(EST PUB DATE) SEMIANNUAL REPORT

• Document Type: FOIA
• Keywords: INSPECTOR GENERAL
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0001311498
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 89
• Document Creation Date: June 24, 2015
• Document Release Date: April 14, 2011
• Case Number: F-2007-00194
• Publication Date: December 1, 2001

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Central Intelligence Agency
Inspector General
SEMIANNUAL REPORT
TO THE DIRECTOR OF CENTRAL INTELLIGENCE
JULY ? DECEMBER 2001
APPROVED FOR RELEASED DATE:
25-Feb-2010
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Acting veputy inspector General
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TABLE OF CONTENTS
PAGE
(U) A MESSAGE FROM THE ACTING DEPUTY
INSPECTOR GENERAL 1
(U) STATUTORY REQUIREMENTS 5
(U) AUDITS 7
SIGNIFICANT COMPLETED AUDITS AND OTHER REVIEWS 8
STATUS OF SIGNIFICANT RECOMMENDED ACTIONS
OUTSTANDING FROM PREVIOUS SEMIANNUAL REPORTS 21
SUMMARIES OF SELECTED CURRENT AUDITS 31
(U) INSPECTIONS 33
SIGNIFICANT COMPLETED INSPECTIONS AND OTHER
REVIEWS 33
STATUS OF SIGNIFICANT RECOMMENDED ACTIONS
OUTSTANDING FROM PREVIOUS SEMIANNUAL REPORTS 56
(U) INVESTIGATIONS 63
SIGNIFICANT COMPLETED INVESTIGATIONS AND OTHER
REVIEWS 64
STATUS OF SIGNIFICANT RECOMMENDED ACTIONS
OUTSTANDING FROM PREVIOUS SEMIANNUAL REPORTS 71
SUMMARIES OF SELECTED CURRENT INVESTIGATIONS 72
(U) ANNEX SECTION
STATISTICAL OVERVIEW
COMPLETED AUDITS AND REVIEWS
CURRENT AUDITS AND REVIEWS
COMPLETED INSPECTIONS AND REVIEWS
CURRENT INSPECTIONS
COMPLETED INVESTIGATIONS
CURRENT INVESTIGATIONS
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(U) A Message from the
Acting Deputy Inspector General
Inspector General
(U) The catastrophic events of 11 September
have provided unprecedented challenges for the
entire nation and the Agency. While the Agency's
surge in support of the war on terrorism has
rightly consumed the lion's share of Agency
resources and attention, it has had little impact on
the work of the Office of Inspector General (OIG).
During the last six months, OIG continued its
efforts under the superb leadership of Deputy
The OIG and the Agency owe a
debt of gratitude for her efforts to maintain the high quality and relevance of
OIG's work in the full year since the departure of our statutory Inspector
General (IG). She will be missed, and we wish her well in her future
endeavors.
(U) Although some adjustments to the OIG audit and inspection
schedule became necessary as a result of 11 September, and travel was
curtailed for a short period of time, we have since resumed all activities. We
continue to have regular access to senior Agency leadership, including the
DCI, and support for and interest in our work from the Agency's Executive
Director has never been greater. In fact, the Executive Director has
regularly emphasized the need to continue the full range of business
activities of the Agency amidst the counterterrorism surge. He has made it
known that those activities include a rigorous program of OIG oversight and
continuous evaluation of the Agency's mission and mission support
activities.
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(U) The OIG has continued to focus its efforts on evaluating how the
Agency manages its resources and all three of its Staffs?Audit, Inspection
and Investigations?are engaged in activities designed to help the Agency
improve its efficiency and effectiveness. Those activities, and managements'
responses, are described in detail in this Report.
During this reporting period, the OIG worked on projects that are
relevan o the Agency's post-11 September challenges. For example, an
inspection of the DCI Counterterrorist Center (CTC), issued prior to
11 September, found that CTC's analytic element was understaffed and
unable to perform long-term analysis that could identify trends; that the
reporting threshold was too low to allow consumers to distinguish threat
levels; and that CTC employees were working "burnout" hours and
struggling with a volume of information collected that was too large to
exploit. Changes since 11 September have addressed many of these issues:
CTC 's analytic corps has been quadrupled; supplemental funding has offset
resource shortfalls; and staffing increases have permitted 24/7 coverage.
(U) The Agency's counterterrorist activities and related funding will
most certainly drive a significant portion of OIG work planned for calendar
year 2002. Senior Agency leadership has expressed an interest in the OIG
becoming actively engaged in assessing how well the Agency is managing
the increased resources provided by the Congress; how the Agency has
managed major shifts in its workload; and the impact that the overall surge
has had on other Agency activities. These efforts and others will require that
we plan our reviews carefully to minimize their impact on critical Agency
operations.
(U) Finally, the OIG has experienced significant turnover at its
senior levels since our last report. In addition to the retirement of the
Deputy Inspector General and my designation to serve in that position on
an acting basis, we have a new Assistant IG for Audit and an Acting
Deputy Assistant IG for Investigations. We are quite fortunate to have
these experienced officers to take over these positions at this critical
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juncture, and I am certain that their energy and commitment to the work of
the OIG will be great assets as we face new challenges in the year ahead.
Nevertheless, we continue to look forward to the selection of a
Presidentially-appointed, Senate-confirmed IG to ensure continued, long-
term success of our independent oversight function at the Agency.
3
31 January 2002
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(U) STATUTORY REQUIREMENTS
(U/ This report is submitted pursuant to section 17 of
the CIA Act of 194, as amended. That section requires the Inspector
General to provide to the Director of Central Intelligence (DCI), not
later than 31 January and 31 July of each year, a semiannual report
summarizing the activities of the Office of Inspector General (OIG)
for the immediately preceding six-month periods, ending
31 December and 30 June, respectively.
(U) All audit activities of the OIG are carried out in accordance
with generally accepted government auditing standards. All OIG
inspection and investigation activities conform to standards
promulgated by the President's Council on Integrity and Efficiency.
(U) The OIG has had full and direct access to all Agency
information relevant to the performance of its duties.
(U) Subpoena Authority
(U/
any subpoenas.
During this reporting period, the IG did not issue
(U) Legislative Proposals
(U) OIG has no proposals for legislative changes.
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(U) AUDITS
(U) The Audit Staff conducts performance, financial-related,
and financial statement audits of Agency programs and activities. In
addition, the Audit Staff provides oversight of Agency interests
through its participation in reviews sponsored by the Intelligence
Community Inspectors General Forum and responds to special
requests from Congressional and Executive Branch officials.
(U/ In the last six months, the Audit Staff has focused
its efforts on a wi e range of financial management and information
technology subjects, evaluations of Agency programs and activities,
and oversight of field stations. The Staff continued to assist the Chief
Financial Officer (CFO) in moving toward the preparation of
auditable financial statements by completing an audit of the Agency's
Fund Balance with Treasury and conducting an audit of Cash and
Other Monetary Assets. Audits planned for the coming year will
focus on other financial statement areas, with a goal of preparing the
Agency for an audit of its fiscal year 2004 financial statements.
(U/ In the information technology area, the Staff
complete the irst audit required by the Government Information
Security Reform Act, which mandates that government agencies
perform an annual independent evaluation of their information
security program and practices. For national security systems, the
evaluation must be audited by the Inspector General. In addition to
that review, the Staff is currently involved in two systems audits as
well as an audit of the Agency's system certification and
accreditation process. The Audit Staff plans to continue expanding
its expertise in the information technology area through focused
training and recruitment.
n Recently, additional requirements have been levied on the
AuditSfaff by Congressional oversight committees. The Staff has
been tasked with stepping up its oversight of Agency covert action
programs, especially in light of the events of 11 September 2001. The
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Agency has also been directed to obtain an audit of its financial
statements by March 2005, which the OIG must either conduct or
direct.
(U) SIGNIFICA1VT COMPLETED AUDITS AND OTHER REVIEWS
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(11) STATUS OF SIGNIFICANT RECOMMENDED ACTIONS OUTSTANDING
FROM PREVIOUS SEMIANNUAL REPORTS
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(U) SUMMARIES OF SELECTED CURRENT AUDITS
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(U) INSPECTIONS
(U/ The Inspection Staff is responsible for conducting
inspections o A gency programs and operations to evaluate their
efficiency and effectiveness and their compliance with law, Executive
orders, and regulations.
The Inspection Staff has adopted a new, more flexible
approach to scheduling its work. During a seven-month cycle
(February-August), inspection teams conduct either a single major
inspection or several smaller, less time-consuming inspections; the
second cycle (September-January) remains five months in length.
During the most recent cycle, the Staff has been working on five
inspections: the Agency's Warning Capability; Collection
Requirements and Evaluation Staff;
and SIS
Promotion Policy. A study to determine the scope of the next cycle's
major inspection of counterintelligence was also completed.
(U The Inspection Staff continues to conduct a two-
week course or new inspectors and a seminar for team leaders before
the start of each inspection cycle. In addition, in order to increase the
sophistication of its methodology, the Staff has instituted a series of
functional seminars for all OIG inspectors and research assistants.
These seminars build on the new inspectors' course and address
topics such as interview methodology, techniques for scoping an
inspection, information technology, research and analysis, and report
drafting.
(LI) SIGNIFICANT COMPLETED INSPECTIONS AND OTHER REVIEWS
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(U) STATUS OF SIGNIFICANT RECOMMENDED ACTIONS OUTSTANDING
FROM PREVIOUS SEMIANNUAL REPORTS
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(U) INVESTIGATIONS
(U/ The Investigations Staff is responsible for
investigating possible violations of statutes, regulations, policies, and
procedures, as well as potential waste, mismanagement, abuse of
authority, or substantial dangers to public health and safety
connected with Agency programs and operations. The Investigations
Staff is also responsible for general oversight of the employee
grievance system and for making recommendations regarding
appeals of decisions of various Agency boards.
(U/ In addition to its focus on criminal and
administrative investigations, the Investigations Staff has worked on
internal process improvements during this reporting period. The
Investigators Manual has been updated and there is an ongoing effort
to revise policies and procedures. A training group has been
established to identify core training requirements and to plan and
facilitate mandatory training. There is also a concerted effort to
identify, document, and track best management practices, and couple
diversity initiatives with continuous improvement principles.
(U/ With respect to proactive initiatives, the
Investigations a f has launched a review to assess the prevalence of
time and attendance abuse in the Agency. In addition, the Staff's
proactive approach to contract fraud issues is paying dividends as
evidenced by recent felony plea agreements and the identification of
potential new cases.
(U/ The Staff's grievance unit continues to oversee the
Agency-wi e grievance system, which is designed to resolve
grievances at the lowest possible level in the organization. The
grievance team conducts one-day grievance resolution training
workshops for component grievance counselors and directorate
grievance officers at least once a year. In March and October 2001,
workshops were presented for approximately 40 officers. Additional
training in interviewing techniques and in dealing with difficult or
angry employees was also sponsored by OIG. This training, together
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with the emphasis on informal resolution at the lowest possible level,
has contributed to a significant reduction in the number of formal
grievances filed by employees.
(U) SIGNIFICANT COMPLETED INVESTIGATIONS AND OTHER REVIEWS
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(U) STATUS OF SIGNIFICANT RECOMMENDED ACTIONS OUTSTANDING
FROM PREVIOUS SEMIANNUAL REPORTS
71
(II) SUMMARIES OF SELECTED CURRENT INVESTIGATIONS
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STATISTICAL OVERVIEW
(U) Audit Staff
(U/ During the period 1 July to 31 December 2001, the
Audit Staff issued 16 reports and memoranda and made 39
recommendations to improve accounting and financial management,
supply and property management, information systems, general
management, and procurement management.
The Audit Staff had 24 audits ongoing at the end of the
reporting period. Seven of the audits involve Agency field stations.
The remaining efforts address topics such as the Agency's corporate
development training program, covert procurement activities, form
and content of Agency financial statements, and the defector
resettlement program.
(U) Inspection Staff
During the last six months of 2001, the Inspection Staff
completed eight inspections and two scoping studies?one of which
led to a decision to postpone an inspection of thE
and the other as a precursor to a full inspection of
which will be
aone m tne
(U) Investigations Staff
(U/ The Investigations Staff completed work on 105
matters of various types during this reporting period. Of this
number, 17 cases were of sufficient significance to be the subject of a
final report-12 Reports of Investigation and 5 Disposition
Memoranda.
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(U/ Recoveries on behalf of the US Government
during this reporting period, as a result of the Investigations Staff's
efforts, totaled approximately $35,250. This figure is the result of
cases closed during this reporting period. An ongoing case has
resulted in the recovery of $159,957.30.
(U/L During this period, two matters were referred
formally to t e epartment of Justice based upon a reasonable belief
that violations of Federal criminal law may have been committed.
(U/ As of 31 December 2001,79 matters were in
various stages o review by the Investigations Staff.
(U) COMPLETED AUDITS AND REVIEWS
1 July - 31 December 2001
(U) Financial Management
(U) Survey of the Oversight of Field Station Financial
Administration
(U) The Agency's Fund Balance With Treasury
(U) Operations
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(U) Personnel and Security
(U) Survey of the Administrative Resources Center
(U) Administration of Personnel Overtime Compensation
(U) Procurement and Technology
(U) Contracting With Independent Contractors
(U) Survey of Internet Requirements and Implementation
(U) Intelligence Community Chief Information Officer's
Independent Evaluation of the Central Intelligence Agency
Security Program and Practices Required by the
Government Information Security Reform Act
(U) CURRENT AUDITS AND REVIEWS
31 December 2001
(U) Financial Management
(U) Audit of Cash and Other Monetary Assets
(U) Fiscal Year 2001 Financial Statements of the Central
Services Working Capital Fund
(U) Form and Content of the Agency's Fiscal Year 2001
Financial Statements
(U) Operations
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(U) Operations (continued)
Covert Action Activities Conducted Under the
(U) Personnel and Security
(U) Corporate Development Training Courses Provided by the
Office of Training and Development
(U) Administration of the Security Protective Service
Administration of the Agency's Surveillance Detection
Training
(U) Thrift Savings Plan for Calendar Years 1997 - 2001
(U) Procurement and Technology
(U) Outsourcing of Agency Processes and Functions
(U) Travel Reengineering, Integration, Automation, and
Development System (TRIAD)
(U) Agency Information Systems Certification and
Accreditation Process
(U) Review of the Agency's Time and Attendance Systems
(U) COMPLETED INSPECTIONS AND REVIEWS
1 July -31 December 2001
(U) Counterterrorist Center (CTC)/DO
(U) Budget Formulation and Execution
(U) Information Management Staff/DO
(U) Near East and South Asia Division/DO
(U) Office of Russian and European Analysis/DI
(U) Scientific, Technical, and Weapons Analysis
(U) Office of Congressional Affairs
(U) Leadership Analysis in the Directorate of Intelligence
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(U) CURRENT INSPECTIONS
31 December 2001
Agency's Warning Capability
Collection Requirements and Evaluation Staff, DI
Asset Validation
SIS Promotion Policies
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(U) INVESTIGATIONS COMPLETED
1 July ?31 December 2001
(U/ Allegation of Operations Conducted in Conflict with
Executive Order 12333
(U) Alleged Agency Policy Violation
U Alle ed Contract Im r ieties
lleged Improper Applicant Processing of Senior
U Alle ed Post Employment Conflict of Interest
(U) Alleged Mischarging of Contract Costs
(U) Alleged Theft of Government Property
(U) Alleged Violation of Law While Serving at Another Federal
Agency
(U) Conversion of Government Funds
* (U) These investigations resulted in a Disposition Memorandum rather than a Report of
Investigation.
(U) Misuse of Agency Vehicle
(U) Misuse of Government Property
(U) Time and Attendance Abuse
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(U) CURRENT INVESTIGATIONS
As of 31 December 2001
Category Number of cases
Grievances
Board Appeals 3
Management and Supervision 3
Retirement/Separation 1
Other 1
General Investigations
Criminal and Prohibited Acts
Conflicts of Interest 7
Embezzlement 1
False Claims/ Statements /Vouchers 1
False Claims - Frequent Flyer Misuse 1
False Claims - Other 4
False Claims - Time & Attendance 13
Megaprojects 2
Misconduct - Employee 1
Misconduct - Management 2
Procurement Fraud 22
Regulatory Violations 1
Theft and Misuse of Government Property 7
Unsubstantiated Allegations 3
Waste 2
Other - Administrative/Criminal 4
Total Ongoing Cases 79
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