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DEPUTY INSPECTOR GENERAL FOR INTELLIGENCE

Qiftltr Secretary of Defense for Intelligence I.)a ta Call

Submissions and Ioter._al Control Processes for

Base Realignment-and Closure 2005·

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Additional Copies

(703) 604-8896 (DSN 664-) or (DSN664-).

To obtain additional copies ofthis re ort contact ·

Suggestions for Future Audits

To suggest.ideas for or to request future audits or evaluations ofDefense intelligence issµes,. conta.ct the Office ofthe Deputy Inspector General for Intelligenceat (703)604... 8800 (DSN 664;.8800) or fax(703) 604-0045. Ideas and requests can also be mailed to:

Office of the Deputy Inspector General for Intelligence

Department ofDefellS'e Inspector General

400 Anny Navy Drive (Room 703)

Arlington, VA 22202-4704

DEPAltTllENT OF DEFENB

hnt·~ I IV nne

Acronyms

BRAC Base Realignment and Closure COBRA Cost ofBase Realignment Actions DoD OIG DoD Office of Inspector General ICP Internal Control Plan JCSG Joint Cross-Service Group OSD Office of the Secretary ofDefense USD(I) Under Secretary of Defense for Intelligence

http:conta.ct

INSPECTOR GENERAL

DEPARTMENT OF DEFENSE

400 ARMY NAVY DRIVE

ARLINGTON, VtRGIN IA 22202-4704

May 12, 2005

MEMORANDUM FOR UNDER SECRETARY OF DEFENSE FOR INTELLIGENCE

SUBJECT: Report on Under Secretary of Defense for Inte11igence Data Ca11 Submissions and Internal Control Processes for Base Realignment and Oosure 2005 (Report No. 05-INTEL-05)

We are providing this report for infonnation and use. We perfonned the audit in respons~ t~ a request ~om the Under S~retary of Defense.for Acquisition, Techn~logy, and Logistics. No wntten response to thts report was requtre~ and none was received Therefore, we are publishing this report in final.

· · aff.uestions should be directedcourt.esies extended to the st..604 -(DSN 664 · · ) or--

(DSN 664 ). See Appendix C for e repo~eam JSted inside the k cover. .

at•er at

Shelton R. Y g Assistant Inspector General

for Intelligence

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Department of Defense Office of Inspector General

Report No. 05-INTEL-05 . May 12, 2005 (Project No. D2004-DINTO1-0228.000)

Under Secretary of Defense for Intelligence Data Call

Submissions and Internal Control Processes

for Base Realignment and Closure 2005

Executive Summary

Who Should Read This Report and Why? Office of the Secretary of Defense personnel responsible for deciding the realignment or closure of military installations based on the Base Realignment and Closure (BRAC) data calls and Under Secretary of Defense for Intelligence managementpersonnel should read this report. The report discusses the validity, integrity, and supporting documentation of the data provided by the Under Secretary ofDefense for Intelligence to assist the Secretary of Defense in BRAC 2005 recommendations.

Background. BRAC 2005 is the formal process outlined in Public Law 101-510, "Defense Base Closure and Realignment Act of 1990," as amended, under which the Secretary of Defense may realign or close military installations inside the United States and its territories. As part ofBRAC 2005, the Under Secretary ofDefense for Acquisition, Technology, and Logistics issued, "Transformation Through Base Realignment and Closure (BRAC 2005) Policy Memorandum One-Policy, Responsibilities, and Procedures," April 16, 2003, which stated that the DoD Office of Inspector General would review the accuracy ofBRAC data and the.certification process.

The BRAC 2005 process was mandated for the United States and its territories and was divided into the following data calls - capacity analysis, supplemental capacity, Military value, Cost of Base Realignment Actions, and scenario specific. The Intelligence agencies' collection process was divided into the following data calls - capacity analysis, Military value, and scenario specific. This report summarizes data calls as of April 2005, for the Under Secretary of Defense for Intelligence BRAC 2005 process.

The Under Secretary of Defense for Intelligence, located in Washington, D.C., is the principal advisor to the Secretary and Deputy Secretary ofDefense on all intelligence, counterintelligence and security, and other intelligence-related matters. The Under Secretary ofDefense for Intelligence was required to submit data for the capacity analysis and Military value data calls.

Results. We evaluated the validity, integrity, and supporting documentation of ,BRAC 2005 data that the Under Secretary of Defense for Intelligence submitted for the capacity analysis and Military value data calls. The Under Secretary of Defense for

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Intelligence collected and submitted BRAC 2005 data that were generally not fully supported. The Under Secretary of Defense for Intelligence collected and submitted responses to 17 questions during the capacity analysis data call, 1 of which was partially supported and 5 were unsupported. The Under Secretary of Defense for Intelligence collected and submitted responses to U questions during the Military value data call, 4 of which were partially supported. We also evaluated compliance with the Office of the Secretary of Defense and Under Secretary ofDefense for Intelligence internal control plans. The Under Secretary ofDefense for Intelligence internal control plan properly incorporated and supplemented the Office of the Secretary of Defense internal control plan. The data collection processes generally complied with the Office of the Secretary of Defense and the Under Secretary of Defense for Intelligence internal control plans. However, some responses were not certified as accurate and complete by responders, and nondisclosure agreements were not signed. In addition, several BRAC 2005 documents used to support responses were not marked with the appropriate warnings in both the header and footer. The lack of adequate supporting documentation for the data calls and identified noncompliances with the internal control plans could impact the reliability and integrity of data that the Under Secretary of Defense for Intelligence provided for the

. BRAC 2005 analysis.

Management Comments. We provided a draft of this report on May 4, 2005 to the Under Secretary of Defense for Intelligence. No written response to this report was required, and none was received. Therefore, we are publishing this report in final form.

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Table of Contents

Executive Summary

Background 1

Objectives 3

Finding

Under Secretary of Defense for Intelligence Base Realignment and Closµre 2005 Data Call Submissions and Internal Control Processes 4

Appendixes

A. Scope and Methodology 7 Prior Coverage .9

B. BRAC Data Call Questions Not Fully Supported 10 C. Report Distribution 12

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Background

Base Realignment and Closure 2005. Public Law 101-510, "Defense Base Closure and Realignment Act of 1990," as amended, establishes the procedures under which the Secretary of Defense may realign or close military installations . inside the United States and its territories. The law authorizes the establishment of an independent Commission to review the Secretary of Defense recommendations for realigning and closing military installations. The Secretary of Defense established and chartered the Infrastructure Executive Council and the Infrastructure Steering Group as the Base Realignment and Closure (BRAC) 2005 deliberative bodies responsible for leadership, direction, and guidance. The Secretary of Defense must submit BRAC recommendations to the independent Commission by May 16, 2005.

Joint Cross-Service Groups. A primary objective of BRA~ 2005, in addition to realigning base structure, is to examine and implement opportunities for greater joint activity. The Office of the Secretary of Defense (OSD) established seven Joint Cross-Service Groups (JCSGs)-Education and Training, Headquarters and Support Activities, Industrial, Intelligence, Medical, Supply and Storage, and Technical to address issues that are common business~oriented support functions, examine functions in the context offacilities, and develop realignment and closure recommendations based oti force structure plans of the Armed Forces and on selection criteria. To analyze the issues, each JCSG developed data call questions to obtain information about the functions thatthey reviewed.

BRAC Data Calls. The BRAC 2005 data collection process was mandated for the United States and its territories. The collection process was divided into the following data calls - capacity analysis, supplemental capacity, Military value, Cost of Base Realignment Actions (COBRA), Joint Process Action Team Criterion Number 7 and scenario specific. The supplemental capacity analysis, Military value, COBRA, and Joint Process Action Team Criterion Number 7 data calls are collectively known as the second data call. The Services, Defense agencies, and Defense-wide Organizations used either automated data collection tools or a manual process to collect data call responses. Each data call had a specific purpose as follows.

• The capacity analysis data call gathered data on infrastructure, current workload, surge requirements, and maximum capacity.

• The supplemental capacity data call clarified inconsistent data gathered during the initial capacity analysis data call.

• ':fhe Military value data call gathered data on mission requirements, survivability, land and facilities, mobilization, and contingency.

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• The COBRA data call gathered data to develop costs, savings, and payback (formerly known as return on investment) of proposed realignment and closure action.

• The Joint Process Action Team Criterion Number 7 data call gathered data to assess the community's ability to support additional forces, missions, and personnel associated with individual scenarios. 1

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include overseeing policy for all DoD intelligence organizations to ensure that those organizations are manned, trained, equipped, and structured to support DoD missions. The USD(I) was required to submit data for the capacity analysis and Military value data calls.

Objectives

The overall objective ofthe audit was to evaluate the validity, integrity, and · supporting documentation of data that the USD(I) collected and submitted for the BRAC 2005 process. In addition, we evaluated whether USD(I) complied with the OSD and USD(I) ICPs. This report is one in a series ondata integrity and internal control processes for BRAC 2005. See Appendix A for a discussion of the scope and methodology and prior coverage related to the audit objectives.

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Under Secretary of Defense for Intelligence Base Realignment and Closure 2005 Data Call Submissions and Internal Control Processes The USD(I) collected and submitted BRAC 2005 data that were generally not fully supported. The USD(I) collected and submitted responses to 17 questions during the capacity analysis data call, 1 of which was partially supported and 5 unsupported. The USD(l) collected and submitted responses to 11 questions during the Military value data call, 4 of which were partially supported. The USD(I) ICP properly incorporated and supplemented the OSD ICP and the data collection processes for the Military value data call generally complied with applicable ICPs. However, during the Military value data call we identified several noncompliances.

• Responses were not certified as accurate and complete by question responders,

• Nondisclosure agreements were not signed, and

• BRAC documents were not marked properly.

The lack of adequate supporting documentation for the data calls and . identified noncompliances with the ICPs could impact the reliability and integrity of data that USD(I) provided for the BRAC 2005 analysis.

USD(I) BRAC 2005 Data Call Submissions

The USD(I) collected and submitted BRAC 2005 data that were generally not fully supported. The USD(I) headquarters forwarded all data call questions and collected the supporting documentation for each of its sites. We evaluated the · validity and integrity of supporting documentation at USD(I) headquarters. Specifically, for the capacity analysis and Military value data.calls, we compared responses to supporting documentation and reviewed "Not Applicable" responses to determine whether the USD(I) responses were reasonable. As· we identified problems with data submissions, we worked with management to correct the data.

Capacity Analysis Data Call. The USD(I) provided inadequate supporting documentation for the capacity analysis data call. The USD(I) identified 6 of 17 questions that applied to its office. The response to question 7 was partially

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supported. In addition, USD(I) supporting documentation was inadequate to validate responses to questions 1through5 (see Appendix B for details). During a followup visit, no additional supporting documentation was provided to correct the issues. We also reviewed the 11 questions that the USD(I) sites determined were "Not Applicable" and we agreed with the USD(I) conclusion. The USD(I) trusted agent stated that no additional documentation could be provided for the capacity data call.

Military Value Data Call. The USD(I) Military value data call generally provided reasonable responses and adequate supporting documentation. The Military value data call consisted of 11 questions with multiple parts; if one segment of the question was not supported, the overall question would be partially supported. We relied on the agency responses when they answered "no," "zero," and "unknown" to applicable portions of the question because all BRAC data were certified as accurate and complete to the best of the certifier's knowledge and belief. We concluded that questions 19, 22 through 25, 27, and 28 were fully supported, and questions 18, 20, 21, and 26 were partially supported (see Appendix B for details). In addition, we reviewed portions of Military value questions that the USD(I) concluded were "Not Applicable'' and agreed with the conclusion. The trusted agent concurred with the results, but stated that no additional supporting documentation could be provided.

Internal Control Processes

We did not evaluate USD(I) compliance with the OSD ICP during the capacity analysis data call. However, during the Military value data caIJ, USD(I) generally complied with the USD(I) and OSD ICPs. We reviewed the completeness of the USD(I) ICP and determined that it properly incorporated and supplemented the OSD ICP. In addition, we reviewed USD(I) compliance with the USD(I) ICP data collection process and determined whether USD(I) personnel completed nondisclosure agreements and properly collected, marked, safeguarded, maintained, and certified thatthe data collected were accurate and complete to the best of the certifier's knowledge and belief,

Completeness ofICP. The USD(I) BRAC 2005 ICP provides management controls and organization responsibilities that ensure the accuracy and completeness of data. The ICP defines the collection, analyses, certification requirements, and control mechanisms to safeguard the BRAC information. The USD(I) ICP outlined documentation requirements to address changed answers. The USD(I) ICP included direction on completing nondisclosure agreements and collecting, marking, safeguarding, and maintaining BRAC data.

Compliance with ICPs. We did not evaluate USD(I) compliance with applicable ICPs during the capacity analysis data call. The OSD ICP, which was issued in

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the Under Secretary ofDefense for Acquisition, Technology, and Logistics' memorandum, "Transformation Through Base Realignment and Closure (BRAC 2005) Policy Memorandum One--Policy, Responsibilities, and Procedures," as guidance to the Defense intelligence agencies, was not distributed to USD(I). As a result, USD(I) did not prepare an I CP that incorporated and supplemented the OSD TCP during the capacity analysis data call. This situation was remedied before issuance of the Military value data call.

The USD(J) data collection and certification processes for the Military value data call generally complied with applicable ICPs. However, several responses were not certified as accurate and complete by responders, and not all nondisclosure agreements were signed by all individuals involved in the BRAC process. In addition, BRAC documents used to support answers to the Military value data call were not properly marked in both the header and footer with the "Deliberative Document-For Discussion Purpose·s Only~Do Not Release Under FOIA." We requested USD(I) to correct all noncompliance issues. The trusted agent stated that USD(I) would resolve the noncompliances by providing all certifications and nondisclosure agreements and marking all documents appropriately.

Conclusion

The USD(I) collected and submitted BRAC 2005 data that were generally not fully supported. The USD(I) collected and submitted responses to .17 questions during the capacity analysis data call, 1 of which was partially supported and 5 unsupported. The USD(I) collected and submitted responses to 11 questions during the Military·value data call, 4 of which were partially supported. The USD(I) data collection process generally complied with OSD and USD(l) ICPs. However, during the Military value data calls, we identified three noncompliances with the OSD and USD(I) ICPs. We believe that the lack of supporting documentation and ICP noncompliances could impact the reliability and integrity of data that USD(I) provided for the BRAC 2005 analysis.

We discussed our findings with USD(I) management after each data call. USD(I) management stated that the noncompliances with the ICPs would be corrected; however, no additional supporting documentation would be provided!

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Appendix A. Scope and Methodology

We evaluated the validity and integrity of all data call responses and the associated supporting documentation ofUSD(I) BRAC 2005 data. Specifically, we perfonned the following audit steps during the capacity analysis and Military value data calls. ·

• Interviewed the personnel responsible for preparing and certifying the responses to the data calls.

• Reviewed all data call responses and associated supporting documentation.

• Compared the adequacy of responses to the supporting documentation.

• Reviewed "Not Applicable" responses to detennine whether they were reasonable and not default responses.

• Reviewed the USD(I) ICP during the Military value data call to detennine whether the USD(I) incorporated and supplemented the OSD TCP and established and implemented procedures and processes to disseminate, collect, safeguard, and maintain supporting documentation. In addition, we reviewed whether the USD(I) designated the appropriate personnel to certify that data and infonnation collected were accurate and complete to the best ofthe certifier's knowledge and belief.

• Relied on Military value responses when they answered "no," "zero," or "unknown" to applicable questions because all BRAC data were· certified by USD(I) as accurate and complete.

• Worked with managementto correct identified problems to data call responses.

We could not validate thatthe USD(I) was consistent in reporting all sites during the capacity analysis data call. We did not evaluate whether internal controls complied with applicable ICPs during the capacity analysis data call because USD{I) was not provided with the "Transformation Through Base Realignment and Closure (BRAC 2005) Policy Memorandum One--Policy, Responsibilities, and Procedures," which included the OSD ICP. As of April 2005, USD(I) had not received any scenario data calls.

Capacity Analysis Data Call. The USD(I) received the capacity analysis data call questions 1 through 17 from the Intelligence JCSG. USD(I) then forwarded

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all questions to each of its sites and collected supporting documentation and responses at USD(I) headquarters. All supporting documentation was maintained at headquarters for validation. We reviewed all data call questions at USD(I) headquarters for accuracy, appropriate markings, and adequacy. We issued one capacity analysis site memorandum to summarize the site visit results. Specifically, we reviewed the following responses and supporting documentation .

. Capacity Analysis Data Call Questions Reviewed

USD(I) Site Que Numberstion

Answered I Not Applicable . USD(I) headquarters 1, 2, 3, 4, 5, and 7 1 · 6, and 8-17

Military Value Data Call. The USD(I) received Military value data call questions 18 through 28 from the Intelligence JCSGs. Most Military value questions had multiple parts. USD(I) then forwarded all questions to each of its sites and collected supporting documentation and responses at USD(I) headquarters. All supporting documentation was maintained at headquarters for validation. We reviewed the data call questions at USD(I) headquarters for accuracy, appropriate markings, and adequacy for each site. In addition to reviewing the Military value data call responses; we followed up on outstanding issues identified during the capacity analysis data call. We issued one Military value site memorandum to summarize the site visit results.

We performed this audit September 2004, through April 2005, in accordance with generally accepted government auditing standards.

Reliability of Computer-Processed Data. We did not test the accuracy of the computer-processed data used to support an answer to a data call question. Potential inaccuracies in the data could affect the results. However, all BRAC data were certified as accurate and complete to the best of the certifier's knowledge and belief.

Government Accountability Office High-Risk Areas. The Government Accountability Office has identified several high-risk areas in DoD. This report provides coverage of the DoD Support Infrastructure Management and Federal Real Property high-risk areas.

8

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Management Control Program Review

We did not review the USD(I) management control program because its provisions did not apply to the op.e-time data collection process; however, we evaluated the USD(I) internal controls for preparing, submitting, documenting, and safeguarding information associated with the Military value data call, as directed by the OSD and USD(l) ICPs, to determine whether the USD(I) complied with the ICPs. Specifically, we reviewed procedures that USD(I) used to develop, submit, and document the Military value data call responses. We reviewed the controls implemented to safeguard BRAC 2005 data against disclosure. Internal controls needed improvement as they applied to the audit objective (see Finding section for additional details).

Prior Coverage

During the last 5 years, the DoD OIG issued 2 site memorandums discussing the USD(I) BRAC 2005 data call submissions and internal control processes.

Site Memorandums

DoD IG Memorandum, "Audit on the Military Value Data Call Submission from the Under Secretary of Defense for Intelligence for the Base Realignment and Closure 2005," March 3, 2005

DoD IGMemorandum, "Audit on the Capacity Analysis Data Call Submission from the Under Secretary ofDefense for Intelligence for the Base Realignment and Closure 2005," March 3, 2005

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Appendix B. BRAC 2005 Data Call Questions Not Fully Supported

Capacity Analysis Data Call. For the capacity analysis data call, the USD(I) provided inadequate supporting documentation. We identified responses during the capacity analysis data call that did not provide adequate supporting documentation.

• The response to question number 1 was unsupported. The question required the USD(I) to identify all facilities and space that the USD(I) have real estate or space management responsibility. The USD(I) provided written estimates based on professionaljudgment. In addition, the lease documents provided could not be traced back to the responses.

• · The response to question number 2 was unsupported. The question required the square footage data by subfunction and attribute for all USD(I) buildings. The USD(I) did not provide adequate supporting documentation to validate square footage responses.

• The responses to question numbers 3 and 5 were unsupported. The questions required the USD(I) to provide personnel by building, subfunction, and attribute. No supporting documentation was provided to support the detailee and contractor data. In addition, the USD(I) provided Excel spreadsheet based on professional judgment to support personnel by locations, subfunction and attribute.

• The response to question number 4 was unsupported. The question required the USD(l) to break space out by category. The supporting documentation provide was inadequate to validate the response. Specifically, leasing documents provided were for an entire section of the of the building and did not represent the specific portion the USD(I) occupied, and no auditable documentation was provided for specialized equipment square footage response.

• The response to question number 7 was partially supported. The question required work years for management activities by building. The USD(I) provided inadequate methodology to support positions by subfunction and attribute. In addition, the documentation provided did not support all responses.

10

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Appendix C. Report Distribution

Office of the Secretary of Defense

Under Secretary of Defense for Intelligence

Director, Base Realignment and Closures (Installations and Environment)

Non-Defense Federal Organization

Government Accountability Office *

"only Government Accountability Office personnel involved in the BRAC process are to receive the report.

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Team Members The Office of the Deputy Inspector General for Intelligence prepared this report. Personnel of the Department of Defense Office of Inspector General who contributed to the report are listed below.

FOR OPPICIAL USE ONLY

POR OPPICIAL USE ONLY

MemorandumExecutive SummaryTable of ContentsBackgroundObjectivesFindingAppendix A. Scope and MethodologyAppendix B. BRAC 2005 Data Call Questions Not Fully SupportedAppendix C. Report DistributionTeam Members