FBI’s Information  Technology Upgrade Project, which FBI subsequently renamed Trilogy,  was FBI’s largest automated information systems initiative to date. Insufficient Invoice Review and Approval Process Increased FBI’s Vulnerability to Payment of Unallowable Contractor Costs

FBI’s review and approval process for Trilogy contractor invoices, which  was carried out by a review team consisting of officials from FBI, GSA, and  Mitretek, did not provide an adequate basis to verify that goods and  services billed were actually received by FBI or that payments were for  allowable costs. We identified  about $10.1 million of questionable contractor costs paid by FBI. These  included payments for first-class travel and other excessive airfare costs,  incorrect billings for overtime hours, potentially excessive labor rates, and  other questionable subcontractor costs. Major Lapses in Accountability Resulted in Millions of Dollars of Missing Trilogy Equipment

FBI did not adequately maintain accountability for computer equipment  purchased for the Trilogy project. Consequently, we found that FBI could not locate over 1,200 assets  purchased with Trilogy funds, which we valued at approximately $7.6  million. In addition, during its physical inventory counts for fiscal years  2003 through 2005, FBI identified over 30 pieces of Trilogy equipment  valued at about $167,000 that it reported as having been lost or stolen. Scope and Methodology

To determine whether the Federal Bureau of Investigation’s (FBI) internal  controls provided reasonable assurance that improper payments to  contractors would not be made or would be detected in the normal course  of business, we used the Standards for Internal Control in the Federal  Government, Guide for Evaluating and Testing Controls Over Sensitive  Payments, and The Executive Guide on Strategies to Manage Improper  Payments: Learning from Public and Private Sector Organizations as a  basis for assessing FBI’s internal control structure over its Trilogy program. Validity of Payments

To determine whether FBI’s payments to contractors were properly  supported as a valid use of government funds, we performed data mining,  document analysis, and other forensic auditing techniques to select  transactions to test. Comments from the Federal Bureau of Investigation

Comments from the General Services Administration

	GAO Comments

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Why GAO Did This Study

The Trilogy project--initiated in 2001--is the Federal Bureau of Investigation's (FBI) largest information technology (IT) upgrade to date. While ultimately successful in providing updated IT infrastructure and systems, Trilogy was not a success with regard to upgrading FBI's investigative applications. Further, the project was plagued with missed milestones and escalating costs, which eventually totaled nearly $537 million. In light of these events, Congress asked GAO to determine whether (1) internal controls provided reasonable assurance that improper payment of unallowable contractor costs would not be made or would be detected in the normal course of business, (2) payments to contractors were properly supported as a valid use of government funds, and (3) FBI maintained proper accountability for assets purchased with Trilogy project funds.

What GAO Found

FBI's review and approval process for Trilogy contractor invoices, which included a review role for the General Services Administration (GSA) as contracting agency, did not provide an adequate basis to verify that goods and services billed were actually received and that the amounts billed were appropriate, leaving FBI highly vulnerable to payments of unallowable costs. This vulnerability is demonstrated by FBI's payment of about $10.1 million in questionable contractor costs we identified using data mining, document analysis, and other forensic auditing techniques. These costs included first-class travel and other excessive airfare costs, incorrect charges for overtime hours, potentially overcharged labor rates, and charges for which the contractors could not provide adequate supporting documentation to substantiate the costs purportedly incurred. FBI also failed to establish controls to maintain accountability over equipment purchased for the Trilogy project. These control lapses resulted in more than 1,200 missing pieces of equipment valued at approximately $7.6 million that GAO identified as part of its review. In addition, in its own inventory counts, FBI identified 37 pieces of Trilogy equipment valued at approximately $167,000 that had been lost or stolen.