The Drug Enforcement Administration (DEA) has reviewed the Office of the Inspector General (OIG) audit report cited above. DEA provided separate responses to the single contract audits summarized in this report for linguistic services provided to the Dallas, Houston, San Diego, and Miami Divisions. Responses to the contract audits were submitted to the appropriate OIG Regional Audit Directors. Copies of these memoranda are attached (Attachment 1).
This memorandum contains DEA's response to the 13 recommendations made in this summary report. Two of the recommendations relate to contract guidance and oversight and 11 recommendations address the costs for services provided by the [ DELETED ].
The OIG recommended that the DEA Administrator:
- Issue guidance to the field division Contracting Officer Technical Representatives (COTRs) instructing them to ensure that:
- contractors are not paid for services not authorized by the delivery orders.
- contractors are not paid for services completed outside the performance period authorized by the delivery order.
- contractors do not begin work before the work has been properly authorized by the Contracting Officer.
- contractors are not paid for hours not supported by time records.
- contractors obtain approval from the DEA before changing the core contractor personnel approved wider the contract.
- contractors are not paid for hours not supported by the sign-in/sign-out logs.
- contractors properly complete the sign-in/sign-out logs.
- contractors obtain approval from the DEA before assigning more than one team leader per shift.
- contractors are not paid for overtime that is not properly approved or at rates higher than approved.
- contractors are not paid for travel expenses that are either not approved or are not supported by receipts.
- a written request is provided to contractors, and a written denial of the request is obtained from the contractors, before the services are obtained through more costly BPAs.
- performance evaluations of the contractors arc completed by the COTRs in a timely manner.
Response: The Office of Acquisition Management (FA) has developed additional guidance that will be Issued to all COTRs designated under a DEA contract. (A draft copy of this guidance is provided In Attachment 2) This guidance reminds COTRs of the Importance of their role and responsibilities as the Contracting Officer's "eyes and ears." This guidance also requires the COTR to act as the technical liaison between the contractor and the Contracting Officer and to actively oversee the contractor's performance to ensure that performance meets the requirements of the contract. This guidance farther addresses the significant weaknesses in COTR oversight Identified In the DOJ/OIG audit report.
In addition, the Office of Acquisition Management has initiated a comprehensive review of the COTR Program within DEA. Upon completion of this review, DEA intends to propose enhancements and modifications to this program This effort is intended to ensure the applicable policies and procedures are revised and these requirements are fully employed by the Contracting Officers responsible for acquisition operations and oversight of COTR actions.
Also, FA Is coordinating a COTR Training Conference currently scheduled for May, 2002. The training conference will address a variety of subjects including the specific issues raised in the audit report.
- Require the Contracting Officer to perform random checks to ensure that the invoices certified by the COTRs are accurate before payment is made.
Response: FA is currently developing written procedures to ensure contractor's invoices are reviewed regularly by the Contracting Officer/Contract Specialist (CO/CS). In addition to the written procedures requiring the regular review of invoices, a checklist for use In examining contractor invoices will be developed. Once a sound working draft of this checklist is developed, it will be tested and evaluated with each of the field divisions audited by the OIG.
The proposed review procedures will require:
- Contractor to provide the CO/CS an informational copy of the invoice submitted to the COTR
- COTR to provide the CO/CS notification of any adjustment make to invoices approved
- CO/CS to conduct an audit of 10 percent of the invoices received within the previous 30-day period
- use checklist to review
- maintain log of Invoices examined
- CO/CS to notify COTR and Contractor of any improper invoices and request correction
- written notification with a suspense date
- Use of the proposed checklist to review invoices
- used by the COTR
- used by CO/CS
- Elements to be reviewed with the proposed checklist include:
- incorporation of required Invoice elements and certification by contractor
- comparison of period of performance billed vs. period of performance ordered
- comparison of hours billed vs. hours ordered
- comparison of overtime billed vs. overtime authorized
- comparison of travel billed vs. travel authorized
- date invoice received/date invoice approved/date invoice paid
- COTR to maintain a log of all invoices received and approved
- copy of DEA-19 and or delivery order
- log by FY with copy of all approved Invoices
- copy of FFS print screen to demonstrate funding and payment
- CO/CS establish system to track and monitor invoices paid during previous month
- Supervisor to evaluate invoice review as a critical element of job performance
FA will also conduct more analysis of the Invoice review and payment process for the linguist support service contracts. The current volume of work, individual delivery order tracking, and case specific requirements will be factored into this additional analysis. It is anticipated this will also assist in identifying if further modification of this review process is required. In addition, as we better understand the review and payment process employed by the COTRs for the linguist contracts, we may be able to revise the process to be more efficient.
- Reestablish hourly rates for linguists in future reimbursable agreements with the [ DELETED ].
Response: An estimated hourly cost will be included In a modification to the FY 2002 reimbursable agreement and future reimbursable agreements with the [ DELETED ]. The estimated hourly cost will be calculated as follows:
[ DELETED ]
- Remedy the $111,842 paid to the [ DELETED ] that exceeded the $1.5 million allowed under the terms of the FY 2000 agreement.
Response: Via memorandum dated November 9, 2000, the [ DELETED ] submitted paperwork to DEA Headquarters, Financial Management Division, to modify the FY 2000 agreement to an estimated amount of $1,611,842.33 (Attachment 4). [ DELETED ] and DEA Headquarters are still working to locate the signed form DOJ-216 for the modification in question. Nonetheless, a new form DOJ-216 will be submitted to retroactively modify the FY 2000 reimbursable agreement and close the file.
- Remedy the $269,476 paid to the [ DELETED ] for: (1) technical and administrative support costs not allowed in the FY 1997, FY 1998, and FY 1999 agreements, and (2) a linguist funded and paid by the Department of Defense (DOD).
Response: 5 (1) Although the positions in question were not specifically identified as "technical support" In the Statement of Work until October 1, 1999, the work and associated costs always supported DEA's linguistics services in furtherance of Title III criminal investigations. The conditions of the reimbursable agreement state that charges for services shall include both direct and indirect costs applicable to the agreement. Technical and administrative support are indirect costs. The [ DELETED ] provided the services, DEA accepted the services, and the Invoices were paid.
5 (2) The OIG questioned costs indicating that a linguist was billed to and paid by both DEA and DOD. The name of the linguist and Public Voucher numbers provided by the OIG were researched by both [ DELETED ] and the [ DELETED ]. This review determined that the amount of $771.99 in question was not charged to DEA. It was charged to DOD only. There is no indication in [ DELETED ] or [ DELETED ] flies that the linguist in question was ever billed to both DEA and DOD.
- Remedy the $63,083 paid to the [ DELETED ] for hours or months worked by part-time linguists that exceeded the terms of the agreements.
Response: The terms of the agreements regarding hours or months to be worked by part-time linguists are based on the average number hours anticipated per employee. There appears to be a misinterpretation on the part of the OIG regarding the State of [ DELETED ] various avenues for hiring part-time employees. The State of [ DELETED ] laws regarding part-time employment are intended to obtain maximum services while engaging a flexible workforce. A part-time employee may not exceed 1,560 hours In a 12-month period, regardless of whether the hours are calculated weekly or monthly. Also, there is no requirement for the weeks or months to be worked consecutively. The State of [ DELETED ] enforces the 1,560-hours rule through payroll employee identification. Each 12-month period and its anniversary are based on the date the employee enters on duty; therefore, nearly all of the part-time employees are on different 12-month cycles.
Based upon a review by [ DELETED ] and [ DELETED ], there Is no Indication that any part-time employee worked in excess of the number of hours permitted. The language in the FY 2002 Statement of Work was simplified to read: "The total number of hours worked by each part-time employee shall not exceed 1,560 hours in a twelve-month period. Each employee's specific workdays and daily hours of duty shall be assigned by the [ DELETED ]." (Attachment 5, Page 2)
- Remedy the $45,163 paid to the [ DELETED ] for travel related expenses not authorized by the agreements.
Response: On April 8, 2002, the OIG provided additional Information to [ DELETED ] regarding this finding. All noted travel costs In question were performed at DEA's request and In support of linguistic services for DEA The Public Vouchers for travel reimbursements provided supporting documentation in the form of travel authorizations, itemized travel vouchers, and receipts. Furthermore, the conditions of the reimbursable agreement state that charges for services shall include both direct and Indirect costs applicable to the agreement. Travel is an indirect cost.
The OIG draft report questions $5,983 in travel expenses and states that the FY 1998 reimbursable agreement stated that travel by full-time civilian personnel shall be funded by the [ DELETED ]. The intent of the FY 1998 reimbursable agreement was for the [ DELETED ] to obtain tickets, provide travel advances, etc., obtain/process travel vouchers, and subsequently bill DEA for the actual amount of travel expenses paid. The travel requirement was clarified In the FY 1999 Statement of Work to read: "Travel by full-time Civilian Personnel, at the request of DEA, shall be funded by the [ DELETED ] and reimbursed under this agreement, in accordance with the Joint Travel Regulations (JTR)." Travel requirements were further defined in subsequent years to accommodate the [ DELETED ] Increasing support to DEA.
The OIG maintains a position that the "technical support" personnel are not authorized in the agreements; therefore, travel In the amount of $29,009.22 for FY 1999 performed by the "technical support" personnel was not eligible for reimbursement. Travel by the "technical support" personnel to various DEA sites and [ DELETED ] was in direct support of Title III monitoring, transcribing, and translating issues and in furtherance of DEA's Title III criminal Investigations.
Travel questioned in the amount of $7,236.68 was for two civilian Spanish linguists to provide on-site support for an active criminal investigation, being conducted by the DEA Casper, WY Resident Office (RO). This was arranged and telephonically approved by an [ DELETED ] Unit Chief, based upon a request by the Casper office for on-site support to an active criminal investigation. Additionally, the travel in question occurred prior to the effective date (December 16, 1998) of the requirement for the [ DELETED ] to fax copies of travel authorizations to DEA.
Travel questioned in the amount of $2,934 because it was not approved in writing by DEA was for:
- [ DELETED ] to the DEA Los Angdes Division ($601) on January 26, 2000. The travel occurred prior to the effective date (March 13, 2000) of the requirement for travel to be approved in writing by DEA.
- On-site civilian Arabic linguist support to the DEA Orlando, FL Resident Office ($141) on August 5,2000. This travel was performed on one day's notice and was telephonically authorized by an [ DELETED ] Unit Chief during the round up of Operation Mountain Express that had to be conducted ahead of schedule due to extenuating circumstances. The reimbursement was for mileage and one night of lodging as the linguist was already in Tampa, FL.
- On-site civilian Vietnamese linguist support to the DEA Houston Division ($2,192) on April 9, 2001. The travel authorization was approved In writing by a DEA [ DELETED ] Assistant Special Agent in Charge. (Attachment 6).
- Remedy the $7,405 paid to the [ DELETED ] for salaries and fringe benefits claimed by the [ DELETED ] personnel, but for which the [ DELETED ] did not provide payroll records to support the payments.
Response: On April 8, 2002, the OIG provided additional Information to [ DELETED ] regarding this finding, which is in reference to Public Voucher No. 99-261 and contains the names of seven civilian linguists. A review of [ DELETED ] and [ DELETED ] files confirmed that the payroll records were attached to Public Voucher 99-261 that was submitted to DEA for payment on September 9, 1999. This appears to be an instance where a page was not copied when the documentation was duplicated for the OIG (Documentation Attachment 7)
- Remedy the $7,295 paid to the [ DELETED ] for average hourly rates paid to the [ DELETED ] personnel that exceeded the terms of the FY1998 and FY 1999 agreements.
Response: As noted under DEA's response to Recommendation 3, the terms of the FY 1998 and FY 1999 agreements were based on average hourly rates and total estimated costs.
- Remedy the $5,838 paid to the [ DELETED ] for monetary awards not allowed in the FY 1999 agreement.
Response: After discussion with the [ DELETED ], DEA agreed that certain employees' performance deserved formal recognition and agreed to reimburse the monetary awards paid to 14 civilian linguists that were billed on Public Voucher No. 99-252. DEA disallowed the awards for four State administrative employees because they were not directly Involved in providing linguistics support to DEA. Three additional awards were billed and paid on Public Voucher No. 99-256. The average amount of the awards was $327.00. Eight of the 17 awards were for $225 each. The nominal amounts of the awards and the small number of awards that were made clearly indicate that the [ DELETED ] was not taking advantage of the reimbursable agreement.
Although the FY 1999 Statement of Work did not specify provisions for monetary awards to [ DELETED ] civilian employees, It included benefits as part of the estimated costs. Performance awards are considered employee benefits and a customary means to attract and retain qualified personnel. This ambiguity was clarified In the FY 2000 Statement of Work, which incorporated specific language for monetary and non-monetary incentive awards for civilian employees, covered under the reimbursable agreement.
- Remedy the $5,804 paid to the [ DELETED ] for administrative costs that were not allowed or exceeded the terms of the FY 1998 and FY 2000 agreements.
Response: FY 1998 was the first full year the reimbursable agreement with the [ DELETED ] was in place. The percentage of the [ DELETED ] overall administrative cost allocation could not be projected prior to entering Into the agreement. Therefore, DEA and the [ DELETED ] agreed to offset the State's administrative cost to support the agreement by funding one-half of the salary of a State administrative assistance who was, in fact, spending half of her time on personnel, accounting, and procurement functions to support the new civilian linguist reimbursement program. When the [ DELETED ] had sufficient history to develop the administrative cost allocation that could be attributed to the reimbursable agreement, it found that the half-salary for the administrative assistant fell short by $4,704 of the amount due.
The OIG states that [ DELETED ] should have been reimbursed $16,500 for administrative cost allocation for FY 2000 Instead of $17,600 and, therefore, was overpaid by $1,100. The $17,600 paid to the [ DELETED ] for the administrative cost allocation for FY 2000 Is an accurate amount based the established rate of 1.1 percent and the actual reimbursed amount of $1,611,842.33.
- Remedy the $3,006 paid to the [ DELETED ] for overtime or compensatory time benefits not allowed by the agreements.
Response: All [ DELETED ] civilian employees assigned to the reimbursable agreement are covered by the Fair Labor Standards Act and applicable State of [ DELETED ] employment laws, rules, and regulations regarding overtime. Under State law, part-time personnel are permitted to work regularly scheduled 40-hour weeks. Additionally, the State of [ DELETED ] defines compensatory time as paid time off at the rate of one and one-half times for each hour worked. (Attachment 8) Employees must be compensated for hours worked In excess of 40 hours per week. The State employment laws prevail, and all overtime and compensatory time earnings billed by the [ DELETED ] were in compliance with State of [ DELETED ] employment laws.
Of the total 17 instances in question where overtime was paid to civilian personnel during FY 1998, FY 1999, FY 2000, and FY 2001, the overtime was worked by 14 different employees and totaled less than 55 hours. The highest number of overtime hours worked by any one individual is 16. This clearly indicates that overtime hours were worked only on those occasions necessary to meet DEA requirements.
The overtime provisions were clarified in the FY 2002 Statement of Work to read: "Authorized overtime for those employees covered by the Fair Labor Standards Act shall not exceed 10 hours per employee per pay period." Both categories of overtime compensation (meaning paid overtime and compensatory time off) must be justified and approved in advance and in writing by the Operations Manager or Assistant Operations Manager. (Attachment 4, Page 2) The FY 2002 Statement of Work will be modified to require that the written overtime approval be attached to the Public Vouchers as supporting payment documentation.
- Establish written procedures for reviewing invoices and overseeing the [ DELETED ] agreements.
Response: The review of [ DELETED ] invoices involved substantially more than verifying the employees' security clearances. [ DELETED ] provided copies of all Public Vouchers and supporting documentation to the OIG at the outset of this audit. Notations throughout, and adjustments when necessary, indicate that DEA closely monitored the costs that were billed by the [ DELETED ]. To strengthen the review and oversight, however, In FY 2001 the [ DELETED ] instituted a policy for [ DELETED ] management staff to review the Public Vouchers aid documentation that are prepared by the [ DELETED ] accounting staff prior to forwarding the Public Vouchers to DEA for payment, in previous years, the accounting staff submitted the Public Vouchers directly to DEA. Language was incorporated into the FY 2002 Statement of Work to formally require [ DELETED ] management to review and sign each invoice for accuracy and completeness prior to forwarding the Invoice to DEA. (Attachment 4, Page 18)
Additionally, on April 3 and 4, 2001, the Special Agent In Charge, [ DELETED ], issued teletypes to DEA Worldwide regarding DEA policy and revised procedures for [ DELETED ] to centrally manage transcription and translation taskings levied on the [ DELETED ]. (Attachments 9).
[ DELETED ] has drafted a checklist for reviewing the [ DELETED ] Public Vouchers that includes the following items:
- Verification of employees' names as belonging to the DEA reimbursable agreement.
- Verification that any "out of cycle payroll processing" fees are incurred at DEA's request (e.g., for a new employee in a low density language, such as Dutch, to report for duty as soon as cleared instead of waiting for the beginning of the next pay period).
- Verification that any travel expenses have the appropriate [ DELETED ] Assistant Special
Agent In Charge signature on the Request for Out of State Travel Authorization forms and the authorization is attached.
- Verification that the State Employee Travel Reimbursement Request and accompanying receipts for airfare, lodging, rental vehicles, taxicabs, etc., are attached.
- Verification that the written approval for overtime (paid overtime or compensatory time earned) is attached.
DEA has reviewed the OIG's recommendations 3-13 and have addressed all the issues related to the "questioned costs". As noted, in all these recommendations the [ DELETED ] provided services in support of DEA's linguistic efforts in furtherance of criminal investigations. A review of the Statements of Work from FY 1997 through the present show a steady progression of changes to clarify the language and strengthen internal controls as the services grew from just 2 people on October 1, 1997 to 130 personnel on board in FY 2002. All of these changes were initiated by DEA and the [ DELETED ] to improve linguistics services available to DEA. In fact, the audit team was very laudatory in its statements regarding the [ DELETED ] during the exit briefing.
In the event you have any questions or require additional information, please Marjorie G. Snider, DEA Audit Liaison at 202-307-4119.
OIG Note: Additional attachments to the consolidated response were too voluminous to incorporate into this report. The attachments may be obtained by contacting the Drug Enforcement Administration.