jurisdiction: US

text: b'Office of Inspector General\nU.S. General Services Administration\n\n\n\nSemiannual Report\nto the Congress\nApril 1, 2006 - September 30, 2006\n\x0cGSA\xe2\x80\x99s SIGNIFICANT MANAGEMENT CHALLENGES\nThe Congress requested the Inspectors General of major Federal agencies to report on the most\nsignificant management challenges facing their respective agencies. Our strategic planning\nprocess commits us to addressing these critical issues. The following table briefly describes the\nchallenges we have identified for GSA and references related work products issued by the GSA OIG\nand discussed in this semiannual report.\n\nCHALLENGES BRIEF DESCRIPTION OF CHALLENGE PAGE\n\nACQUISITION Merging GSA\xe2\x80\x99s procurement organizations will yield a 2\xe2\x80\x93 4\nPROGRAMS single acquisition service that will award and administer\n governmentwide contracts worth $40 to $50 billion.\n With growing programs and shrinking numbers of\n qualified acquisition personnel, attention to important\n fundamentals, such as ensuring competition and\n meaningful price analysis, has diminished.\n\nCONTRACT GSA\xe2\x80\x99s multibillion dollar acquisition programs have 4 \xe2\x80\x936\nMANAGEMENT expanded rapidly in terms of sales, variety, and complexity\n of the procurements performed. A growing list of warning\n signs throughout the acquisition process suggests that\n the technical and management skills needed by the\n procurement workforce to operate in this more\n sophisticated arena are not keeping pace with these\n new demands.\n\nINFORMATION Technology applications have increased exponentially 6 \xe2\x80\x938\nTECHNOLOGY as \xe2\x80\x9cE-Gov\xe2\x80\x9d is used to better manage operations and\n interface with the public, but complex integration and\n security issues exist.\n\nMANAGEMENT Management controls have been streamlined, resulting 8 \xe2\x80\x93 10\nCONTROLS in fewer and broader controls, making it essential that\n the remaining controls be emphasized and consistently\n followed. The need for strong internal controls underlies\n several of the other management challenges.\n\nHUMAN CAPITAL GSA has an aging workforce and is facing significant loss 10 \xe2\x80\x93 11\n of institutional knowledge due to retirements, including a\n loss of key management staff over the past year. Better\n recruitment and training programs are needed to develop\n the 21st century workforce.\n\nPROTECTION OF GSA is responsible for protecting the life and safety of No\nFEDERAL FACILITIES employees and public visitors in Federal buildings. The Reports\nAND PERSONNEL increased risks from terrorism have greatly expanded the This\n range of vulnerabilities. A broadly integrated security Period\n program is required.\n\nAGING FEDERAL GSA is being challenged to provide quality space to No\nBUILDINGS Federal agencies using an aging, deteriorating inventory Reports\n of buildings and facing critical budgetary limitations in This\n its modernization program. Period\n\x0c Foreword\n\n\nI am pleased to report to the people of the United States and their\nrepresentatives in Congress that the Office of Inspector General (OIG) at\nGSA has continued to work hard on your behalf to identify waste, fraud, and\nabuse in programs managed by the General Services Administration. For\nthe period covered by this semiannual report (SAR), over $622 million has\nbeen identified as funds recommended for better use or questioned costs.\nThe OIG has issued 70 audit reports and made 337 referrals for criminal\nprosecution, civil litigation, and/or administrative action. These activities are\nvaluable in their own right, as well as for their deterrent effect.\n\nThe Office of Inspector General, in conjunction with the Department of\nJustice, just achieved the largest recovery in a civil settlement under the\nFalse Claims Act in the history of GSA\xe2\x80\x99s Multiple Award Schedules (MAS)\nprogram\xe2\x80\x94a $98.5 million dollar recovery from the Oracle Corporation for\nPeopleSoft\xe2\x80\x99s defective pricing of sales under GSA\xe2\x80\x99s MAS Program (to be\ndiscussed in more detail in the next SAR). GSA\xe2\x80\x99s MAS contracting\nprogram\xe2\x80\x94with sales of well over $30 billion in the last fiscal year\xe2\x80\x94depends\non vendors\xe2\x80\x99 honesty in price negotiations. PeopleSoft misled and\novercharged the government for years. Without the OIG\xe2\x80\x99s auditors\xe2\x80\x99\nspecialized training and years of experience examining GSA\xe2\x80\x99s MAS pricing\narrangements, the overcharging could have continued far beyond the\namount recovered. The OIG\xe2\x80\x99s preaward and postaward audits have saved\nthe taxpayers billions of taxpayer dollars over the years (approximately\n$1.6 billion in just the past 18 months). All of these results provide to the\nAmerican taxpayer a return of many times the cost of OIG operations.\n\nLooking ahead, we will continue the audit and investigative initiatives which\nserve the people of the United States, and will be adding to them in the\nfollowing ways:\n\n\xe2\x80\xa2 Homeland Security. GSA OIG will be doing more to improve the Nation\xe2\x80\x99s\n homeland security, in a series of activities planned in cooperation with the\n OIG of the Department of Homeland Security.\n\n\xe2\x80\xa2 National Procurement Fraud Task Force. The GSA OIG has increased\n coordination with other agencies to increase the prosecution of\n procurement fraud. I worked with the Justice Department and a number\n of fellow Inspectors General to develop a National Procurement Fraud\n Task Force, of which I serve as the Vice Chair. The Task Force will help\n protect American taxpayers by increasing the deterrence and\n effectiveness of sanctions imposed on parties found guilty of procurement\n fraud.\n\n\xe2\x80\xa2 Computer Crime. We are developing ways to improve the reporting of\n computer crime in which the American people are victimized by electronic\n fraud and other offenses against Federal E-Gov applications. Improved\n reporting will facilitate the government\xe2\x80\x99s ability to prevent and punish\n computer crime and protect individuals\xe2\x80\x99 private information entrusted to\n the government.\n\x0c\xe2\x80\xa2 Suspension and Debarment. The OIG will continue to focus on whether\n GSA\xe2\x80\x99s actions on suspension and debarment recommendations from the\n OIG are timely and adequate to maintain the integrity of the contractor\n pool eligible to receive public funds for performing tasks.\n\nIG Independence\nThe independence of the Office of Inspector General is essential to carrying\nout objective audits and investigations per the mandate of the Inspector\nGeneral Act of 1978, as amended. It is also an asset to GSA in providing a\nsource of credibility in those cases where it can vouch for the efforts of the\nAgency to improve its practices, as in the \xe2\x80\x9cGet It Right\xe2\x80\x9d training effort that\nformer GSA Administrator Perry initiated.\n\nI want to express my appreciation to Congress and OMB and senior GSA\nstaff who have worked with us in achieving our tremendous results for the\ntaxpayer.\n\n\n\nBrian D. Miller\nInspector General\nOctober 31, 2006\n\x0c Table of Contents\n\n Page\n\nSummary of OIG Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .v\n\nFiscal Year 2006 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vi\n\nExecutive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii\n\nOIG Organization Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiv\n\nOIG Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1\n\nManagement Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2\n\n Acquisition Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2\n\n Contract Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4\n\n Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6\n\n Management Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8\n\n Human Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10\n\nPromoting and Protecting Integrity . . . . . . . . . . . . . . . . . . . . . . . . . .12\n\nGovernmentwide Policy Activities . . . . . . . . . . . . . . . . . . . . . . . . . . .26\n\nProfessional Assistance Services . . . . . . . . . . . . . . . . . . . . . . . . . . .28\n\nStatistical Summary of OIG Accomplishments . . . . . . . . . . . . . . . . .30\n\nAppendices\n\nAppendix I \xe2\x80\x93 Significant Audits from Prior Reports . . . . . . . . . . . . .37\n\nAppendix II \xe2\x80\x93 Audit Report Register. . . . . . . . . . . . . . . . . . . . . . . . .41\n\nAppendix III \xe2\x80\x93 Audit Reports over 12 Months Old, Final Agency\n Action Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49\n\nAppendix IV \xe2\x80\x93 Delinquent Debts. . . . . . . . . . . . . . . . . . . . . . . . . . . .59\n\nAppendix V \xe2\x80\x93 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . .60\n\nAppendix VI \xe2\x80\x93 OIG Offices and Key Officials . . . . . . . . . . . . . . . . . .61\n\nThis semiannual report may be accessed on the Internet at the following\naddress: http://www.gsa.gov/inspectorgeneral\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 iii\n\x0c\x0c Summary of OIG Performance\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006\n\nOIG Accomplishments Total financial recommendations $622,716,483\n\n These include:\n\n \xe2\x80\xa2 Recommendations that funds be put to better use $622,480,897\n\n \xe2\x80\xa2 Questioned costs $235,586\n\n Audit reports issued 70\n\n Referrals for criminal prosecution, civil\n litigation, and administrative action 337\n\nResults Attained Management decisions agreeing with audit\n recommendations, civil settlements, and\n court-ordered and investigative recoveries $528,682,998\n\n Indictments and informations on criminal referrals 42\n\n Cases accepted for criminal prosecution 24\n\n Cases accepted for civil action 3\n\n Successful criminal prosecutions 43\n\n Civil settlements 2\n\n Contractors/individuals debarred 48\n\n Contractors/individuals suspended 53\n\n Employee actions taken on administrative referrals\n involving GSA employees 7\n\n\n\n\n OIG Spending Authority Compared to Value Returned*\n Millions of dollars\n 1,400\n\n 1,200\n\n 1,000\n\n 800\n\n 600\n\n 400\n\n 200\n\n 0\n 2000 2001 2002 2003 2004 2005 2006\n\n Spending Authority Value Returned\n *Value returned is the sum of accepted audit findings plus investigation recoveries.\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 v\n\x0c Fiscal Year 2006 Results\n\n\n\n During Fiscal Year (FY) 2006, OIG activities resulted in:\n\n \xe2\x80\xa2 Over $870 million in recommendations that funds be put to better use and\n in questioned costs. If adopted, these recommendations ultimately result\n in savings for the taxpayer.\n\n \xe2\x80\xa2 155 audit reports that assisted management in improving the efficiency\n and effectiveness of Agency operations.\n\n \xe2\x80\xa2 Nearly $1.2 billion in management decisions agreeing with audit\n recommendations; $52.4 million in criminal, civil, and administrative\n recoveries; and $3.0 million in other recoveries.\n\n \xe2\x80\xa2 249 new investigations opened and 148 cases closed.\n\n \xe2\x80\xa2 63 case referrals (141 subjects) accepted for criminal prosecution and\n 10 case referrals (42 subjects) accepted for civil litigation.\n\n \xe2\x80\xa2 82 criminal indictments/informations and 106 successful prosecutions on\n criminal matters referred.\n\n \xe2\x80\xa2 10 civil settlements.\n\n \xe2\x80\xa2 14 employee actions taken on administrative referrals involving GSA\n employees.\n\n \xe2\x80\xa2 73 contractor/individual suspensions and 65 contractor/individual\n debarments.\n\n \xe2\x80\xa2 279 legislative matters and 22 regulations and directives reviewed.\n\n \xe2\x80\xa2 2,112 Hotline calls and letters received of which 81 were referred for\n criminal or civil investigations, 81 were referred to other agencies for\n follow up, and 214 were submitted to GSA for review and appropriate\n administrative actions.\n\n\n\n\nvi Semiannual Report to the Congress\n\x0c Executive Summary\n\n\n\n During this semiannual period, the OIG continued to direct its audit,\n investigative, and evaluative resources to address what we believe to be the\n major management challenges facing the Agency. We provided a wide\n variety of services, including program and financial audits; management\n control assessments; contract reviews; and investigative coverage and\n litigation support in civil fraud and enforcement actions, criminal\n prosecutions, contract claims, and administrative actions. We also\n continued to provide professional assistance services and reviews of\n proposed legislation and regulations.\n\n Management Challenges\n We have highlighted a number of reviews that address major management\n issues facing GSA. We continued our work in addressing these challenges,\n making recommendations, and working with management to improve\n Agency operations. During this period, our efforts included work focusing on\n acquisition programs, contract management, information technology (IT),\n management controls, and human capital.\n\n Acquisition Programs\n The OIG\xe2\x80\x99s contract preaward review program provides information to\nContract preaward contracting officers for use in negotiating contracts. The pre-decisional,\n advisory nature of preaward reviews distinguishes them from other audits.\n review program\n This period, the OIG performed preaward reviews of 45 contracts with an\n estimated value of $5.1 billion. We recommended that more than\n $622 million of funds be put to better use through lower contract prices\n (page 2).\n\n Since FY 2002, we have been performing reviews of contracting practices at\n the Federal Acquisition Service\xe2\x80\x99s Client Support Centers (FAS\xe2\x80\x99 CSCs).\n CSCs help customer agencies define their IT requirements, identify sources\n of products or services, prepare task orders, and assist in managing\n FAS contracting projects. In FY 2005, CSC procurements exceeded $3.6 billion, with\n practices Department of Defense (DoD) customers representing about 84 percent of\n the business. As part of our continuing effort on reviewing CSC contracting\n practices, we performed a 2005 joint review with the DoD OIG, of each CSC\n to determine compliance with defense procurement requirements. We found\n that 11 of the 12 CSCs were not compliant but were making significant\n progress toward becoming compliant, and one was compliant. During this\n period we conducted follow-up testing of controls, jointly with the DoD OIG,\n and determined that while some minor procurement deficiencies existed in\n several of the regional CSCs, they were isolated cases and did not indicate\n a pattern of non-compliance. Overall, we determined that the 11 CSCs are\n now compliant with procurement regulations (page 3).\n\n Contract Management\n GSA\xe2\x80\x99s Federal Systems Integration and Management Center (FEDSIM)\n FEDSIM\n provides IT solutions for Federal agencies by contracting with private sector\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 vii\n\x0c Executive Summary\n\n\n\n vendors. FEDSIM uses a variety of contract vehicles to provide the larger,\n often complex, IT solutions to the Federal agencies it serves on a\n reimbursable basis. In our review of FEDSIM, we found that FEDSIM was\n generally complying with the Federal Acquisition Regulation, but that there\n were opportunities for improving task order management and increasing\n price competition (page 4).\n\n GSA\xe2\x80\x99s University for People (U4P) provides training opportunities to GSA\n employees nationwide. U4P is a fully reimbursable \xe2\x80\x9cfee for use\xe2\x80\x9d program\n and enters into a memorandum of agreement with each of its clients that\n identifies the type of training requested and the total cost. At the request of\n GSA\xe2\x80\x99s University the National Capital Region\xe2\x80\x99s Acting Regional Administrator, we initiated a\n for People review of the program which focused on U4P\xe2\x80\x99s procurement practices and\n contract administration. We found substantial procurement deficiencies and\n irregularities in U4P\xe2\x80\x99s delivery of project management training. As a result,\n we recommended that U4P develop a formal business plan, obtain\n appropriate procurement support, and establish appropriate fund and\n accounting controls to ensure compliance with applicable appropriation law\n (page 5).\n\n Information Technology\n The Federal Information Security Management Act (FISMA) requires Federal\n agencies to develop, implement, and document an agency-wide information\n security program. While GSA continues to better secure its systems, system\n security officials do not consistently ensure effective implementation of\n GSA\xe2\x80\x99s IT Security Policy. Although steps have been taken to address\n previously reported weaknesses, we found instances where system security\n IT Security Program officials did not ensure that systems were properly secured. We noted\n improvements in the number of critical vulnerabilities identified by our\n automated systems vulnerability scanning this year, compared to prior years.\n And as in previous years, we identified weaknesses with implementation of\n the Certification and Accreditation process, contractor background\n investigations, and contractor provided solutions. During our review, we\n issued an Alert Report to management which identified two significant areas\n of risk with Web applications including: 1) insufficient validation of data\n fields, and 2) unsecured Web servers running outdated and unsupported\n operating system software (page 7).\n\n Management Controls\n FAS\xe2\x80\x99 Information Technology Acquisition Center piloted the Quick-Mod\n Program to provide customer agencies with the most current IT products on\n the market. Under the Quick-Mod Program, contractors are allowed to\n modify or add products to GSA Advantage!TM, for pre-approved product\n Quick-Mod Program categories and pricing structures without contracting officer approval.\n Contracting officers are required to review modifications/additions after they\n are posted on GSA Advantage!TM. The Program is being tested with\n contractors who supply products under Schedule 70, \xe2\x80\x9cGeneral Purpose\n\n\nviii Semiannual Report to the Congress\n\x0c Executive Summary\n\n\n\n Commercial Information Technology Equipment, Software, and Services,\xe2\x80\x9d\n SIN 132-8 \xe2\x80\x9cPurchase of Equipment.\xe2\x80\x9d Management requested that we\n perform this review to determine if Quick-Mod should be expanded to other\n schedules. We found that a lack of management controls allowed incorrect\n prices and unauthorized products to be placed on GSA Advantage!TM and go\n undetected. Consequently, customers have access to products and prices\n via GSA Advantage!TM that 1) are not based upon a contractually\n pre-negotiated rate, or 2) are not fair and reasonable since they exceed the\n established pricing structure. We recommended that FAS should not expand\n the Quick-Mod program to other schedules at this time (page 8).\n\n The National Capital Region, with the largest number of government-owned\n buildings in GSA, is responsible for providing a multitude of building\n operations functions and has incurred significant overtime labor costs. Our\nOvertime management review focused on the management control environment for building\n operations that frequently incur overtime costs. In FY 2004, about a third of\n the 1,262 employees that engaged in these functions received a total of\n nearly $3.4 million for overtime, averaging 19 percent of their base pay; the\n trend continued in FY 2005. We concluded the region needs better\n oversight and control of overtime costs. We recommended that\n management redesign the overtime form as a mandatory, standard\n electronic version that captures pertinent data elements and implements a\n variance analysis reporting capability to provide a means to better control\n the overtime expense element (page 9).\n\n Human Capital\n Competitive sourcing is the process for competition between Federal\n agencies and the private sector to determine who is best able to perform\n commercial activities to ensure the best value. The President\xe2\x80\x99s\n Management Agenda (PMA) requires agencies to explore competitive\n sourcing as a means to make government more efficient. GSA currently\n maintains a score of \xe2\x80\x9cGreen\xe2\x80\x9d for Competitive Sourcing on the PMA\nCompetitive sourcing Scorecard for both \xe2\x80\x9cCurrent Status\xe2\x80\x9d and \xe2\x80\x9cProgress in Implementing\xe2\x80\x9d the\n PMA. Our review noted several areas of concern that may negatively impact\n GSA\xe2\x80\x99s ability to continue effective and efficient implementation of the PMA,\n and place GSA in jeopardy of losing its \xe2\x80\x9cGreen\xe2\x80\x9d status. First, as the\n competitive sourcing focus shifts from GSA\xe2\x80\x99s Public Buildings Service to the\n rest of the Agency, there will be a significant loss of first hand knowledge\n and experience with the process. It is expected that future competitions will\n be more standard, increasing the length and complexity of the process. In\n addition, the merger of the Federal Supply Service and Federal Technology\n Service into the new Federal Acquisition Service (FAS) may have a negative\n impact on scheduled competitions. Also, GSA has yet to post and share\n lessons learned from the competitive sourcing process as required by\n OMB Circular A-76 (page 10).\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 ix\n\x0c Executive Summary\n\n\n\n Promoting and Protecting Integrity\n This period we obtained criminal, civil, and other monetary recoveries\n totaling more than $8.7 million. Our work involved a wide variety of criminal\n and civil investigations and reviews, and participation in joint task forces with\n other Federal law enforcement agencies (page 12).\n\n Public Corruption Initiative\xe2\x80\x94Highlights\n A joint investigation was initiated when it was suspected that David H.\n Safavian, GSA\xe2\x80\x99s former Chief of Staff, aided a Washington, DC lobbyist in\n the lobbyist\xe2\x80\x99s attempts to acquire GSA-controlled property in and around DC.\n Safavian was found guilty of obstructing the work of the GSA OIG and of\n lying to a GSA ethics official. It also convicted him of lying to the GSA OIG\n and making a false statement to the Senate Indian Affairs Committee. He\n was sentenced to 18 months incarceration and 2 years of supervised\n probation. In a collateral investigation, Congressman Robert Ney pled guilty\n to conspiracy in violation of post-employment restrictions for former\n Congressional staff members, mail and wire fraud, and depriving the public\n of honest services (page 12).\n\n A former FTS program director, one of his employees, and a GSA contractor\n employee used their respective positions to arrange no-show jobs for a\n company that held contracts to provide IT-related support services to the\n U.S. Army. The FTS program director pled guilty to making false claims and\n tax evasion. His employee pled guilty to filing false claims; the GSA\n contractor pled guilty to making false claims. Sentencing is pending for all\n three individuals (page 13).\n\n The director of GSA\xe2\x80\x99s National Center for Utilities Management accepted\n gratuities from Tiger Natural Gas, Inc. (Tiger) of Tulsa, Oklahoma. The\n director pled guilty to conspiracy to engage in conflicts of interest and was\n sentenced to 6 months home confinement and 3 years probation (page 14).\n\n Two GSA contractor employees conspired to steal and depredate U.S.\n Government property valued at $192,000 from a cellblock that was under\n construction at the new U.S. District Courthouse in the Eastern District of\n New York. The contractors pled guilty to conspiracy to commit depredation\n against property of the United States and were each sentenced to 3 years\n probation and ordered to pay a fine and restitution (page 15).\n\n A U.S. Army employee used his official position as contracting officer\n technical representative to direct prime contractors to subcontract with two\n companies in which he had financial interest. He pled guilty to wire fraud\n and was sentenced to 24 months incarceration, 3 years supervised\n probation, and ordered to pay $150,049 in restitution (page 15).\n\n A joint investigation found that the assistant district director for the SBA\xe2\x80\x99s\n 8(A) Business Development Program in Puerto Rico and the U.S. Virgin\n\n\nx Semiannual Report to the Congress\n\x0c Executive Summary\n\n\n\nIslands used his position to obtain monies for his personal benefit from a\nGSA contractor that did business through this program. The director\nreceived $20,000 in cash from the GSA contractor; the contractor received\nover $3 million in 8(A) contracts, renewals, and extensions for his business.\nA Federal jury found the former director guilty of bribery; sentencing is\npending (page 16).\n\nThe owner of Electrics and More established a large inventory of computer\nand medical equipment bought through GSA auctions in order to create\nfictitious invoices for \xe2\x80\x9cnew\xe2\x80\x9d equipment. The owner claimed that he furnished\n\xe2\x80\x9cnew\xe2\x80\x9d equipment to educational programs in Missouri and received over\n$2 million in tax credits. When the inventory was questioned, there was a\nsuspicious fire. The owner pled guilty to mail fraud and money laundering\nand was sentenced to 60 months confinement, 36 months parole, and\nordered to pay restitution in the amount of $2,004,813 (page 16).\n\nThe technical services supervisor at Tricon Restaurants International (Tricon)\nconspired with the president of Gate Engineering Corporation (Gate), a GSA\ncontractor. While employed with Tricon, the supervisor received over\n$31,000 in payoffs from the president of Gate in exchange for directing over\n$1 million dollars in electrical contract work to Gate. The supervisor was\nfound guilty of conspiracy and was sentenced to 12 months and 1 day\nincarceration and 2 years supervised release. The president pled guilty to\nmaking kickback payments and was sentenced to 12 months home\nconfinement with electronic monitoring, 4 years probation, 400 hours of\nunpaid community service, and was ordered to pay a fine of $250,000. Also,\nthe attorney representing the defendant was found guilty of conspiracy,\nwitness tampering, and obstruction of an investigation and was sentenced to\n33 months imprisonment, 3 years supervised probation, 120 hours\ncommunity service, and ordered to surrender his law license (page 17).\n\nFleet Charge Card Initiative\xe2\x80\x94Highlights\nDuring FY 2006, the OIG received reimbursable funding from the GSA fleet\nprogram to place an increased emphasis on charge card fraud. The OIG\nexamines the use of these charge cards at commercial service stations\nunder vehicle leasing agreements with various Federal agencies. The\ninitiative involves investigative staff, identifying both the accounting\nanomalies associated with the current billing procedures and instances of\ncriminal fraud and abuse associated with improper card usage. From\nOctober 2005 through September 2006, the OIG initiated 94 investigations\nof fleet card fraud. To date, these cases have resulted in 63 judicial actions\nincluding 19 indictments and 44 criminal convictions. The monetary returns\npaid by defendants totaled $402,256 in restitution, fines, and special\nassessments (page 20).\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 xi\n\x0c Executive Summary\n\n\n\n Civil Actions\xe2\x80\x94Highlights\n AT&T Corporation (AT&T) agreed to pay $2.9 million to settle a qui tam\n complaint relating to overcharges for telecommunications services. The\n complaint alleged that AT&T overcharged the government with regard to\n Pre-Subscribed Interexchange Carrier Charges (page 22).\n\n The Hunt Corporation (Hunt) agreed to pay $1.9 million to settle a potential\n civil False Claims Act case relating to Hunt\xe2\x80\x99s withholding of payments to its\n subcontractors under its contract for the construction of the United States\n Federal Building and Courthouse in Hammond, Indiana (page 23).\n\n Suspension and Debarment Initiative\xe2\x80\x94Highlights\n During this reporting period, the OIG made 111 referrals for consideration of\n suspension/debarment to the GSA Office of Acquisition Policy. This period\n GSA issued 53 suspension and 48 debarment actions based on OIG\n referrals. Currently, 260 OIG referrals are pending decisions/actions by the\n Agency (page 23).\n\n Summary of Results\n The OIG made over $622 million in financial recommendations to better use\n government funds; made 337 referrals for criminal prosecution, civil litigation,\n and administrative actions; reviewed 152 legislative and regulatory actions;\n and received 1,121 Hotline contacts. This period, we achieved savings from\n management decisions on financial recommendations, civil settlements, and\n investigative recoveries totaling over $528 million. (See page v for a\n summary of this period\xe2\x80\x99s performance.)\n\n\n\n\nxii Semiannual Report to the Congress\n\x0c(This page was intentionally left blank.)\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 xiii\n\x0c OIG Organization Chart\n\n\n Inspector General\n Brian D. Miller Advisor\n Deputy Inspector General Robert M. Samuels\n Eugene L. Waszily\n\n\n Office of Counsel to the IG Office of Internal Evaluation & Analysis\n Kevin A. Buford Peter J. Coniglio\n Counsel to the IG Director\n\n\n Office of Administration Office of Audits Office of Investigations\n (Vacant) Andrew Patchan, Jr. Charles J. Augone\n AIG for Administration Acting AIG for Auditing AIG for Investigations\n\n\n Human Resources Audit Operations Staff Investigations Operations\n Division Division\n\n Administration &\n Information Data Systems Staff\n Regional Offices\n Technology Division Washington, DC\n Information New York\n Technology Audit Office Atlanta\n Administrative & Chicago\n Financial Management Kansas City\n Real Property Fort Worth\n Division\n San Francisco\n Audit Office\n Auburn\n\n Finance & Administrative\n Audit Office Sub-Offices\n Boston\n Philadelphia\n Acquisition Programs\n Audit Office\n\n\n Contract Audit Office\n\n\n Field Audit Offices\n Washington, DC\n Boston\n New York\n Philadelphia\n Atlanta\n Chicago\n Kansas City\n Fort Worth\n San Francisco\n\n\n Sub-Office\n Auburn (WA)\nxiv Semiannual Report to the Congress\n\x0c OIG Profile\n\n\n\n The GSA OIG was established on October 1, 1978 as one of the original\n 12 OIGs created by the Inspector General Act of 1978. The OIG\xe2\x80\x99s five\n components work together to perform the missions mandated by Congress.\n\nOrganization The OIG provides nationwide coverage of GSA programs and activities. Our\n components include:\n\n \xe2\x80\xa2 The Office of Audits, an evaluative organization staffed with auditors and\n analysts who provide comprehensive coverage of GSA operations through\n program performance reviews, assessment of management controls, and\n financial and compliance audits. The office also conducts external\n reviews in support of GSA contracting officials to ensure fair contract\n prices and adherence to contract terms and conditions. The office\n additionally provides research, benchmarking, and other services to assist\n Agency managers in evaluating and improving their programs.\n\n \xe2\x80\xa2 The Office of Investigations, an investigative organization that conducts\n a nationwide program to prevent, detect, and investigate illegal and/or\n improper activities involving GSA programs, operations, and personnel.\n\n \xe2\x80\xa2 The Office of Counsel, an in-house legal staff that provides legal advice\n and assistance to all OIG components, represents the OIG in litigation\n arising out of or affecting OIG operations, and manages the OIG\n legislative/regulatory review.\n\n \xe2\x80\xa2 The Office of Internal Evaluation and Analysis, a quality control staff\n that provides management assessments of OIG operations and conducts\n internal investigations and reviews at the direction of the Inspector\n General.\n\n \xe2\x80\xa2 The Office of Administration, a professional staff that provides\n information technology, budgetary, administrative, personnel, and\n communications support and services to all OIG offices.\n\nOffice Locations The OIG is headquartered in Washington, DC, at GSA\xe2\x80\x99s Central Office\n Building. Field audit and investigation offices are maintained in Boston, New\n York, Philadelphia, Atlanta, Chicago, Kansas City, Fort Worth, San\n Francisco, Auburn, and Washington, DC. (A contact list of OIG offices and\n key officials is provided in Appendix VI.)\n\nStaffing and Budget As of September 30, 2006, our on-board strength was 291 employees. The\n OIG\xe2\x80\x99s Fiscal Year (FY) 2006 budget was $48.3 million.\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 1\n\x0c Management Challenges\n\n\n\n Each year since 1998, we have identified and shared with Congress and\n senior GSA management what we believe to be the major challenges facing\n the Agency. (The current list is summarized on the front inside cover.) This\n period we continued our work in addressing these challenges, making\n recommendations, and working with management to improve Agency\n operations. The following sections highlight our activities in these areas.\n\n Acquisition Programs\n GSA provides Federal agencies with products and services valued in the\n billions of dollars through various types of contracts. We conduct reviews of\n these activities to ensure that the taxpayers\xe2\x80\x99 interests are protected.\n\n Significant Contract Preaward Reviews\n The OIG\xe2\x80\x99s contract preaward review program provides information to\n contracting officers for use in negotiating contracts. The pre-decisional,\n Over $600 million advisory nature of preaward reviews distinguishes them from other audits.\n in savings can This program provides vital and current information to contracting officers,\n enabling them to significantly improve the government\xe2\x80\x99s negotiating position\n be achieved and to realize millions of dollars in savings on negotiated contracts. This\n through lower period, the OIG performed preaward reviews of 45 contracts with an\n contract prices. estimated value of $5.1 billion. We recommended that more than\n $622 million of funds be put to better use through achieving lower contract\n prices.\n\n Many of the reviews disclosed that vendors offered prices and labor rates to\n GSA that were not as favorable as the prices and rates other customers\n received from these vendors. For example, contrary to one company\xe2\x80\x99s\n disclosure, the offer to GSA was not reflective of the company\xe2\x80\x99s most\n favored customer pricing. Another company did not completely disclose its\n commercial end-user discounts and practice of awarding volume discounts.\n\n There are now more than 10,000 vendors doing over $35 billion in business\n annually under GSA\xe2\x80\x99s rapidly expanding procurement programs. Based on\n documentation we received in FY 2006, GSA contracting officers, using the\n information included in our preaward audit reports, negotiated lower contract\n prices or more favorable terms and conditions equivalent to a savings of\n OMB authorized $31 for every dollar invested in OIG preaward contract reviews, significantly\n benefitting the government and the taxpayer. The Office of Management\n additional funding and Budget (OMB) has long recognized the increasing dollar value of GSA\xe2\x80\x99s\n for further reviews. contract activities and our limited resources in providing commensurate audit\n coverage. Through the Federal Acquisition Service (FAS) contract program\n revenues, OMB officials have provided us additional financial support to\n increase our work in this area. These funds enabled us to hire additional\n staff to support expanded contract review activities including, primarily, an\n increase in preaward contract reviews, as well as more contract\n performance reviews that evaluate contractors\xe2\x80\x99 compliance with pricing,\n\n\n\n2 Semiannual Report to the Congress\n\x0c Management Challenges\n\n\n\nAcquisition Programs (continued)\n\nbilling, and terms of their contracts, and periodic program evaluations to\nassess the efficiency, economy, and effectiveness of contracting activities.\nWe now allocate about 45 percent of our resources to contract reviews.\n\nDuring this 6-month period, management decisions were made on 49 of the\npreaward reports issued during the last year, which recommended that more\nthan $509 million of funds be put to better use. Management agreed with\n100 percent of the recommended savings.\n\nFAS Contracting Practices and Agency Improvement Actions\nSince FY 2002, we have been performing reviews of contracting practices at\nthe Federal Acquisition Service\xe2\x80\x99s1 (FAS) Client Support Centers (CSCs).\nCSCs help customer agencies define their IT requirements, identify sources\nof products or services, prepare task orders, and assist in managing\nprojects. In FY 2005, CSC procurements exceeded $3.6 billion, with\nDepartment of Defense (DoD) customers representing about 84 percent of\nthe business. Our initial audits in 2003 and 2004 identified a number of\nimproper task order and contract awards, including work outside the contract\nscope, improper order modifications, frequent inappropriate use of time-and-\nmaterials task orders, and failure to enforce contract provisions. In response\nto our audit findings, GSA has initiated a number of improvement actions to\nensure controls are in place in each CSC including the \xe2\x80\x9cGet it Right\xe2\x80\x9d initiative\nwhich includes educating and training acquisition employees, aligning\nperformance measures, publishing new contracting regulations and\nprocedures, and validating the proper use of GSA contract vehicles and\nservices. GSA has also deobligated and returned excess client-agency\nfunds from prior fiscal years, and issued guidelines to contracting staff on the\nuse of fiscal year funding.\n\nAs directed by the Ronald W. Reagan National Defense Authorization Act for\nFY 2005, we performed a 2005 joint review with the DoD Office of Inspector\nGeneral of each CSC to determine compliance with defense procurement\nrequirements. We found that 11 of the 12 CSCs were not compliant but\nwere making significant progress toward becoming compliant, and one was\ncompliant.\n\nAs also mandated in the Act, we conducted follow-up testing of controls,\njointly with the DoD OIG, to determine whether the 11 CSCs are now\ncompliant. The objective of this review was to test the effectiveness of\n\n\n1\n On October 12, 2006, GSA\xe2\x80\x99s Administrator signed the GSA Order officially creating the\nFederal Acquisition Service (FAS). This order combined the former Federal Technology\nService (FTS) and Federal Supply Service (FSS) to create FAS. It also combines the\nGeneral Supply Fund and the IT Fund into a single Acquisition Services Fund.\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 3\n\x0c Management Challenges\n\n\n\n Acquisition Programs (continued)\n\n recent GSA and DoD procurement initiatives, and whether current\n contracting practices have improved, including meeting requirements for\n obtaining competition in awarding task orders.\n\n On September 29, 2006, we issued 11 regional CSC reports. While we did\n find some minor procurement deficiencies in several of the regional CSCs,\n we found they were isolated cases, were not pervasive, and did not indicate\n CSCs found a pattern of non-compliance. We determined, overall, that the 11 CSCs are\n compliant with now compliant with procurement regulations. We recognize that during the\n procurement period of our review, GSA and DoD components lacked a common\n understanding of the proper use of funds across fiscal years and the format\n regulations. for interagency agreements, and there was no clear official position between\n the two agencies. GSA and DoD officials are continuing to work on\n developing consistent policies and procedures to be implemented for GSA\n and DoD interagency contracting.\n\n Contract Management\n GSA increasingly accomplishes its mission by using contractors to provide\n client services and products. Its multibillion dollar acquisition programs have\n expanded rapidly in terms of size, variety, and complexity of the\n procurements performed. While many GSA contracts are well crafted and\n properly administered, we continue to find a significant number of\n weaknesses. Our audit work in recent years has revealed a growing list of\n warning signs throughout the acquisition process that suggests the technical\n and management skills needed by the procurement workforce to operate in\n this more sophisticated arena are not keeping pace with these new\n demands.\n\n FEDSIM\n GSA\xe2\x80\x99s Federal Systems Integration and Management Center (FEDSIM)\n provides IT solutions for Federal agencies by contracting with private sector\n vendors. FEDSIM uses a variety of contract vehicles to provide the larger,\n often complex, IT solutions to the Federal agencies it serves. FEDSIM\n provides the acquisition services and project management throughout a\n project\xe2\x80\x99s life on a reimbursable basis.\n\n FEDSIM is organized into two main divisions\xe2\x80\x94one to serve DoD and the\n Business practices other for civilian agencies. Each division has two subdivisions\xe2\x80\x94contracting\n and project management. In 2004, FEDSIM generated about $1.4 billion in\n can be improved to revenue, with DoD clients representing approximately 60 percent of the\n increase price business.\n competition.\n In our review, we found that FEDSIM was generally complying with the\n Federal Acquisition Regulation, but that there were opportunities for\n improving task order management and increasing price competition.\n\n\n4 Semiannual Report to the Congress\n\x0c Management Challenges\n\n\n\nContract Management (continued)\n\nSpecifically, the terms and conditions of task orders were not always\nenforced. We identified deficiencies regarding inaccurate contractor\ninvoicing, unsupported contractor travel and other costs, and lack of security\nclearances, which we believe were caused by an overreliance on outside\nparties to supply information and support. Some invoices were approved\nwithout adequate support and as a result the government accepted\nsub-standard services and, in some cases, did not receive all services.\n\nWe also found FEDSIM business practices can be improved to increase\nprice competition. FEDSIM publishes fairly narrow cost ranges derived from\ngovernment estimates in its solicitations. We found contractors generally\nproposed prices within a few percentage points of the mid-point of the\nranges.\n\nIn our September 29, 2006 report, we recommended that the Commissioner,\nFederal Acquisition Service direct FEDSIM management to:\n\n\xe2\x80\xa2 Have project managers proactively manage task orders.\n\n\xe2\x80\xa2 Institute quality control procedures to improve fair opportunity,\n competition, and planning in the procurement process.\n\n\xe2\x80\xa2 Analyze the basis and approach for setting published cost ranges and\n levels of effort in the solicitation to promote opportunities for further cost\n savings.\n\nIn response to our draft report, the Commissioner agreed with the first two\nrecommendations but disagreed with the third. We revised our third\nrecommendation to clarify our concerns. We noted that while there may be\nbenefits to publishing cost ranges and an estimated level of effort in\nsolicitations, FEDSIM may be missing opportunities for further cost savings\nby publishing cost ranges which are not analytically based and narrowly\ndefined.\n\nGSA\xe2\x80\x99s University for People\nGSA\xe2\x80\x99s University for People (U4P) provides training opportunities for GSA\nemployees. Although it is a component of the National Capital Region\n(NCR), U4P extends its services to GSA employees, nationwide. U4P is a\nfully reimbursable \xe2\x80\x9cfee for use\xe2\x80\x9d program and enters into a memorandum of\nagreement with each of its clients (GSA internal organizations such as FAS\nand the Office of Chief Information Officer) that identifies the type of training\nrequested and the total cost. While U4P manages the client obligated\ntraining funds, course scheduling, and payment remittals, a vendor under\ncontract with U4P provides the actual training. During FY 2005, the vendor\ntrained 2,662 GSA employees at a cost of more than $1.4 million. We\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 5\n\x0c Management Challenges\n\n\n\n Contract Management (continued)\n\n performed a review focusing on U4P\xe2\x80\x99s procurement practices and contract\n administration at the request of NCR\xe2\x80\x99s Acting Regional Administrator.\n\n Specifically, we addressed U4P\xe2\x80\x99s delivery of project management training,\n and found substantial procurement deficiencies and irregularities. First, U4P\n entered into an unauthorized, sole source procurement to acquire project\n management training on behalf of its client organizations. This contract was\n Multiple negotiated, signed, and executed by a government representative who\n procurement lacked the authority to enter into that agreement on behalf of the\n deficiencies and government.\n fundamental Secondly, as specific client requirements arose, U4P issued task orders that\n control misleadingly referenced another GSA-issued contract held by the vendor (a\n weaknesses exist legitimate multiple award schedule (MAS) contract put in place by FAS),\n while the terms and conditions of the unauthorized sole source contract were\n in project training in fact controlling.\n contract.\n We also found, due in some part to the underlying procurement vehicle,\n fundamental controls absent from U4P\xe2\x80\x99s contract administration process.\n Generally, vendor invoices were not, and could not, be reconciled with their\n originating order document; current administrative practices did not permit\n reconciliation between the source of funding (customer orders placed with\n U4P) and the payment for services (U4P orders placed with its vendor); and\n a number of obligations remained open beyond the appropriate fiscal year\n with no apparent valid justification under appropriations law.\n\n As a result of our review, we recommended that U4P:\n\n \xe2\x80\xa2 Develop a formal business plan.\n\n \xe2\x80\xa2 Develop and maintain acquisition plans to support its business plan.\n\n \xe2\x80\xa2 Obtain appropriate procurement support.\n\n \xe2\x80\xa2 Establish appropriate fund and accounting controls to ensure compliance\n with applicable appropriation law as well as to facilitate program\n management.\n\n Management concurred with our recommendations.\n\n Information Technology\n GSA is in the process of replacing or upgrading a number of its legacy\n information systems to improve performance and take advantage of\n technological advances. Since GSA has had difficulty sharing usable data\n between systems, many of the new IT projects are intended to go beyond\n automating current business functions and to create real change in the way\n\n\n6 Semiannual Report to the Congress\n\x0c Management Challenges\n\n\n\n Information Technology (continued)\n\n that GSA does business. However, GSA systems development projects\n have typically experienced significant schedule delays and cost overruns,\n the need for frequent redesign, and a prolonged period of time in\n development.\n\n GSA\xe2\x80\x99s IT Security Program\n The Federal Information Security Management Act (FISMA) requires Federal\n agencies to develop, implement, and document an agency-wide information\n security program. While GSA continues to better secure its systems, system\n security officials do not consistently ensure effective implementation of\n GSA\xe2\x80\x99s IT Security Policy. Although GSA\xe2\x80\x99s Senior Information Security Officer\n has taken steps to address previously reported weaknesses, we continue to\n find instances where system security officials did not ensure that systems\n were properly secured. Effective implementation of GSA\xe2\x80\x99s IT Security\nAccountability of IT Program at the system level is dependent upon improved accountability for\n system security persons with key IT security responsibilities. There is a need for improved\n officials and policy and procedures to establish standardized performance goals and\n measures for those with key IT security responsibilities, since these\n performance individuals do not typically report directly to the GSA Office of the Chief\n measures need to Information Officer. We did note improvements evidenced by a major\n be improved to decrease in the number of critical vulnerabilities identified by our automated\n systems vulnerability scanning this year, compared to prior years. As in\nensure IT security. previous years, we identified weaknesses with implementation of the\n Certification and Accreditation process, contractor background investigations,\n and contractor provided solutions. Shortfalls in these key areas demonstrate\n the need for improved accountability for individuals with key IT security\n responsibilities. Finally, an analysis of technical security controls for Web\n applications and Voice over Internet Protocol (VOIP) implementations found\n that GSA\xe2\x80\x99s IT Security Program would benefit from a more proactive\n approach to addressing emerging IT security risks.\n\n During our review, we identified two significant areas of risk with Web\n applications: 1) insufficient validation of data fields, and 2) unsecured Web\n servers running outdated and unsupported operating system software. We\n issued an Alert Report to the Chief Information Officer on May 2, 2006\n notifying management to focus immediate attention on these risks.\n\n In our September 8, 2006 report, we recommended that the Chief\n Information Officer:\n\n \xe2\x80\xa2 Improve accountability for employees and contractors responsible for IT\n security by developing standardized performance goals and measures.\n\n \xe2\x80\xa2 Strengthen policy and clarify responsibilities in the background\n investigation process.\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 7\n\x0c Management Challenges\n\n\n\n Information Technology (continued)\n\n \xe2\x80\xa2 Ensure the IT Architecture Planning Committee takes action to address\n risks with emerging technologies.\n\n \xe2\x80\xa2 Develop and implement technical/hardening guides for securing Web\n applications and VOIP.\n\n The Chief Information Officer generally concurred with the findings and\n recommendations.\n\n Management Controls\n Multiple management controls and extensive supervisory reviews have been\n replaced, through streamlining efforts, by fewer and broader controls,\n making it essential that the remaining control processes be emphasized and\n consistently followed. Streamlined processes have helped GSA achieve its\n goal of serving customers more quickly and efficiently; however, the Agency\n is exposed to the risk of mismanagement and abuse if program officials do\n not ensure the faithful application of existing safeguards.\n\n FAS\xe2\x80\x99 Quick-Mod Program\n FAS\xe2\x80\x99 Information Technology Acquisition Center piloted the Quick-Mod\n Program to provide customer agencies with the most current IT products on\n the market. The Program is being tested with contractors who supply\n products under Schedule 70, \xe2\x80\x9cGeneral Purpose Commercial Information\n Technology Equipment, Software, and Services,\xe2\x80\x9d SIN 132-8 \xe2\x80\x9cPurchase of\n Equipment.\xe2\x80\x9d Under the Quick-Mod Program, contractors are allowed to\n modify or add products to GSA Advantage!TM, for pre-approved product\n categories and pricing structures without contracting officer approval.\n Contracting officers are required to review modifications/additions after they\n Lack of are posted on GSA Advantage!TM. Management requested that we perform\n management this review to determine if Quick-Mod should be expanded to other\n schedules.\n controls allow\n unauthorized or We found that a lack of management controls allowed incorrect prices and\n incorrectly priced unauthorized products to be placed on GSA Advantage!TM and go\n undetected. Contracting officers either did not effectively review the\n products to be Quick-Mods or chose not to perform reviews at all. During our review, we\n offered for sale found that contracting officers did not have a strong understanding of their\n under GSA overall responsibilities and review procedures under the Quick-Mod\n Program. As a result of these conditions, 8 of the 10 Quick-Mods sampled\n Advantage!TM. had unauthorized products and/or incorrect prices.\n\n We determined that the unauthorized products found in the Quick-Mods\n included software, licenses, maintenance, training, and miscellaneous\n products. When unauthorized products were listed on GSA Advantage!TM,\n customers were viewing products for which there was no contractual price\n\n\n8 Semiannual Report to the Congress\n\x0c Management Challenges\n\n\n\n Management Controls (continued)\n\n structure. In addition, we found that many Quick-Mods had pricing errors.\n Although contractors have been made aware of Quick-Mod policy, they still\n entered incorrect data into the system. Consequently, customers have\n access to products and prices via GSA Advantage!TM that: 1) are not based\n upon a contractually pre-negotiated rate, or 2) are not fair and reasonable\n since they exceed the established pricing structure. It is our opinion that\n FAS should not expand the Quick-Mod Program to other schedules at this\n time.\n\n In our April 6, 2006 report, we recommended that the Acting Commissioner\n of FAS develop a single point of entry database that contractors can use to\n enter modifications, and contracting officers can use to verify Quick-Mods.\n This would eliminate the need for contractors to submit a separate\n spreadsheet for contracting officers to review, which is not linked directly to\n data placed on GSA Advantage!TM. Secondly, we recommended that FAS\n institute policies to determine whether contractors who make repeated\n mistakes should be allowed to continue under the Program, and to remove\n those who blatantly abuse the Quick-Mod Program.\n\n Management generally concurred with the report recommendations.\n\n Overtime Management\n The National Capital Region, with the largest number of government-owned\n buildings in GSA, is responsible for providing a multitude of building\n operations functions and has incurred significant overtime labor costs. We\n Region lacks focused our review on the management control environment for building\ncontrols to justify operations support such as utility systems repair, mechanical engineering,\n fire systems, and custodial tasks, since these employees most frequently\nand reconcile over incur overtime costs. In FY 2004, about a third of the 1,262 employees\n $3.4 million in engaged in these functions received a total of nearly $3.4 million for\n overtime costs. overtime, averaging 19 percent of their base pay; the trend continued in\n FY 2005.\n\n We concluded the region needs better oversight and control of overtime\n costs. The current control environment in the region relies on poorly\n designed overtime control forms and procedures. The design and\n implementation shortcomings of the GSA form used to request, authorize,\n and report overtime compromise effective management control of the\n expense. We found that existing records cannot fully support or justify the\n costs incurred, required reconciliations and validation tests were not\n performed, and overtime was not subject to routine examination or analysis.\n We observed a standard practice that reduced the authorization process to a\n generic description of work to be performed with no justification for why the\n function required overtime. We also noted a continual use of overtime for\n shift coverage, an indication of an inadequate resource management plan.\n As a result, the process is left vulnerable to undetected errors and abuse.\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 9\n\x0c Management Challenges\n\n\n\n Management Controls (continued)\n\n In our April 19, 2006 report, we recommended that the Assistant Regional\n Administrator, in conjunction with the appropriate policy office:\n\n \xe2\x80\xa2 Redesign the overtime form as a mandatory, standard electronic version\n that captures pertinent data elements.\n\n \xe2\x80\xa2 Implement a variance analysis reporting capability to provide a means to\n better control the overtime expense element.\n\n Management generally concurred with the recommendations.\n\n Human Capital\n Like many Federal agencies, GSA has an aging workforce and faces\n significant potential loss of institutional knowledge in the coming years.\n Since 1993, GSA has been downsizing and has focused on restructuring its\n financial and business efforts. Much of the downsizing was accomplished\n through early retirement and buyout authority, and by filling job vacancies\n sparingly.\n\n Congress and the Government Accountability Office (GAO) have identified\n human capital management policies as a missing link in the government\xe2\x80\x99s\n performance management framework. GAO identified human capital\n planning and organizational alignment, leadership continuity and succession\n planning, and recruitment and retention of staff with the right skills as key\n areas needing attention.\n\n GSA\xe2\x80\x99s Competitive Sourcing Initiative\n Competitive sourcing is the process for competition between Federal\n agencies and the private sector to determine who is best able to perform\n commercial activities to ensure the best value. The President\xe2\x80\x99s\n Management Agenda (PMA), enacted in 2001, requires agencies to explore\n competitive sourcing as a means to make government more efficient.\n\n GSA currently maintains a score of \xe2\x80\x9cGreen\xe2\x80\x9d for Competitive Sourcing on the\n PMA Scorecard for both \xe2\x80\x9cCurrent Status\xe2\x80\x9d and \xe2\x80\x9cProgress in Implementing\xe2\x80\x9d the\n PMA. GSA achieved this status, in part, through the performance of\n competitions and the development of the GSA Green Plan. Guidance for\n public-private competitions is provided by OMB Circular A-76 (A-76).\n\n In our review, we noted several areas of concern that may negatively impact\n GSA\xe2\x80\x99s ability to continue effective and efficient implementation of the PMA,\n and place GSA in jeopardy of losing its \xe2\x80\x9cGreen\xe2\x80\x9d status on the PMA\n scorecard.\n\n First, as the competitive sourcing focus shifts from GSA\xe2\x80\x99s Public Buildings\n Service (PBS) to the rest of the Agency, there will be a significant loss of first\n\n10 Semiannual Report to the Congress\n\x0c Management Challenges\n\n\n\n Human Capital (continued)\n\n hand knowledge and experience with the process since, between FY 2004\n and 2005, PBS has performed 53 of the 54 completed competitions, all of\n which were streamlined (less complex with short completion timeframes).\n Future reviews will be \xe2\x80\x9cstandard\xe2\x80\x9d competitions which are more complex and\n can take considerably longer to complete. Adding to this, the merger of FSS\n Lessons learned and FTS into the new FAS may have a negative impact on scheduled\n from the competitions. Also, GSA has yet to post and share lessons learned from the\n competitive sourcing process as required by A-76. Finally, GSA is scheduled\n competitive to re-compete the previously cancelled agency-wide marketing function but\nsourcing process has not yet addressed the problems and issues that led to the cancellation.\nneed to be shared\n To help ensure that GSA continues to effectively and efficiently implement\n within GSA and the provisions of the PMA and A-76, we recommended that the Office of\n with other Performance Improvement:\n agencies. \xe2\x80\xa2 Seek the active participation of PBS staff to ensure their experiences and\n knowledge gained from prior competitions is carried forward to upcoming\n competitions.\n\n \xe2\x80\xa2 Examine the potential impact of the FSS/FTS reorganization on the\n scheduled competitions to determine whether to proceed, and examine\n alternative areas for competition where necessary.\n\n \xe2\x80\xa2 Post lessons learned from both streamlined and standard competitions to\n the SHARE A-76! Web site.\n\n \xe2\x80\xa2 Review the issues that led to the cancelled marketing competition before\n re-competing the function.\n\n The Acting Associate Administrator, Office of Performance Improvement,\n generally agreed with the recommendations and stated that the office has\n already taken some steps toward implementation.\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 11\n\x0c Promoting and Protecting Integrity\n\n\n\n GSA is responsible for providing working space for almost one million\n Federal employees. The Agency also manages the transfer and disposal of\n excess and surplus real and personal property and operates a\n governmentwide service and supply system. To meet the needs of customer\n agencies, GSA contracts for billions of dollars worth of equipment, supplies,\n materials, and services each year. We conduct reviews and investigations in\n all these areas to ensure the integrity of the Agency\xe2\x80\x99s financial statements,\n programs, and operations, and that the taxpayers\xe2\x80\x99 interests are protected. In\n addition to detecting problems in these GSA programs and operations, the\n OIG is responsible for initiating actions to prevent fraud, waste, and abuse\n and to promote economy and efficiency. When systemic issues are\n identified during investigations, they are shared with GSA management for\n appropriate corrective actions. During this period, criminal, civil, and other\n monetary recoveries totaled more than $8.7 million.\n\n Public Corruption Initiative\n The detection and investigation of criminal conduct by employees of GSA\n and other government employees and contractors doing business with GSA\n have been given top priority within the Office of Investigations. Our efforts\n have led to several prosecutions, sending the message to other government\n employees and the public that the Office of Inspector General is\n Public corruption aggressively pursuing public corruption.\n initiative leads to\n numerous arrests With the cooperation and assistance of several United States Attorneys\xe2\x80\x99\n Offices, the Department of Justice (DOJ), and the Federal Bureau of\n of GSA employees. Investigation (FBI), many overt and covert investigations are ongoing to\n detect and prosecute corrupt public officials. The results have increased\n public awareness and added a deterrent effect.\n\n The following are examples of public corruption cases worked by the Office\n of Investigations during this reporting period.\n\n Former GSA Chief of Staff and U.S. Congressman Found Guilty in\n Public Corruption Investigation\n A major public corruption case being investigated by the OIG, the FBI, the\n Department of Interior OIG, and the Internal Revenue Service (IRS) was\n initiated when it was suspected that from May 16, 2002 until January 10,\n 2004, David H. Safavian, GSA\xe2\x80\x99s former Chief of Staff, aided a Washington,\n DC lobbyist in the lobbyist\xe2\x80\x99s attempts to acquire GSA-controlled property in\n and around Washington, DC. In August 2002, this lobbyist took Safavian\n and others on a golf trip to Scotland.\n\n On June 20, 2006, a jury found Safavian guilty of obstructing the work of the\n GSA OIG and of lying to a GSA ethics official. It also convicted him of lying\n to the GSA OIG and making a false statement to the Senate Indian Affairs\n Committee. He had resigned from his White House post last year as the\n\n\n\n12 Semiannual Report to the Congress\n\x0c Promoting and Protecting Integrity\n\n\n\n Federal Government\xe2\x80\x99s chief procurement officer. On October 27, 2006,\n Safavian was sentenced to 18 months incarceration and 2 years supervised\n probation.\n\n In a collateral investigation, on September 15, 2006, Congressman Robert\n Ney pled guilty to conspiracy in violation of post-employment restrictions for\n former Congressional staff members, mail and wire fraud, and depriving the\n public of honest services.\n\n Former GSA Employees Pled Guilty to Making False Claims\n A joint investigation with the DoD Criminal Investigative Service and the IRS\n was initiated when our audit office reported possible irregularities with the\n issuance of an IT task order designated for full and open competition.\n\n The investigation disclosed that the former Federal Technology Service\n (FTS) program director, one of his employees (a supervisory IT specialist),\n and a GSA contractor employee (who was the IT specialist\xe2\x80\x99s daughter) used\n their respective positions to arrange no-show jobs for a company that held\n GSA director contracts to provide IT-related support services to the U.S. Army at Fort\n involved in Monmouth, New Jersey. The company then billed the Army for services,\n which the director approved\xe2\x80\x94approximately $283,000 in payment claims for\nprocurement fraud work that the company did not perform. The contractor\xe2\x80\x99s employee received\n scheme. $125,424 in salary for performing almost no work.\n\n Further investigation disclosed that the FTS director and his employee\n arranged for a company on a separate GSA contract to be a subcontractor\n and were paid $555,710 for GSA IT-related services. The contractor\xe2\x80\x99s\n employee received $156,788 in salary for performing almost no work.\n\n The FTS director hired a second company, \xe2\x80\x9cR-ZED Engineering,\xe2\x80\x9d (a sole\n proprietorship he controlled) as a subcontractor for the second company\xe2\x80\x99s\n GSA contract. The director mailed approximately 35 payments, totaling\n $151,500, to a post office box that he had opened in the name of R-ZED\n Engineering. R-ZED Engineering never performed any work as a\n subcontractor. Instead, he deposited the second company\xe2\x80\x99s checks into\n either his personal bank account or an account he controlled in the name of\n \xe2\x80\x9cR-ZED Engineering Services.\xe2\x80\x9d\n\n The FTS program director pled guilty to conspiracy to defraud the United\n States by making false claims and to tax evasion. The IT specialist pled\n guilty to filing false claims. The IT specialist\xe2\x80\x99s daughter pled guilty to\n conspiracy to defraud the United States by making false claims. Sentencing\n is pending for all three individuals.\n\n GSA Employee Pleads Guilty to Accepting Bribes\n During an investigation of Trataros Construction Inc. (TCI), the president of\n TCI, pursuant to a nonprosecution agreement with the U.S. Attorney\xe2\x80\x99s Office,\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 13\n\x0c Promoting and Protecting Integrity\n\n\n\n disclosed that he paid cash bribes to a former GSA Public Buildings Service\n (PBS) architect. TCI was the prime GSA PBS contractor on the U.S. Post\n Office and Courthouse project in Old San Juan, Puerto Rico.\n\n GSA architect The investigation disclosed that TCI paid cash bribes to the former architect\n guilty of accepting in exchange for his assistance on the project. At the time of the bribe\n payments, the architect was the GSA contracting officer\xe2\x80\x99s representative.\n bribes. The contract value was over $23 million. In exchange for the bribe\n payments, the architect agreed not to negotiate aggressively on behalf of\n GSA PBS when TCI submitted requests for payment on change orders.\n Additionally, he agreed to recommend approval of the claims for progress\n payments submitted by TCI that overstated the work completed on the\n project. The GSA employee pled guilty to bribery and was sentenced to\n 3 years probation and ordered to pay $6,000 in restitution and a\n $100,000 fine.\n\n Former GSA Official Sentenced in Procurement Fraud Case\n An investigation was initiated when it was reported that the director of GSA\xe2\x80\x99s\n National Center for Utilities Management was accepting cash payments from\n Tiger Natural Gas, Inc. (Tiger) of Tulsa, Oklahoma. The director was\n responsible for buying natural gas in bulk for Federal facilities, including\n prisons and hospitals, around the country.\n\n The investigation disclosed that the director accepted gratuities from Tiger.\n Specifically, it was found that Tiger provided the director with $14,000 in\n meals and entertainment and gave his wife $11,000 in exchange for allowing\n the company to overcharge the government. In exchange, the director\n invited Tiger to overcharge Federal prisons, hospitals, and other facilities.\n\n The director resigned from his position as director of a GSA office when he\n was targeted by investigators looking into a scheme to overcharge the\n government for natural gas. He pled guilty to conspiracy to engage in\n conflicts of interest and was sentenced to 6 months home confinement and\n 3 years probation.\n\n Previously, Tiger agreed to pay $11 million in fines and restitution to the\n government to settle civil litigation resulting from this case.\n\n PBS Director Pleads Guilty in Property Management Scheme\n An investigation was initiated when it was alleged that a GSA PBS employee\n PBS director had approved contracts in which she had a financial interest. The U.S.\n Attorney for the Western District of Kentucky filed a criminal information\n charged with charging the GSA director of the Kentucky Property Management Center\n criminal conflict of with approving government contracts that benefited her financially.\n interest.\n The director had direct authority over a number of GSA contractors,\n including a GSA contractor who at various times employed her live-in\n\n\n14 Semiannual Report to the Congress\n\x0cPromoting and Protecting Integrity\n\n\n\n companion and her two dependent children. Despite this knowledge and\n corresponding financial interest, she participated personally and substantially\n through the decision, approval, and recommendation of government\n contracts for this GSA contractor. It is illegal for a Federal employee to\n participate in the approval or recommendation of a government contract that\n would financially benefit them. The director pled guilty to acts affecting\n personal interest. She was sentenced to 2 years probation, fined, and\n agreed not to seek re-employment with GSA or any other government\n agency; she also resigned from her position with GSA.\n\n GSA FTS Director Pleads Guilty to Theft of Government Property\n An investigation was initiated based on information received indicating that a\n GSA FTS director knowingly submitted fraudulent claims to the U.S.\n Government involving two separate personal trips. In April 2005, the director\n purchased an airline ticket on her government travel account for an\n unauthorized trip. In May 2005, the director filed a travel voucher for\n unauthorized meals and an unapproved round trip airline ticket. She pled\n guilty to theft of government property and was sentenced to 100 hours of\n community service and ordered to pay restitution.\n\n Two GSA Contractor Employees Conspired to Steal and Depredate\n Government Property\n A joint investigation with the U.S. Marshals Service disclosed that two GSA\n contractor employees conspired to steal and depredate U.S. Government\n property from a cellblock that was under construction at the new U.S. District\n Courthouse in the Eastern District of New York. The U.S. property consisted\n of security surveillance equipment valued at approximately $192,000.\n\n Specifically, the employees attempted to use a drill, a hammer, and a lock\n picking kit to open the lock on the cell door. They committed depredation of\n GSA property by attempting to bypass the security system by performing an\n electrical override to disable the electronic lock on the cell doors, which\n damaged the system. The total cost of the damage to the security system\n was approximately $31,000. The contractors pled guilty to conspiracy to\n commit depredation against property of the United States and were each\n sentenced to 3 years probation and ordered to pay a fine and restitution.\n\n Government Employee Pleads Guilty to Wire Fraud\n An investigation was initiated when it was alleged that a U.S. Army\n employee and his girlfriend conspired to defraud the U.S. Government\n through knowingly making and submitting false and fictitious invoices to the\n government for work and services on GSA contracts that they did not\n perform.\n\n The investigation disclosed that the employee used his official position as\n contracting officer technical representative to obtain more than $150,000\n from the government by directing prime contractors to subcontract with two\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 15\n\x0c Promoting and Protecting Integrity\n\n\n\n companies in which he had financial interest. He pled guilty to wire fraud\n and was sentenced to 24 months incarceration, 3 years supervised\n probation, and ordered to pay $150,049 in restitution.\n\n GSA Contractor Pleads Guilty to Mail Fraud\n A joint investigation with the FBI disclosed that a former assistant project\n manager with ADF Steel Corporation (ADF) was accepting cash payoffs on\n various commercial, city, and Federal jobs. It was determined that ADF was\n a subcontractor under J.A. Jones Construction Company in the GSA PBS\n GSA contractor renovation contract of the Brooklyn Federal Courthouse.\n guilty of accepting\n The investigation found that the manager defrauded the owners of ADF and\n kickbacks. ultimately the government, by accepting payoffs from a subcontractor who\n worked on the Courthouse project. The manager had the subcontractor\n inflate bids for work in the Courthouse project and various other jobs to\n include a cash payoff to him of 15 percent of the bid. He accepted at least\n $13,000 from the subcontractor. The manager pled guilty to mail fraud and\n was sentenced to 3 years probation and ordered to pay restitution in the\n amount of $9,100.\n\n SBA Official Found Guilty of Bribery\n A joint investigation was conducted in conjunction with the DOJ Antitrust\n Division, Atlanta, Georgia Field Office; the U.S. Small Business\n Administration (SBA), Office of Inspector General; and the FBI when it was\n alleged that the assistant district director for the SBA\xe2\x80\x99s 8(A) Business\n Development Program in Puerto Rico and the U.S. Virgin Islands used his\n position to obtain monies for his personal benefit from a GSA contractor that\n did business through this program. The investigation found that the director\n requested and received over $20,000 in cash from the GSA contractor in\n order to ensure that he did not adversely affect the contractor\xe2\x80\x99s business\n dealings with the SBA. Additionally, in exchange for the $20,000, the\n contractor received over $3 million in 8(A) contracts, renewals, or extensions\n for his business. On August 22, 2006, a Federal jury in the U.S. District\n Court/District of Puerto Rico found the former director guilty of bribery;\n sentencing is pending.\n\n GSA Contractor Pleads Guilty to Using Surplus Government Property\n to Defraud the State of Missouri\n A joint investigation with the U.S. Postal Inspection Service, IRS, and the\n State of Missouri Attorney General\xe2\x80\x99s Office revealed that the owner of\n Contractor uses Electrics and More purchased GSA surplus property and stored it in his\n warehouse in Missouri. By establishing a large inventory of computer and\n GSA surplus medical equipment through GSA auctions, he was able to create fictitious\n property program invoices for newer equipment not actually housed in his warehouse.\n to defraud state.\n The owner claimed that he furnished \xe2\x80\x9cnew\xe2\x80\x9d medical and computer\n equipment to educational programs in Missouri and obtained over $2 million\n\n\n16 Semiannual Report to the Congress\n\x0cPromoting and Protecting Integrity\n\n\n\n in Missouri tax credits. When the inventory was questioned, there was a\n suspicious fire. The owner pled guilty to mail fraud and money laundering\n and was sentenced to 60 months confinement, 36 months parole, and\n ordered to pay restitution in the amount of $2,004,813.\n\n GSA Contract Employees Plead Guilty to Conspiracy and Theft of\n Government Property\n An investigation revealed that four former contract employees of TMI\n Management Systems, Inc., GSA Eastern Distribution Center (EDC) were\n stealing government property valued at approximately $311,000 from the\n GSA EDC and then selling the property on eBay and at local flea markets.\n The execution of search warrants at one contract employee\xe2\x80\x99s residences\n confirmed allegations. Two of the contractors have pled guilty to conspiracy\n and theft of government property; sentencing is pending. Charges are\n pending for the other two contract employees.\n\n President of Gate Engineering Corporation Sentenced for Making\n Kickback Payments\n A joint investigation by the OIG, the DOJ Antitrust Division, and the SBA OIG\n disclosed that the president of Gate Engineering Corporation (Gate), a GSA\n contractor, was paying off the technical services supervisor at Tricon\n Restaurants International (Tricon) in exchange for Tricon awarding electrical\n contracts to Gate.\n\n The investigation revealed that the technical services supervisor conspired\n with the president of Gate. While employed with Tricon, the supervisor\n received over $31,000 in payoffs from the president of Gate in exchange for\n directing over $1 million in electrical contract work to Gate. A Federal jury\n found the supervisor guilty of conspiracy and sentenced him to 12 months\n and 1 day incarceration and 2 years supervised release. Pursuant to a plea\n agreement, the president pled guilty to making kickback payments and was\n sentenced to 12 months home confinement with electronic monitoring,\n 4 years probation, 400 hours of unpaid community service (100 hours per\n year), and was ordered to pay a fine of $250,000.\n\n Also, the defendant\xe2\x80\x99s attorney in the Gate case was found guilty by a\n Federal jury of conspiracy, witness tampering, and obstruction of an\n investigation and was sentenced to 33 months imprisonment, 3 years\n supervised probation, 120 hours community service, and ordered to\n surrender his law license.\n\n President of Company Pleads Guilty to Theft of Government Property\n A joint investigation with the U.S. Air Force, Office of Special Investigations\n disclosed that Bald Industries (BI) did not deliver items ordered by the Air\n Force from the company. The investigation revealed that the Air Force\n placed an order on a GSA contract with BI for two walk-in freezers and four\n refrigerators. BI received payment for the order but the president made false\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 17\n\x0c Promoting and Protecting Integrity\n\n\n\n statements to his supplier that there were money restrictions with the\n military, and instructed the supplier to modify the delivery of the refrigeration\n units. As a result, only two refrigeration units were shipped to the Air Force.\n\n The president of BI pled guilty to theft of government property and was\n sentenced to 4 months incarceration, 3 years supervised probation, and\n ordered to pay $41,052 in restitution.\n\n GSA Contractor Pleads Guilty to Fraud and False Statements\n An investigation was initiated when the DOJ OIG reported that six\n companies might have been involved in bid rigging and/or false statements\n or false claims in connection with Department of Homeland Security, DoD,\n and GSA construction contracts. The ongoing investigation disclosed that\n the owner of one of the six companies knowingly and willfully made material\n false, fictitious, and fraudulent statements to the U.S. Coast Guard (USCG)\n Civil Engineering Unit on a mechanical rehabilitation project.\n\n Specifically, the USCG issued a bid solicitation for the mechanical\n rehabilitation of a sandblast building. The bid solicitation for the USCG\n project required each bidding party to provide three references for prior jobs\n performed. In response to the bid solicitation the owner had a subordinate\n prepare a bid that included three job references, including a fire sprinkler\n retrofit project. At the time the subordinate included the job references in the\n USCG project bid, the owner was aware that the fire sprinkler retrofit job\n Bid-rigging scheme reference was false, and that he never performed the project. The USCG\n uncovered. bid, which contained the fraudulent job reference, was signed on the owner\xe2\x80\x99s\n behalf with his authorization and sent from his offices in Mesa, Arizona to the\n USCG office in Cleveland, Ohio for the mechanical rehabilitation of a\n sandblast building.\n\n On August 1, 2006, the owner pled guilty to fraud and false statements and\n was sentenced to 3 years supervised probation and ordered to pay a\n $5,000 fine.\n\n Works Progress Administration Artwork Recovered\n During the depths of the Great Depression, the Federal Government under\n the Works Progress Administration (WPA) (later renamed the Work Projects\n Administration) employed thousands of artists to create public art. As a\n result, numerous works of art adorned Federal buildings throughout the\n WPA artwork nation. Since 1949, GSA has been the custodian of the WPA works of art.\n recovered. Some artists who got their start working under the program became\n renowned, and the works they created became quite valuable. In the\n 1990\xe2\x80\x99s, GSA initiated a project to identify, locate, catalog, and recover\n lost/stolen WPA paintings.\n\n\n\n\n18 Semiannual Report to the Congress\n\x0cPromoting and Protecting Integrity\n\n\n\n In 2001, to facilitate the recovery of missing artwork, a list of 136 pieces of\n lost/stolen artwork was developed by GSA fine arts specialists. This\n information was coordinated with DOJ and listed in a stolen art database\n maintained by the FBI. Fine arts dealers are required to check this database\n prior to the sale of any work of art.\n\n In June 2006, an R.A.D. Miller painting titled House With Fence (which is the\n property of GSA and part of the WPA project) was identified on the Internet\n site of the Sanford Alderfer Auction Company in Hatfield, Pennsylvania. The\n auction house provided the name and contact information of the consigner of\n the painting being auctioned. A joint investigation and counsel review led to\n the successful recovery and return of the painting to the control of the U.S.\n Government. The value of the painting is estimated at $15,000. After final\n cataloging and appraisal, the painting was subsequently loaned to the\n James A. Michner Art Museum in Bucks County, Pennsylvania for public\n display. We continue to review and assist in the recovery of missing/stolen\n WPA artwork.\n\n Telecommunications Fraud\n The OIG continues to be a principal participant in the New York Electronic\n Crimes Task Force (NYECTF), which has been investigating\n telecommunications fraud primarily involving Federal facilities within the New\n York metropolitan area. GSA is the principal provider of telecommunications\n services for these facilities. NYECTF members include the Secret Service,\n Department of Defense, Department of Justice, New York City Police, and\n telecommunications industry representatives.\n\n A fraud investigation was initiated when Alltel Communications, Inc. (Alltel)\n disclosed to members of the NYECTF that an individual was engaged in a\n fraudulent telecommunications activity known as \xe2\x80\x9csocial engineering.\xe2\x80\x9d The\n investigation found that the individual misrepresented himself as an Alltel\n customer service representative and fraudulently obtained personal account\n information from at least 29 separate customer accounts. After obtaining the\n victims\xe2\x80\x99 account information, he opened additional phone lines and obtained\n approximately 25 mobile phone handsets under the names of these victims\n and had them shipped to his residence. On June 12, 2006, the individual\n pled guilty to conspiracy to commit mail fraud and aggravated identity theft;\n sentencing is pending.\n\n Another NYECTF fraud investigation disclosed that the owner of a T-Mobile\n dealer and five of his employees were involved in a scheme whereby they\n fraudulently obtained the identities of T-Mobile cellular telephone customers\n and then used this information to illegally obtain, without the consent or\n knowledge of the victims, large numbers of mobile handsets from T-Mobile.\n Industry specialists for T-Mobile indicate that the losses associated with the\n fraudulent handset orders are approximately $674,600. The owner pled\n guilty to conspiracy to commit wire fraud, conspiracy to commit mail fraud,\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 19\n\x0c Promoting and Protecting Integrity\n\n\n\n and aggravated identity theft and is scheduled to be sentenced on\n October 24, 2006. Of the five employees, two pled guilty to conspiracy to\n commit mail fraud; two pled guilty to conspiracy to commit wire fraud and\n aggravated identity theft; and one pled guilty to wire fraud, fraud with an\n access device, and destruction of records. Sentencing for these individuals\n have not been determined.\n\n Fleet Charge Card Initiative\n During FY 2006, the OIG received reimbursable funding from the GSA fleet\n program to place an increased investigative emphasis on charge card fraud.\n The fleet card program at the OIG examines the use of these charge cards\n at commercial service stations under vehicle leasing agreements with\n various Federal agencies. The initiative entails investigative staff identifying\n both the accounting anomalies associated with the current billing procedures\n and instances of criminal fraud and abuse associated with improper card\n usage. The OIG initiative on the investigative side has resulted in the\n following:\n\n \xe2\x80\xa2 From October 2005 through September 2006, the OIG worked on\n 58 investigations dealing with fleet card fraud.\n Charge card fraud\n initiative leads to \xe2\x80\xa2 To date, these cases have resulted in 63 judicial actions including\n 19 indictments and 44 criminal convictions.\n 44 convictions.\n \xe2\x80\xa2 The monetary returns paid by defendants totaled $402,256 in restitution,\n fines, and special assessments. In addition, the GSA fleet program has\n been able to identify and cancel numerous charge cards that have been\n misused and bill back the agencies assigned the cards.\n\n \xe2\x80\xa2 Analysis of GSA fleet card investigations indicates that enforcement\n actions during the past year may have averted as much as $2 million in\n potential losses to the Agency.\n\n \xe2\x80\xa2 Examples of the types of cases investigated under this initiative include:\n double-billing for purchases at a service station, multiple purchases on the\n same day for personal use, and theft and illegal use of a fleet card.\n\n During this reporting period, the following fleet charge card cases were\n investigated by the Office of Investigations.\n\n \xe2\x80\xa2 A joint investigation by the OIG and the Amtrak OIG determined that a gas\n station attendant in New Jersey was making unauthorized fuel charges\n using a fleet card assigned to Amtrak. It was found that multiple, same\n day fuel purchases were made on several Amtrak vehicles leased through\n the GSA Fleet Management Program. The fuel purchases totaled over\n $2,999. He pled guilty to theft charges.\n\n\n\n\n20 Semiannual Report to the Congress\n\x0cPromoting and Protecting Integrity\n\n\n\n \xe2\x80\xa2 An investigation was initiated when it was reported that a fleet card issued\n to a National Guard Unit was lost, yet daily purchases of gas with the card\n were being recorded. Video surveillances captured the fraudulent use of\n the card by four individuals. Two of the individuals pled guilty to theft of\n government property. One was sentenced to serve 36 months probation,\n 3 months of home detention, and was ordered to pay restitution in the\n amount of $10,888. The other individual was sentenced to\n 12 months probation and ordered to pay restitution.\n\n \xe2\x80\xa2 A joint investigation by the OIG and the Department of Veterans Affairs\n (VA) revealed that a VA employee was fraudulently using four fleet cards\n assigned to the Veteran\xe2\x80\x99s Medical Center in Philadelphia, Pennsylvania.\n It was found that the employee used the cards to purchase gas for known\n cocaine dealers and received either cocaine or cash at 60 cents on the\n dollar in payment. He pled guilty to theft of government property and was\n sentenced to 3 years supervised probation and ordered to pay restitution\n in the amount of $9,559.\n\n \xe2\x80\xa2 An investigation was initiated when it was reported that six gas cards\n were reported missing from an Albuquerque Auto Action in New Mexico.\n The investigation revealed that an individual stole the fuel cards when a\n government agency turned in its vehicle. The individual then used the\n cards to fraudulently purchase gas. The individual, an employee of the\n auto action company, pled guilty to theft charges and was sentenced to\n serve 100 hours of community service and ordered to pay restitution.\n\n \xe2\x80\xa2 A joint investigation by the OIG and the AMTRAK Police Department\n determined that a National Railroad Passenger Corporation employee\n was making unauthorized fuel charges using a fleet card he stole from the\n corporation. The fuel purchases totaled over $7,615. He pled guilty to\n theft charges and resigned from his position.\n\n \xe2\x80\xa2 An investigation was initiated after GSA reported that the same gas card\n was being used to make multiple fuel purchases on the same day, often\n within minutes of one another. The individual admitted that he purchased\n the gas card for $80 and had been using the card to fuel his car as well\n as those of his friends and family. He pled guilty to theft of government\n property; sentencing is pending.\n\n \xe2\x80\xa2 An investigation was initiated when it was reported that a gas card\n assigned to a GSA vehicle leased to the Colville Confederated Tribes was\n missing. The investigation disclosed that an individual was using the\n stolen gas card for his personal gain. He pled guilty to embezzlement\n and conversion of public property in the amount of $925; sentencing is\n pending.\n\n \xe2\x80\xa2 An investigation was initiated when it was reported that a reservist with\n the Georgia Army National Guard stole a fleet card from the Fort\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 21\n\x0c Promoting and Protecting Integrity\n\n\n\n McPherson military base. He was charged with using a stolen fleet card\n to purchase fuel from several fuel service stations.\n\n \xe2\x80\xa2 An investigation was initiated when it was reported that gas cards\n assigned to vehicles leased by the National Oceanic and Atmospheric\n Association were being used to make multiple gas purchases on the\n same day. A husband and wife were indicted for theft of government\n property.\n\n \xe2\x80\xa2 An investigation was initiated when it was reported that possible\n unauthorized purchases of gas were being made with a gas card issued\n to a vehicle leased by GSA to the Department of the Army. The\n investigation revealed that an Army specialist and her fianc\xc3\xa9 were using\n the card to fill up their personal cars as well as their friends\xe2\x80\x99 cars. Both\n pled guilty to theft of government property and were sentenced to\n 24 months probation and ordered to pay $3,000 in restitution.\n\n \xe2\x80\xa2 An employee of the Department of Public Works was arrested for gas\n card fraud. The investigation disclosed that the employee used a gas\n card assigned to the Department to fuel two privately-owned vehicles and\n vehicles owned by other individuals. The loss to the government totaled\n approximately $2,800.\n\n \xe2\x80\xa2 An employee of the Bureau of Engraving and Printing pled guilty to theft\n of government property. The investigation revealed that the employee\n used a gas card for a vehicle assigned to Saint Elizabeth\xe2\x80\x99s Hospital to fuel\n a privately-owned vehicle. He was sentenced to 12 months probation,\n 50 hours of community service, and ordered to pay $2,667 in restitution.\n\n \xe2\x80\xa2 An employee of the U.S. Postal Service (USPS) was arrested for grand\n larceny. The investigation disclosed multiple, same-day fuel purchases\n minutes apart from each other at various gas stations using a gas card\n assigned to the USPS. The employee admitted to fraudulently using the\n card to refuel his personal vehicle and selling gasoline at a discount to\n conspirators. The loss to the government was approximately $2,648.\n\n Significant Civil Actions\n AT&T Pays $2.9 Million for Overcharging Government Customers\n In a settlement agreement signed June 6, 2006, AT&T Corporation (AT&T)\n agreed to pay $2.9 million to settle a qui tam complaint relating to\n overcharges for telecommunications services. The complaint alleged that\n AT&T, during its FTS bridge contract from 1998 to 2001, overcharged the\n government with regard to Pre-Subscribed Interexchange Carrier Charges\n (PICCs). Under the contract, AT&T was allowed to pass through to the\n government \xe2\x80\x9cactual charges\xe2\x80\x9d associated with the PICCs. However,\n\n\n\n\n22 Semiannual Report to the Congress\n\x0cPromoting and Protecting Integrity\n\n\n\n according to the relator, AT&T passed through to the government costs and\n fees for PICCs in excess of what was allowed under the contract.\n\n Construction Company Pays $1.9 million for False Certifications About\n Payments to Subcontractors\n On April 10, 2006, The Hunt Corporation (Hunt) agreed to pay $1.9 million to\n settle a potential civil False Claims Act case relating to Hunt\xe2\x80\x99s withholding of\n payments to its subcontractors under its contract with PBS for the\n construction of the United States Federal Building and Courthouse in\n Hammond, Indiana. In each of its progress payment applications to GSA,\n Hunt officials certified that Hunt was in compliance with the timely payment\n requirements of the Federal Acquisition Regulation and its contract, i.e. that\n payments to subcontractors had already been made, or would be made in a\n timely manner from the proceeds of each payment received from GSA, and\n that the requests for progress payments did not include any amounts which\n Hunt intended to withhold or retain from its subcontractors. The case\n stemmed from a GSA OIG audit of progress payments made to Hunt, which\n was initiated as a result of complaints to PBS officials by Hunt\n subcontractors that they were not being paid in a timely manner.\n\n An OIG investigation, performed under the supervision of the United States\n Attorney\xe2\x80\x99s Office for the Northern District of Indiana, and the Commercial\n Litigation Branch, Civil Division, Department of Justice, confirmed the\n findings of the audit report, and found a widespread practice by Hunt of\n retaining money from its subcontractors while billing GSA for the entire\n amount of its progress, as measured by the schedule of values in place\n during the contract.\n\n Suspension and Debarment Initiative\n The GSA has a responsibility to ascertain whether the people or companies\n they do business with are eligible to participate in federally assisted\n programs and procurements, and that they are not considered \xe2\x80\x9cexcluded\n parties.\xe2\x80\x9d Excluded parties are individuals and companies debarred,\n suspended, proposed for debarment, or declared ineligible to receive\n contracts by a Federal agency. The Federal Acquisition Regulation\n authorizes an agency to suspend or debar individuals or companies for the\n commission of any offense indicating a lack of business integrity or business\n honesty that directly affects the present responsibility of a government\n contractor or subcontractor. The OIG has made it a priority to assist GSA in\n ensuring that the government does not award contracts to individuals or\n companies that lack business integrity or honesty. Additionally, the OIG\n assisted the Department of Interior (DOI) OIG in reviewing and analyzing\n several of their investigations for potential debarment action. The GSA OIG\n processed 13 completed DOI investigations and made recommendations for\n consideration of debarment to the GSA suspension/debarment official during\n this reporting period.\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 23\n\x0c Promoting and Protecting Integrity\n\n\n\n During this reporting period, the OIG made 111 referrals for consideration of\n suspension/debarment to the GSA Office of Acquisition Policy. This period\n GSA issued 53 suspension and 48 debarment actions based on OIG\n referrals. Currently, 253 OIG referrals are pending decisions/actions by the\n Agency.\n\n Integrity Awareness\n The OIG presents Integrity Awareness Briefings nationwide to educate GSA\n employees on their responsibilities for the prevention of fraud and abuse and\n to reinforce employees\xe2\x80\x99 roles in helping to ensure the integrity of Agency\n operations.\n\n This period, we presented 21 briefings attended by 207 regional employees.\n These briefings explain the statutory mission of the OIG and the methods\n available for reporting suspected instances of wrongdoing. In addition,\n through case studies, the briefings make GSA employees aware of actual\n instances of fraud in GSA and other Federal agencies and thus help to\n prevent their recurrence. GSA employees are the first line of defense\n against fraud, abuse, and mismanagement. They are a valuable source of\n successful investigative information.\n\n Hotline\n The OIG Hotline provides an avenue for employees and other concerned\n citizens to report suspected wrongdoing. Hotline posters located in\n GSA-controlled buildings encourage employees to use the Hotline. We also\n use our FraudNet Hotline platform to allow Internet reporting of suspected\n wrongdoing. During this reporting period, we received 1,121 Hotline\n contacts. Of these contacts, 235 Hotline cases were initiated. In 134 of\n these cases, referrals were made to GSA program officials for review and\n action as appropriate, 43 cases were referred to other Federal agencies for\n follow up, 32 were referred for OIG criminal/civil investigations or audits, and\n 26 did not warrant further review.\n\n GSA OIG Receives OSC Certification\n On September 26, 2006, the U.S. Office of Special Counsel certified that the\n GSA Office of Inspector General has successfully met all of the requirements\n of 5 U.S.C. \xc2\xa72302(c). The certification means that the GSA OIG has\n demonstrated its commitment to ensuring that its employees are fully aware\n of their rights and responsibilities under the Whistleblower Protection Act. To\n obtain the certification, the GSA OIG provided both written and oral training\n to its supervisors, ensuring that they understand how to identify and respond\n to whistleblower complaints.\n\n Hurricane Katrina\n The Federal Inspector General community, coordinated through the\n President\xe2\x80\x99s Council on Integrity and Efficiency/Executive Council on Integrity\n\n\n24 Semiannual Report to the Congress\n\x0cPromoting and Protecting Integrity\n\n\n\n and Efficiency (PCIE/ECIE), initiated an aggressive review of agencies\xe2\x80\x99\n response efforts to the Gulf Coast hurricane disasters. The Department of\n Justice established a fraud task force that includes Federal, state, and local\n law enforcement agents. These actions focus on ensuring relief funds were\n spent wisely; improving agency response to disasters; and identifying fraud,\n waste, and abuse early in the process.\n\n As part of the PCIE Katrina working group, we have initiated an audit that\n assesses the effectiveness of GSA\xe2\x80\x99s response to Hurricane Katrina. Under\n the 2004 National Response Plan, which is the Federal Government\xe2\x80\x99s\n unified approach to disasters, GSA serves a central role in procuring\n equipment and services used by the Federal Emergency Management\n Agency (FEMA). GSA has awarded approximately $1 billion in contracts on\n FEMA\xe2\x80\x99s behalf. In these procurements, FEMA uses GSA contracting\n professionals to award contracts for which FEMA has identified the\n procurement requirement and is billed directly. In our ongoing audit, we are\n examining 255 of GSA\xe2\x80\x99s procurements for FEMA totaling over $695 million.\n In addition, we are also reviewing charges against mission assignments as\n well as the related management controls and processes internal to GSA.\n While we are continuing with our audit, we have been providing preliminary\n observations to management, through audit memoranda, to provide timely\n feedback during the current hurricane season.\n\n Additionally, GSA has responsibilities as the landlord to Federal agencies in\n the affected area to locate or repair space so that the agencies may continue\n their missions. Initially, 84 facilities in four states were affected. We are\n examining GSA\xe2\x80\x99s role as landlord during the response to Hurricane Katrina.\n\n Protecting Personally Identifiable Information\n Following numerous high profile incidents involving the substantial\n compromise or loss of sensitive personal information associated with the\n growing threat of identity theft, the Office of Management and Budget issued\n memorandum M-06-16, on June 23, 2006. The memorandum stresses that\n Federal agencies need to take all necessary/reasonable measures to swiftly\n eliminate significant vulnerabilities to the sensitive information entrusted to\n them. It required agencies to take specified actions to ensure that\n safeguards are in place and appropriately reviewed within 45 days from the\n issuance of the memorandum. As part of the PCIE/ECIE initiative, we\n performed a fast paced assessment of GSA\xe2\x80\x99s compliance with the\n requirements of the memorandum. The PCIE/ECIE drafted a report\n summarizing the Inspectors General\xe2\x80\x99s findings and agencies\xe2\x80\x99 actions.\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 25\n\x0c Governmentwide Policy Activities\n\n\n\n We regularly provide advice and assistance on governmentwide policy\n matters to the Agency, as well as to other Federal agencies and to\n committees of Congress. In addition, as required by the Inspector General\n Act of 1978, we review existing and proposed legislation and regulations to\n determine their effect on the economy and efficiency of the Agency\xe2\x80\x99s\n programs and operations and on the prevention and detection of fraud and\n mismanagement. Because of the central management role of the Agency in\n shaping governmentwide policies and programs, most of the legislation and\n regulations reviewed invariably affect governmentwide issues in areas such\n as procurement, property management, travel, and government\n management and information technology systems.\n\nInteragency This period, we provided advice and assistance to the Office of Management\n and Budget (OMB) on various procurement policy issues. In addition, we\nCommittees and participated on a number of interagency committees and working groups that\nWorking Groups deal with cross-cutting and governmentwide issues:\n\n \xe2\x80\xa2 The IG is a participating member of the PCIE/ECIE Homeland Security\n Roundtable, headed by the IG of the Department of Homeland Security.\n The Homeland Security focus of the Roundtable was a springboard for a\n review of the Federal response efforts to Hurricane Katrina and Hurricane\n Rita. The Roundtable meets quarterly to help coordinate efforts of the IG\n community, to ensure accountability of the Federal money being spent in\n those response efforts, and to deter waste, fraud, and abuse.\n\n \xe2\x80\xa2 The Deputy Inspector General represents all civilian government agencies\n on the Cost Accounting Standards Board, an independent board within\n OMB\xe2\x80\x99s Office of Federal Procurement Policy, which promulgates, amends,\n and revises Cost Accounting Standards designed to achieve uniformity\n and consistency in cost accounting practices by individual government\n contractors.\n\n \xe2\x80\xa2 The Acting Assistant Inspector General for Auditing co-chairs the IT\n Committee under the PCIE Federal Audit Executive Council. This\n Committee is responsible for leading discussion and reaching consensus\n among all of the OIGs regarding a myriad of IT issues, including proposed\n legislation and regulations, OMB questions and reporting requirements,\n and IT audit approaches and best practices. OIG audit representatives\n participate in the Federal Audit Executive Council\xe2\x80\x99s IT Committee to\n develop approaches and techniques for conducting IT security audits\n under the Federal Information Security Management Act (FISMA). Audit\n representatives also participate in the PCIE IT Roundtable to discuss\n various methodologies and best practices for conducting IT audits.\n\n \xe2\x80\xa2 The Acting Assistant Inspector General for Auditing participates in the\n After Action/Lessons Learned Working Group in response to the Katrina\n disaster, under the PCIE/ECIE Homeland Security Roundtable.\n\n\n\n26 Semiannual Report to the Congress\n\x0c Governmentwide Policy Activities\n\n\n\n \xe2\x80\xa2 Our TeamMateTM Technical Support Group participates in the TeamMateTM\n Federal Users Group and the PricewaterhouseCoopers TeamMateTM\n Users Group to discuss concerns and new challenges facing TeamMateTM\n users. TeamMateTM is an automated audit workpaper management\n system designed to make the audit process more efficient.\n\nLegislation and During this reporting period, the OIG reviewed 140 legislative matters and\n 12 proposed regulations.\nRegulations\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 27\n\x0c Professional Assistance Services\n\n\n\n Government Auditing Standards prohibit Federal audit organizations from\n performing certain types of management consulting projects because they\n may impair the independence of the auditors when performing subsequent\n audit work in the same area. To maintain our independence when working\n closely with GSA management, we carefully assess our services to ensure\n compliance with the standards. As allowed under the standards, we are\n continuing our participation on Agency improvement task forces, committees,\n and working groups in an observer or advisory capacity.\n\n Task Forces, Committees, and Working Groups. The OIG provides\n advice and counsel to GSA while monitoring ongoing Agency initiatives. Our\n representatives advise management at the earliest possible opportunity of\n potential problems, help ensure that appropriate management controls are\n provided when installing new or modifying existing Agency systems, and\n offer possible solutions when addressing complex financial and operational\n issues.\n\n Our direct participation with the Agency on task forces, committees, and\n working groups allows us to contribute our expertise and advice, while\n improving our own familiarity with the Agency\xe2\x80\x99s rapidly changing systems.\n We nevertheless maintain our ability to independently audit and review\n programs. Our participation on the task forces is typically as a\n nonvoting advisory member. We maintain a strict policy of excluding staff\n members who have served on developmental task forces from subsequent\n audits of the same subject areas.\n\n Some areas in which we have been involved this period include:\n\n \xe2\x80\xa2 Single Audit Act Activities. The Single Audit Act established uniform\n audit requirements for state and local governments receiving Federal\n awards. The non-Federal entities that receive Federal awards under\n more than one Federal program are required to undergo a single audit to\n prevent duplicate audits and inefficiencies. Each Federal agency monitors\n the non-Federal entity\xe2\x80\x99s use of awards provided by the Agency, and\n assesses the quality of the audits conducted relative to its program. The\n OIG monitors these activities primarily as they relate to the personal\n property disposal program.\n\n \xe2\x80\xa2 Multiple Award Schedule Working Group. The Multiple Award\n Schedule (MAS) Working Group was established as a result of an OIG\n report released in August 2001 relating to MAS contracting pricing\n practices. The MAS Working Group is primarily comprised of members of\n the Federal Acquisition Service (FAS) and the OIG, with representation\n also from the Office of General Counsel and the Office of the Chief\n Acquisition Officer. The Working Group has served as an effective\n institutionalized communications channel for both broad policy issues and\n discrete issues having to do with particular contracts or reviews.\n\n\n\n28 Semiannual Report to the Congress\n\x0cProfessional Assistance Services\n\n\n\n The Working Group has had several areas of focus, including preaward\n contract reviews and MAS negotiations issues. The Working Group has\n developed guidance to MAS contracting officers (COs) regarding the\n performance and use of preaward MAS contract reviews. Further, the\n Working Group has reinvigorated the process by which FAS and the OIG\n collaboratively select and commence preaward reviews of vendors, and\n has built into this process specific mechanisms for COs to request\n reviews of particular vendors. The Working Group has focused on issuing\n guidance to COs regarding negotiation objectives and discrete negotiation\n issues for MAS contract awards. The Working Group also provided input\n to FAS in its efforts to upgrade or enhance pricing performance measures\n on MAS contracts.\n\n \xe2\x80\xa2 GSA IT Governance Groups. Audit representatives participate as\n nonvoting members on three of GSA\xe2\x80\x99s major IT governance teams and\n attend all meetings. The Information Technology Architecture Planning\n Committee defines the standards for GSA\xe2\x80\x99s information technology in\n support of business goals and at the direction of the Information\n Technology Council (ITC). The ITC is comprised of senior IT staff\n members from the Office of the Chief Information Officer with GSA\n services, staff offices, and regions to collaboratively explore and\n determine actions needed to ensure that IT decisions have a sound\n business and IT investment basis. Senior audit representatives also\n participate in meetings of the Business Systems Council, a senior\n management forum chaired by the Deputy Administrator, which make\n decisions regarding major IT investments in conjunction with GSA\xe2\x80\x99s\n Performance Management process, the Human Capital Planning process,\n the IT Capital Planning and Investment process, and ongoing business\n process changes for the Agency.\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 29\n\x0c Statistical Summary of OIG Accomplishments\n\n\n\n Audit Reports Issued\n The OIG issued 70 audit reports during this reporting period. The 70 reports\n contained financial recommendations totaling $622,716,483 including\n $622,480,897 in recommendations that funds be put to better use and\n $235,586 in questioned costs. Due to GSA\xe2\x80\x99s mission of negotiating\n contracts for governmentwide supplies and services, most of the savings\n from recommendations that funds be put to better use would be applicable\n to other Federal agencies.\n\n Management Decisions on Audit Reports\n Table 1 summarizes the status of the universe of audits requiring\n management decisions during this period, as well as the status of those\n audits as of September 30, 2006. There were no reports more than\n 6 months old awaiting management decisions as of September 30, 2006.\n Table 1 does not include one report issued to other agencies this period.\n Table 1 also does not include five reports excluded from the management\n decision process because they pertain to ongoing investigations.\n\n\n Table 1. Management Decisions on OIG Audits\n\n\n Reports with Total\n No. of Financial Financial\n Reports Recommendations Recommendations\n\n For which no management decision\n had been made as of 4/1/06\n Less than six months old 39 21 $ 112,216,801\n Six or more months old 0 0 0\n Reports issued this period 69 40 622,716,483\n TOTAL 108 61 $ 734,933,284\n For which a management decision\n was made during the reporting period\n Issued prior periods 39 21 $ 112,216,801\n Issued current period 44 21 405,998,742\n TOTAL 83 42 $ 518,215,543\n For which no management decision\n had been made as of 9/30/06\n Less than six months old 25 19 $ 216,717,741\n Six or more months old 0 0 0\n TOTAL 25 19 $ 216,717,741\n\n\n\n\n30 Semiannual Report to the Congress\n\x0c Statistical Summary of OIG Accomplishments\n\n\n\n Management Decisions on Audit Reports with\n Financial Recommendations\n Tables 2 and 3 present the audits identified in Table 1 as containing financial\n recommendations by category (funds to be put to better use or questioned\n costs).\n\n\n\n\n Table 2. Management Decisions on OIG Audits with\n Recommendations that Funds be Put to Better Use\n\n No. of Financial\n Reports Recommendations\n\nFor which no management decision had\nbeen made as of 4/1/06\n Less than six months old 19 $ 103,855,576\n Six or more months old 0 0\nReports issued this period 36 622,480,897\nTOTAL 55 $ 726,336,473\n\nFor which a management decision was\nmade during the reporting period\nTOTAL 36 $509,618,732*\n\nFor which no management decision had\nbeen made as of 9/30/06\n Less than six months old 19 $ 216,717,741\n Six or more months old 0 0\nTOTAL 19 $ 216,717,741\n\n *Management agreed with 100 percent of the recommended amount.\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 31\n\x0c Statistical Summary of OIG Accomplishments\n\n\n\n\n Table 3. Management Decisions on OIG Audits\n with Questioned Costs\n\n No. of Questioned\n Reports Costs\n\n For which no management decision\n had been made as of 4/1/06\n Less than six months old 2 $ 8,361,225\n Six or more months old 0 0\n Reports issued this period 4 235,586\n TOTAL 6 $ 8,596,811\n\n For which a management decision\n was made during the reporting period\n TOTAL 6 $10,327,538*\n\n For which no management decision\n had been made as of 9/30/06\n Less than six months old 0 $ 0\n Six or more months old 0 0\n TOTAL 0 $ 0\n\n *Includes $1,730,727 that management decided to seek that exceeded recommended amounts.\n\n\n\n\n32 Semiannual Report to the Congress\n\x0c Statistical Summary of OIG Accomplishments\n\n\n\n Investigative Workload\n The OIG opened 131 investigative cases and closed 61 cases during this\n period. In addition, the OIG received and evaluated 53 complaints and\n allegations from sources other than the Hotline that involved GSA\n employees and programs. Based upon our analyses of these complaints\n and allegations, OIG investigations were not warranted.\n\n Referrals\n The OIG makes criminal referrals to the Department of Justice or other\n authorities for prosecutive consideration and civil referrals to the Civil\n Division of the Department of Justice or U.S. Attorneys for litigative\n consideration. The OIG also makes administrative referrals to GSA officials\n on certain cases disclosing wrongdoing on the part of GSA employees,\n contractors, or private individuals doing business with the government.\n\n\n\n Table 4. Summary of OIG Referrals\n\nType of Referral Cases Subjects\nCriminal 42 108\nCivil 5 9\nAdministrative 91 220\nTOTAL 138 337\n\n\n In addition, the OIG made 25 referrals to GSA officials for information\n purposes only.\n\n Actions on OIG Referrals\n Based on these and prior referrals, 24 cases (52 subjects) were accepted\n for criminal prosecution and 3 cases (7 subjects) were accepted for civil\n litigation. Criminal cases originating from OIG referrals resulted in\n 42 indictments/informations and 43 successful prosecutions. OIG civil\n referrals resulted in 2 case settlements. Based on OIG administrative\n referrals, management debarred 48 contractors/individuals, suspended\n 53 contractors/individuals, and took 7 personnel actions against employees.\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 33\n\x0c Statistical Summary of OIG Accomplishments\n\n\n\n Monetary Results\n Table 5 presents the amounts of fines, penalties, settlements, judgments,\n and restitutions payable to the U.S. Government as a result of criminal and\n civil actions arising from OIG referrals.\n\n\n Table 5. Criminal and Civil Recoveries\n Criminal Civil\n\n Fines and Penalties $ 705,669 $ \xe2\x80\x94\n\n Settlements 4,846,000\n\n Restitutions 2,507,330 \xe2\x80\x94\n\n TOTAL $3,212,999 $4,846,000\n\n\n Table 6 presents the amount of administrative recoveries, cost avoidance,\n and management commitment as a result of investigative activities.\n\n\n Table 6. Other Monetary Results\n Administrative Recoveries $176,902\n\n Cost Avoidance 464,002\n\n Management Commitment 36,825\n\n TOTAL $677,729\n\n\n\n\n34 Semiannual Report to the Congress\n\x0cAPPENDICES\n\x0c\x0c Appendix I\xe2\x80\x93Significant Audits from Prior Reports\n\n\n\n\nUnder the Agency audit management decision process, Southeast Sunbelt Region PBS\nthe GSA Office of the Chief Financial Officer, Office of\nthe Controller, is responsible for tracking the Environment Program Management\nimplementation of audit recommendations after a Period First Reported: October 1, 2005, to March 31, 2006\nmanagement decision has been reached. That office\nfurnished the following status information. This regional review identified a need to expand the\n ERI to include delegated facilities and to improve the\nSeventeen audits highlighted in prior reports to the accuracy of environmental liability reporting. The\nCongress have not yet been fully implemented; all are report contained two recommendations; they have not\nbeing implemented in accordance with currently been implemented.\nestablished milestones.\n The recommendations require strengthening\nPBS Environment Program environmental liability reporting and ensuring that the\n environmental officials include delegated buildings.\nManagement They are scheduled for completion on November 15,\nPeriod First Reported: October 1, 2005, to March 31, 2006 2006.\nThe review found that the scope of the Environment Tenant Improvements\nManagement Program needs to be expanded, and the Period First Reported: October 1, 2005, to March 31, 2006\ndatabase needs several application controls. The\nreport contained ten recommendations; two have been The review of tenant improvements in three GSA\nimplemented. regions disclosed the need for better oversight of the\n tenant improvement process in leased space. The\nOne recommendation involves implementing a national\n report contained four recommendations; they have not\nEnvironmental Management System (EMS) to ensure\n been implemented.\nthe PBS program\xe2\x80\x99s national office continues to make\nprogress, to develop and implement a regional\n The recommendations involve ensuring that associates\nstrategy, and to incorporate the recommendations of\n follow established guidance, initiating a standardized\nthe EPA EMS review. It is scheduled for completion on\n methodology for tracking and reconciling improvement\nJanuary 15, 2007. Another recommendation involves\n costs, providing guidance and training related to cost\nimproving the Environmental Risk Index (ERI) by\n proposals, and ensuring that the responsible person\nexpanding its scope, ensuring that all regional\n manages tenant improvement projects. They are\nenvironment officials know how to include delegated\n scheduled for implementation between January 15,\nbuildings, and enhancing the ERI database with a\n 2007 and July 15, 2007.\nnumber of controls. It is scheduled for completion\nbetween November 15, 2006 and April 15, 2007.\nAnother recommendation involves ensuring that\n Using Facility Management\nPBS management supervises the environmental Schedules\nliability report. It is scheduled for completion on Period First Reported: October 1, 2005, to March 31, 2006\nApril 15, 2007. The fourth recommendation involves\napplying a risk-based approach to identify tenants This review found that PBS was not using the\nwhose activities pose a greater risk to the environment FSS Facilities Maintenance and Management\nand execute a written agreement with them. It is schedules extensively. The report contained two\nscheduled for completion on January 15, 2007. recommendations; they have not been implemented.\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 37\n\x0c Appendix I\xe2\x80\x93Significant Audits from Prior Reports\n\n\n\nThe recommendations require fostering awareness Fleet. The report contained four recommendations;\nand compliance with guidelines, and assessing how the they have not been implemented.\nMAS schedule can best serve PBS\xe2\x80\x99s need for facility\nmaintenance contracting. They are scheduled for The recommendations involve working with DESC to\ncompletion on February 15, 2007 and May 15, 2007, establish a written agreement, establishing internal\nrespectively. procedures to quickly review the bills and process them\n for payment, and working with DESC to reevaluate and\nReview of the Western Distribution resolve disputed bills. They are scheduled for comple-\nCenter Relocation Project tion between November 15, 2006 and March 15, 2007.\nPeriod First Reported: October 1, 2005, to March 31, 2006\n CONNECTIONS Program Contract\nIn the review of the relocation project, we found that the Period First Reported: October 1, 2005, to March 31, 2006\nprocurement was inadequately competed and\nadministered contributing to cost overruns. The report This review found that several problems exist in the use\ncontained three recommendations; they have not been of the CONNECTIONS contract at the regional level.\nimplemented. The report contained three recommendations; two\n have been implemented.\nThe recommendations involve strengthening the\nmanagement controls over the acquisition process, The remaining recommendation, which requires\nheightening the awareness among associates on the establishing a percentage limit for other direct costs to\nimportance of proper procurement practices, and be used by all the regions, is scheduled for completion\nenforcing compliance with acquisition policies, on December 15, 2006.\nregulations, and procedures. They are scheduled for\ncompletion on December 15, 2006. IT System Contingency Planning\n Period First Reported: October 1, 2005, to March 31, 2006\nE-Gov Travel\nPeriod First Reported: October 1, 2005, to March 31, 2006 The review identified the need to develop a\n comprehensive FSS-19 specific IT contingency plan to\nThe review of the management practices providing cover all system components and procedures. The\noversight of the E-Gov Travel Initiative and support report contained two recommendations; they have not\nagencies disclosed that cost, schedule, and been implemented.\nperformance risks exist. The report contained five\nrecommendations; three have been implemented. The recommendations involve addressing steps to\n develop an IT contingency plan in accordance with\nThe remaining recommendations require developing agency-wide policy and guidance and ensuring that\nrealistic Industrial Funding Fee revenue estimates and policy and guidance address all key policy elements.\ncreating guidance to help agencies develop reasonable They are scheduled for completion on February 15,\ndeployment and migration task timeframes. They are 2007 and April 15, 2007, respectively.\nscheduled for completion between November 15, 2006\nand February 15, 2007. Federal Procurement Data System\xe2\x80\x94\n Next Generation\nFleet\xe2\x80\x99s Purchase of Defense Energy Period First Reported: October 1, 2005, to March 31, 2006\nSupport Center Fuel\nPeriod First Reported: October 1, 2005, to March 31, 2006 The review disclosed that certain contract and system\n requirements had not been addressed and\nThis review identified the need to develop a centralized discrepancies existed in some elements in the system.\nelectronic billing and payment procedure between The report contained three recommendations; two\nDefense Energy Support Center (DESC) and GSA\xe2\x80\x99s have been implemented.\n\n\n38 Semiannual Report to the Congress\n\x0c Appendix I\xe2\x80\x93Significant Audits from Prior Reports\n\n\n\n\nThe remaining recommendation, which requires The remaining recommendations involve ensuring that\nresolving all data element discrepancies and data all significant contractual areas are included on the\nmigration issues, is scheduled for completion on report card, integrating a rating and weighting system,\nNovember 15, 2006. providing guidance on formulating the report card and\n follow-up procedures on contractor deficiencies, and\nRepair and Alterations Program instituting a directive that contractors use the report\nPeriod First Reported: April 1, 2005, to September 30, 2005 card. They are scheduled for completion between\n November 15, 2006 and December 15, 2006.\nThe review centered on whether GSA has an effective\nstrategy to repair and modernize federally-owned GSA Advantage!\nbuildings. The report contained four recommendations; Period First Reported: April 1, 2005, to September 30, 2005\nthey have not been implemented.\n The review centered on specific shortfalls with GSA\nThe recommendations involve a comprehensive plan Advantage\xe2\x80\x99s management funding and planning\naddressing repair and modernization requirements of process. The report contained four recommendations;\nthe GSA building inventory; advocating its processes they have not been implemented.\nand systems to assess building conditions, identify\n The recommendations involve establishing a\nbuilding deficiencies, and schedule work items;\n management structure with adequate authority and\ncompleting a strategy to systematically define the\n responsibility, developing and implementing specific\nbuilding inventory to meet customer agency long-term\n performance measures, ensuring adequate processes\nneeds; and developing a methodology to prioritize the are in place to minimize potential delays of vendor\nprospectus-level projects. They are scheduled for product data uploads, and analyzing virtual stores to\ncompletion on November 15, 2006. ensure the benefits of these investments exceed their\n development and maintenance costs. They are\nExpanded Direct Delivery Program scheduled for completion on November 15, 2006.\nPeriod First Reported: April 1, 2005, to September 30, 2005\n Comprehensive Human Resources\nThe review focused on the timely processing of\ncustomer orders under two blanket purchase Integrated System\n Period First Reported: April 1, 2005, to September 30, 2005\nagreements under the Office of Global Supply\xe2\x80\x99s\nExpanded Direct Delivery (EDD) Program. The report\n The review of the Comprehensive Human Resources\ncontained two recommendations; one has not been\n Integrated System identified user reluctance to use the\nimplemented.\n system and the availability of duplicative system\n functionality provided by other GSA systems. The\nThe remaining recommendation involves establishing report contained three recommendations; one has\nincentives for EDD contractors to fulfill their been implemented.\nperformance metric on order fills and back orders and\nestablishing a system to address missing shipment The remaining recommendations involve conducting a\nstatus records. It is scheduled for completion on post-implementation review and ensuring that\nNovember 15, 2006. adequate security controls are in place to manage\n risks. They are scheduled for completion on\nContractor Assessment Initiative November 15, 2006.\nPeriod First Reported: April 1, 2005, to September 30, 2005\n Review of FedBizOpps\nThe review focused on the Administrative Report Card Period First Reported: April 1, 2004, to September 30, 2004\nwhich was created to assist contracting officers in\nmaking decisions about exercising contract options and The review involved an online survey of FedBizOpps\nawarding additional contracts. The report contained six users to gather information on user satisfaction to\nrecommendations; two have been implemented. assess the effectiveness of FedBizOpps. The report\n April 1, 2006 \xe2\x80\x93 September 30, 2006 39\n\x0c Appendix I\xe2\x80\x93Significant Audits from Prior Reports\n\n\n\n\ncontained four recommendations; one has been Consolidation of Distribution Centers\nimplemented. Period First Reported: October 1, 2002 to March 31, 2003\n\n The review examined the operations of the FSS Stock\nThe recommendations involve developing a process to\n Program. The report contained two recommendations;\nsolicit input from vendors on system enhancements,\n one has been implemented.\nevaluating enhancements to FedBizOpps based on\nvendor input, and ensuring that memoranda of The remaining recommendation, which requires\nagreement are in place for FedBizOpps users. The developing access to reliable data for all delivery\nrecommendations are scheduled for completion methods, is scheduled for completion on November 15,\nbetween November 15, 2006 and May 15, 2006. 2006.\n\n\n\n\n40 Semiannual Report to the Congress\n\x0c Appendix II\xe2\x80\x93Audit Report Register\n Financial\n Recommendations\n Funds to Questioned\nDate of Audit Be Put to (Unsupported)\nReport Number Title Better Use Costs\n\n\n\n\n(Note: Because some audits pertain to contract award or actions that have\nnot yet been completed, the financial recommendations related to these\nreports are not listed in this Appendix.)\n\nPBS Internal Audits\n04/19/06 A050130 Review of Overtime Management Controls\n in GSA Public Buildings Service, National\n Capital Region\n\nPBS Contract Audits\n06/14/06 A020126 Review of Progress Payments Under $169,273\n Fixed-Price Construction Contract: U.S.\n Courthouse, Hammond, Indiana, Hunt\n Construction Group, Inc., Contract Number\n GS-05P-96-GBC-0015\n\n08/01/06 A050253 Limited Review of a Claim for Increased\n Costs: Garfunkel Development\n Corporation, Contract Number GS-04B-\n 36092\n\n09/13/06 A060231 Preaward Review of Architect and\n Engineering Services Contract: Teng &\n Associates, Inc., Contract Number GS-\n 01P-06-BZC-0004\n\n09/26/06 A060203 Review of a Claim for Termination: Ross\n Barney and Jankowski Inc., Contract\n Number GS-04P-04-EXC-0046\n\nFSS Internal Audits\n04/06/06 A060029 Review of the Federal Supply Service\xe2\x80\x99s\n Quick-MOD Program\n\n06/07/06 A060016 Review of Inventory of Sensitive Items,\n Western Distribution Center, Pacific Rim\n Region, Federal Supply Service\n\n06/30/06 A060164 Review of Federal Supply Service Travel\n Card Program, Pacific Rim Region\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 41\n\x0c Appendix II\xe2\x80\x93Audit Report Register\n Financial\n Recommendations\n Funds to Questioned\nDate of Audit Be Put to (Unsupported)\nReport Number Title Better Use Costs\n\n\n\n\nFSS Contract Audits\n04/12/06 A060008 Preaward Review of Multiple Award\n Schedule Contract: Lenovo, Inc.,\n Solicitation Number FCIS-JB-98001B\n\n04/12/06 A060064 Preaward Review of Multiple Award\n Schedule Contract Extension: Cherokee\n Information Services, Incorporated,\n Contract Number GS-00F-0052M\n\n04/18/06 A050122 Review of Industrial Funding Fee $35,274\n Remittances: Fastenal Company, Contract\n Number GS-06F-0039K\n\n04/20/06 A060114 Preaward Review of Multiple Award\n Schedule Contract Extension: GE Ion\n Track, Incorporated, Contract Number GS-\n 07F-9500G\n\n04/25/06 A050265 Preaward Review of Multiple Award\n Schedule Contract Extension: Lawson\n Products, Inc., Contract Number GS-06F-\n 0027L\n\n04/27/06 A050200 Preaward Review of Multiple Award\n Schedule Contract: Motorola\n Incorporated, Solicitation Number FCIS-\n JB-980001-B\n\n04/27/06 A050242 Preaward Review of Multiple Award\n Schedule Contract Extension: EC\n America, Inc., Contract Number GS-35F-\n 0414K\n\n04/28/06 A060041 Preaward Review of Multiple Award\n Schedule Contract Extension: Morgan\n Research Corporation, Contract Number\n GS-23F-0191L\n\n05/04/06 A060087 Preaward Review of Multiple Award\n Schedule Contract Extension: Rapiscan\n Security Products, Incorporated, Contract\n Number GS-07F-9429G\n\n\n\n42 Semiannual Report to the Congress\n\x0c Appendix II\xe2\x80\x93Audit Report Register\n Financial\n Recommendations\n Funds to Questioned\nDate of Audit Be Put to (Unsupported)\nReport Number Title Better Use Costs\n\n\n\n\n05/04/06 A050223 Limited Scope Review of Multiple Award $19,765\n Schedule Contract Number GS-07F-\n 8785D for the Period January 1, 2004\n Through September 30, 2005: Advantor\n Systems Corporation\n\n05/05/06 A050079 Limited Scope Review of Multiple Award $11,274\n Schedule Contract: Johnson Controls,\n Inc., Contract Number GS-07F-7823C\n\n05/09/06 A050180 Preaward Review of Multiple Award\n Schedule Contract Extension: Office\n Depot, Incorporated, Contract Number GS-\n 14F-0040K\n\n05/09/06 A060077 Preaward Review of Multiple Award\n Schedule Contract Extension: Worldwide\n Language Resources, Inc., Contract\n Number GS-10F-0307L\n\n05/11/06 A060073 Preaward Review of Multiple Award\n Schedule Contract Extension: Safety\n Systems Corporation, Contract Number\n GS-07F-8860D\n\n05/11/06 A060108 Preaward Review of Multiple Award\n Schedule Contract Extension: Protective\n Materials Company, Contract Number GS-\n 07F-9489G\n\n05/17/06 A050195 Preaward Review of Multiple Award\n Schedule Contract Extension: TAC\n Americas, Inc., Contract Number GS-07F-\n 7851C\n\n05/17/06 A060147 Preaward Review of Multiple Award\n Schedule Contract Extension: K-Con, Inc,\n Contract Number GS-07F-0216L\n\n05/19/06 A060083 Preaward Review of Multiple Award\n Schedule Contract Extension: Information\n Manufacturing Corporation, Contract\n Number GS-25F-0032L\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 43\n\x0c Appendix II\xe2\x80\x93Audit Report Register\n Financial\n Recommendations\n Funds to Questioned\nDate of Audit Be Put to (Unsupported)\nReport Number Title Better Use Costs\n\n\n\n05/24/06 A050245 Preaward Review of Multiple Award\n Schedule Contract: Corporate Express,\n Inc., Solicitation Number GS-14F-0016L\n\n05/24/06 A060104 Preaward Review of Multiple Award\n Schedule Contract Extension: Benefit\n Recovery Specialists, L.P., Contract\n Number GS-23F-0186L\n\n06/01/06 A060111 Preaward Review of Multiple Award\n Schedule Contract Extension: American\n Science & Engineering, Inc., Contract\n Number GS-07F-8897D\n\n06/08/06 A050251 Preaward Review of Multiple Award\n Schedule Contract Extension: ARES\n Corporation, Contract Number GS-23F-\n 0113L\n\n06/08/06 A060107 Preaward Review of Multiple Award\n Schedule Contract Extension: OMNIPLEX\n World Services Corporation, Contract\n Number GS-15F-0051L\n\n06/12/06 A060099 Preaward Review of Multiple Award\n Schedule Contract Extension: Criticom,\n Inc., Contract Number GS-35F-0272L\n\n06/20/06 A050235 Preaward Review of Multiple Award\n Schedule Contract Extension: Research\n Triangle Institute, Contract Number GS-\n 10F-0097L\n\n06/22/06 A060154 Preaward Review of Multiple Award\n Schedule Contract Extension: Pierce\n Manufacturing, Inc., Contract Number GS-\n 30F-1045D\n\n06/28/06 A060130 Preaward Review of Multiple Award\n Schedule Contract Extension:\n InfoReliance Corporation, Contract\n Number GS-35F-0273L\n\n\n\n\n44 Semiannual Report to the Congress\n\x0c Appendix II\xe2\x80\x93Audit Report Register\n Financial\n Recommendations\n Funds to Questioned\nDate of Audit Be Put to (Unsupported)\nReport Number Title Better Use Costs\n\n\n\n\n07/05/06 A060162 Preaward Review of Multiple Award\n Schedule Contract Extension: Corporate\n Relocation Services, Contract Number GS-\n 23F-0243L\n\n07/06/06 A060054 Preaward Review of Multiple Award\n Schedule Contract Extension: Applera\n Corporation - Applied Biosystems Group,\n Contract Number GS-26F-5927A\n\n07/14/06 A060090 Preaward Review of Multiple Award\n Schedule Contract Extension: Point Blank\n Body Armor, Inc., Contract Number GS-\n 07F-8942D\n\n07/19/06 A060100 Preaward Review of Multiple Award\n Schedule Contract Extension: The Gallup\n Organization, Contract Number GS-00F-\n 0078M\n\n07/20/06 A060062 Preaward Review of Multiple Award\n Schedule Contract Extension: Agilent\n Technologies, Inc., Contract Number GS-\n 26F-5944A\n\n07/25/06 A060146 Preaward Review of Multiple Award\n Schedule Contract Extension: Xiotech\n Corporation, Contract Number GS-35F-\n 0244L\n\n07/27/06 A060063 Preaward Review of Multiple Award\n Schedule Contract Extension: EMC\n Corporation, Contract Number GS-35F-\n 0088K\n\n08/09/06 A050204 Preaward Review of Multiple Award\n Schedule Contract Extension: Plantronics,\n Incorporated, Contract Number GS-35F-\n 0167L\n\n08/14/06 A060093 Preaward Review of Multiple Award\n Schedule Contract Extension: WFI\n Government Services, Inc., Contract\n Number GS-23F-0215L\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 45\n\x0c Appendix II\xe2\x80\x93Audit Report Register\n Financial\n Recommendations\n Funds to Questioned\nDate of Audit Be Put to (Unsupported)\nReport Number Title Better Use Costs\n\n\n\n08/15/06 A060127 Preaward Review of Multiple Award\n Schedule Contract Extension May 7, 2006\n Through May 6, 2011: W. B. Brawley\n Company, Contract Number GS-27F-\n 0018L\n\n08/31/06 A060191 Preaward Review of Multiple Award\n Schedule Contract Extension: Deco,\n Incorporated, Contract Number GS-07F-\n 0103M\n\n09/07/06 A060181 Preaward Review of Multiple Award\n Schedule Contract Extension: Haverstick\n Government Solutions, Inc., Contract\n Number GS-35F-0496L\n\n09/07/06 A060183 Preaward Review of Multiple Award\n Schedule Contract: Cubic Simulation\n Systems, Inc., Solicitation Number 2FYA-\n WA-030003-B\n\n09/12/06 A060115 Preaward Review of Multiple Award\n Schedule Contract Extension: WFI\n Government Services, Inc., Contract\n Number GS-03F-0553L\n\n09/25/06 A060215 Preaward Review of Multiple Award\n Schedule Contract Modification: SAP\n Public Services, Inc., Contract Number\n GS-35F-5891H\n\n09/28/06 A060155 Preaward Review of Multiple Award\n Schedule Contract Extension: Security\n Consultants Group, Inc., Contract Number\n GS-07F-0267L\n\nFTS Internal Audits\n09/25/06 A060151 Review of Federal Technology Service\xe2\x80\x99s\n Telecommunications Ordering and Pricing\n System\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Northeast and\n Caribbean Region\n\n\n46 Semiannual Report to the Congress\n\x0c Appendix II\xe2\x80\x93Audit Report Register\n Financial\n Recommendations\n Funds to Questioned\nDate of Audit Be Put to (Unsupported)\nReport Number Title Better Use Costs\n\n\n\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Mid-Atlantic Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Southeast Sunbelt\n Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Greater Southwest\n Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Rocky Mountain\n Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, New England\n Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Heartland Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Pacific Rim Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Great Lakes Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, Northwest/Arctic\n Region\n\n09/28/06 A050198 Review of Federal Technology Service\xe2\x80\x99s\n Client Support Center, National Capital\n Region\n\n09/29/06 A050078 Review of Federal Systems Integration and\n Management Center (FEDSIM)\n\nFTS Contract Audits\n04/27/06 A050259 Preaward Review of Price Adjustment\n Claim: Lockheed Martin Information\n Technology, Task Order Number\n R1570125, Contract Number GS-35F-\n 4863G\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 47\n\x0c Appendix II\xe2\x80\x93Audit Report Register\n Financial\n Recommendations\n Funds to Questioned\nDate of Audit Be Put to (Unsupported)\nReport Number Title Better Use Costs\n\n\n\n\nOther Internal Audits\n05/02/06 A060123 Alert Report on Information Technology\n Security Controls for GSA\xe2\x80\x99s Public and\n Intranet Web Applications and Web\n Servers\n\n08/28/06 A050250 Review of GSA\xe2\x80\x99s University for People,\n National Capital Region\n\n09/08/06 A060123 FY 2006 Office of Inspector General\n FISMA Review of GSA\xe2\x80\x99s Information\n Technology Security Program\n\n09/29/06 A050260 Review of GSA\xe2\x80\x99s Competitive Sourcing\n Initiative\n\nNon-GSA Contract Audits\n09/07/06 A060150 Review of Del Amo Reimbursement\n Requests: Shell Oil Company\n\n\n\n\n48 Semiannual Report to the Congress\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\nPublic Law 104-106 requires the head of a Federal In GSA, the Office of the Chief Financial Officer (OCFO)\nagency to complete final action on each management is responsible for monitoring and tracking open recom-\ndecision required with regard to a recommendation in mendations. While we continue to assist the agency in\nan Inspector General\xe2\x80\x99s report within 12 months after the resolving these open items, various litigative\ndate of the report. If the head of the agency fails to proceedings, continuing negotiations of contract\ncomplete final action within the 12-month period, the proposals, and corrective actions needed to undertake\nInspector General shall identify the matter in the complex and often phased-in implementing actions\nsemiannual report until final action is complete. often delay timely completion of the final action.\n\nThe OCFO provided the following list of reports with action items open beyond 12 months:\n\n\nDate of Audit\nReport Number Title\n\n\nContract Audits\n03/21/97 A70632 Preaward Audit of Change Order Proposal: Expert Electric, Inc., Contract Number\n GS-02P-94-CUC-0033(N)\n\n06/27/97 A71811 Audit of Claim for Increased Costs, Miscellaneous Subcontractors to: Morse Diesel\n International, Inc., Contract Number GS-06P-94-GYC-0037\n\n07/11/97 A71803 Audit of Claim for Increased Costs: Nicholson Construction Company, Contract\n Number GS-06P-94-GYC-0037\n\n07/22/97 A71804 Audit of Claim for Increased Costs: Rodio/ICOS St. Louis Joint Venture,\n Subcontractor to Morse Diesel International, Inc., Contract Number\n GS-06-P94-GYC-0037\n\n07/31/97 A71820 Audit of Claim for Increased Costs: Morse Diesel International, Inc., Contract\n Number GS-06-P94-GYC-0037\n\n08/05/97 A73617 Refund From The Committee For Purchase From People Who Are Blind Or\n Severely Disabled, Agreement Number GS-02F-61511\n\n02/05/98 A80609 Preaward Audit of a Delay Claim: The Woodworks Architectural Millwork, Inc.,\n Subcontractor to Beacon/Pro Con Joint Venture, Contract Number GS-02P-94-\n CUC-0070(N)\n\n05/27/98 A42146 Postaward Audit of Multiple Award Schedule Contract: Haworth, Incorporated,\n Contract Number GS-00F-07010\n\n06/17/98 A82441 Preaward Audit of a Claim for Increased Costs: Morse Diesel International, Inc.,\n Contract Number GS-09P-95-KTC-0010\n\n02/05/99 A995113 Preaward Audit of Supplemental Architect and Engineering Services Contract: Van\n Deusen & Associates, Solicitation Number GS-02P-98-PLD-0029(N)\n\n03/24/99 A995128 Preaward Audit of Cost or Pricing Data: Sachs Electric Company, Subcontractor to\n Morse Diesel International, Inc., Contract Number GS-06P-95-GZC-0501\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 49\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit\nReport Number Title\n\n\n06/24/99 A995231 Audit of Small Business Subcontracting Plan: Rael Automatic Sprinkler Company,\n GS-02P-95-DTC-0041(N)\n\n07/07/99 A995249 Audit of Small Business Subcontracting Plan: L. Martone and Sons, Inc., Contract\n Number GS-02P-95-DTC-0041(N)\n\n10/13/99 A995262 Preaward Audit of a Claim: Metropolitan Steel Industries, Inc., Subcontractor to\n Turner Construction Company, Contract GS-02P-95-DTC-0014(N)\n\n10/26/99 A995278 Preaward Audit of a Claim: Midlantic Erectors, Inc., Subcontractor to Metropolitan\n Steel Industries, Inc., Contract Number GS-02P-95-DTC-0014(N)\n\n11/04/99 A995272 Preaward Audit of a Claim: Metropolitan Steel Industries, Inc., Subcontractor to\n Turner Construction Company, Contract Number GS-02P-95-DTC-0014(N)\n\n11/10/99 A995271 Preaward Audit of Architect and Engineering Services Contract: HLW International\n LLP, Contract Number GS-02P-93-CUC-0062\n\n03/29/00 A81830 Postaward Audit of Standardization and Control of Industrial-Quality Tools\n Contract: Wright Tool Company, Contract Number GS-00F-14609 for the Period\n March 8, 1991 Through February 29, 1996\n\n03/29/00 A995122 Postaward Audit of Standardization and Control of Industrial-Quality Tools\n Contract: Wright Tool Company, Contract Number GS-00F-14609 for the Interim\n Period March 1, 1996 Through April 30, 1998\n\n06/01/00 A000971 Audit of Claims for Increased Costs: Midwest Curtainwalls, Inc., The Federal\n Triangle Project\n\n07/19/00 A000940 Preaward Audit of a Claim: Coken Company, Inc., Subcontractor to Turner\n Construction Company, Contract Number GS-02P-95-DTC-0014\n\n08/24/00 A000941 Preaward Audit of a Claim: Centrifugal/Mechanical Associates, Inc., Subcontractor\n to Turner Construction Company, Contract Number GS-02P-95-DTC-0014\n\n10/17/00 A001024 Preaward Audit of a Claim: Canron Fabrication Corp., Second-Tier Subcontractor\n to Turner Construction Company, Contract Number GS-02P-95-DTC-0014\n\n10/30/00 A000942 Preaward Audit of a Claim: Centrifugal/Mechanical Associates, Inc., Subcontractor\n to Turner Construction Company, Contract Number GS-02P-95-DTC-0014\n\n01/29/01 A000909 Preaward Audit of a Claim: Turner Construction Company, Contract Number GS-\n 02P-95-DTC-0014\n\n02/08/01 A010089 Audit of a Claim for Increased Costs: Palafox Street Associates, L.P., Federal\n Courthouse, Pensacola, FL, Lease Number GS-04B-35055\n\n\n\n50 Semiannual Report to the Congress\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit\nReport Number Title\n\n\n03/20/01 A001119 Audit of Forward Pricing Rates: J.A. Jones-GMO, LLC, Contract Number GS-02P-\n 99-DTC-0006 & GS-02P-98-DTC-0088\n\n04/30/01 A010127 Audit of Billings under Contract Number GS-06P-99-GZC-0315: DKW\n Construction, Inc.\n\n05/11/01 A010128 Preaward Audit of a Change Order Proposal: D.A.G. Floors, Inc., Subcontractor to\n J. Kokolakis Contracting, Inc., Contract Number GS-02P-98-DTC-0056N\n\n07/31/01 A001055 Preaward Audit of a Claim: Heritage Air Systems, Inc., Subcontractor to Turner\n Construction Company, Contract Number GS-02P-95-DTC-0014\n\n10/18/01 A63630 Postaward Audit of Multiple Award Schedule Contract: The Presidio Corporation,\n Contract Number GS-00K-95-AGS-6170, Contract Period April 1, 1995 through\n March 31, 1996\n\n10/31/01 A010265 Preaward Audit of Architect and Engineering Services Contract; HNTB District of\n Columbia Architecture, P.C., Solicitation Number GS-11P-00-MQC-0041\n\n01/11/02 A010281 Preaward Audit of a Claim for Increased Costs: Lawson Mechanical Contractors,\n Subcontractor to Morse Diesel International, Inc., New U.S. Courthouse & Federal\n Building, Sacramento, California, Contract Number GS-09P-95-KTC-0032\n\n02/20/02 A010138 Preaward Audit of a Claim: Heritage Air Systems, Inc., Subcontractor to Turner\n Construction Company, Contract Number GS-02P-95-DTC-0014\n\n04/03/02 A010263 Preaward Audit of a Claim: Island ADC, Inc., Subcontractor to Turner Construction\n Company, Contract Number GS-02P-95-DTC-0014\n\n04/11/02 A60648 Postaward Audit of Multiple Award Schedule Contract: Gaylord Bros., Contract\n Numbers GS-00F-3918A & GS-00F-3919A\n\n04/18/02 A010248 Preaward Audit of a Claim: LBL Skysystems, Inc., Subcontractor to Turner\n Construction Company, Contract Number GS-02P-95-DTC-0014\n\n04/26/02 A010262 Preaward Audit of a Claim: Coken Company, Inc., Subcontractor to Turner\n Construction Company, Contract Number GS-02P-95-DTC-0014\n\n04/30/02 A020101 Preaward Audit of a Claim, Additional Change Items: Turner Construction\n Company, Contract Number GS-02P-95-DTC-0014\n\n05/16/02 A020115 Limited Scope Audit of a Termination Claim: Patriot Group Contractors, Inc.,\n Contract Number GS-11P-99-MAC-0006\n\n05/17/02 A020134 Audit of Delay Costs: J. Kokolakis Contracting, Inc., Contract Number GS-02P-98-\n DTC-0056N\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 51\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit\nReport Number Title\n\n\n05/29/02 A020109 Preaward Audit of a Claim: Schindler Elevator Corporation, Subcontractor to Turner\n Construction Company, Contract Number GS-02P-95-DTC-0014\n\n05/29/02 A020124 Preaward Audit of a Claim for Increased Costs: Res-Com Insulation, Inc.,\n Subcontractor to Morse Diesel International, Inc., New U.S. Courthouse & Federal\n Building, Sacramento, California, Contract Number GS-09P-95-KTC-0032\n\n06/12/02 A020097 Preaward Audit of a Claim for Increased Costs: Artisans G & H Fixtures, Inc.,\n Subcontractor to Morse Diesel International, Inc., New U.S. Courthouse & Federal\n Building, Sacramento, California, Contract Number GS-09P-95-KTC-0032\n\n06/27/02 A010239 Preaward Audit of a Claim: Turner Construction Company, Contract Number GS-\n 02P-95-DTC-0014\n\n07/16/02 A020191 Preaward Audit of Supplemental Architect and Engineering Contract: McMullan &\n Associates, Inc., Solicitation Number GS-11P-01-YTD-0319\n\n07/30/02 A020086 Preaward Audit of a Claim for Increased Costs: Raymond Interior Systems North,\n Subcontractor to Morse Diesel International, Inc., New U.S. Courthouse & Federal\n Building, Sacramento, California, Contract Number GS-09P-95-KTC-0032\n\n09/04/02 A020180 Preaward Audit of Architect and Engineering Services Contract: Adtek Engineering,\n Inc., Solicitation Number GS-11P-01-YTD-0319\n\n09/24/02 A020196 Preaward Audit of Architect and Engineering Services Contract: BEI Structural\n Engineers, Inc., Solicitation Number GS-11P-01-YTD-0319\n\n09/26/02 A020201 Preaward Audit of a Claim: Almar Plumbing and Heating Corp., Subcontractor to\n Turner Construction Company, Contract Number GS-02P-95-DTC-0014\n\n10/02/02 A020178 Preaward Audit of Multiple Award Schedule Contract Modification: Motorola, Inc.,\n GSA Contract Number GS-35F-0004L\n\n11/14/02 A020223 Preaward Audit of a Claim: Fine Painting Co., Inc., Subcontractor to Turner\n Construction Company, Contract Number GS-02P-95-DTC-0014\n\n11/20/02 A010279 Preaward Audit of a Claim for Increased Costs: Morse Diesel International, Inc.,\n U.S. Courthouse & Federal Building, Sacramento, California, Contract Number\n GS-09P-95-KTC-0032\n\n01/30/03 A020248 Audit of Claim for Increased Costs: Doan/Lake Erie LLC, Contract Number GS-\n 05P-99-GBC-0012\n\n03/14/03 A020197 Preaward Audit of a Claim: Rael Automatic Sprinkler Co., Inc., Subcontractor to\n Turner Construction Company, Contract Number GS-02P-95-DTC-0014\n\n\n\n\n52 Semiannual Report to the Congress\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit\nReport Number Title\n\n\n03/21/03 A020133 Preaward Audit of a Claim for Increased Costs: Cosco Fire Protection, Inc.,\n Subcontractor to Morse Diesel International, Inc., U.S. Courthouse & Federal\n Building, Sacramento, California, Contract Number GS-09P-95-KTC-0032\n\n03/25/03 A030140 Limited Scope Review of Termination Claim: Science Applications International\n Corporation, Contract Number GS-35F-4461G, Task Order Number T0002SJ0159\n\n05/02/03 A030106 Preaward Audit of a Claim for Increased Costs: George Foss Company,\n Subcontractor to Morse Diesel International, Inc., New U.S. Courthouse & Federal\n Building, Sacramento, California, Contract Number GS-09P-95-KTC-0032\n\n05/29/03 A020230 Preaward Audit of a Claim for Increased Costs: C.E. Toland & Son, Subcontractor\n to Morse Diesel International, Inc., U.S. Courthouse & Federal Building,\n Sacramento, California, Contract Number GS-09P-95-KTC-0032\n\n06/02/03 A030138 Audit of Claim for Increased Costs: Hunt Construction Group, Inc., Contract\n Number GS-05P-96-GBC-0015\n\n07/02/03 A030163 Preaward Audit of Multiple Award Schedule Contract Extension: Information\n Network Systems, Inc., Contract Number GS-35F-5002H\n\n08/08/03 A030177 Review of Incurred Costs: Jacobs Facilities, Inc., Contract Number GS-11P-98-\n MYD-0015\n\n09/29/03 A030152 Preaward Audit of a Claim: J.A. Jones Construction Group, LLC, Contract Number\n GS-02P-99-DTC-0006\n\n10/09/03 A030247 Preaward Audit of Architect and Engineering Design Services Contract: Syska\n Hennessy Group, Inc., Solicitation Number GS-11P-02-MKC-0057\n\n10/09/03 A030248 Preaward Audit of Architect and Engineering Design Services Contract: STUDIOS\n Architecture, Solicitation Number GS-11P-02-MKC-0057\n\n10/09/03 A030250 Preaward Audit of Architect and Engineering Design Services Contract: Thorton-\n Tomasetti-Cutts LLC, Solicitation Number GS-11P-02-MKC-0057\n\n10/09/03 A030244 Preaward Audit of Architect and Engineering Design Services Contract: Shalom\n Baranes Associates, Solicitation Number GS-11P-02-MKC-0057\n\n10/16/03 A030225 Preaward Audit of Claim: AMEC Construction Management, Inc., Contract Number\n GS-11P-96-MKC-0015\n\n12/05/03 A030241 Audit of Claim for Increased Costs: BPI Mechanical, Inc., Subcontractor to AMEC\n Construction Management, Inc., Contract Number GS-11P-96-MKC-0015\n\n12/17/03 A030168 Preaward Audit of Multiple Award Schedule Contract: Dynamic Systems, Inc.,\n Solicitation Number FCIS-JB-980001B\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 53\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit\nReport Number Title\n\n\n12/17/03 A040001 Preaward Audit of Multiple Award Schedule Contract: Concord Communications,\n Incorporated, Solicitation Number FCIS-JB-980001B\n\n12/31/03 A030172 Preaward Audit of a Claim: Cord Contracting Co., Inc., Subcontractor to J.A. Jones\n Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n12/31/03 A030215 Preaward Audit of a Claim: A&L Construction Corporation, Subcontractor to J.A.\n Jones Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n01/12/04 A040067 Audit of Claim for Increased Costs: C.J. Coakley Co., Inc., Subcontractor to AMEC\n Construction Management, Inc., Contract Number GS-11P-96-MKC-0015\n\n01/12/04 A040098 Preaward Audit of Supplemental Architect and Engineering Services Contract:\n Gonzalez Hasbrouck, Inc., Solicitation Number GS-05P-03-GBD-0072\n\n01/13/04 A030265 Interim Audit of Multiple Award Schedule Contract: BearingPoint, LLC, Contract\n GS-23F-9796H\n\n01/15/04 A030155 Preaward Audit of a Claim: LBL Skysystems, Inc., Subcontractor to J.A. Jones\n Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n01/16/04 A030234 Preaward Audit of a Claim: KSW Mechanical Services, Inc., Subcontractor to J.A.\n Jones Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n01/29/04 A030223 Preaward Audit of Claim: John J. Kirlin, Inc., Subcontractor to AMEC Construction\n Management, Inc., Contract Number GS-11P-96-MKC-0015\n\n02/03/04 A040119 Attestation Review of Supplemental Architect and Engineering Services Contract:\n Julie Snow Architects, Inc., Solicitation Number GS-05P-03-GBD-0072\n\n03/01/04 A030259 Preaward Audit of a Claim: Airflex Industrial Inc., Subcontractor to J.A. Jones\n Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n03/09/04 A040162 Price Adjustments on Multiple Award Schedule Contract: Nova Solutions, Inc.,\n Contract Number GS-29F-0173G, for the Interim Period April 1, 2004 Through\n September 30, 2006\n\n03/09/04 A030186 Postaward Audit of Multiple Award Schedule Contract: Nova Solutions, Inc.,\n Contract Number GS-29F-0173G, for the Contract Period December 12, 1996\n Through October 31, 2003\n\n03/23/04 A030191 Preaward Audit of a Claim: Five Star Electric Corp., Subcontractor to J.A. Jones\n Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n03/31/04 A030230 Preaward Attestation Review of a Claim: Singleton Electric Company, Inc., a\n Subcontractor to AMEC Construction Management, Inc., Contract Number GS-\n 11P-96-MKC-0015\n\n\n54 Semiannual Report to the Congress\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit\nReport Number Title\n\n\n06/03/04 A040091 Audit of Claim for Increased Costs: Industrial First, Inc., Subcontractor to Hirschfeld\n Steel Co., Inc., Contract Number GS-05P-97-GBC-0011\n\n06/08/04 A040165 Audit of Claim for Increased Costs: Industrial First, Inc., Subcontractor to Ajay\n Glass & Mirror Co., Inc., Contract Number GS-05P-97-GBC-0011\n\n06/09/04 A040095 Preaward Audit of a Termination Settlement Proposal: M.L. Benjamin Enterprises,\n Inc., Contract Number GS-02P-00P-VC-0024\n\n06/15/04 A040095 Audit of Final Contract Payment: M.L. Benjamin Enterprises, Inc., Contract Number\n GS-02P-00P-VC-0024\n\n06/28/04 A040085 Limited Scope Postaward Audit of Multiple Award Schedule Contract: Onboard\n Software, Inc., Contract Number GS-35F-0117J\n\n07/01/04 A040143 Review of Claim for Increased Costs: SimplexGrinnell, LP,GS-05P-99-GBC-0015\n\n07/12/04 A040125 Attestation Engagement Review of A/E Services Contract: Cannon Design, Inc.,\n Solicitation Number GS-02P-03-DTC-0003\n\n08/31/04 A030158 Preaward Audit of a Claim: ADF Steel Corp., Subcontractor to J.A. Jones\n Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n10/12/04 A040190 Review of a Claim: Peterson Geller Spurge, Inc., Subcontractor to J.A. Jones\n Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n10/14/04 A040192 Preaward Review of Multiple Award Schedule Contract Extension: US\n Investigations Services, Professional Services Division, Incorporated, Contract\n Number GS-07F-0385J\n\n10/28/04 A040161 Preaward Audit of a Claim: Artex Systems Inc., Subcontractor to J.A. Jones\n Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n10/29/04 A040211 Preaward Review of Multiple Award Schedule Contract Extension: Allsteel Inc.,\n Contract Number GS-28F-0010J\n\n12/30/04 A050083 Attestation Engagement Review of Claim for Increased Costs: LDI Metalworks,\n Inc., Subcontractor to Mitchell Enterprises, Inc., Contract Number GS-07P-00-\n UJC-0007\n\n01/04/05 A040255 Review of Information Systems Support, Inc.\xe2\x80\x99s billings for Task Order Number\n GS10TR-00EBF-2546 Under GSA Contract Number GS-06K-97-BND-0710\n\n01/05/05 A040212 Preaward Review of Multiple Award Schedule Contract Extension: ManTech\n Advance Systems International, Inc., Contract Number GS-23F-0122J\n\n04/06/05 A050059 Preaward Review of Multiple Award Schedule Contract: Cort Business Services,\n Solicitation Number 3FNO-M1-010001-B\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 55\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit\nReport Number Title\n\n\n05/10/05 A050112 Preaward Review of Multiple Award Schedule Contract Extension: Entrust, Inc.,\n Contract Number GS-35F-0332K\n\n05/11/05 A020220 Review of Industrial Funding Fee Remittances: Kipper Tool Company, Contract\n Number GS-06F-0018L\n\n06/10/05 A040262 Preaward Review of Multiple Award Schedule Contract Extension: Digital Systems\n Group, Incorporated, Contract Number GS-35F-0760J\n\n06/17/05 A050100 Preaward Review of Multiple Award Schedule Contract Extension: Technical and\n Management Services Corporation, Contract Number GS-00F-0020L\n\n06/24/05 A050077 Preaward Audit of Cost or Pricing Data: DPRA, Inc., Contract Number GS-00F-\n 0030L\n\n06/29/05 A040144 Preaward Audit of a Claim: Solera Construction, Inc./DCM Erectors, Inc., Joint\n Venture 2nd Tier Subcontractor to J.A. Jones Construction Group, LLC, Contract\n Number GS-02P-99-DTC-0006(N)\n\n06/30/05 A040207 Preaward Audit of a Claim: Laquila Construction, Inc., Subcontractor to J.A. Jones\n Construction Group, LLC, Contract Number GS-02P-99-DTC-0006(N)\n\n07/08/05 A050007 Preaward Review of Multiple Award Schedule Contract Extension: Network\n Equipment Technologies Federal, Inc., Contract Number GS-35F-0205K\n\n07/08/05 A050138 Review of Claim: Nason and Cullen, Inc., Contract Number GS-03B-02301\n\n07/14/05 A040022 Review of Multiple Award Schedule Contract Number GS-29F-0001N for the\n Interim Period October 10, 2002 to December 31, 2003: Humanscale\n\n07/29/05 A050239 Preaward Review of Architect and Engineering Services Contract: DMJMH&N,\n Inc., Contract Number GS-11P-04-MKC-0038\n\n08/02/05 A050093 Preaward Review of Multiple Award Schedule Contract Extension: H J Ford\n Associates, Inc., Contract Number GS-23F-0206K\n\n08/04/05 A050203 Preaward Review of Architect Engineer Proposal: Skidmore, Owings and Merrill,\n LLP, Contract Number GS-05P-04-GBC-0057\n\n08/15/05 A050157 Review of Termination Settlement Proposal: CompuCom Federal Systems, Inc.,\n Contract Number GS-00K-97-AFD-2226\n\n09/07/05 A050125 Preaward Review of Multiple Award Schedule Contract Extension: Steelcase,\n Incorporated, Contract Number GS-28F-8021H\n\n09/12/05 A050151 Preaward Review of Multiple Award Schedule Contract Extension: Global\n Computer Enterprises, Inc., Contract Number GS-35F-0426K\n\n\n56 Semiannual Report to the Congress\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit\nReport Number Title\n\n\n09/13/05 A050073 Preaward Review of Multiple Award Schedule Contract Extension: Computer\n Sciences Corporation, Contract Number GS-23F-0092K\n\n09/19/05 A040222 Postaward Review of Multiple Award Schedule Contract Number GS-07F-9477G\n for the Period February 1, 1999 to January 31, 2004; New Hermes, Incorporated\n\n09/19/05 A040164 Preaward Review of Multiple Award Schedule Contract: Oracle Corporation,\n Solicitation Number FCIS-JB-980001B\n\n\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 57\n\x0cAppendix III\xe2\x80\x93Audit Reports over 12 Months Old, Final Agency Action Pending\n\n\nDate of Audit Projected Final\nReport Number Title Action Date\n\n\nInternal Audits\n07/15/99 A82706 PricewaterhouseCoopers LLP Management Letter, Fiscal Year Open\n 1998 Financial Statement Audit\n\n09/27/01 A010110 Review of GSA\xe2\x80\x99s Natural Gas Program, Public Buildings 01/15/2007\n Service\n\n03/18/03 A020161 Audit of the Consolidation of Distribution Center Operations: 11/15/2006\n Impact on Shipment Costs & Delivery Times\n\n08/05/04 A020245 Review of FedBizOpps 05/15/2007\n\n12/07/04 A040109 PricewaterhouseCoopers LLP Fiscal Year 2004 Information Open\n Technology Management Letter\n\n03/28/05 A040132 Audit of FTS Working Capital/Reserve Fund Levels 11/15/2006\n\n05/03/05 A040109 Audit of the General Services Administration\xe2\x80\x99s Fiscal Years 2004 03/15/2007\n and 2003 Financial Statements\n\n06/06/05 A040257 Review of GSA Global Supply\xe2\x80\x99s Expanded Direct Delivery 11/15/2006\n Program\n\n09/26/05 A040176 Audit of PBS\xe2\x80\x99s Major Repair and Alterations Program 10/15/2006\n\n09/29/05 A040132 Audit of FTS Regional Telecommunications and Regional 10/15/2006\n Information Technology Solutions Fees\n\n09/29/05 A040246 Review of the GSA Advantage! System 10/15/2006\n\n09/29/05 A040252 Audit of FSS\xe2\x80\x99s Contractor Assessment Initiative (CAsI) 12/15/2006\n\n09/30/05 A040142 Strategic Challenges for GSA\xe2\x80\x99s Comprehensive Human 10/15/2006\n Resources Integrated System (CHRIS)\n\n\n\n\n58 Semiannual Report to the Congress\n\x0c Appendix IV\xe2\x80\x93Delinquent Debts\n\n\n\n\nThe GSA Office of the Chief Financial Officer provided the following information.\n\nGSA Efforts to Improve Debt delinquency notices. We have also increased our\n efforts to identify invoice offsets on amounts due to\nCollection commercial vendors on other contracts. We expect\nDuring the period April 1, 2006 through September 30, these administrative adjustments will result in faster\n2006, the following activities were undertaken by GSA claim resolution. In addition, more aggressive\nin an effort to improve debt collection and reduce the actions have been taken to resolve past due receiv-\namount of debt written off as uncollectible. ables including timelier referrals to Treasury and\n\xe2\x80\xa2 From April 1, 2006 to September 30, 2006, the accelerated write-offs of older receivable balances.\n GSA Finance Centers referred approximately\n \xe2\x80\xa2 As of September 30, 2006, the DC Government\n $32.9 million of delinquent non-Federal claims to the\n owed GSA $203 for two supply bills over 300 days\n U.S. Department of the Treasury (Treasury) for\n cross-servicing collection activities. Collections on old. All other supply bills are under 180 days old.\n non-Federal claims exceeded $216.9 million. The GSA Automotive Acquisition Center is now\n Administrative offsets have resulted in additional accepting orders for non-emergency vehicles from\n collections of $4.1 million. GSA also collects the DC Government. The DC Government has\n non-Federal claims using Pre-Authorized Debits ordered, received, and been billed for several\n (PADs). From April 1, 2006 to September 30, 2006, vehicles. A listing of all outstanding supply bills is\n 159 PADs totaling $49,302 were processed. sent monthly to the DC Government\xe2\x80\x99s Inspector\n General and Chief Financial Officer.\n\xe2\x80\xa2 To comply with the Debt Collection Improvement Act\n of 1996, GSA transmits delinquent claims each \xe2\x80\xa2 A claim was setup for $30,778 in the Accounts\n month to the U.S. Department of the Treasury, Receivable Claims System (ARCS) against\n Financial Management Service (FMS) for collection. Raytheon Systems Company for four delinquent\n fleet bills from 2004 that the Billing Unit was unable\n\xe2\x80\xa2 Claims procedures have been revised to improve to collect. If unpaid after 180 days, the claim will be\n claims management and control. Changes include referred to the Treasury Offset Program for\n increases in telephone follow-up contacts with collection. There are several more contractors that\n commercial vendors, field personnel, and GSA have unpaid fleet or supply bills over a year old that\n managers to obtain and resolve issues. We imple- will be referred to the Claims Unit once a Tax ID\n mented a more consistent and timely process of Number (TIN) is obtained.\n\nNon-Federal Accounts Receivable\n\n As of As of\n April 1, 2006 September 30, 2006 Difference\n\n Total Amounts Due GSA $158,919,439 $159,520,284 $600,845\n\n Amounts Delinquent $21,131,176 $16,633,579 ($4,497,597)\n\n Total Amount Written\n Off as Uncollectible\n Between 4/1/06 and\n 9/30/06 $3,181,186\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 59\n\x0c Appendix V\xe2\x80\x93Reporting Requirements\n\n\n\n\nThe table below cross-references the reporting require- Congress in Senate Report No. 96-829 relative to the\nments prescribed by the Inspector General Act of 1978, 1980 Supplemental Appropriations and Rescission Bill\nas amended, to the specific pages where they are and the National Defense Authorization Act is also\naddressed. The information requested by the cross-referenced to the appropriate page of the report.\n\n\n\n Requirement Page\n\n Inspector General Act\n\n Section 4(a)(2) \xe2\x80\x93 Review of Legislation and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27\n\n Section 5(a)(1) \xe2\x80\x93 Significant Problems, Abuses, and Deficiencies. . . . . . . . . . . . . . . . . . . . . . . . . .2, 12\n\n Section 5(a)(2) \xe2\x80\x93 Recommendations with Respect to Significant\n Problems, Abuses, and Deficiencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2, 12\n\n Section 5(a)(3) \xe2\x80\x93 Prior Recommendations Not Yet Implemented . . . . . . . . . . . . . . . . . . . . . . . . . . . .37\n\n Section 5(a)(4) \xe2\x80\x93 Matters Referred to Prosecutive Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33\n\n Sections 5(a)(5) and 6(b)(2) \xe2\x80\x93 Summary of Instances Where\n Information Was Refused. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .None\n\n Section 5(a)(6) \xe2\x80\x93 List of Audit Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41\n\n Section 5(a)(7) \xe2\x80\x93 Summary of Each Particularly Significant Report. . . . . . . . . . . . . . . . . . . . . . . . .2, 12\n\n Section 5(a)(8) \xe2\x80\x93 Statistical Tables on Management Decisions on\n Questioned Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32\n\n Section 5(a)(9) \xe2\x80\x93 Statistical Tables on Management Decisions on\n Recommendations That Funds Be Put to Better Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31\n\n Section 5(a)(11) \xe2\x80\x93 Description and Explanation for Any Significant\n Revised Management Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .None\n\n Section 5(a)(12) \xe2\x80\x93 Information on Any Significant Management\n Decisions with Which the Inspector General Disagrees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .None\n\n Senate Report No. 96-829\n\n Resolution of Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37\n\n Delinquent Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59\n\n National Defense Authorization Act, Public Law 104-106, 5 U.S.C. App. 3, \xc2\xa7 5 note . . . . . . . . . . .49\n\n\n\n\n60 Semiannual Report to the Congress\n\x0c Appendix VI\xe2\x80\x93OIG Offices and Key Officials\n\n\n\nOffice of the Inspector General\nInspector General, Brian D. Miller (J) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-0450\n\nDeputy Inspector General, Eugene L. Waszily (JD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-1362\n\nAdvisor, Robert M. Samuels (JX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-0450\n\n\nOffice of Counsel to the Inspector General\nCounsel to the IG, Kevin A. Buford (JC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-1932\n\nDeputy Counsel to the IG, Virginia S. Grebasch (JCD) . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-1932\n\n\nOffice of Internal Evaluation and Analysis\nDirector, Peter J. Coniglio (JE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-2460\n\n\nOffice of Audits\nActing Assistant IG for Auditing, Andrew Patchan, Jr. (JA) . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-0374\n\nActing Principal Deputy Assistant IG for Auditing, Andrew A. Russoniello (JAD) . . . . . . . .(202) 501-0374\n\n\nDeputy Assistant Inspectors General for Auditing\nInformation Technology Audit Office, Gwendolyn A. McGowan (JA-T) . . . . . . . . . . . . . . . .(703) 308-1223\n\nReal Property Audit Office, Rolando N. Goco (JA-R) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 219-0088\n\nFinance & Administrative Audit Office, Vacant (JA-F) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-0006\n\nAcquisition Programs Audit Office, Kenneth L. Crompton (JA-A) . . . . . . . . . . . . . . . . . . . .(703) 603-0189\n\nContract Audit Office, Joseph B. Leland (JA-C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(617) 565-6795\n\n\nRegional Inspectors General for Auditing\nNational Capital Region Field Office, Paul J. Malatino (JA-W) . . . . . . . . . . . . . . . . . . . . . .(202) 708-5340\n\nNew England Field Office, Joseph B. Leland (JA-1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(617) 565-6795\n\nNortheast and Caribbean Field Office, Joseph M. Mastropietro (JA-2) . . . . . . . . . . . . . . . .(212) 264-8620\n\nMid-Atlantic Field Office, Glenn D. Merski (JA-3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(215) 446-4840\n\nSoutheast Sunbelt Field Office, James D. Duerre (JA-4) . . . . . . . . . . . . . . . . . . . . . . . . . .(404) 331-5125\n\n\n April 1, 2006 \xe2\x80\x93 September 30, 2006 61\n\x0c Appendix VI\xe2\x80\x93OIG Offices and Key Officials\n\n\n Regional Inspectors General for Auditing (continued)\n Great Lakes Field Office, David K. Stone (JA-5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(312) 353-7781\n\n The Heartland Field Office, Arthur L. Elkin (JA-6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(816) 926-7052\n\n Greater Southwest Field Office, Rodney J. Hansen (JA-7) . . . . . . . . . . . . . . . . . . . . . . . . .(817) 978-2572\n\n Pacific Rim Field Office, Vacant (JA-9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(415) 522-2744\n\n Auburn Sub-Office, Auditor-in-Charge Raymond E. Drew (JA-9/AUB) . . . . . . . . . . . . . .(253) 931-7650\n\n\n Office of Investigations\n Assistant IG for Investigations, Charles J. Augone (JI) . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-1397\n\n Acting Deputy Assistant IG for Investigations, Gregory G. Rowe (JID) . . . . . . . . . . . . . . . .(202) 501-1397\n\n\n\n Special Agents in Charge (SAC)\n National Capital Regional Office, SAC Randal A. Stewart (JI-W) . . . . . . . . . . . . . . . . . . . .(202) 252-0008\n\n Philadelphia Resident Office, Special Agent James Barry (JI-3) . . . . . . . . . . . . . . . . . . .(215) 446-4830\n\n Northeast and Caribbean Regional Office, SAC Daniel J. Walsh (JI-2) . . . . . . . . . . . . . . .(212) 264-7300\n\n Boston Resident Office, Assistant SAC Joseph J. Dziczek (JI-1) . . . . . . . . . . . . . . . . . .(617) 565-6820\n\n Southeast Regional Office, SAC Lee P. Quintyne (JI-4) . . . . . . . . . . . . . . . . . . . . . . . . . . .(404) 331-5126\n\n Great Lakes Regional Office, SAC Harvey G. Florian (JI-5) . . . . . . . . . . . . . . . . . . . . . . . .(312) 353-7779\n\n Heartland Regional Office, SAC John F. Kolze (JI-6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(816) 926-7214\n\n Southwest Regional Office, SAC Paul W. Walton (JI-7) . . . . . . . . . . . . . . . . . . . . . . . . . . .(817) 978-2589\n\n Pacific Rim Regional Office, SAC Liza Shovar (JI-9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(415) 522-2755\n\n Northwest Regional Office, SAC Terry J. Pfeifer (JI-10) . . . . . . . . . . . . . . . . . . . . . . . . . . .(253) 931-7654\n\n\n Office of Administration\n Assistant IG for Administration, Vacant (JP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(202) 501-2319\n\n Human Resources Division, Director Arrie Etheridge (JPH) . . . . . . . . . . . . . . . . . . . . . .(202) 501-0360\n\n Information Technology Division, Director Margaret A. Hamilton (JPM) . . . . . . . . . . . . .(202) 501-3134\n\n Administrative and Financial Management Division, Director Marta M. Viera (JPF) . . . .(202) 501-2887\n\n\n\n\n62 Semiannual Report to the Congress\n\x0cMake\nlike\nit\xe2\x80\x99s\nyour\nmoney!\nIt is.\nTo report suspected waste, fraud, abuse, or\nmismanagement in GSA, call your\n\n\nInspector General\xe2\x80\x99s Hotline\nToll-free 1-800-424-5210\nWashington, DC metropolitan area\n(202) 501-1780\n\nor write: GSA, IG, Hotline Officer\n Washington, DC 20405\n\nor access the Web: www.gsa.gov/fraudnet\n\nOffice of Inspector General\nU.S. General Services Administration\n\x0cOffice of Inspector General\nU.S. General Services Administration\n1800 F Street, NW\nWashington, DC 20405\nhttp://www.gsa.gov/inspectorgeneral\n\x0c'