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Dod OIG Semiannual Report to the Congress April 1, 2012 Through Department of Defense Department of Defense Inspector General Inspector General 4800 Mark Center Drive 4800 Mark Center Drive Alexandria, VA 22350-1500 Alexandria, VA 22350-1500 www.dodig.mil www.dodig.mil Defense Hotline 1.800.424.9098 Defense Hotline 1.800.424.9098 INSPECTOR GENERAL DEPARTMENT OF DEFENSE 4800 MARK CENTER DRIVE ALEXANDRIA, VIRGINIA 22350-1500 I am pleased to present the Department of Defense Inspector General Semiannual Report to Congress for the reporting period April 1 through September 30, 2012. We are dedicated to detecting and preventing fraud, waste, and abuse while improving the effectiveness of DoD programs and operations. Our statutory authority places us in a unique position to directly impact DoD programs and operations to sustain mission-essential activities. To this end, we conduct oversight to help ensure that the warfighter and DoD personnel are best equipped to fullfil the critical mission of defending our country. This report highlights our work related to operations in Afghanistan and warrior care, along with some of our most significant audits, investigations, and inspections. To accomplish our important mission, we work jointly with our counterpart agencies within the Defense oversight community, including the Army Audit Agency, Naval Audit Service, Air Force Audit Agency, Army Criminal Investigation Command, Naval Criminal Investigative Service, Air Force Office of Special Investigations, and the Defense Contract Audit Agency. We thank them for their contributions to this report. We issued 79 reports that identified $2.8 billion in potential monetary benefits during this reporting period. The Defense Criminal Investigative Service, working closely with our counterpart law enforcement agencies, conducted investigations that resulted in 72 arrests, 167 criminal convictions, Principal Deputy 37 suspensions, and 136 debarments, generating a return of $3.3 billion to the U.S. government. The Inspector General Defense Hotline handled 12,201 contacts. Of special concern are some of the continuing challenges Lynne M. Halbrooks. we have identified, including: • Contract oversight and training and equipping the Afghan National Security Forces. The ANSF is a critical pillar for establishing security and stability in Afghanistan. • The Military Health System, which provides services to approximately 9.5 million beneficiaries, including active duty personnel and their families. Medical care required by military personnel is expected to increase in the next several years, especially in the areas of rehabilitation and transition care. I want to express my appreciation for the dedication and achievements of DoD IG employees. Additionally, I commend the military services, the Defense agencies, and members of the oversight community for their professionalism and devotion to the mission. We thank the soldiers, Marines, sailors, and airmen whose service and sacrifice inspire our goal to achieve excellence through unity. In closing, we look forward to the continued support of Congress and the Department as we strive to use our extensive oversight functions to promote accountability, integrity, and efficiency; improve DoD programs and operations; and ensure the most efficient use of taxpayer dollars. Lynne M. Halbrooks Principal Deputy STATISTICAL HIGHLIGHTS SUMMARY OF AUDIT ACTIVITIES Reports Issued 59 Monetary Benefits Recommendations Made on Funds Put to Better Use $2.8 billion Achieved Monetary Benefits (Funds Put to Better Use) $59.7 million SUMMARY OF DEFENSE CRIMINAL INVESTIGATIVE SERVICE ACTIVITIES Total Returned to the U.S. Government1 $3.3 billion Recovered Government Property $1.5 million Civil Judgments/Settlements $2 billion Criminal Fines, Penalties, Restitution and Forfeitures $1.3 billion Administrative Recoveries2 $39.9 million Investigative Cases Arrests 72 Charges 179 Convictions 167 Suspensions 37 Debarments 136 SUMMARY OF ADMINISTRATIVE INVESTIGATIONS Complaints Received 1,173 Complaints Closed 551 Senior Official 323 Whistleblower Reprisal 228 SUMMARY OF POLICY AND OVERSIGHT ACTIVITIES Existing and Proposed Regulations Reviewed 165 Evaluation Reports Issued 4 Inspector General Subpoenas Issued 273 Contractor Disclosures Received 92 SUMMARY OF INTELLIGENCE ACTIVITIES Intelligence and Special Program Assessment Reports Issued 9 SUMMARY OF SPECIAL PLANS AND OPERATIONS ACTIVITIES Assessment Reports Issued 7 SUMMARY OF DEFENSE HOTLINE ACTIVITIES Contacts 12,201 Cases Opened 1,930 Cases Closed 1,269 1 Includes investigations conducted jointly with other law enforcement organizations. 2 Includes contractual agreements and military non-judicial punishment. ii SEMIANNUAL REPORT TO THE CONGRESS CONTENTS 1. OVERVIEW MISSION & ORGANIZATION ............................................................................................................................................2 MISSION ...............................................................................................................................................................2 ORGANIZATION .................................................................................................................................................3 EXECUTIVE SUMMARY ........................................................................................................................................................4 OVERVIEW ...........................................................................................................................................................4 PRIORITIES ...........................................................................................................................................................4 CORE MISSION AREAS .....................................................................................................................................5 ENABLING MISSION AREAS ..........................................................................................................................7 IG HIGHLIGHTS ......................................................................................................................................................................7 AFGHANISTAN ...................................................................................................................................................7 WARRIOR CARE ...............................................................................................................................................10 2. CORE MISSION AREAS AUDITS .................................................................................................................................................................................. 12 ACQUISITION PROCESSES AND CONTRACT MANAGEMENT ..........................................................12 FINANCIAL MANAGEMENT .........................................................................................................................21 JOINT WARFIGHTING AND READINESS ..................................................................................................28 INFORMATION ASSURANCE, SECURITY AND PRIVACY .....................................................................30 HEALTH CARE ..................................................................................................................................................32 EQUIPPING AND TRAINING IRAQI AND AFGHAN SECURITY FORCES .........................................34 NUCLEAR ENTERPRISE..................................................................................................................................40 INVESTIGATIONS ................................................................................................................................................................ 41 PROCUREMENT FRAUD ...............................................................................................................................41 PUBLIC CORRUPTION ...................................................................................................................................42 PRODUCT SUBSTITUTION ...........................................................................................................................44 HEALTH CARE FRAUD ...................................................................................................................................45 TECHNOLOGY PROTECTION ......................................................................................................................46 INSPECTIONS ...................................................................................................................................................................... 49 HEALTH AND SAFETY...................................................................................................................................... 49 JOINT WARFIGHTING AND READINESS.................................................................................................. 51 INFORMATION ASSURANCE, SECURITY AND PRIVACY ....................................................................52 ADMINISTRATIVE INVESTIGATIONS............................................................................................................................. 53 WHISTLEBLOWER REPRISAL INVESTIGATIONS.....................................................................................53 INVESTIGATIONS OF SENIOR OFFICIALS ................................................................................................56 3. ENABLING MISSION
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