicable to all JIEDDO components.
    Functional responsibilities described below are not inclusive. JIEDDOI
    5000.01 is enclosed and contains a thorough description of the
    initiative process and associated responsibilities.

    JCAAMP is conducted in three phases – VET, Equip, and Sustain. Each of
    these phases incorporates transition points (TP) representing critical
    activities and decisions that define the path forward through each of
    the three phases.

    JCAAMP's goal is to approve, develop, and acquire initiatives quickly,
    normally within 4 to 12 months. JCAAMP also enables initiative delivery
    for employment by warfighters while conducting operational assessments,
    normally within 6 to 24 months. After an initiative receives a
    successful operational assessment (OA) and a decision on transition,
    transfer, or termination (T3) to a Service or agency has been made,
    JCAAMP manages the remainder of the fiscal year and one additional
    fiscal year of sustainment prior to T3 execution.

    C-IED Urgent Needs and Operational Capability gaps are obtained from
    various sources – principally warfighter JUONs, after action reviews
    (AAR), reports, lessons learned, special access programs, and theater
    visits by senior leaders. Operational analyses, intelligence trends,
    tactical and strategic gaming, the special technical operations
    community, and JIEDDO's finding networks also inform the development of
    needs and, ultimately, may result in the identification all approval of
    C-IED operational capability gaps. JUONs forwarded to JIEDDO by the
    Joint Staff (JS), J-8, are processed for acceptance through the JIEDD
    JUONs Review Board (J2RB) for review by the JIEDDO Chief of Staff's
    JCAAMP Council and acceptance by the JIEDDO Deputy Director. The
    Director, JIEDDO, reviews and approves all C-IED operational capability
    gaps semi-annually. Time critical JUONs may be forwarded directly by
    the J2RB to the Deputy Director with subsequent notification to the
    Chief of Staff's JCAAMP Council.

    JIEDDO leverages aggressive finding networks comprised of industry,
    academia, laboratories, special technical operations, and other
    government agencies to develop potential solutions to urgent and
    operational capability gaps. Most proposed technology solutions enter
    JCAAMP through the Broad Agency Announcement (BAA) Information Delivery
    System (BIDS) and are processed by one of the six Integrated Process
    Teams (IPTs) aligned with JIEDDO's three Lines of Operations (LOO):
    Attack the Network (Atn); Defeat the Device (DtD), and Train the Force
    (TtF). Proposals that do not enter JCAAMP through BIDS, such as
    Commercial Off the Shelf (COTS) and some non-material solutions, are
    submitted by the LOO IPT Leads to the Chief of Staff's JCAAMP Council
    for disposition to the appropriate IPT for further development and
    evaluation.

    Figure:

    [See PDF for image]

    [End of figure]

    TP 1 — Complete assessment of technology merit against capability gaps
    and IPT Leads gain approval as a proposal from the Deputy Director or
    Chief of Staff's JCAAMP Council;

    TP 2 — LOO Chair approval to proceed to JR2AB;

    TP 3 — JR2AB recommendation to proceed to JIEDD Integrated Process Team
    (JIPT);

    TP 4 – JIPT endorsement and Initiative Decision Memoranda signed;

    TP 5 – Decision to deploy for operational assessment by Director;

    TP 6 – Authorize full rate production based on OA report. Decision to
    transition, transfer, or terminate (T3) initiatives, as appropriate;

    TP 7 — Complete transition or transfer of initiatives to Services or
    Agencies; or Terminate.

    JCAAMP Characteristics:

    * Support for flexible points of entry depending on maturity;

    * Effective test and evaluation requirements;

    * Initiative assessment continues after initial delivery to warfighters

    * Continuous risk reduction enforced;

    * Formal acquisition oversight during every phase;

    * The JCAAMP Governance is perhaps the most important part of the
    process to ensure that all initiatives pass though various approval
    levels before a decision is made to commit funding. Every initiative
    must be vetted through the JCAAMP process as follows:

    * JIEDDO Senior Resource Steering Group (SRSG)

    The SRSG is an advisory body to the Deputy Secretary of Defense
    (DEPSECDEF), established to review JIPT-recommended C-IED initiatives
    that are valued greater than $25 million, and to make recommendations
    to the DEPSECDEF for disposition.

    SRSG membership consists of the Principal Deputies of the Under
    Secretaries of Defense, the DOT&E; the Principal Deputy ASD(NII); the
    Principal Deputy General Counsel of the Department of Defense; the
    Deputy PA&E; the Vice Chief of Staff of the Army, the Vice Chief of
    Naval Operations, the Vice Chief of Staff of the Air Force; the
    Assistant Commandant of the Marine Corps; the Vice Chairman and the
    Joint Chiefs of Staff; the Assistant to the Chairman of the Joint
    Chiefs of Staff, the Director, JRAC; and other members as the DEPSECDEF
    may determine.

    * JIEDD IPT (JIPT);

    The JIPT is an advisory body to the Director, JIEDDO, established to
    consider C-IED proposals after review by the JIEDD Requirements,
    Resources, and Acquisition Board (JR2AB).

    Membership consists of representatives at the Flag or General
    Officer/SES level from the Offices of the Under Secretaries of Defense;
    the ASD (NII)/DoD CIO; the DOT&E; the Director, PA&E, the Military
    Services; the Chairman of the Joint Chiefs of Staff and such other
    representatives as the Director, JIEDDO, may determine.

    The JIPT is chaired by the Deputy director and meets weekly to
    recommend further development and funding of a proposal as a C-IED
    initiative; provide comments on transition, transfer, or terminate (T3)
    actions of mature initiatives; ensure synchronization of JIPT member C-
    IED efforts and those of other agencies; validate JIEDD efforts
    requiring rapid implementation, acceleration, or development and
    recommend appropriate funding levels to the Director; review potential
    C-IED solutions provided by industry, interagency, and international
    sources when considering appropriate funding levels to the Director;
    review actions of the JR2AB and make recommendations to the Director,
    as appropriate.

    * JIEDD Requirements, Resources, Acquisition Board (JR2AB);

    The JR2AB meets weekly to assess all C-IED proposals forwarded by the
    LOO chairs prior to making any funding recommendations to the JIPT.
    Proposals are evaluated using the following criteria: extent of systems
    integration; military utility and effectiveness; programmatic and
    resource limitations; potential to satisfy and operational capability
    gap; ability to be developed and deployed in JACAAMP-designated
    timeframe; and the degree of risk. Additionally, JR2AB develops
    strategies for integration into the Joint Capabilities Integration and
    Development System (JCIDS); advises the Director, JIEDDO, regarding
    resource and acquisition management matters; reviews the current status
    of program execution and operational fielding of approved JIEDD
    initiatives; monitors coordination between JIEDDO and the appropriate
    Service or agency for the transition of approved C-IED initiatives that
    are deemed only required for the duration of a given conflict or
    theater of operations; and reviews resource requirements and
    appropriate planning documents for establishment of current and future
    funding needs, including out-year funding requirements.

    Membership consists of representatives at the O-6/GS-15/PB3 level from
    the Offices of the Secretaries of Defense; the Director, PA&E; the
    Military Services; the Chairman of the Joint Chiefs of Staff, and the
    ASD(NII)/DoD CIO. The Director, JIEDDO, may select additional members
    to serve on the JR2AB and may modify JR2AB requirements with respect to
    JIEDD initiatives, as necessary.

    * Chief of Staff's JCAAMP Council.

    The JIEDDO Chief of Staff, assisted by the Division Chief's and select
    special staff officers, provides oversight of JCAAMP to ensure the
    Director's guidance and priorities are met.

    The Council meets weekly to review JIEDDO's metrics; identify resource
    imbalances, coordinate required management actions to resolve
    outstanding issues and make recommendations for actions by the
    Executive Committee. Additionally, the Council reviews all actionable,
    pending and approved JUONs; reviews operational capability gaps and
    science and technology gaps and recommends changes to JIEDDO
    leadership; reviews BIDS key performance indicators, including the
    processing rate, BAAs in development, and the number of proposals
    received, accepted and rejected that week; reviews that week's JR2AB
    results and forecasted agenda; reviews that week's JIPT results and
    forecasted agenda; reviews the corporate budget and balance; identifies
    tradeoffs between changing budget requirements; reviews all JIEDDO
    initiatives assessed as "Red;" and reviews the transition, transfer,
    terminate actions monthly and review staffing issues.

    * JIEDDO JUONs Review Board (J2RB);

    The J2RB meets weekly to review emergent JUONs and recommends their
    acceptance, rejection or limited acceptance to the Deputy Director via
    the Chief of Staff's JCAAMP Council. The J2RB reviews all JUONs to
    determine the tactical, technical, training, and acquisition readiness
    levels of a proposed solution and develops a recommendation for the
    Chief of Staff's JCAAMP Council and a drafts a decision memo for the
    Deputy Director.

    J2RB membership consists of representatives from JIEDDO's TRID, AOD,
    the JRAC, JCS (J-8) and the supported COCOM. Service Liaison Officers
    and additional subject matter experts relevant to the topic(s) under
    discussion are also included in the meetings to ensure unilateral
    representation resulting in informed, educated decision-making.

    3) Establishment of the Records Management Division;

    (See comment 4.):

    As noted by GAO, internal controls necessitate the completion,
    maintenance and availability of documentation to support decisions and
    transactions accomplished by JIEDDO leadership. The Records Management
    Division was tasked to ensure that JIEDDO personnel are educated on the
    importance of maintaining supporting documentation.

    The JIEDDO Records Management Program provides oversight and assists
    JIEDDO components in the establishment and maintenance of a system for
    maintaining and protecting records in all media. Adhering to statute
    (44 U.S.C. Chapter 31), JIEDDO's Records Management Program has
    accomplished the following:

    * Issued a Records Management Directive and/or Instruction;

    * Instituted training on policies, responsibilities, and recordkeeping
    requirements and ensuring employees understand the distinction between
    records and non-records;

    * Developed and implemented records disposition schedules; preserving
    permanent records and promptly destroying temporary records when their
    retention period expires;

    * Established a Vital Records Program for safeguarding and recovering
    JIEDDO records.

    * At the request of JIEDDO leadership and through coordination with
    Washington Headquarters Services, McNeil Technologies was requested to
    conduct an assessment of JIEDDO's records management policies,
    practices, and procedures. The objective was to establish a baseline
    status. The review occurred during JAN/FEB 2007. The report findings
    are enclosed.

    * The Chief of Staff (CoS) formally designated a JIEDDO Records Manager
    with responsibility for carrying out a Records Management Program. The
    designation letter is enclosed.

    * The Director signed the Directive establishing responsibility for the
    Records Management Program under the Chief of Staff, establishing
    policy and responsibilities for life-cycle management (creation,
    maintenance and use, and disposition) of information as records in all
    media (including electronic), and establishing and authorizing the
    publication of procedural guidance on the management of records within
    JIEDDO. Directive 1015.1A, JIEDDO Records Management Program, is
    enclosed.

    * Records administrative staff, action officers, executive assistants,
    file clerks, and others with regular records duties receive training in
    records maintenance and filing procedures and records disposition.
    Module 1 training (basic course) occurs bi-weekly and is a requirement
    for all employees. Module 2 training (topics: hard copy and electronic
    recordkeeping, AI 15, Naming Convention, shared drives, emails,
    labeling, File Plan, etc.) was conducted on 4 January 2008. It is also
    being executed as a desk-side training session for Division
    administrators. Training slides are enclosed. Module 3 training began
    in January 2008. This course focuses on Action Officer responsibilities
    in handling records.

    * A rigorous Program Plan of Action for Headquarters Records Management
    implementation was developed. The initial operational capability (IOC)
    date for Division administrator central file systems is projected to be
    31 January 2008; for Branch administrator central file areas, the IOC
    date is projected to be 01 March 2008.

    * An electronic file structure was established to capture official,
    final version documents. The output of this process is an electronic
    File Disposition Schedule on JIEDDO's internal J: drive. As of January
    2008, 5,469 files were identified as official records and have been
    placed within this File Disposition Schedule.

    * The Chief of Staff issued a Standardized Naming Convention memo,
    providing direction on the importance of naming electronic files
    properly, along with rules for developing file names and versions.
    Electrons of the memo are enclosed.

    * File Plans were drafted and Division employees are in the process of
    validating the content.

    * The Records Program's Final Operational Capability (FOC) date is
    projected to include an assessment process to ensure employees are
    operating under the guidelines of the program being established. The
    FOC assessment will confirm whether administrators are maintaining
    electronic and hard copy file systems. The assessment will determine
    whether further training/practice is required.

    * Self-evaluation checklists and internal reviews are included in the
    Draft JIEDDO Records Management Handbook. The Draft Handbook provides
    guidance on how the Records Manager, with the assistance of the Records
    Team and Division/Branch records Administrative Staff, will
    periodically evaluate records management practices. Reference: NARA's
    publication Records Management Self-Evaluation Guide, 2001 edition,
    available at [hyperlink, http://www.archives.gov/records-
    mgmt/publications/records-management-self-evaluation-guide.html
    ].

    * A draft Management Control Checklist for Records Management is
    underway. The initial draft is enclosed.

    * JIEDDO is in the implementation phase of its Records Management
    Program. Fostering Records Management practices in the JIEDDO culture
    will be a paramount focus.

    * With the support of JIEDDO's senior leadership we are eliciting
    support and adherence from JIEDDO's middle-management and Action
    Officers. There adherence to the new Records Management Program is a
    critical factor in establishing a culture inclusive of Records
    Management processes.

    * The Records Program strategy is in two phases: (1) Division Level;
    (2) Branch Level. The Initial Operational Capability (IOC) and Final
    Operational Capability (FOC) dates are schedule as:

    Division IOC: 31 Jan 08;

    Division FOC: 15 Feb 08;

    Branch IOC: 01 Mar 08;

    Branch IOC: 01 May 08;

    4) Implementation of Comprehensive Cost and Requirement System (CCaRs).

    (See comment 5.):

    In 2007 JIEDDO began implementation of the Comprehensive Cost and
    Requirement System (CCaR) used by Air Force, Army, Navy and Defense
    Threat Reduction Agency (DTRA) to manage billions in funding.

    JIEDDO CCaR objectives include:

    * Maintains budget requirement packages/initiatives;

    * Coordinate workflow electronically for MIPRs;

    * Track budgets and associated fiscal years, as well as all
    commitments, obligations, and expenditures providing internal financial
    controls;

    * Ensure STANFINS data (official Defense Finance and Accounting System
    (DFAS) data) is downloaded daily for reconciliation against JIEDDO data
    for validation of accuracy;

    * Provides reporting capability to quickly assess JIEDDO financial
    position by overall budget (macro) or single initiative (micro)
    perspective providing internal financial controls.

    Currently, there is on-going training of Program Integrators in CCaR
    and one-on-one training as necessary. CCaR was installed for the
    Resource Management Budget Execution team enabling the electronic
    preparation of Military Interdepartmental Purchase Requests (MIPRs).
    Full implementation of CCaRs is expected by March 2008.

    JIEDDO CCaR process improvements include:

    * The system will serve as a repository for all new MIPRs;

    * The system eliminates the need to maintain a JIEDDO MIPR log;

    * CCaRs allows Program Integrators/Office Primary Responsibilities
    (OPRs) visibility of their assigned initiatives by Lines of Operation;

    * Requirements gathering for interface with current financial system is
    underway

    * CCaRs ensures that backup Resource Management (RM) staff can execute
    transactions when primary RM staff is unavailable.

    The CCaR is an enterprise program and financial management system that
    will deliver real-time program information to decision makers. At the
    core of the CCaR system are the automated reports and analysis tools
    which allow the program and financial managers to define program
    requirements, formulate program budgets, forecast program execution and
    track the execution of program funds.

    Recommendation 2. The GAO recommends that the Secretary of Defense
    direct the Director of JIEDDO to develop and document a comprehensive
    system of internal control for its financial management processes by
    establishing effective controls to ensure transactions are properly
    authorized before funding is executed, related documentation supporting
    transactions is accurately dated, and exceptions are properly approved
    and documented.

    DOD Response: Concur.

    Funding documents are only released after proper authorization is
    received and documented; i.e. funding memorandums (for less than $25M)
    or Deputy Secretary of Defense approval (for in excess of $25M). In the
    past, there has been some confusion regarding the actual definition of
    the $25M. JCAAMP (described above) clearly defines that the $25M is
    total program costs. There have been instances when the projected total
    costs were under $25M, but it was subsequently determined that the
    actual initiative costs would exceed the threshold. The current process
    requires that as soon as it is determined that an initiative will
    exceed the $25M threshold, an SRSG package is developed and SECDEF
    approval is obtained addressing the increase.

    (See comment 6.):

    In another effort to ensure adequate internal control standards are
    included in JIEDDO processes, RM developed mandatory minimal
    transaction documentation that must be completed and kept on file. For
    example, the JIEDDO RM Funding Request Flow and Required Documents
    package, and the JIEDDO RM Checklist were developed and enclosed for
    your review. The JIEDDO Projects/Initiatives Pending Prioritized
    Listing and MIPRs Listing is updated and published daily. The JIEDDO
    Corporate Report (reporting of expenditures from our "official"
    financial system by each initiative), the Monthly Execution Report
    (compares execution to monthly spend plan by each initiative), and
    Status of Funds is also included in internal daily reporting.

    Because of its charter JIEDDO must respond quickly to requests from the
    field. Supplemental funding is a contributing factor of JIEDDO's
    flexibility. These funds are not "programmed" in a traditional DOD
    fashion but fluid and available where needed to meet approved lED
    Defeat initiatives. For example, JIEDDO's Corporate Report has
    successfully tracked these funds and pointed out errors when funds have
    been improperly executed allowing for detection and correction.

    Recommendation 3. The GAO recommends that the Secretary of Defense
    direct the Director of JIEDDO to develop and document a comprehensive
    system of internal control for its financial management processes by
    establishing effective controls to ensure all transactions are properly
    classified by lines of operation and other expenditure categories used
    by JIEDDO, and to promptly and properly correct misclassifications when
    identified.

    DOD Response: Concur.

    Early in fiscal year 2007, JIEDDO Resource Management (RM) identified
    and corrected inconsistencies with the assignment of Lines of
    Operations (LOOs) to ensure that information being reported in its
    financial reports was correct. JIEDDO currently has the ability to
    accurately determine trends in the use of funds in conjunction with its
    priorities. In an effort to prevent future erroneous postings of LOOs,
    all funding documentation must include the LOO. RM then validates
    against spending plan data to ensure accuracy prior to committing any
    funds in the accounting system. In addition, JIEDDO continues to review
    LOO assignments for individual requirements during each budget review
    and corrections are made as required.

    (See comment 7.):

    As JIEDDO is growing, so is the understanding of operational functions
    and mission. Initiatives recorded in first quarter of 2007 that were
    recorded and reported in one Line of Operation (LOO) and subsequently
    moved and reported in another LOO in later quarters demonstrates
    JIEDDO's informal non-documented continual review of initiatives and
    the reporting thereof. Perspective on what LOO an initiative falls into
    is relative to the familiarity of the initiative/program. JIEDDO
    efforts to accurately report and record transactions are represented by
    our continual improvement. In addition, JIEDDO continues to review LOO
    assignments for individual requirements during each budget review and
    corrections are made as required.

    RM is developing guidance for accounting and budget personnel to ensure
    that correct Elements of Resource (EORs) are used in the recording of
    accounting data. It is important to note that as requirements mature
    their nature may change. In a fluid operating environment technologies
    may cross EOR and LOO definitions and require adjustments in accounting
    information on an individual basis when identified. JIEDDO continues to
    review LOO assignments for individual requirements during each budget
    review and corrections are made as required. The goal is to accurately
    process all financial documentation and when exceptions occur we will
    continue to promptly and properly correct misclassifications and
    document corrective action in official records.

    RM is also in the process of fully staffing the Resource Management
    (RM) Division. The additional essential personnel will allow us to take
    immediate action in correcting the weakness identified in the audit. We
    are currently studying the feasibility of establishing a Policy and
    Quality Assurance Section within RM that will be dedicated to fully
    documenting all internal control processes and procedures related to
    our financial management through the development of management
    directives, administrative policies, standard operating procedures, and
    other documentation that describe specific organizational
    responsibilities. Following is our planned actions:

    Action Item: Establish Desk Guides for each Position within RM (Job
    Title; Job Description; General Description of Daily Duties; General
    Description of Weekly Duties; General Description of Monthly Duties;
    General Description of Unscheduled or Annual Duties);
    Planned Completion Date: 28 February 2008.

    Action Item: Timeline Chart for all RM Requirements/Submissions (I.e.
    for Budget Formulation, Budget Execution, and Accounting);
    Planned Completion Date: 31 January 2008.

    Action Item: Reference Guide to identify Useful Financial Web Sites
    Standard Operating Procedures Documenting the Financial Management
    Process to Resolve Aged Commitments and Unliquidated Obligations
    (ULOs);
    Planned Completion Date: 28 February 2008.

    Action Item: Standard Operation Procedures for the Processing of MIPRs;
    Planned Completion Date: 15 March 2008.

    Action Item: Standard Operating Procedures for the Corporate Report
    process;
    Planned Completion Date: 29 February 2008.

    Action Item: Budget Formulation Guidance;
    Planned Completion Date: 29 February 2008.

    Action Item: Consolidated Funding Package Handbook (i.e. JIEDDO Funds;
    Funding Policy; Funding Package Process; Required Documentation; Travel
    Policy; Accounting Process, etc.);
    Planned Completion Date: 31 March 2008.

    Recommendation 4. The GAO recommends that the Secretary of Defense
    direct the Director of JIEDDO to develop and document a comprehensive
    system of internal control for its financial management processes by
    developing an internal process, to include involvement of its internal
    audit staff, to routinely monitor and review the efficacy of JIEDDO's
    system of internal control and promptly correct any weaknesses
    identified.

    DOD Response: Concur.

    JIEDDO agrees that an adequate internal process to monitor and review
    the efficacy of its internal controls is required. Funds allocated to
    JIEDDO are for the IED Defeat mission within DOD. JIEDDO's primary
    mission is to provide funding to the Military Services and DOD agencies
    to rapidly develop and field counter-lED solutions and is successfully
    accomplishing its mission. Mission accomplishment in this area is not
    the only part of the process. GAO accurately identified weaknesses in
    JIEDDO's internal control process. It is very important to JIEDDO that
    any agency looking at JIEDDO's execution of funds can understand
    funding decisions from the inception of researching an initial idea or
    initiative through documentation of a decision and each stop of the
    approval process. Recognizing our weaknesses, especially in the area of
    maintaining adequate documentation to ensure an accurate transaction
    audit trail, JIEDDO hired an Internal Review Evaluator to have
    continuous oversight over internal controls and recommend improvements
    to correct any identified weakness. The auditor actually came on board
    during the audit timeframe. The auditor reports directly to the JIEDDO
    Director to avoid any conflicts of interest and to maintain
    independence within the organization. The auditor also serves as
    JIEDDO's Management control Administrator. Specific details will be
    addressed later in our comments.

    (See comment 8.):

    Internal Review has incorporated Management Control Training during our
    Block Training sessions for new employees. The importance of the
    training is centered on ensuring that personnel understand the
    importance of internal control standards. A basic overview is provided
    on the Management Control Program so that awareness is instituted at
    all levels of the organization.

    Internal Review has also provided elementary training to all key JIEDDO
    leadership. A training package developed by OAA was provided to
    leadership and successful review of the package was certified. An
    example is enclosed.

    A draft Five-Year Management Control Plan was developed and will be
    provided to JIEDDO leadership for comment and modification. Target date
    for development is 8 February 2008.

    Additional training and instructions will be provided to all JIEDDO
    personnel. Key checklists were developed and are integral piece of the
    Management Control Program. Management Control Administrators and
    Assessable Unit Managers will be identified and targeted training will
    be provided to ensure that checklists are not just completed – but
    actual testing of key controls will be accomplished. Target date for
    completion is 15 March 2008.

    Recommendation 5. The GAO recommends that the Secretary of Defense
    direct the Director of JIEDDO to report to congress on the status of
    its efforts to implement its comprehensive system of internal control
    as part of its quarterly congressional reports. DOD RESPONSE:
    Nonconcur.

    OSD Policy comments best explain the basis for this nonconcurrence.
    JIEDDO's progress in implementing its internal control measures should
    not be reported in the Quarterly Reports to Congress. This report is
    specifically focused on describing the lED threat and JIEDDO's efforts
    to counter that threat. Including JIEDDO's internal "administrative
    efforts" within the report is not in keeping with the intent of the
    report and serves to weaken the report's focus. OSD Policy recommends
    that the Deputy Secretary of Defense direct JIEDDO to provide Ranking
    and Minority leaders of the Armed Services and Appropriations Committee
    with a report within one year from the date of the GAO final report as
    to steps JIEDDO has taken to address and correct the weaknesses
    identified by GAO.

    (See comment 9.):

    As noted throughout JIEDDO comments, many actions have already been
    taken to address these weaknesses. It is our firm commitment to ensure
    that constant improvements are made to strengthen our internal
    controls.

    Recommendation 6. The GAO recommends that the Secretary of Defense
    direct the Director of JIEDDO to establish and document a method or
    system to comprehensively identify, track, and report on a routine
    basis all government and contractor personnel.

    DOD Response: Concur.

    The Joint Improvised Explosive Device Defeat Organization (JIEDDO) was
    established as a temporary, non-institutionalized jointly-manned entity
    by directive of the Deputy Secretary of Defense effective January 18,
    2006. As a temporary entity, the JIEDDO manpower requirement is
    identified and documented on a Joint Manning Document (JMD). Following
    a decision to institutionalize JIEDDO, the JMD identified positions
    will be validated and formally approved on a Joint Table of
    Distribution (JTD). The JTD is a permanent funded authorization
    document that articulates the approved manpower for the organization.
    The JMD is an unfunded temporary document that identifies the specific
    positions required to support a non-institutionalized organization.
    Since JIEDDO is a jointly-manned activity the manpower to support the
    organization's requirements, come directly from the Services and are
    maintained on the Service documents. The JMD replicates the positions
    identified on the Service documents.

    (See comment 10.):

    JIEDDO, though a non-institutionalized jointly-manned entity, does
    comply with the provisions of Department of Defense Directive 1100.4,
    Guidance for Manpower Management. The organization has implemented and
    continues to refine the implementation of the provisions outlined in
    this Directive to include requirements determination, resource
    allocations, manpower authorizations, and manpower planning.

    When JIEDDO was formed, the Army Task Force from which JIEDDO was
    constructed was staffed from temporary personnel resources, primarily
    military and contractor personnel, by the Army. Historical data
    indicates that at the time of transition the Army Task Force consisted
    of 174 billets, of which 99 were contractors, 1 was a SES, and 74 were
    military personnel, including four coalition officers. When JIEDDO was
    formed many of these individuals chose to remain with their parent
    organizations. Most contracted personnel did transfer to JIEDDO.

    At the direction of the DEPSECDEF, JIEDDO set up and conducted a
    Service Manpower Validation Board to review, validate, and authorize
    the manpower to support the JIEDDO requirements. The Board validated
    383 billets. The structure and manpower allocation recommended by the
    Board was approved by DEPSECDEF on 27 Jan 06 as reported to the
    military services in his Memorandum, dated February 14, 2006. The
    Service Manpower Validation Board authorized 129 US military billets,
    39 government civilian billets, five (5) coalition officer billets, and
    190 Contract Manpower Equivalent (CME) billets. Since the establishment
    of JIEDDO the leadership has received approval from the Army for an
    additional 54 government civilian billets (approved May 3, 2007) and
    has pending a request (November 30, 2007) for an additional 39
    government civilian employees. Additionally, the Army approved three
    military billets. Two were approved on May 3, 2007 and the third on
    July 19, 2007. The Navy approved one military billet. Two of those
    billets, the Deputy Director of the COIC and the Chief of the Resource
    Management Division, possess primarily inherently government
    supervisory responsibility over resource management and fiduciary
    oversight of JIEDDO assets.

    (See comment 11.):

    The success of JIEDDO as an organization depends on its ability to
    leverage the capabilities of each person employed within the
    organization. Our strategic human capital plan (encl) is a key step in
    providing our workforce with the means to reach its full potential. A
    copy of the final draft is attached. This plan is comprised of three
    overarching goals with objectives and action steps that can be taken to
    achieve outcomes and initiatives. These three goals are the essential
    first steps that must be in place in order to address the significant
    challenges that we are facing.

    * Goal 1: Build a well-balanced, world-class workforce with the
    knowledge, expertise, and abilities necessary to accomplish JIEDDO's
    mission;

    * Goal 2: Institute a framework of human resource policies and
    processes that model JIEDDO's business approach of rapid, responsive,
    and effective solutions;

    * Goal 3: Construct a physical and technological infrastructure that
    supports JIEDDO's world-class workforce;

    The Secretariat is developing a plan for achieving these goals and
    expects to achieve these goals by 2010.

    JIEDDO from its inception on 18 January 2006 has focused on creating
    the organizational structure best suited for the expanding and ever
    changing mission. The organization recognizes and has taken the
    necessary steps to increase government oversight and fiduciary control
    over all JIEDDO controlled and directed programs. The control and
    oversight of programs, projects, or initiatives controlled and directed
    by the military services and other Department of Defense and government
    departments, including those funded wholly or in part by JIEDDO, remain
    the responsibility of the service or organization overseeing and/or
    operating the program, project, or initiative. The manpower and
    resources applied to these programs are reported by the individual
    services and are not included in the JIEDDO reported manpower and
    resource components. The Service documented manpower is provided in the
    quarterly report to the Congress.

    (See comment 12.):

    JIEDDO is currently undergoing an annual JMD review and validation
    process and expects to validate requirements for an additional 18
    military and 27 government civilian billets to provide enhanced
    government oversight and fiduciary control over the organization's
    resources. This chart identifies the manpower growth by JMD category
    over the two year history of JIEDDO and known projections for the
    future.

    Figure: EVOLUTION OF JIEDDO STAFFING LEVELS:

    This figure is a combination line chart showing the evolution of JIEDDO
    staffing levels.

    [See PDF for image]

    Sources: FY04 data obtained from approval briefing from JIEDDOTF
    manning requirements dated 2 Nov 05. FY05 data obtained from a JIEDDO
    Billet Staffing Summary dated 30 January 2006. FY06 data based on
    authorized JMD positions dated 14 February 2006. FY07 Data based on
    authorized JMD positions dated 3 May 2007.

    [End of figure]

    As noted in the above chart, JIEDDO in its short two-year existence has
    focused on increasing the number of military and civilian billets
    required to ensure proper resource and fiduciary oversight. In the
    first year (FY06), JIEDDO requested and received Army support for an
    additional 54 government civilian billets and three (3) Army military
    billets to perform inherently governmental functions. The US Navy
    provided one (1) senior military billet to oversee our Resource
    Management Division. This represents an increase of 135 percent in
    manpower billets associated with government oversight of JIEDDO
    resources. In the second year, JIEDDO requested an additional 39
    government civilian billets (encl). This request is still pending at
    the Army. JIEDDO has also initiated a JMD review to determine areas
    where additional government oversight would be warranted. The review is
    still on-going but the organization has identified 57 additional
    government positions that if supported by the Army will further enhance
    the performance of inherently governmental responsibilities. It is
    expected that after a detailed review by the JIEDDO senior leadership,
    the requests for additional manpower will be submitted to the
    respective military services for consideration. The civilian billets
    will be requested from the Army as it is the executive agent for
    civilian personnel support. The formal submission is expected to be
    released in late March 2008.

    JIEDDO's official JMD authorizes 192 contractors (Contract Manpower
    Equivalent) s. The Service Validation Board in Jan 2006 approved 190.
    Two additional CMEs were requested in February 2007 and supported in
    May 2007 by the Army. The CME program was established by the Department
    of Defense to compensate for the lack of sufficient government civilian
    billets. In the current annual JMD review, the JIEDDO staffs have
    identified an additional eight CME billets to enhance operational
    oversight of JIEDDO programs and initiatives. In addition to the CMEs
    authorized in the Joint Manning Document, JIEDDO employs other
    contractor personnel under various contract instruments. These
    additional contractor billets are necessary to support JIEDDO
    initiatives, programs, projects, and provide administrative support and
    are categorized as Below-The —Line (BTL) and constrained by funding
    limitations. At the request of the GAO and in an effort to provide
    further clarification, the BTL category was further broken out into
    IAPT, LOEs, and BMS. The following definitions previewed with the GAO
    are consistently applied in accounting for manpower and ensures a
    commonality in reporting: Joint Improvised Explosive Devise Defeat
    Organization (JIEDDO) Manpower Definitions:

    1. Joint Manning Document (JMD)

    * JIEDDO Manning;

    - Military, government civilians, and Contractor Man-year Equivalent
    (CME) personnel reflected in the approved JIEDDO JMD (3 May 2007);

    - Serve as the baseline around which appropriate structures are built
    to address critical integration missions;

    - Standard Joint Task Force Headquarters (SJTFHQ) — Counter-IED
    Operations Integration Center (COIC);

    - Core element of military, government civilian, or CME personnel
    assigned to the COIC;

    2. Basic Mission Staff (BMS) and Below the Line (BTL) Contractors;

    - Augment the JMD approved counter IED mission staff, providing
    additional capability in support of the JIEDDO mission;

    - Approved by the JIEDDO senior leadership based on available funding

    3. Partners;

    * Liaison Personnel (LNO)

    - Representatives of external agencies that provide interagency
    assistance in support of the JIEDDO mission;

    - Individuals are normally military, government civilian employees, or
    contractors;

    - Support is funded by the parent agency. JIEDDO may reimburse salary
    and travel related expenses;

    * COIC-Interagency partnership Team (IAPT);

    - Individuals that represent agencies involved in the integration of
    external capabilities in support of the counter-lED mission;

    - Individuals may be military, government civilians, or contractors
    with the appropriate experience and access;

    - JIEDDO may fund salary and/or travel expenses as agreed jointly by
    the represented agency;

    * Interns;

    - Students or recent university graduates participating in a supervised
    program, attached to JIEDDO, to gain knowledge and insight in the
    JIEDDO concept of operation and JIEDDO sponsored programs;

    4. Level of Effort (LOE) (Interim Mission-based Capability);

    - Individuals that are retained to provide mission essential support on
    an interim or limited term basis to support the execution of specific
    elements of the mission;

    - Individuals provide support through an approved government services
    contract vehicle providing level of effort support for requirements for
    various programs for a defined duration in support of the warfighter.

    5. Field Service Representatives;

    - Individuals retained as part of a services contract to install,
    maintain, and service procured or contracted equipment and software
    programs.

    - Services are provided on an as needed basis.

    These definitions were approved by the JIEDDO senior leadership and
    have been frequently disseminated to the JIEDDO staff. It is
    understandable that one might find individuals who are not directly
    involved in the manpower management process that may not fully
    understand the meaning of these definitions. JIEDDO will make every
    effort to ensure wider dissemination of these definitions.

    A report to the Congress on the manpower authorized on the JMD to
    support the JIEDDO mission is submitted on a quarterly basis in
    response to language in the annual Department of Defense Authorization
    and the Department of Defense Appropriations bills. These reports, at
    the direction of the Department, are also used to report the manpower
    applied, funded, and controlled by the military services in support of
    the Department of Defense counter-IED mission. The service manpower
    contributions are applied by the services to support their internal
    counter- lED programs and are not part of the manpower used to support
    JIEDDO counter-lED programs, projects, and initiatives. Therefore, the
    service internal counter-lED manpower component is not accounted or
    documented on the JIEDDO JMD or manning document. In some cases, JIEDDO
    funding supports initiatives under the management and direction of the
    Services. In these instances, the Services normally account for and
    report the manpower contributions.

    JIEDDO also responds regularly to manpower data requests from the
    Congress and other Departmental and government agencies. As an example,
    the Report to the Congress in May 2007 requested in the FY 2007 Senate
    Appropriations bill asked JIEDDO to report all assigned civilian,
    military, and those individuals detailed from other agencies. The
    report also asked for an accounting of "all contractor support that is
    provided through various contracts." In the report, JIEDDO provided
    full accountability for all manpower billets and personnel.

    The Report suggests that JIEDDO does not include field service
    representatives, interagency liaisons, law enforcement training
    personnel, interagency partnership team members and infrastructure
    contractors working at the Counter-lED Operational Integration Center.
    The charts below from the Senate Report were provided to the GAO in
    response to a request for this data. It covers interagency liaisons,
    law enforcement training personnel, and interagency partnership team
    members.

    (See comment 13.):

    Table:

    [See PDF for image]

    [End of table]

    In an effort to provide complete transparency, JIEDDO solicited and
    obtained from firms under contract to provide services for JIEDDO
    supported programs and initiatives the number of Full Time Equivalent
    (FTE) manpower required to accomplish the contracted support. The firms
    translated the FTEs into manpower equivalents for the May 2007 report
    to the Congress. Normally under Part 37 "Service Contracting" of the
    Federal Acquisition Regulation (FAR) the effort expended in support of
    such contracts are reported as the number of FTEs. For the May 2007
    report to the Congress the FTEs represented the equivalent of 474
    manpower equivalents.

    Table:

    [See PDF for image]

    [End of table]

    Section 37.102 of the FAR indicates that performance-based acquisition
    (see subpart 37.6) is the preferred method for acquiring services
    (Public Law 106-398, section 821). JIEDDO's contracted support falls
    within this definition. In order to fill approved Contractor billets,
    JIEDDO works hand in hand with various DoD Contracting Agencies in
    order to ensure that those contracts that are let are done so in
    accordance with the guidelines detailed with FAR 37.1 and 37.2.
    Furthermore, surveillance plans are utilized to provide a guide to
    systematically and effectively monitor the contractor's performance to
    ensure compliance with the terms and conditions of the contract. The
    Contracting Officer's Representative (COR) documents the contract file
    with sufficient information to support decisions to exercise option
    years and outline corrective procedures to be taken against the
    contractor for deficient performance and determine if and when the
    government should intercede or terminate the contract."

    JIEDDO also applies the definitions outlined in the FAR in categorizing
    the contracted manpower that is applied to directed, funded, and
    supported programs and initiatives. The JIEDDO definition cited above
    are consistent with the intent of the FAR. These definitions were
    previewed with the GAO team prior to being implemented.

    The chart below was provided to the GAO in October. Subsequent updates
    were also provided.

    The manpower management process is overseen by the Chief of the
    Secretariat supported by a staff of manpower and personnel subject
    matter experts within the Secretariat and within the supported
    divisions and the two agencies. All requirements are reviewed,
    assessed, validated, and justified prior to submission through the
    Joint Improvised Explosive Device Defeat (JIEDD) Capability Approval
    and Acquisition Management Process (JCAAMP) process to the senior
    leadership for consideration. To refine the processes and to help
    validate the requirements, JIEDDO employs an outside agency to work
    with the requesting organizational entities. Each manpower proposal is
    reviewed to ensure that the tasks are properly identified and
    categorized and the manpower requirement properly articulates the
    capabilities required to perform the task. Following the review and
    assessment by the Secretariat staff and the outside agency, the
    requirement is entered into the JCAAMP process.

    Through the JCAAMP process, all manpower requirements identified by the
    organizational entities and validated by the Secretariat are reviewed
    by the COS Council and presented to the Executive Committee for
    consideration and approval. The COS Council consists of representatives
    of each of the JIEDDO Divisions, the Joint Center of Excellence (JCOE),
    and the Counter-IED Operational Integration Center (COIC). The
    Executive Committee includes the Director, the Deputy Director, the
    Deputy Director for Operations and the Deputy Director for
    Intelligence. The JCAAMP process ensures that manpower and other
    resource requirements are appropriate and adequate and comply with the
    intent of the provisions of DoD 1100.4 and all other issuances of the
    Department of Defense associated with the management of departmental
    manpower and resources.

    JIEDDO manpower requirements are generally related to new programs,
    initiatives, and projects developed in response to the ever-changing
    improvised explosive device threat. JIEDDO manpower requirements are
    driven by workload required to perform specific tasks as defined by the
    program, project or initiative approved by the JIEDDO senior
    leadership. Such proposals, projects and initiatives go through a
    series of detailed review and analysis prior to approval by the senior
    leadership. These include the JCAAMP, the JROC, JR2AB, JIPT, the SRSG
    and various internal and external Departmental oversight committees
    prior to approval. For programs and initiatives, in excess of 25
    million dollars additional approval processes exist that require
    approval at the Secretary level. Manpower requirements associated with
    staff and infrastructure requirements are reviewed through the JCAAMP
    process, which includes review by the COS Council, the Executive
    Committee, and final approval by the Director. All manpower
    requirements are proposed and sustained at the lowest level possible to
    ensure the accomplishment of the mission. Additionally, JIEDDO manpower
    is revalidated annually as part of the Annual JMD Review process. The
    2007 JMD Review assessed approximately 100 new manpower requirements
    but only approved 29 additional permanent civilian billets, 25
    temporary civilian billets and 4 military billets for submission to the
    Services for consideration. Because of the revalidation of
    requirements, several of the new requirements were met by the
    redistribution of existing manpower assets. A similar review is
    currently on-going for 2008.

    As an example of the level of effort taken to validate new manpower
    requirements, the Counter- IED Operational Integration Center (COIC)
    recently contracted for a Personnel Management Review that sought to
    validate the organization's missions, functions statements, and
    manpower requirements. The organization applied the workload standards
    accepted by the Officer of the Secretary of Defense Policy and
    Requirements, the Office of the Secretary of Defense Program Analysis
    and Evaluation, and the Joint Staff in determining manpower
    authorizations. The analysis captured total workload performed by
    existing personnel and developed appropriate Full time Equivalent (FTE)
    requirements for each task. The standards were applied to each of the
    organizational elements producing an accurate assessment of the
    manpower needed to achieve the missions assigned. This detailed
    analysis was used to support the organization's manpower request
    submitted for consideration in the current JMD Review.

    The Report notes a preference on the part of the JIEDDO leadership to
    employ contractor personnel rather than government civilians and
    military personnel. JIEDDO has been aggressively taking the necessary
    steps to increase the number of military and civilian billets required
    to provide effective government oversight. However, the time required
    to obtain the additional billets has forced JIEDDO to rely on
    contractor personnel to fill temporarily requested government civilian
    requirements. JIEDDO since its establishment has requested 54
    additional government civilian billets, has pending with the Army a
    request for 39 additional government civilian billets and is currently
    reviewing a potential request for 27 additional government civilian
    billets. The timelines for establishing, classifying, and hiring
    government civilians does not lend itself to expeditious filling of
    critical manpower billets. The timeline for obtaining approval of
    additional billets normally exceeds 165 days. Following the approval of
    a billet, the average processing time to fill such valid vacancies,
    from initiation of position classification to selection, was an
    additional 171 days. As an example, in the May 2007 time period 56 of
    the 93 JIEDDO billets were vacant. Today, JIEDDO has 46 vacant
    government civilian billets. The hiring process was further exacerbated
    by the quality of the applicants and unattractiveness of the 25 Term
    billets with limited appointments. Further challenging the process is
    the need for highly specialized scientific and professional skills
    required by JIEDDO's unique mission. Such time lags in the recruitment
    processes have placed a significant strain on the organization's
    ability to meet its government oversight and fiduciary
    responsibilities.

    (See comment 14.):

    JIEDDO has solicited the help of senior Army and Defense officials in
    an effort to shorten the hiring process timelines and to ensure that
    the best qualified individuals are recruited and hired. With the
    assistance of the Deputy Under Secretary of Defense for Civilian
    Personnel Policy, the Army appointed a "Strategic Advisor" to assist

    JIEDDO in addressing civilian personnel management issues. The Chief of
    the Secretariat has initiated a weekly reporting process providing the
    Civilian Personnel Advisory Center (CPAC) the status of pending
    civilian personnel actions that: (1) require CPAC classification, (2)
    require job announcements, (3) are awaiting release of a referral list,
    (4) awaiting the extension of a Tentative Job Offer (TJO) following
    selection, (5) awaiting a Firm Job Offer (FJO) after the TJO has been
    accepted, and (6) the positions where FJOs have been accepted but a
    report date has not been established. This is intended to ensure that
    both the CPAC and JIEDDO have a firm accountability of pending hiring
    actions.

    While these actions have provided some relief to the hiring process,
    the timelines for hire have not improved substantially. Pending the
    approval of the current request under consideration by the Army JIEDDO
    will have 85 vacant government civilian billets that will require
    expeditious recruitment and hire.

    The GAO report cites several examples of individuals not accounted for
    on the JIEDDO JMD and manning document. The report cites the staff of
    the Joint Testing Board as one example. This agency is an element of
    the Army and is accounted for on their Table of Distributions and
    Authorizations (TDA). While it is recognized that JIEDDO provides some
    funding for this organization, its primary mission is in support of the
    Army. The report also cites the use of contractors to pilot unmanned
    aerial vehicles. The program that these individuals are involved with
    is managed by the Army as well. As noted earlier, Service manpower
    contributions that are applied by the Services to support their
    internal counter-lED programs are accounted for and reported by the
    Services. Since the Joint Test Board is an Army entity it is not
    accounted or documented on the JIEDDO JMD or manning document.

    (See comment 15.):

    As noted earlier field service representatives based on the contract
    vehicle that solicits the service being provided are tracked as Full
    Time Equivalent (FTE) effort applied to perform the contracted tasks.
    The report to the Senate included the FTE's converted to actual
    manpower applied to these functions on 1 May 2007. JIEDDO recognizes
    that the tasks contracted for drives the level of manpower contribution
    required to achieve the contracted service and that the level of FTE
    will or may fluctuate on a daily basis. The report to the Senate was an
    attempt to provide visibility on this category of support and was not
    intended to reflect a continuous manpower commitment associated with
    the specific service contracts. JIEDDO does track the FTEs associated
    with the effort of field service representatives and complies with the
    guidance outlined in the Secretary of the Army direction on accounting
    for contract services as outlined in the Secretary's guidance of 7
    January 2005. JIEDDO also complies with the manpower accountability
    requirements outlined in the Federal Acquisition Regulation.

    Since the Army is the executive agent for support of JIEDDO, the
    command recognizes the responsibility to apply the Army guidance on
    contracting and has systematically taken the necessary steps to
    transition all contracts under the Army contracting system. JIEDDO has
    been working diligently to implement the provision of the Secretary of
    the Army Memorandum of 7 January 2005 that outlines the procedures for
    accounting for contract services. As these programs are transitioned to
    the Services, the provisions of the Army guidance are applied
    consistent with the policies for contracting of services outlined in
    the Federal Acquisition Regulation. Additionally as programs are
    transferred to the Services, the control, funding and accountability
    are also transferred. As an example, this fiscal year, the Law
    Enforcement Program will be transferred to the Army. Once the transfer
    is completed, the manpower and funding associated with this program

    will be reported by the Army and not JIEDDO.

    The Report notes that the contractors maintaining the infrastructure at
    the Counter-IED Operational Integration Center (COIC) are not being
    accounted for on the JIEDDO JMD and manning documents. The facility
    occupied by the COIC is contracted for by the Office of the Secretary
    of Defense (OSD). The facility houses other government agencies. The
    manpower associated with support of this facility also services the
    other agencies. JIEDDO recognizes and has begun to track the manpower
    specifically associated with the JIEDDO occupied portion of the
    facility. The actual number of individuals involved in this process
    attributed to JIEDDO support is under negotiation between JIEDDO and
    the OSD. Once this number is validated manpower that specifically can
    be attributed to the support of JIEDDO will be tracked on the JIEDDO
    manning document.

    JIEDDO has continuously and systematically applied additional controls
    to the management of the manpower associated with the command's
    program, projects, and initiatives. As an example, in November 2007
    JIEDDO migrated all civilian billets under the National Security
    Personnel System (NSPS). The NSPS strengthens our ability to accomplish
    the mission in an ever-changing national security environment and
    accelerates the Department's efforts to create a Total Force (military,
    civilian personnel, Reserve, Guard, and contractors), operating as one
    cohesive unit, with each performing the work most suitable to their
    skills. NSPS provides a human resources system that appropriately
    recognizes and rewards our employees' performance and the contributions
    to the JIEDDO mission.

    JIEDDO has also instituted the Manpower Staffing Request System within
    the JCAMMP program to formalize the management of new manpower
    requirements. The purpose of the JIEDDO MSRF is to provide an
    efficient, centralized, and automated method for requesting additional
    manpower and personnel. JIEDDO has formulated and published common
    manpower definitions cited earlier to provide consistency in the
    application of manpower resources.

    (See comment 16.):

    JIEDDO has also issued various policy statements that refine the
    manpower management process. As an example, Policy Memorandum 25
    provides guidance on the selection and hiring of GS/GG 14 and 15s
    setting standards for the selection processes and mandating Deputy
    Director review prior to final selection. Policy Memorandum 24 set
    policy for the reimbursement of PCS expenses as a recruitment tool. The
    entitlements provided in each case will be in accordance with the
    policies published by the Department of the Army as executive agent for
    our civilian component.

    Policy Memorandum 20 establishes management controls, rules, methods,
    procedures, and devices to be used to ensure that business is conducted
    ethically. These controls assure the JIEDDO leadership that resources-
    military and civilian personnel, property, and funds are employed and
    accounted for properly. The JIEDDO management control process ensures
    the periodic evaluation of the organization's most critical controls.
    The management control process also provides a means for disclosing any
    shortcomings detected. The process involves assessing safety
    operations, safeguarding resources, complying with laws and policy, and
    using resources efficiently and effectively. The process also helps
    identify vulnerabilities and minimize risks. Management controls are a
    leadership responsibility and an essential part of being prudent
    stewards of the organizations limited resources.

    Policy Memorandum 13 provides guidance on duty hours, overtime,
    compensatory time and other administrative policy applicable to the
    staff. Memorandum 16A speaks directly to the control of personnel
    requiring that all civilian employees and contractor report the hours
    worked in support of JIEDDO initiatives. The effort was initiated to
    obtain a clear understand of the workload required to support the
    JIEDDO missions.

    Policy Memorandum 28 requires that all JIEDDO activities that seek to
    propose organizational changes to include; internal organizational
    structures, manpower increases, and/or recategorizations or
    reallocations of manpower or personnel must submit through the
    Secretariat a formal proposal for review by the COS Council and
    approval for the Director. The underlying guidance recognizes that with
    the unique challenges brought on by the counter-lED fight, there is a
    need to reflect on the organizational structure, manning, and processes
    that have supported our efforts. There is a realization that the
    organization must evolve in response to the ever-changing threat but
    such an evolution must be structurally sound. The policy also
    recognizes that such evolution should not disrupt the synergy that has
    been the underpinning of our successes. Finally, the policy recognizes
    that any structural changes be responsive to the mission and to the
    needs of the individuals who are dedicated to the resolution of the IED
    problem.

    Another action initiated by JIEDDO was to institute a formal records
    management program (mentioned earlier in our response). JIEDDO
    Directive 1015.1A outlines the responsibilities for life-cycle
    management (creation, maintenance and use, and disposition) of
    information as records in all media, including electronic. This
    includes the documentation supporting the management of manpower. While
    in the infancy, the program will help to ensure that all manpower
    requirements are appropriately documented and reinforce JIEDDO's effort
    to enhance accountability of the organization's manpower.

    JIEDDO is also in the process of developing and instituting matrices to
    enable an assessment of the organizational functions, missions, goals
    and processes. These matrices will reinforce the manpower and personnel
    management processes insuring that manpower resources are allocated to
    the most needed requirements and to provide increasingly granular
    alignment of resources against missions. The data will also support the
    development of manpower requirements. This will support the development
    of a synergy in the application of manpower and personnel. It is
    expected that a fully developed matrices system will be in place by the
    end of 2009.

    These initiatives have had a positive affect on the ability of the
    organization to effectively manage and oversee the manpower and
    personnel programs. JIEDDO had and will continue to work systematically
    to enhance its oversight and accountability of all categories of
    personnel and to refine policies, procedures, and processes to manage
    the command manpower and personnel resources.

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    The following are our comments on the Department of Defense's (DOD)
    letter dated February 14, 2008.

    GAO Comments:

    1. DOD states that before our audit commenced, JIEDDO had worked
    diligently to formalize and document its processes to ensure that
    internal controls were in place. Further, DOD asserts that "many of
    these processes were finalized during the audit timeframe," and then
    lists details on four specific "samples" where JIEDDO has "finalized,
    documented and implemented processes and procedures." While we
    recognize that JIEDDO has undertaken efforts to improve its operations
    and resource management, the specific efforts described in DOD's
    comments overstate the status and degree of implementation regarding
    these four "samples." Specifically, responses 2 through 5 summarize our
    conclusions regarding the status and potential effectiveness of JIEDDO
    "samples" contained in DOD's comments.

    2. Before our review began in May 2007, JIEDDO planned to spin off part
    of an existing division to form a new acquisition oversight division.
    JIEDDO did not identify the planned division as relevant to our audit
    objectives, and while we were aware of the plans for the new division,
    we did not see documented objectives, plans, or policies describing the
    division's role or purpose. The first policy document JIEDDO issued
    outlining the oversight division's responsibilities was a broad
    instruction issued in November 2007, which was too late for us to
    review in the conduct of our audit. Further, as of mid-February 2008,
    JIEDDO was still drafting a roles and procedures manual to implement
    the instruction's requirements for the new division, and none of the
    five civil service positions planned for the division had been
    filled.[Footnote 29] Consequently, this particular "sample" cited in
    the DOD comments does not by itself support the statement that JIEDDO
    has "finalized, documented and implemented processes and procedures."

    3. JIEDDO issued this instruction to define and implement JIEDDO's
    "rapid acquisition management responsibilities" established in its
    charter documents and presented to us when we met to close out our
    fieldwork.[Footnote 30] To follow up on the comprehensiveness of the
    instruction related to the internal control weaknesses we identified
    during our review, we had brief follow-up conversations with JIEDDO
    personnel involved in the development of the instruction. At that time,
    we determined that specific steps regarding addressing the control
    weaknesses identified were not fully developed because JIEDDO divisions
    had not yet documented or developed the specific roles,
    responsibilities, processes, and procedures at the division level.
    Further, JIEDDO had not yet identified the persons who would
    participate in developing and drafting proposed division-level
    instructions for coordination and approval. One official stated that to
    have done so before issuing the instruction would have delayed issuance
    by 1 to 2 months. As with the prior item cited in DOD's comments on our
    recommendation, this instruction does not by itself support the
    statement that JIEDDO has "finalized, documented and implemented
    processes and procedures."

    4. While JIEDDO has established the Records Management Division in
    recognition of the importance of good documentation, it is still an
    effort in development and not fully implemented. The comments provided
    state that some elements of JIEDDO's records management processes and
    procedures are still in draft and are not scheduled to be initially
    operational until March 2008 or fully operational until May 2008. Based
    on DOD's comments, we again conclude that establishment efforts for
    this division do not support the summary statement that JIEDDO has
    "finalized, documented and implemented processes and procedures."

    5. JIEDDO is in the process of adopting a new financial management
    system, adapted from an existing system, and is expecting full
    implementation of the new system by March 2008. While JIEDDO has
    identified the objectives of the new system and lists expected
    improvements for the organization, the comments clearly indicate that
    all requirements for the new system have not yet been gathered, which
    makes full implementation by March 2008 uncertain. Further, given the
    tasks yet to be accomplished for full implementation, JIEDDO's new
    system status does not support the summary statement that JIEDDO has
    "finalized, documented and implemented processes and procedures."

    6. DOD states emphatically that funding authorizations are always made
    and documented according to the criteria in JIEDDO's charter directive.
    As we reported, this was not the case for the items we selected in our
    review. DOD identified a new resource management checklist in its
    comments, and while it constitutes a new control measure that is a
    positive step, we were not able to test compliance with the new control
    or assess its effectiveness.

    7. JIEDDO's reasons for initial assignment and change in its lines of
    operations accounting do not address the specific inconsistency and
    potential impact on the reliability of its financial reports that we
    reported when JIEDDO moved Joint IED Defeat Test Board expenses to its
    attack the network line of operation. Further, changes in controls over
    recording of fund use into expenditure categories or lines of operation
    are either still in development or were not sufficiently developed for
    us to evaluate their effectiveness in meeting our recommendation's
    intent.

    8. DOD's statements acknowledge JIEDDO's internal control weaknesses.
    The actions proposed and those already taken, if fully implemented,
    would substantially address the intent of our recommendation.

    9. Expressing full agreement with the findings in our report, DOD
    proposed an alternative approach for communicating the status of its
    efforts to Congress. We agree that DOD's approach for reporting its
    progress in implementing internal control measures satisfies the
    overall intent of our recommendation. Consequently, we modified our
    original recommendation to reflect this change.

    10. JIEDDO outlines steps that it is taking toward identifying and
    tracking civilian, military, and contractor personnel and to improve
    its personnel management practices that we highlighted in our report.
    While a positive first step, other efforts are needed to
    comprehensively account for all personnel, as noted in comments 11
    through 16.

    11. JIEDDO introduces processes that do not directly address our
    recommendation. We were aware of the development of JIEDDO strategic
    human capital plan, and based on our review of JIEDDO's working
    documents, we concluded that the strategic human capital plan would not
    directly address the extent to which JIEDDO would identify and track
    all of its personnel. Also, JIEDDO had not instituted prior to the
    conclusion of our audit its Manpower Staffing Request System within the
    JCAAMP program to formalize the management of new manpower
    requirements. While these steps may assist JIEDDO in improving its
    personnel management, they do not directly address our recommendation.

    12. We recognize and understand DOD's comments regarding accounting for
    JIEDDO personnel who staff programs under the control and direction of
    the military services and other DOD and government departments,
    including those funded wholly or in part by JIEDDO. However, we believe
    that as an organization, JIEDDO has an interest in accounting for all
    civilian, military, and contractor personnel working in any capacity
    for JIEDDO, as a matter of sound personnel management. This information
    can be collected and reported with caveats stating that the personnel
    are, in whole or part, funded by JIEDDO.

    13. DOD noted that our report suggested that JIEDDO does not account
    for categories of contractor personnel, such as field service
    representatives, interagency liaisons, law enforcement training
    personnel, interagency partnership team members, and infrastructure
    contractors, and stated that the information was included in the Senate
    report. During our audit and as stated in our report, we recognized
    that this information with the associated charts was included in the
    Senate report, but we found that it was not included in any of JIEDDO's
    personnel documentation or daily staffing reports prior to the
    development of the Senate report. As a result, we questioned why JIEDDO
    did not account for these categories of personnel in its daily staffing
    reports or in other personnel documentation.

    14. DOD explained JIEDDO's challenges in hiring staff and the steps it
    is taking to increase the number of military and civilian billets and
    to facilitate the hiring of civilian employees by working with the Army
    and the Office of the Secretary of Defense. While these steps appear to
    address our recommendation and other areas of concern, we cannot
    validate the information because these steps occurred after we
    completed our audit.

    15. We disagree with DOD's statement that JIEDDO provides some funding
    for the staff of the Joint Test Board. According to financial
    documentation we obtained and corroborated with interviews, the Joint
    Test Board's primary mission is to provide support to JIEDDO as stated
    in JIEDDO's charter, DOD Directive 2000.19E.

    16. See comment 11.

    [End of section]

    Appendix III GAO Contact and Staff Acknowledgments:

    GAO Contact:

    William M. Solis, (202) 512-8365 or solisw@gao.gov:

    Acknowledgments:

    In addition to the contact named above, the following individuals made
    contributions to this report: Cary Russell, Assistant Director; Grace
    Coleman; Eric Essig; Paul Kinney; Ronald La Due Lake; Stephen Lipscomb;
    Lonnie McAllister; Paulina Reaves; James Reynolds; Brian Shiels; Glenn
    Slocum; Yong Song; and John Strong.

    [End of section]

    Footnotes:

    [1] Congressional Research Service, Improvised Explosive Devices (IEDs)
    in Iraq and Afghanistan: Effects and Countermeasures (Washington, D.C.:
    Aug. 28, 2007).

    [2] S. Rep. No. 109-292 at 239-40 (2006).

    [3] GAO, Defense Management: A Strategic Plan Is Needed to Guide the
    Joint Improvised Explosive Device Organization's Efforts to Effectively
    Accomplish Its Mission, GAO-07-377C (Washington D.C.: Mar. 28, 2007).

    [4] DOD Directive 1100.4, "Guidance for Manpower Management," para.
    4.4.10 (Feb. 12, 2005).

    [5] S. Rep. No. 110-37 at 26-27 (2007).

    [6] DOD uses MIPRs as the primary documents to order goods or services
    from other DOD components. MIPRs are prepared on DD Form 448, "Military
    Interdepartmental Purchase Request," and include a description of the
    supplies or services requested, unit price, total price, period of
    performance, and fund citation.

    [7] In this case, the acquiring department would be one of the military
    services and the requiring department would be JIEDDO.

    [8] OMB Circular A-123, Management's Responsibility for Internal
    Control, Section I (2004).

    [9] 31 U.S.C. § 3512 (2007).

    [10] GAO, Internal Control: Standards for Internal Control in the
    Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November
    1999).

    [11] S. Rep. No. 110-37 at 26-27 (2007).

    [12] DOD Directive 1100.4, "Guidance for Manpower Management," para.
    4.4.10.1 (Feb. 12, 2005).

    [13] S. Rep. No. 110-37 at 26-27 (2007).

    [14] GAO/AIMD-00-21.3.1.

    [15] We have issued many reports that highlight the importance of
    addressing internal control weaknesses. For example, see GAO, Premium
    Class Travel: Internal Control Weaknesses Governmentwide Led to
    Improper and Abusive Use of Premium Class Travel, GAO-07-1268
    (Washington, D.C.: Sept. 28, 2007); Financial Audit: Significant
    Internal Control Weaknesses Remain in the Preparation of the
    Consolidated Financial Statements of the U.S. Government, GAO-07-805
    (Washington, D.C.: July 23, 2007); and Veterans Affairs: Lack of
    Accountability and Control Weaknesses over IT Equipment at Selected VA
    Locations, GAO-07-1100T (Washington, D.C.: July 24, 2007).

    [16] GAO/AIMD-00-21.3.1.

    [17] JIEDDO issued JIEDDO Instruction 5000.01 on November 9, 2007, to
    define and implement the rapid acquisition management responsibilities
    for counter-IED efforts contained in DOD Directive 2000.19E.

    [18] GAO/AIMD-00-21.3.1.

    [19] GAO/AIMD-00-21.3.1.

    [20] GAO/AIMD-00-21.3.1.

    [21] The statement is required by FMFIA to disclose material weaknesses
    identified through an evaluation to determine the effectiveness of an
    entity's internal controls for its overall program, administrative, and
    operational activities and describe the plans and schedules to correct
    identified weaknesses.

    [22] Department of Defense Office of the Inspector General, Department
    of the Army Purchases from Government sources, Report No. D-2007-075
    (Arlington, Va.: Mar. 22, 2007).

    [23] GAO-07-377C.

    [24] Field service representatives are contractors who are responsible
    for providing a range of support (goods and services) needed while an
    equipment item or system is in use in the field versus in production or
    manufacture.

    [25] The Joint Test Board is an organization within the Army and funded
    by JIEDDO that the Deputy Secretary of Defense directed be established.
    Its mission is to synchronize testing of communications and counter-IED
    and other systems, to ensure that they can operate and are compatible
    with other JIEDDO initiatives currently fielded in Iraq and
    Afghanistan. The board has been in operation since fiscal year 2006
    with current fiscal year 2007 funding commitments of $92 million.

    [26] OMB Circular A-76 (Revised), Performance of Commercial Activities,
    Attachment A, sec. B.1.a (2003).

    [27] GAO, Military Operations: High-Level DOD Action Needed to Address
    Long-standing Problems with Management and Oversight of Contractors
    Supporting Deployed Forces, GAO-07-145 (Washington, D.C.: Dec. 18,
    2006).

    [28] We excluded 1 of the top 10 attack the network initiatives because
    its sensitive nature and remote location made obtaining documentation
    difficult.

    [29] There are approximately 20 positions identified in the new
    division. Two military staff currently manage the contract staff
    filling the other positions in the division.

    [30] Joint IED Defeat Organization Instruction 5000.01, Joint
    Improvised Explosive Device Defeat Capability Approval and Acquisition
    Management Process (JCAAMP), (Nov. 9, 2007).

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