Report Documentation Page Form Approved OMB No. 0704-0188 Public reporting burden for the collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington VA 22202-4302. Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to a penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number. 1. REPORT DATE 3. DATES COVERED 2010 2. REPORT TYPE 00-00-2010 to 00-00-2010 4. TITLE AND SUBTITLE 5a. CONTRACT NUMBER Semiannual Report to the Congress. April 1, 2010 - September 30, 2010 5b. GRANT NUMBER 5c. PROGRAM ELEMENT NUMBER 6. AUTHOR(S) 5d. PROJECT NUMBER 5e. TASK NUMBER 5f. WORK UNIT NUMBER 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING ORGANIZATION Inspector General of the Department of Defense,400 Army Navy REPORT NUMBER Drive,Arlington,VA,22202-4704 9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSOR/MONITOR’S ACRONYM(S) 11. SPONSOR/MONITOR’S REPORT NUMBER(S) 12. DISTRIBUTION/AVAILABILITY STATEMENT Approved for public release; distribution unlimited 13. SUPPLEMENTARY NOTES 14. ABSTRACT 15. SUBJECT TERMS 16. SECURITY CLASSIFICATION OF: 17. LIMITATION OF 18. NUMBER 19a. NAME OF ABSTRACT OF PAGES RESPONSIBLE PERSON a. REPORT b. ABSTRACT c. THIS PAGE Same as 124 unclassified unclassified unclassified Report (SAR) Standard Form 298 (Rev. 8-98) Prescribed by ANSI Std Z39-18 Department of Defense � Inspector General � 400 Army Navy Drive � Arlington, VA 22202-4704 � www.dodig.mil Defense Hotline 1.800.424.9098 THcohenedg dHreeolslns sioowrnaeaballr esh eGinaor birndegofo.n r e a tt io oima imt tm c IoCRwhs pi t AA pi Fa nearpi ou gro i v•r moThoacsodr c•na ntro i •mculrliT vcket a•giiu v l O coitggpfi tenioa i ir see yhaedD z s nm nhEeclc tet us t Isee aeirhiegRsrcOCar.hIomtdxen rfi epa cResffwo tov oneORmp ueaewewroqgso ceffilpe e imeeuft mitineaetaieo dncuff eous aomanuicct ni rrdaccptetlhmffih win prrnortorpt ritisvhubher eio fiti, fmmtelnatcrtmaletv eso napceedyi ixo eraoth gnrvhtsmeitserAir hiaslttieesnean moDhfheteivnidnktiyeip la nnnatisgsnsrnedgo t Smen g g uerrehelIsea,emtsttsgnh mgfp fc eens ass-xopet$etvnari $setly sosoipwi toehn vsypr3 oceia sovddne7 tiep fgcr.ufovavee .or rahr0nineofn0ietA byirhdnis etierr tnnns3 aeA rntfit.octmi tho tssteu.e1d ah l d lg isie istmocstetmt vllemm gW und. iI ei ise ehph mefffee efioemgoan,tisgwnc o.ireepffie ffirtfftehetua enelvDt iitW t hs irylacpo tlrodAD eDoree.osiwiciclaia rtieorg ec cri s roanicieiwggofiatreoetfatiretnahievpn a eati eectippifignnpannnoCestyg vyp lnonnnsctapad h krnt ,rcc ae ,fosroiod st ccRrrai kptsouSiinttneea aeo utitmeey enm oi terlescfnAemnmr eorr,srshlneeaesd cceisaesic sm tdtnipa txgceittto.rlee shshr latynyaaeo tasirac ee ssninvinagaiae.o t.bxion tent ni,o i etenDltint o oedaGfsThpisn Nbn d secrnd l1dsirodvsnk tpeioyi suni cau y thtaee ft,v ,r fDtt eeDrtiy tht c at evroasohettedDow eoh co lnx,ihmsenSaor na ura tsfeD ote paOie lmeeoipn Ddiesc dhtn Doo nnpft rAsaheu woer dNeheev pr neRevy edo pdeiengnuA : eteeonrlniresc ham efhaeahc trsd vmha.rertovifvifeitrsceee m kgtsinionnaoeaneaSatecetis e h rmaIvccounlst tsal etejspmS ndtoOemoe tauieCn spet hanoiDee m s ons isdoebsRtwi vCnr,rnportur dre i con meioevetsiseotutseoyomomoenarrDa’lmt ifusscb rnyuonncsasn enft u tbtpkio e ieo ehftnnsttbthoonowIgl epriit ,rlptaGnto,oei rfnmefyayhtrd timoty e orwf ,f,Ae tl hgttG M eS 3s r rhycihfwo abaIfepehrncs tae ,0onren wuecl n o e .to rtcie loat,Anu tr v dacirc odcGorhouffauhD2ofi eelh te iyvm y sevudorewd0rinrtsarst eooff eeh cit nauOwa1t,acsFiibmed iDnraetolern n0wroisgloe asietpseqy fmrtSv.asuea siColn arnaa ,Iteugilpree. tnl cnsGfr dis WdD otreiohmenai na eettvitaterds r ns fie tnee poh eptoeeean Ao i mi,Drsgiecs dar D m rvifootfSosapasoduoro eni e isD,onn eroecu fiamcsp m dgr inIeaprDslissurdttereGolriiv nusvie,itooe tvmpdda r ooD w i aidt ad cyaet amlAoecw onhnwb eult onsoeg jder thfepn eg-uu.iRsenleaordt ,t ilffiel o eer.Eto skdsncrlGeai e asio n;steutfi a xgcacnnc pcsddyfhagua;ctrogtelamioi edot dei nerease yaonmhndirrmedra sn,rnsmdeetf nDt tdtatm efb othpnidecci oyn h sacn oetrreyttlt ss slgoheeol sspuet te ayA se h mae x aeisrn rnni io eri rtsatsmrtdclhf h tl amt lyi eeeuotnsii ne dnrgionsd e gu t: r operations. Gordon S. Heddell Inspector General STATISTICAL HIGHLIGHTS SUMMARY OF AUDIT ACTIVITIES Reports Issued 66 Monetary Benefits Recommendations Made on Funds Put to Better Use $144.6 million Achieved Monetary Benefits (Funds Put to Better Use) $4.1 billion SUMMARY OF INVESTIGATIVE ACTIVITIES Total Returned to the U.S. Government $303 million Seizures and Recoveries $194 thousand Civil Judgments $213 million Criminal Judgments $41.8 million Administrative Judgments $47.9 million Investigative Cases Indictments 160 Convictions 125 Suspensions 23 Debarments 65 Administrative Investigations Cases Received 688 Cases Closed 643 Senior Official Investigations 274 Reprisal Cases 369 SUMMARY OF POLICY AND OVERSIGHT ACTIVITIES Existing and Proposed Regulations Reviewed 186 Evaluation Reports Issued 2 Inspector General Subpoenas Issued 391 SUMMARY OF INTELLIGENCE ACTIVITIES Intelligence Reports Issued 11 SUMMARY OF SPECIAL PLANS AND OPERATIONS ACTIVITIES Assessment Reports Issued 6 SUMMARY OF DEFENSE HOTLINE ACTIVITIES Contacts 9,016 Cases Opened 1,265 Cases Closed 1,446 ii SEMIANNUAL REPORT TO THE CONGRESS CONTENTS 1. OVERVIEW � MISSION & ORGANIZATION................................................................................................................................................ 2 � EXECUTIVE SUMMARY ................................................................................................................................................... 4 � IG HIGHLIGHTS................................................................................................................................................................... 10 OVERSEAS CONTINGENCY OPERATIONS................................................................................................ 10 � GUAM REALIGNMENT................................................................................................................................... 12 � RECOVERY ACT................................................................................................................................................ 14 � 2. OVERSIGHT � AUDITS ................................................................................................................................................................................. 18 ACQUISITION PROCESSES AND CONTRACT MANAGEMENT .......................................................... 18 � FINANCIAL MANAGEMENT ....................................................................................................................... 26 � HEALTH CARE ................................................................................................................................................. 29 INFORMATION ASSURANCE, SECURITY, & PRIVACY............................................................................ 30 � JOINT WARFIGHTING & READINESS.................................................................................................... 32 � INVESTIGATIONS ............................................................................................................................................................. 35 � PUBLIC CORRUPTION .............................................................................................................................. 35 � PROCUREMENT FRAUD .............................................................................................................................. 36 � HEALTH CARE FRAUD ............................................................................................................................... 38 � PRODUCT SUBSTITUTION ....................................................................................................................... 39 � TECHNOLOGY PROTECTION .................................................................................................................. 40 � COMPUTER CRIMES ...................................................................................................................................... 41 � INSPECTIONS ................................................................................................................................................................... 42 � HEALTH CARE .............................................................................................................................................. 42 � LOGISTICS ..................................................................................................................................................... 43 � COMPLIANCE .............................................................................................................................................. 43 � 3. OUTREACH � HOTLINE............................................................................................................................................................................... 48 WHISTLEBLOWER PROTECTION................................................................................................................................... 50 � SENIOR OFFICIALS ............................................................................................................................................................ 52 � CONGRESSIONAL TESTIMONY .................................................................................................................................... 53 POLICY OVERSIGHT .......................................................................................................................................................... 54 ACTIVITIES ............................................................................................................................................................................55 � 4. SERVICES � ARMY .................................................................................................................................................................................... 58 � ARMY AUDIT AGENCY ................................................................................................................................. 58 � ARMY CRIMINAL INVESTIGATION COMMAND ................................................................................ 65 � NAVY ..................................................................................................................................................................................... 69 � NAVAL AUDIT SERVICE ............................................................................................................................. 69 � NAVAL CRIMINAL INVESTIGATIVE SERVICE ........................................................................................ 74 � AIR FORCE ......................................................................................................................................................................... 76 � AIR FORCE AUDIT AGENCY ...................................................................................................................... 76 � AIR FORCE OFFICE OF SPECIAL INVESTIGATIONS ...................................................................... 84 � 5. APPENDICES A. AUDIT, INSPECTION, AND EVALUATION REPORTS ISSUED .................................................................. 88 � B. REPORTS CONTAINING POTENTIAL MONETARY BENEFITS ..................................................................... 100 � C. FOLLOW-UP ACTIVITIES ...................................................................................................................................... 101 � D. CONTRACT AUDIT REPORTS ISSUED ............................................................................................................. 103 � E. STATUS OF ACTION ON POST-AWARD CONTRACTS ................................................................................... 104 � F. STATUS OF REPORTS WITH ACTION PENDING .............................................................................................. 105 � G. CONTRACT AUDITS WITH SIGNIFICANT FINDINGS ..................................................................................... 111 � H. RESULTS OF PEER REVIEWS .................................................................................................................................. 114 � I. ACRONYMS ................................................................................................................................................................ 115 � APRIL 1, 2010 TO SEPTEMBER 30, 2010 iii REPORTING REQUIREMENTS The Inspector General Act of 1978, as amended, states that each inspector general shall no later than April 30 and October 31 of each year prepare semiannual reports summarizing the activities of the office during the immediately preceding six-month periods ending March 31 and September 30. The IG Act specifies reporting requirements for semiannual reports. The requirements are listed below and indexed to the applicable pages. REFERENCES REQUIREMENTS PAGE Section 4(a)(2) “review existing and proposed legislation and regulations...make recommendations...” N/A Section 5(a)(1) “description of significant problems, abuses, and deficiencies...” 17-46 Section 5(a)(2) “description of recommendations for corrective action...with respect to significant problems, abuses, and 17-46 deficiencies...” Section 5(a)(3) “identification of each significant recommendation described in previous semiannual reports on which cor- N/A rective action has not been completed...” Section 5(a)(4) “a summary of matters referred to prosecutive authorities and the prosecution and convictions which have 17-46 resulted.” Section 5(a)(5) “a summary of each report made to the [Secretary of Defense] under section 6(b)(2)...” instances where infor- N/A mation requested was refused or not provided” Section 5(a)(6) “a listing, subdivided according to subject matter, of each audit report, inspection report, and evaluation re- 88-100 port issued.” showing dollar value of questioned costs and recommendations that funds be put to better use. Section 5(a)(7) “a summary of each particularly significant report...” 17-46 Section 5(a)(8) “statistical tables showing the total number of audit reports, inspection reports, and evaluation reports and 101 the total dollar value of questioned costs...” Section 5(a)(9) “statistical tables showing the total number of audit reports, inspection reports, and evaluation reports and 101 the dollar value of recommendations that funds be put to better use by management...” Section 5(a)(10) “a summary of each audit report, inspection report, and evaluation report issued before the commencement 101 of the reporting period for which no management decision has been made by the end of reporting period...” Section 5(a)(11) “a description and explanation of the reasons for any significant revised management decision...” N/A Section 5(a)(12) “information concerning any significant management decision with which the Inspector General is in N/A disagreement...” Section 5(a)(13) “information described under Section 05(b) of the Federal Financial Management Improvement Act of 1996...” N/A (instances and reasons when an agency has not met target dates established in a remediation plan) Section 5(a)(14) “An Appendix containing the results of any peer review conducted by another Office of Inspector General 114 during the reporting period...” Section 5(a)(15) “A list of any outstanding recommendations from any peer review conducted by another Office of Inspector N/A General that have not been fully implemented, including a statement describing the status of the implemen- tation and why implementation is not complete...” Section 5(a)(16) “Any peer reviews conducted by DoD IG of another IG Office during the reporting period, including a list of 114 any outstanding recommendations made from any previous peer review . . . that remain outstanding or have not been fully implemented...” Section 5(b)(2) “statistical tables showing the total number of audit reports, inspection reports, and evaluation reports and 102 the dollar value of disallowed costs...” Section 5(b)(3) “statistical tables showing the total number of audit, inspection, and evaluation reports and the dollar value 102 of recommendations that funds be put to better use by management agreed to in a management decision...” Section 5(b)(4) “a statement with respect to audit reports on which management decisions have been made but final action 105-110 has not been taken, other than audit reports on which a management decision was made within the preced- ing year...” Section 8(f)(1) “information concerning the number and types of contract audits...” 103 5 USC app. 5 note “an annex on final completed contract audit reports...containing significant audit findings.” 111-113 iv SEMIANNUAL REPORT TO THE CONGRESS 1 Overview Mission Serving the Congress and the Department Department of Defense Inspector General is an independent, objective agency within the U.S. Department of Defense that was created by the Inspector General Act of 1978, as amended. DoD IG is dedicated to serving the warfighter and the taxpayer by conducting audits, investigations, inspections, and assessments that result in improvements to the Department. DoD IG provides guidance and recommendations to the Department of Defense and the Congress. Mission Promote integrity, accountability, and improve- ment of Department of Defense personnel, pro- grams, and operations to support the Depart- ment’s mission and serve the public interest. Vision One professional team strengthening the integrity, efficiency, and effectiveness of the Department of Defense. Core Values Accountability • Integrity • Efficiency Goal 1 Improve the economy, efficiency, and effectiveness of Department of Defense personnel, programs, and operations. Goal 2 Eliminate fraud, waste, and abuse in the programs and operations of the Department of Defense. Goal 3 Ensure the efficiency and effectiveness of DoD IG products, processes, and operations. 2 SEMIANNUAL REPORT TO THE CONGRESS Organization Secretary of Defense Inspector General Administrative Special Plans & Auditing Investigations Intelligence Policy & Oversight Investigations Operations Auditing Intelligence The Office of the Deputy Inspector General for The Office of the Deputy Inspector General for Auditing conducts audits on all facets of DoD Intelligence provides oversight (audits, evalua- operations. The work results in recommenda- tions, and inspections) across the full spectrum tions for reducing costs; eliminating fraud, waste, of programs, policies, procedures, and functions and abuse of authority; improving performance; of the Intelligence Community, Special Access strengthening internal controls; and achieving Programs, Nuclear Enterprise, and related secu- compliance with laws, regulations, and policy. rity issues within DoD. Investigations Policy and Oversight The Office of the Deputy Inspector General for The Office of Deputy Inspector General for Policy Investigations is the criminal investigative arm and Oversight provides oversight and policy for of DoD IG. The Defense Criminal Investigative audit, investigative, and hotline activities within Service protects America’s warfighters by DoD; and provides technical advice and support conducting criminal investigations in support of to DoD IG projects. crucial national defense priorities. Special Plans and Operations Administrative Investigations The Office of the Deputy Inspector General The Office of the Deputy Inspector General for for Special Plans and Operations facilitates in- Administrative Investigations investigates and formed decision-making by senior civilian and oversees investigations of allegations regarding: military leaders of the Department of Defense the misconduct of senior DoD officials, both and U.S. Congress in order to accomplish prior- civilian and military; whistleblower reprisal ity national security objectives. against service members, defense contractor employees, and DoD civilian employees (appropriated and nonappropriated fund); and improper command referrals of service members for mental health evaluations. APRIL 1, 2010 TO SEPTEMBER 30, 2010 3