EXPEDITIONARY
AUDITING, ORGANIZING, AND DOING
Presentation To:
American Society of Military Comptrollers
By:
Mr. Benny Piccolo
Principal Deputy Auditor General
3 June 2010
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TALKING POINTS
 Agency Overview
 You Know You’re Deployed When
 Civilian Deployment
 Southwest Asia Operations – Today’s Risk Areas
 Ongoing and Future Work
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AGENCY OVERVIEW
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Organizational Alignment
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What do we do for the U.S. Army?
 Our mission is not to find problems. We set out to provide Army leaders
assurance that:
 Policies, programs, organizations, systems and operations are
achieving their objectives.
 Resources are efficiently used and properly safeguarded.
 Laws and regulations are complied with.
 Internal controls and oversight are in place and operating to prevent
fraud, waste, and abuse.
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AAA in OCO
Past, Present, & Future
 Support dates back to Vietnam War era.
 Operations Desert Storm.
 Bosnia and Kosovo.
 OEF/OIF
 Iraq Vested and Seized Assets.
 GEN Casey/LOGCAP
 Auditors deployed (2005 – Permanent Presence)
 Expeditionary Support Audits team (2008 – Dedicated Team)
 Way Ahead – Working with Army leadership to be part of future
contingency plans.
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Audit Accomplishments
 Audit reports covering a wide range of issues
in support of contingency operations.
 Contracting
 ACC
 JCC-I/A
 USACE
 Financial Management
 CERP/Quick Reaction Fund
 Vendor Payments
 Logistics
 Containers
 Government Property
 LOGCAP
 Retrograde
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Deployment
You know
you’re deployed
when…
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Everyone eats at the same DFAC…
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All rides are chauffeured…
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Auditors are taught to fire a weapon…
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You live with your 20 closest friends…
that you just met.
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A bed and walls are considered “fancy”!
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The bathroom is:
- plastic
- protected with barbed wire
- cleaned with a water hose
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Or in special situations…flushable!
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You learn the proper disposal method
for water bottles…
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The beach comes to you…
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The client is just a step away…
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Anybody need a lift?
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DEPLOYMENTS
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Civilian Pre-Deployment
 Official Passport
 Pre-Deployment Health
Assessment
 CRC
 Legal Matters
 Gear
 First Aid
 Weapons Familiarization
 IED Training
 Final Medical Screening
 Audit Coordination
(DODIG/CENTCOM/DA)
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Civilian Deployment
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Transportation
Housing
Hygiene
Communications
Office Space
Personal Time
Food & Water
Troop Medical Center
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Civilian Redeployment
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Transportation
CRC
Post Deployment Health Assessment
Re-integrate
Technology
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SOUTHWEST ASIA
OPERATIONS
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Audit Risk Areas
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Responsible Drawdown
Afghan Buildup
Contingency Contracting
Expeditionary Financial Management
Responsible Reset
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Oversight Activities
 USAAA is one of several audit and investigative agencies that make up the
oversight community in Southwest Asia.
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Air Force Audit Agency
Commission on Wartime Contracting
Criminal Investigation Command
Defense Contract Audit Agency
Defense Contract Management
Agency
 Defense Criminal Investigative
 Defense Intelligence Agency
Service
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Department of Justice
Department of State Inspector General
DOD Inspector General
Federal Bureau of Investigation
Government Accountability Office
Special IG for Iraq/Afghanistan
Reconstruction
 U.S. Agency for International
Development
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Audit Coordination
 Several mechanisms in place to ensure adequate audit coverage and prevent
duplication of effort.
 Southwest Asia Joint Planning Group
 Special Inspector General for SWA, DOD-IG
 Inspector General Offices –
 ARCENT
 CENTCOM
 USF-I
 USFOR-A
 International Contracting Corruption
Task Force
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Current Audit Work
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Vendor Pay
Equipment Disposal
Contracting
Attestations
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Vendor Pay
 Audit of Controls Over Vendor Payments (Iraq, Afghanistan, Kuwait,
Qatar)
 Hard copy voucher packages didn’t provide sufficient support to
validate vendor payments. AAA identified error rate:
 50% (563 of 1,116) statistical sample vouchers.
 27% (105 of 394) judgmental (on-site) sample vouchers.
 Automated data didn’t always match hardcopy voucher packages or
actual operations.
 Dollar value disbursement mismatch to documentation.
 Manual exchange rate losses.
 Numerous breakdowns with purchasing, accountability, and
payments processes.
 Limited Depository Accounts (LDAs) not reconciled.
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Vendor Pay
 Working relationship and
initiatives between the fiscal triad
weren’t synchronized.
 Inconsistently applied
retrograde initiatives.
 Cash on the Battlefield.
 Identified CVS training gaps.
 Function only performed in
theater.
 Stove piped systems training.
 Insufficient internal control
program – checklist mentality.
 15-6 Investigations and CID
referrals.
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Vendor Pay
 Actions Taken:
 Vendor Pay Summit (April 2010) - members of fiscal triad
collaboratively worked through contracting and payment issues.
 Finance Management Workshop (May 2010) - addressed training
and automation challenges.
 Finance Management Command - revising internal control
program (incorporating risk assessment).
 We recommended:
 Re-report material weakness for hard copy audit trail.
 Report material weakness for automated audit trail.
 Incorporate high risk areas into inspection programs.
 Monitor and limit the use of LDAs.
 Investigate, correct, and report loss of funds for questionable and
invalid payments and exchange rate losses.
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Equipment Disposal
 Audit of Disposal of Army Equipment and Materiel into DRMO (Iraq)
 Units supported the drawdown by disposing of unserviceable, nonreparable items into DRMO sites as permitted by guidance. However,
we also determined that:

All four DRMO sites in Iraq have the same RIC causing the SSAs
SARSS to route DRMO shipments to Balad, not the nearest
DRMO.

Unit’s are not always aware of proper disposition procedures for
equipment and materials.
 Recommended:
 Create unique RICs for each DRMO.
 Create a portal on USF-I website with disposal and turn-in procedure
information.
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Equipment Disposal
 Audit of Disposal of Army Equipment and Materiel into Dump sites (Iraq)
 Lack of monitoring and effective controls allow military equipment,
hazardous waste and material, and items prohibited by USF-I
Environmental SOP to enter Garrison dumpsites and trash disposal
operations.
 Units are disposing of government property in dumpsters and base
dumpsites.
 Disposal sites contain hazardous waste and prohibited items.
 Unsorted solid waste is shipped to off-site locations.
 We recommended:
 Close solid waste sites when other disposal avenues are available.
 Sort and remove prohibited items from trash before transporting to off
FOB/COB dumpsite and send prohibited items to proper disposal
facilities.
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Pictures
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Pictures
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Contracting
 Audit of Base Life Support Contracts – Basra, Iraq
 Collectively the support contracts were not cost effective.
 Reviewed 13 contracts representing 16 services awarded in 2009.
 Contract costs were $76.8M or 103% higher than IGE ($37.9M).
 Contracts were poorly developed. Contracting and unit personnel rushed
to award contracts due to British forces leaving and U.S. forces needing
base life support.
 Made modifications totaling $18.9M within first year of award.
 Raised total cost of the contracts to over $95M (in line with LOGCAP
contract costs at similar sized FOBs).
 Identified out of scope work directed by unit representatives.
 We recommended:
 Develop new PWS for 10 services to be re-solicited.
 Evaluate out of scope work for ratification/recoupment of payment.
 Additional COR training for legal and ethical responsibilities.
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Contracting
 Audit of Camp Buehring Fuel Farm Operations (Kuwait)
 Lack of controls for proper fuel accountability.
 Inventory measurements not standard or estimated.
 Inadequate theft detection and prevention.
 Insufficient government oversight of contracted security services.
 Identified weaknesses at entry control points.
 Debarment action not initiated.
 We recommended:
 Use calibrated gauging sticks.
 Establish standard reference.
 Issue and record all truck seals.
Reconcile seal log with shipping
documents.
Reconcile daily meter readings to
fuel transactions.
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Attestations
 We coordinate with and make referrals to investigative agencies.
 US Army Criminal Investigation Command
 Defense Criminal Investigative Service
 Federal Bureau of Investigation
 Internal Revenue Service
 Receive requests for limited scope reviews.
 Contract Terms
 Controls for Safeguarding Assets
 Data Analysis
 Logistics Issues
 Vendor Payments
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Ongoing and Future Work
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LOGCAP IV
Retrograde
Equipment transfers
Return of Assets from SWA
Army Prepositioned Stock
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Contact Information
Mr. Benny Piccolo
Principal Deputy Auditor General
Benjamin.Piccolo@us.army.mil
(703) 681-9802
Ms. Monique Ferrell
Program Director, Expeditionary Support Audits
Monique.Ferrell@us.army.mil
DSN (314) 421-2996
Ms. Crystal Beard
Senior Auditor
Expeditionary Support Audits
Crystal.Beard@us.army.mil
(210) 221-1758
Ms. Janet Stallings
Audit Manager
Expeditionary Support Audits
Janet.Stallings@us.army.mil
(910) 396-1981
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Closing Comments
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