(EST PUB DATE) SEMIANNUAL REPORT

• Document Type: FOIA
• Keywords: INSPECTOR GENERAL
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0001311511
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 70
• Document Creation Date: June 24, 2015
• Document Release Date: April 14, 2011
• Case Number: F-2007-00194
• Publication Date: December 1, 2003

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Central Intelligence Agency
Inspector General
SEMIANNUAL REPORT
TO THE DIRECTOR OF CENTRAL INTELLIGENCE
JULY - DECEMBER 2003
APPROVED FOR RELEASES
DATE: 25-Feb-2010
I/
John L. Helgerson
Inspector General
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TABLE OF CONTENTS
PAGE
(U) A MESSAGE FROM THE INSPECTOR GENERAL 1
(U) STATUTORY REQUIREMENTS 5
(U) AUDITS 7
(U) AUDIT STAFF OVERVIEW 7
(U) SIGNIFICANT COMPLETED AUDITS 8
(U) STATUS OF SIGNIFICANT RECOMMENDED ACTIONS
OUTSTANDING FROM PREVIOUS SEMIANNUAL REPORTS 16
(U) SUMMARIES OF SELECTED CURRENT AUDITS 29
(U) INSPECTIONS 31
(U) INSPECTION STAFF OVERVIEW 31
(U) COMPLETED INSPECTIONS 32
(U) STATUS OF SIGNIFICANT RECOMMENDED ACTIONS
OUTSTANDING FROM PREVIOUS SEMIANNUAL REPORTS 35
(U) SUMMARIES OF CURRENT INSPECTIONS 41
(U) INVESTIGATIONS 43
(U) INVESTIGATIONS STAFF OVERVIEW 43
(U) SIGNIFICANT COMPLETED INVESTIGATIONS 44
(U) STATUS OF SIGNIFICANT RECOMMENDED ACTIONS
OUTSTANDING FROM PREVIOUS SEMIANNUAL REPORTS 45
(U) SUMMARIES OF SELECTED CURRENT INVESTIGATIONS 46
(U) SPECIAL REVIEWS 51
(U) COMPLETED SPECIAL REVIEWS 51
(U) SUMMARIES OF CURRENT SPECIAL REVIEWS 54
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(U) ANNEX SECTION
(U) STATISTICAL OVERVIEW
(U) COMPLETED AUDITS
(U) CURRENT AUDITS
(U) COMPLETED INSPECTIONS
(U) CURRENT INSPECTIONS
(U) COMPLETED INVESTIGATIONS
(U) CURRENT INVESTIGATIONS
(U) COMPLETED SPECIAL REVIEWS
(U) CURRENT SPECIAL REVIEWS
11
(U) A Message From the
Inspector General
(U The Agency's activities relating
to the war on terrorism and the war in Iraq have
generated a range of novel and complex issues for the
Office of Inspector General (OIG) to review during
this reporting period. In these cases, the challenge
has been to conduct thorough and independent
inquiries that will produce meaningful findings and
recommendations to improve performance in the
long run, while at the same time not unduly
interfering with the ability of the Agency to perform
its vital mission on a day-to-day basis.
(U/ The OIG continues to focus a large proportion of its time
and resources on a number of high-priority special reviews and
investigations. Jointly with the Inspector General of the Department of
State, and with the assistance of the Inspectors General of the Defense
Intelligence Agency and the Department of Energy, we produced a "joint
Report on the Alleged Iraqi Attempts to Procure Uranium From Niger."
The review, undertaken at the request of the Senate Select Committee on
Intelligence (SSCI), assessed the adequacy of efforts performed by the
Intelligence Community to authenticate and analyze the reporting on the
Iraq/Niger matter, the circumstances of the dispatch to Niger of a retired US
ambassador to review the claims, and the manner in which the reporting was
incorporated into a National Intelligence Estimate, other intelligence
products, and speeches of senior US officials. The findings of the inquiry
were briefed to the DCI, the SSCI, and the President's Foreign Intelligence
Advisory Board.
OIG officers, working in coordination with the Department of
Justice op, are investigating selected activities undertaken by Agency
officers as part of the counterterrorist effort in Afghanistan. OIG is also
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concluding an investigation
(LI) The OIG team conducting the Congressionally-directed review of
accountability issues associated with the Agency's handling of developments
related to the events of 9/11 is nearing completion of its work. Despite
having been given access to much of the work product of the earlier Joint
Inquiry by the Intelligence Oversight Committees of the House and Senate,
the OIG team has found it necessary to conduct a substantial amount of
additional research and interviews. The team has coordinated with the DN.
OIG and has also provided support to the ongoing review by the Kean
Commission.
(LI
At Dor s request, we continue a criminal investigation
of certain issues re ated to the management and implementation of the
The DCI,
senior Agency officials, and the chairman and vice chairman of the SSCI
have been briefed on the status of the investigation.
ursuant to our more traditional responsibilities, the OIG has
complete several audits and inspections of key Agency programs and
components. These have included audits of covert action programs, as
mandated by Congress, and inspections of programs and components that
support the Agency's overseas operations, including Global Support, and
the discipline of target analysis. Past inspections of two Agency
components, Africa Division and th found such
notable management and operational success mat tne txecutive Director
recently awarded each of the components a Meritorious Unit Citation. OIG
completed significant work on information technology issues, including the
security of external connections to the Agency's networks, the
communications modernization program, and production of our first annual
independent evaluation of the Agency's information security program called
for by the Federal Information Security Management Act.
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(U) Audit Staff has completed or has underway several financial
audits that will feed into our first-ever audit of the Agency's consolidated
financial statements?in this case, statements for fiscal year 2004. OIG has
worked closely with the Chief Financial Officer to coordinate our respective
actions related to the production and audit of these financial statements by
the deadlines established by the Office of Management and Budget and by
the Congress. This comprehensive audit is scheduled to be completed in
November 2004, and will be conducted annually thereafter.
(U) I am particularly pleased to report that the 01G, for the first time
in many years, ended fiscal year 2003 with a full complement of auditors
and has entered fiscal year 2004 with a budget sufficient to meet the needs of
the office. I extend sincere thanks to the Agency managers and recruiters,
and Members and staff of the Congressional oversight committees who
brought this about. The additional personnel and financial resources will
significantly strengthen our capability to perform audits and inspections,
and to investigate waste, fraud, and abuse. We will recruit a modest
number of additional auditors in the current fiscal year to complete the
expansion of our audit capabilities made necessary when the OIG was
assigned responsibility for auditing the Agency's financial statements. The
office also has initiated a comprehensive review of its information technology
requirements with the aim of developing a strategic investment plan and
related multi-year funding program. This investment will enable the office
to better use technology to manage the growing volumes of information that
must be reviewed and retained to carry out inspections, audits, reviews, and
investigations of Agency programs.
(U) We recently published and distributed our calendar year 2004
Work Plan, which lists the many audits, inspections, and proactive
investigations the OIG will undertake in the coming year. The planning
process focuses our work on the programs and operations of the Agency that
are the most important or, for one reason or another, are perceived to be most
subject to management or other challenges. We have included all matters
mandated by law, and have been guided also by the DCI's Strategic
Direction, Congressional report language, requests of senior Agency
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managers, the findings of completed OIG reviews, and the trends and issues
we observe in the Agency. Copies of our Work Plan are available upon
request, and we welcome your comments or suggestions at any time.
V jonn L. tieigerson
15 January 2004
4
"SE-C-44E.14,
(U) STATUTORY REQUIREMENTS
(U/ This report is submitted pursuant to section 17 of
the CIA Act of 1949, as amended, which requires the Inspector
General to provide to the DCI, not later than 31 January and 31 July
of each year, a semiannual report summarizing the activities of the
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 IC did not issue
(U) Legislative Proposals
(U) OIG has no proposals for legislative changes.
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""SESRET/
(U) AUDITS
(1.1) AUDIT STAFF OVERVIEW
(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 joint reviews of Intelligence Community
programs and activities and responds to requests for audits or
reviews from Congressional and Executive Branch officials. In the
last six months, the Audit Staff has completed evaluations and audits
of Agency programs and activities, financial management, and
information technology issues.
(U) The Audit Staff continues to focus on three significant
issues that have been mandated either by the Congress or through
statute: (1) auditing the Agency's fiscal year (FY) 2004 financial
statements, (2) providing continuing oversight of covert action
programs, and (3) evaluating the Agency's information security
program. The audit of the Agency's FY 2004 financial statements is
under way and will continue through November 2004. The Audit
Staff continued its aggressive audit schedule of covert action
programs: audit fieldwork was completed on two covert action
programs and an audit of one of the Agency's largest covert actions
began in November 2003. The first independent evaluation of the
Agency's information security program required by the Federal
Information Security Management Act was completed in September
2003.
(U/ A robust recruiting effort over the past several
years has resu es m the Audit Staff having a full complement of
auditors who possess a wide range of skills and experience to
provide oversight of the important issues facing the Agency. The
Staff continues to recruit auditors with information technology and
other unique skills to ensure that it will have the needed resources to
meet its obligatory audit responsibilities.
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(U) SIGNIFICANT COMPLETED AUDITS
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(U) 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) INSPECTION STAFF OVERVIEW
(U/ The Inspection Staff is responsible for conducting
inspections of Agency programs and operations to evaluate their
efficiency and effectiveness and their compliance with law, Executive
orders, and regulations.
(U/ During the current reporting period, the Staff
completed inspections of Global Support, Target Analysis, and one
special review. The Staff is nearing completion of the inspections of
Cover Management, Information Security, and the Directorate of
Operations' (DO) Central Eurasia Division. In addition, the Staff
continues work on one special review and began inspections of the
DO's National Resources (NR) Division and
and the Directorate of Intelligence's (DI) Offices
of I ransnational Issues (OTT) and Policy Support (OPS).
(U/ The Inspection Staff continues to conduct a two-
week course for new inspectors and a seminar for team leaders before
the start of each inspection cycle. The Staff also conducts seminars
for OIG inspectors and research assistants during the course of each
cycle, instituted in response to the increasing sophistication of our
methodology. These seminars build on the New Inspectors' Training
Course and address topics such as interview strategy, the
exploitation of databases, electronic focus group methodology,
research and analysis, process mapping, graphic production, and
constructing sound Findings and Recommendations.
(U/ In addition, the Inspection Staff continues to reap
the benefits of utilizing an independent contractor to track, monitor,
and pursue the compliance with recommendations. As a result, the
Staff has closed six inspections that were open as of 1 July 2003.
31
(U) COMPLETED INSPECTIONS
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(U) SUMMARIES OF CURRENT INSPECTIONS
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(U) INVESTIGATIONS
(U) INVESTIGATIONS STAFF OVERVIEW
(U The Investigations (INV) Staff investigates
possible violations of statutes, regulations, policies, and procedures,
as well as allegations of waste, fraud, mismanagement, abuse of
authority, and substantial dangers to public health and safety related
to Agency programs and operations. The INV Staff also oversees the
Agency's grievance system and conducts proactive initiatives aimed
at detecting and preventing fraud, waste, and abuse.
More than half of the Staff's resources are devoted to high
priority investigations or special reviews. These include a review of
certain post-9/11 counterterrorism responsibilities; an investigation
into the circumstances of an overseas training exercise that resulted
in a fatality; an investigation of selected activities undertaken by
Agency officers as part of the counterterrorist effort in Afghanistan;
an investigation of an "Urgent Concern" filed under section 17(d)(5)
of the CIA Act of 1949, as amended, alleging retaliation against a
whistleblower; and an investigation of the procedures involved in the
Many of
tnese special inquiries are nearing completion.
(U/ The Staff has initiated a number of investigations
regarding fabrication of security background investigations and
Federal Employees' Compensation Act (FECA) payments for
potential fraud. An Agency employee and three independent
contractors working on an Agency contract allegedly submitted false
claims and fabricated interview reports while conducting security
background investigations. Another individual, a former Federal
agent who served as an independent contractor on an Agency
contract, recently pled guilty to knowingly making false statements
in the submission of background investigations on current and
prospective employees of the US Government. He was sentenced to
one year supervised probation, ordered to pay restitution of $20,800,
43
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and fined $1,000. INV is also investigating, under the direction of the
Department of Justice (DoD, three significant, potential FECA fraud
cases.
(U The Staff oversees the Agency-wide grievance
system. e investigator who served as the focal point for all
grievance-related matters retired after serving in that capacity for
seven years. Another investigator assumed responsibility for the
function in June. OIG issued a revised Agency regulation on
grievance resolution, which sets forth the basic rules applicable to the
presentation and handling of grievances.
ap SIGNIFICANT COMPLETED INVESTIGATIONS
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(U) STATUS OF SIGNIFICANT RECOMMENDED ACTIONS OUTSTANDING
FROM PREVIOUS SEMIANNUAL REPORTS
(U) SUMMARIES OF SELECTED CURRENT INVESTIGATIONS
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(U) SPECIAL REVIEWS
(U/ Special reviews are undertaken by ad hoc teams
under the leadership of a senior OIG officer to address issues of
special concern identified by Congress, senior CIA leaders, or the
Inspector General. During this period, the OIG completed a joint
Report of the Alleged Iraqi Attempts to Procure Uranium From Niger;
began a joint peer review of the National Reconnaissance Office
(NRO), Office of Inspector General; and continued work on two
ongoing special reviews.
(U) COMPLETED SPECIAL REVIEWS
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(U) SUMMARIES OF CURRENT SPECIAL REVIEWS
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(U) STATISTICAL OVERVIEW
(U) Audit Staff
(U During the period 1 July to 31 December 2003, the
Audit Sta issue ? 0 reports and made 37 recommendations to
improve accounting and financial management, information systems
security, supply management and program effectiveness, and general
management.
(U) The Audit Staff had 23 audits and reviews ongoing at the
end of the reporting period.
(U) Inspection Staff
During the last six months of 2003, the Inspection Staff
comp e ed two inspections?Global Support and Target Analysis?
and one special review, Joint Report of the Alleged Iraqi Attempts to
Procure Uranium From Niger. The Staff also had seven ongoing
inspections at the end of the reporting period that include reviews of
the Information Security, Cover Management, Central Eurasia
Division/DO, National Resources Division/DO, the Office of
Transnational Issues/DI, the Office of Policy Support/DI, and an
inspection of the Resource, Policy and Plans arm of the DO. The Staff
also closed six inspections during this period: Budget Formulation
and Execution (December 2001), Leadership Analysis (December
2001), CIA's Approach to Warning (May 2002), Collection
Requirements and Evaluation Staff/DI (June 2002), Exploitation of
Technical Tools (September 2002), and Africa Division/DO (June
2003).
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(U) Investigations Staff
(U/ The Investigations Staff completed work on 136
matters of various types during this reporting period. Of this
number, 27 cases were of sufficient significance to be the subject of a
final report-14 Reports of Investigation and 13 Disposition
Memoranda.
(U/ During this period, the IG formally referred
12 matters to ased upon a reasonable belief that violations of
Federal criminal law may have been committed.
(U/ Recoveries on behalf of the US Government
during this reporting period, as a result of the Investigations Staffs
efforts, totaled $15,000.
(U As of 31 December 2003, 76 matters were in
various stages of review by the Investigations Staff.
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(U) COMPLETED AUDITS
1 July ?31 December 2003
(U) Financial Management
(U) Foreign Broadcast Information Service -
Financial and Acquisition Management at
(U) The Agency's Fund Balance With Treasury
(U) Payroll Expense Processing and Reporting
(U) Operations
(U) Financial and Other Administrative Aspects of a Sensitive
Project in the Information Operations Center
(U) Procurement and Technology
(U) Communications in the 21st Century Program
(U) Security of External Connections to the Agency Data
Services Network
(U) Independent Evaluation of the CIA Information Security
Program and Practices Required by FISMA
(U) Joint Review of the Inventory of Assets of the
Program Office
(U) Other
(U) External Quality Control ? Security Program Evaluation and
Assessment Division, Office of Security and Intelligence
Oversight, Department of State Office of Inspector General
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(U) CURRENT AUDITS
31 December 2003
(U) Financial Management
(U) Agency Bank Accounts
(U) Central Intelligence Agency Retirement and Disability
System (CIARDS)
(U) Environmental Liabilities, Other Liabilities, and
Commitments and Contingencies
(U) Administration of Transactions With Other Government
Agencies
(U) Adequacy of Documentation Supporting Financial
Transactions
(U) Financial Management System Year-end Closing Process
(U) The Agency's Fiscal Year 2004 Financial Statements
(U) Operations
(U) Review of the National HUMINT Requirements Tasking
Center
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(U) CIA Support to Federal Agencies Responsible for Issuing
Deemed Export Licenses
(U) Procurement and Technology
(U) Directorate of Operations Operational Records System-
Starbase
(U) Service Contracts
(U) Use of Agency Vehicles
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(U) COMPLETED INSPECTIONS
1 July ?31 December 2003
(U) Target Analysis
(U) Global Support (GS) Mission Support Office
(U) CURRENT INSPECTIONS
31 December 2003
(U) Central Eurasia Division, Directorate of Operations
(U) Cover Management
(U) Information Security
(U
Intelligen
(U/
Intelligence
(U/
Operations
Office of Transnational Issues, Directorate of
Office of Policy Support, Directorate of
National Resources Division, Directorate of
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(U) COMPLETED INVESTIGATIONS
1 July ?31 December 2003
(U) Alleged Embezzlement
(U) Alleged Federal Employees' Compensation Act Fraud
(U) Alleged Gratuities Solicitation
(U) Alleged Improper Relationship Between a Contracting Officer's
Technical Representative and an Agency Contractor
U Alle ed Misconduct of Agency Officers
(U) Alleged Misuse of Government Computer
(U) Alleged Misuse of Government Equipment and Potential Time
and Attendance Fraud
(U) Alleged Nepotism
(U) Alleged Procurement Fraud
* (U) These investigations resulted in a Disposition Memorandum rather than a Report of
Investigation.
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U Alle ed Re ulatory Violation
(U) Alleged Time and Attendance Fraud
(U) Alleged Voucher Fraud
(U) Conflict of Interest
(U) Fraudulent Receipt of Agency Funds
(U) Management Culpability in Time and Attendance Fraud
U Misuse of Government Equipment
(U) Privacy Act Violation
U Re ? ulator Violation
(U) Review of Agency-Administered Annuity Payments
(U) Time and Attendance Fraud
U Voucher Fraud
(U) CURRENT INVESTIGATIONS
As of 31 December 2003
Category Number of cases
Grievances
Assignment
Management and Supervision - Grievance
General Investigations
1
2
Criminal and Prohibited Acts
Conflicts of Interest 10
Embezzlement 4
False Claims ? Other 8
False Claims/Statements/Vouchers 3
False Claims - Time & Attendance 10
False Claims ? Visa/Passports 1
Firearms 1
Management and Supervision ? Administrative 1
Megaprojects 1
Misconduct ? Employee 4
Misconduct ? Management 2
Procurement Fraud 10
Retaliation 1
Regulatory Violations 1
Theft and Misuse of Government Property 1
Waste 1
Other - Administrative/Criminal 13
Unsubstantiated Allegations 1
Total Ongoing Cases 76
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(U) COMPLETED SPECIAL REVIEWS
1 July ?31 December 2003
(U) Joint Report of the Inspectors General on the Alleged Iraqi
Attempts to Procure Uranium From Niger
(U) CURRENT SPECIAL REVIEWS
31 December 2003
(U) Peer Review of the NRO Office of Inspector General
(U/ Special Review of Accountability of the Findings
and Recomm.en ations From the Joint Inquiry Report on 9/11
Special Review of Management Practices Associated With a
Counterterrorism Covert Action Program