Of the 22 recommendations, 17 were focused on developing agencywide  policies and procedures to address internal control weaknesses in the  FBI’s procurement and contract administration processes. FBI’s Sentinel project  was approved in July 2005 and was to succeed and expand on elements  of the Trilogy project, namely to provide the FBI with a modern,  automated investigative case-management system. FBI Developed Policies and Procedures and Took Other Specific Corrective Actions Sufficient to Address 26 of 27 Prior Recommendations

The corrective actions developed by the FBI were sufficient to address 21  of the 22 Trilogy recommendations and all 5 of the Sentinel  recommendations we made in our prior reports. The FBI substantially  addressed 17 Trilogy recommendations related to contract administration,  invoice processing, and property accountability by establishing or revising  policies and procedures, 4 by contracting for follow-up audits of the  Trilogy costs, and the 5 Sentinel recommendations by revising Sentinel  policies and procedures. The one recommendation that the FBI had not fully addressed from our  Trilogy report recommended that the FBI investigate the 1,205 assets that  we identified as missing, lost, or stolen and determine whether any  confidential or sensitive information may be exposed to unauthorized  users, and identify any patterns related to the equipment that could  necessitate a change in FBI policies and procedures. In February 2011, FBI officials provided documentation accounting for the  status of all but 134 assets, including desktop computers, laptops, and  servers that could contain sensitive information. With regard to the 134  assets, the FBI stated that all of these assets had a useful life of 7 years  or less and that if they were not already returned or destroyed, they are  now obsolete and that spending more time or resources to search for the  obsolete equipment would be wasteful. However,  FBI officials also stated they would make the necessary entries to  properly record any of the remaining 134 assets for which they  subsequently determine the status. In our  testing of the four recommendations dealing with interagency agreements  and contracts, we found that they were effectively implemented, but we  identified a new issue unrelated to our prior recommendations. The  FBI’s monitoring of the interagency agreement process did not identify  that the Determination and Findings forms were not properly prepared as  required. As shown in  table 2, our tests of non-statistically selected transactions identified  implementation issues primarily in policies and procedures related to  review of contractor invoices and accountability for purchased assets. Without verifying labor groups and labor rates billed on  contractor invoices against the contractor’s proposal as required by FBI  policy, the FBI is at increased risk that it will not identify erroneous or  improper billings and will disburse government funds for unallowable  contractor charges. As shown in table 2, we also found instances in which the FBI did not  record accountable property items in its system in a timely manner and  did not accurately record key accountability information such as location  and serial numbers as required by the FBI’s policies and procedures. With an  estimated 40 percent of its interagency agreements lacking a properly  completed Determination and Findings form, the FBI increases the risk  that it is obligating funds for supplies and/or services that are not in the  best interest of the government or executing a contract that is inconsistent  with federal laws or regulations. Additionally, our testing of selected  accountable property items identified property items that were not timely  or accurately recorded. In the area of contractor invoice review and approval, we recommend  the Director of the FBI to direct the Chief Financial Officer to:    review agencywide implementation of the new or revised policies  and procedures related to our prior recommendations to verify that  invoice costs are in accordance with contract terms to determine if  the indications of issues we identified in this report represent  systemic, agencywide implementation deficiencies, and  take appropriate, cost-effective actions to better ensure  agencywide compliance with the applicable policies and  procedures. To address our second objective to determine whether there were any  indications of implementation issues related to the policies and  procedures that the FBI developed to address 17 of the 27  recommendations, we selected statistical samples of interagency  agreements and contracts. According to the FBI’s listing, 20 of the 34  purchase orders included accountable property that had been recorded in  the FBI’s PMA. Appendix II: Status of Trilogy and Sentinel Recommendations and Actions Taken by the FBI

	Recommendation area/recommendations Trilogy recommendations

Interagency agreements and contract Administration  1. 2. 13. 27. lost, or stolen, reducing the number reported to 1,205.
Why GAO Did This Study

The FBI has spent over $900 million on the Trilogy and Sentinel information technology (IT) projects intended to provide FBI with an upgraded IT infrastructure and an automated case management system to support FBI agents and analysts. In February 2006 and July 2008, GAO reported on significant internal control weaknesses related to FBI's contract administration, processing of contractor invoices, and accountability for equipment acquired for these projects. GAO made 27 recommendations to the FBI to address these deficiencies. The FBI concurred with all 27 recommendations. This report provides an assessment of (1) the FBI's corrective actions to address GAO's 27 recommendations and (2) whether there were any indications of implementation issues related to the policies and procedures the FBI developed to address 17 of the 27 recommendations. GAO reviewed FBI policies and procedures, performed walk-throughs, and conducted detailed tests on statistically and nonstatistically selected samples of transactions.

What GAO Found

The corrective actions developed by FBI were sufficient to address 21 of the 22 Trilogy recommendations and all 5 Sentinel recommendations. The FBI substantially addressed: 17 Trilogy recommendations related to contract administration, invoice processing, and property accountability by establishing or revising policies and procedures; 4 by contracting for follow-up audits of the Trilogy costs; and the 5 Sentinel recommendations by revising Sentinel policies and procedures. The one Trilogy recommendation that FBI did not address completely was related to 1,205 missing, lost, or stolen Trilogy assets. As of February 2011, the FBI had researched and determined the status of all but 134 of these assets. FBI officials stated that almost all of these assets had a useful life of 7 years, and if they were not already returned or destroyed, they are now obsolete. There are diminishing returns to continue to pursue these assets, which included several information technology items that could potentially contain sensitive information. However, if the FBI is able to determine the status of any of these assets in the future, officials stated that they will make the entries to properly record them in FBI's property management application (PMA). In assessing implementation of the policies and procedures developed in response to GAO's 17 Trilogy recommendations related to contract administration, invoice processing, and property accountability, GAO found that policies and procedures related to the 4 recommendations dealing with contract administration, including interagency agreements, were effectively implemented but also identified a new issue. Specifically, GAO found that forms--required by the Federal Acquisition Regulation to support the use of interagency agreements to conveniently or economically obtain supplies and services--were not timely completed for 15 of 54 statistically selected interagency agreements tested, and found that FBI's monitoring did not identify this deficiency. GAO estimates that as much as 39.5 percent of FBI's fiscal year 2009 interagency agreements did not meet this requirement, increasing the risk that funds may have been disbursed for goods or services that were not in the best interest of the government. In addition, GAO's testing of FBI's implementation of polices and procedures for the remaining 13 recommendations that were related to invoice processing and property accountability found indications of implementation issues in 3 areas. (1) Regarding the review of contractors' invoices, 5 invoices (of the 37 tested) that had been reviewed and approved by FBI officials included labor rates that were not fully supported by the contract documentation. Without verifying labor charges against the contractor's proposal as required by FBI policy, there is an increased risk of disbursing funds for unallowable charges. (2) For property accountability, GAO found instances in which FBI (1) did not record accountable property items in its system in a timely manner and (2) did not accurately record key accountability information, such as location and serial numbers, as required by FBI's policies. These shortcomings increase the risk that assets could be lost or stolen and not be detected and investigated in a timely manner.

What GAO Recommends

GAO makes three new recommendations to improve interagency agreement controls and determine if additional actions are necessary to improve controls for invoice processing and property accountability. The FBI concurred with all three recommendations and discussed actions it has initiated to address GAO's recommendations.