intelligence community inspector general report (july 2012-march 2013)

8/13/2019 Intelligence Community Inspector General Report (July 2012-March 2013)

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Mr. Steven Aftergood

Office of the Director of National IntelligenceWashington , DC 20511

Federation of Am e ri can Scienti sts1725 DeS ales Street NW, Suite 600Wa shington , DC 20036

NOV2 0 2 13

Refe re nce: ODNI C ase DF-201 3-00128

Dea r Mr. Aftergood:

Thi s is in res pon se to your ema il dated 12 June 2013, rece ived in the In fo rm at ion Management Divi sionof the Office of th e Dire ctor of Nation al Intelli gence (ODND on 14 Jun e 2013 . Pur suant to th e Freedom ofInformati on Act (FOIA ), you are requ est in g a copy of the latest Semi-Annual or Annual Report o theIntelligence Comm unit y Inspector General.

Your r eq uest was proce ssed in acco rd ance with th e FOIA, 5 U.S.C. 552 , as ame nd ed. A tho rou ghse a rch of our reco r ds a nd databa ses located one document res pons ive to you r requ est. Upon rev iew, it isdetermjned th at the do cument may be rel eased in segreg abl e form with dele tion s made pursuant to F OIAex emption s b) l), (b)(3), (b)(5) an d (b)(6).

Exe mp tion (b)( l) applie s to in fo rm ation prop erly class ified und er Exec utive Order 13526, Sect io n 1.4(g).Exempt io n (b)(3) app lies to inform at ion ex e mpt from di sc losure by stat ute. The relevant withholdin g statutes arethe Nat ional Security Act of 1947 , as ame nd ed, 50 U.S.C. 3024(i)( I , whic h protect s informatio n per ta inin g tointe lli gence so urces and methods and 50 U.S.C. 3024(m)( I , which prot ec ts , among ot her thin gs , the nam es andide ntify ing inform atio n of ODNI per so nne l. Exempt ion (b)(6) ap p lies to records wh ich, if re leased, wouldconst itute a clear ly unwarranted inva s ion of the perso nal pri vacy of ind ividual s.

You have the right to appeal thi s dete rmin at ion within 45 day s of the date of thi s le tter to:

Office of th e Direc to r of Nat ional Intell ige nceInform at ion Management Offi ceWa s hin g ton , DC 205 11

Should yo u decide to do thi s, ple ase explain the ba s is of yo ur app eal. f yo u have any qu e stio ns, plea se ca ll theRequ este r Service Cente r at (7 03 ) 874-8500.

n ~n n i f rHud son

Directo r Inform atio n Man agem e nt Di v isio nnclosure


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. . . 4 ::

Ul 1 July 2 0 1 2 - 31 March 2013

U) SEMI NNU L REPORTTO THE DIRECTOR OFNATIONAL INTELLIGENCEU) OFFICE OF THE INSPECTOR GENERAL

OF THE INTELLIGENCE COMMUNITY

I. Charles McCullough, ll

In specto r General of the Intelligence Commun ity

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CLASSIFIED BY:DERIVED FROM: ODNI G v2.03 JULY 2012

DECLASSIFY ON: 20380430

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0 U) MissionUl e conduct Independent and objective aud its, inspe ctions investigations

and reviews to promote economy effic iency effectiveness and Integrationacross the Intelligence Community.

0 U ) VisionUl Speak truth; enable exce llence In management and accountability .

0 U ) Core ValuesUl lntt zrity e are honest, trustworthy accountable for our ac tions

and committed to fulfilling our mission.

U) ll eu i oNii ur e hold ourselves to the highest standards of tech nicalproficiencyand treat others with courtesy and respect .

Ul lnll lpudnn We conduct our mission free of external influence andprovide objective assessments , ad vice and conclusions regardless of po litica lor personal consequence .

0 U) DiversityUl The IC IG promotes diversity In all aspects of our mission as a key to our

success. Our professiona l and Innovative culture demonstrates the value weplace in having a diverse worl


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U) A Message from the Inspector General

U F O )I am pleasedto s{avide this summaryof the activities of theOfficeof the InspectorGeneral of theIntelligence Community( C IG) for the per iodof 1 July 2012 through31 March 2013.This report covers anextended reportingperiod due to a recent

statutory change in our semiannual report ing cycle.This report is submitted pursuant to Section 103Hof the National Security Actof 1947, as amended .

U During this report ing period w

solidified our foundation by completingour Concept of Operations, Strategic Plan,and Workplan for CY 2013:

issued our first compilation of IC-wideManagement Challenges;

completed three audits : the Auditof Intell igence Community SecurityClearance Reciprocity, the FY2012ODNIFtSMAReview, and the FY 2012FISMA Capstone;

completed four inspect ions of ODNIcomponents: the Officeof PartnerEngagement, the Officeof legislat iveAffairs,the National C ounterterrorismCenter, and the Office of the ChiefFinancial Officer;

completed work on 46 investigative

matters , 16 of which were substantiated;and

initiated an anti-fraud program focusing oncontract labor mischa rging .

{U/IFO.x{, We are currently performingtheODNTs l;;.;proper Pa yments Elimination andRecovery Act audit, a study of Electronic WasteDisposal Practices in the IC, an evaluation of theimplementation of the Reduc ing Over-class ification

Act at the ODNI, an audit of the CONI s payroll

systems, and a follow-up study on audit readinessacross the IC. In addition, w are also performingan inspection of the Office of the InformationSharing Environment and evaluating the NCTCTlDE Program and the criminal referral aspect ofthe National Reconnaissance Office s polygraphprogram.

(U//Fotlo l We continue to foster integration andc o l a b o~ t ion among the IC Offices of InspectorGeneral (IC OIGs) by:

leading the statutory IC IG F(){um and theF(){um s Audit, Inspections, Investigations,and Counsel committees;

pursu ing the implementation ofPresidential Policy Directive- 19,Protecting Whistleblower s with Access to

Classifiecf Informationhiring Specia l Advisor lor IG Community Standards to create and implementa Peer Review program among and incoordination with the IC OIGs:

hosting an IC-wide training seminar for IGprofess ionals on FOIAand Privacy Actmatters; and

liaising with the Council of InspectorsGeneral on Integrity and Efficiency(CIGIE), co-host ing the 14th Annual CIGIEAwards Ceremony.

(U//Fru O) I cred it our hard-w(){kingpersonnelf(){t,{e;; accomplishments and ongoing efforts .I very much apprec iate the steadfast support Ihave received from the ONI, the Administration,and the Congressional Intellige nce Committeesand remain committed to the highest standards ofprofessionalism, objectivity, independen ce,and integrity.

< : : >~ ~ 7 ~I. Charles McCullough IllInspect or General of the Intelligence Community


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SECRET ti OFQR N

Table of ontents

l U) STATUTORY REPOATIIIGAmtJIAMOITS 18 IX. Ul IHTEWGf:NCEOVERSIGHT

18 A. U) Completed Reports

2 I U) OVRVIW 18 8 . U) Ongoing Eva luations2 A. (Ul Organiza tion

3 8. lUI Personnel 19 X (U) IC IHSPECTOIISGf:NRA1 ACTIVITES

4 C. (U) Funding 19 A. (U) IC IG Forum

19 8 . lUI The Council of the lnspec tOIS

5 HI. U) PWININQ General On Integrity and Efficiency

5 A. U) Strlltegic Planno g 19 C. U) Conferences and Awards

5 B. U) Annual PlaMi ng 20 D. U) IC-Wide Tra ining

20 E (U) IC IG Peer Review Activities

6 IV. U) aJIIQRSSIOIW. EllllAIOEMEHTS

6 A. U) Briefings 21 (U) APPENDIXA: STAT\SnCALOVEAVEW

6 B. (U) Legislation Impacting the IC IG22 (U) APPOIDIX8: SUMMARYOf AIJIIITS

7 V. U) AUOITDIVISION

7 A. (U) Completed Audits 23 UJ APPENDIXC SUMMARYOf INSPECTIONS

8 B. (U) Ongoing Audits4 U) APPENDIXD SUMMARYOF INVESTIGATIONS

VI lUI IHSPECTIONS DIVISION

11 A. U) Completed Inspection s 5 U) APPEIIIIXE: ONGOING INVEST1GAnONS

12 B. (Ul Ongoing Inspections

12 C. (UI Other Inspec tion Activity 26 U) APPENDIX F: MANAGf:MEIITCHAWNGf:S

31 U) APPENDIXG: STATUS OF AEaJMME IDATIONS13 VU. U) INVESTIQATIONSDIVISION

13 A. (U) Select Comp leted Investigations

14 B. (U) other Investigative Activities

16 VII. U) I IGCOUNSEL

16 A. U I F egal and f lllicy Reviews16 B. U f ~ lLegislative Reviews

17 C. (U/If_900i Conwessional ~ t17 D. U//;gc(oj Special COUnsel f roiects

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RI. U) Statutory Reporting Requirements

(U) On January 14, 2013, the President signed into

law the Intelligence Authorization Act for Fisca lYear (FYI 20 13. Section 309 of this Act changedthe IC IGs semiannual report ing schedu le from thecalendar yea r (CY) to the FY. In view of that change,this semiannua l report covers a 9 month period IJuly to 31 March), rather than 6.

A. U) StandardsU) All audits are carried out in accordance with

generally accepted government auditing standards .All inspection and investigation activities conform tostandard s adopted y the Council of the InspectorsGeneral on Integrity and EHiciency (CIGIE).

B. U) Certification of Fulland Direct Access

(U) The IC IG has had full and direct access toall Informationrelevant to the performance ofhis duties.

C. U) Subpoena Authority

(U) During th is reporting period the IC IG ssuedone subpoena.

D. U) Leaislative ProposalsU) During th is reporting period, the IG reviewed

several proposa ls for enhancement to the IC IGstatutory authorities including person nel authorities,budget authorities, and protection of IG materials.

Those proposa ls are being r efined and may eIncluded In legislation under the cu rrent Congress .

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E. U) Status of Recommendations(U) Appendix C provides an update on the statusof IC IG recommendat ions. Each recommendationlisted outlines the OHice of the Directorof NationalIntelligence (ODNI)component or Intell igenceCommunity (IC) element responsib le for thenecessary corrective actions and whether or notthe correc tive act ion has been fully implemented .Where corrective act ion has been completed , adescription of that corrective action is provided .

F U) lc-Wide Manaaement Challenaes(U) Inaccordance with the Reports ConsolidationAct of 2000, the IC IG ssessed the most ser iousmanagemen t and pe rformance challenges impactingthe DNI s management of the IC en terpr ise. Wereviewed IG management challenges reports fromeach IC eleme nt, as well as our own recent IC IGCapstones, to ident ify the followingfour broad andsystemic challenges:

Financia l Management and Auditab ility

Acquis ions and Contract Management

Information Assurance

Continuity of Operations

Those challenges are detailed in Appendix F


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All number - b3 50USC 3024 m) 1)

B. U) Personnel

U O The IC IG is authOfized a totalstaff ing cOfnplement o f w i t h appropriated .Those posi t ions consist of full-time and part-timecivilian positions . The table below shows positionsby d ivision and office. Filled positions, as of31 March 2013 r e f l e c t full-time, I part -time,I contractOfS, and I vacancies .

F ll-time

Part-time

Total

acancta

OIIIractor

adre

Noolinative

Rotationalontr actoll

Centrallntelli enceA ency(CIA)

National Reconnai saoceOffice(NROl

NationalSecurityAgency NSA)

I II II II II I

O RN

U//FeOol The tC IG is composed of a m ixtureof ONI cadre, rotationa l employees on Joint DutyAssignments, and contractors who provide subjectmatter expertise . The following figures summarizethe breakdown of the IC IG stall by category.

1 i / F l C IG P o ~ i t i o nAll o c t i ontrspections 10 U CaiiiSet l uderVill otll

I I I I I II .

I I I I 1 I II I I I I II I I I I I

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C. (U) Fundin

U//FOOOl The CONI provided adequate fundingfor the IC IG mission during this reporting period.Our budget covered personnel serv ices and generalsupport requirements suc h as travel, training,equipment, supplies, information technologysupport, and office automation requirements.

U / I CIG Employee Spolli hlName :

Position: Sen ior Investigator

Years with IC:

currentlya and sinceNovember 2011 she has served as a Sen iorInvestigator on a rotational assignment with theIC JG. - unwavering ded ication to theIC IG miss ion is integral to ou r success andgreatly contribut ed to the stable trans ition froman administrative IG, serving only the CONI, to astat utory IG, serving the entire IC.

U / lanlflcant AccomplishmentsU//FQtfO l l e d a cross-agency effort to ensure

i n t l coordina tion and informati on-sha ring relatedto Unauthorized Disclosu res of informationthatcou ld be detr imental to nat ional security wenton to identify and implement strategies tha t led to successfu lly working with mult iple agencies andconducting follow-up investigat ions.

U//FOd Q also took on a signif icant caseloadof ~ i s h r g i n ginvestiga tions. . conductedmultiple interviews and reviewed hundreds of pages

of data over a several month period to ident ifyfalse billings of o v e r hours, represent ingapproxomately in potential recoveries forthe Government.

U//FW Ol

accomp lishments andprofessionalism reflect the highest credit upon

a n d he IC personifies the standard for

cross-agen cy integration.

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A. (U) Strate ic PlanninUI The IC IG has three st rategic goals:

1 To establish an orga nizationalfoundation.

2. To implement and fulfill theODNI mission .

3. To implement our IC-wide mission.

U) Those goals and associated objectivesreflec t our mission vision and core values ofpromoting economy efficiency, effectiveness,and integration across the IC while enab lingexcellence in management and accountability. Wehave established timelines to achiev e those goalsupdated our work planning process to ensure themost efficient and effective allocation of IC IGresources to best meet mission requirement s andrequi red all IC IG officers to create per formance

plans to meet the needs of both the individ ua land the IC IG.

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Ill. U) Planning

B (U) Annual PlanninUI We published our work plan for Audits an d

Inspec tions for CY 2013. The plan provides forbroad coverage of iss ues of continuing Importanceto the ONI and IC as a whole.

U) To iden tify top ics that were both relevan t andtime ly we obtained input from CONI leadershi pand senior staff as well as fellow IGs from the IC IGForum . We also considered the Natio nal Intelligen ceStrategy congressional reports and the results ofour IC-wide and componen t efforts.

UI In CY 2013, we are focusing our eff orts onimproving efficiency and effect iveness in crit ica lareas for the DONI and the IC such as:

Corltinuity of Operat ions

Financial Manageme nt and Administration

Procurement and Corltracting

Information Management and Techno logy


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IV. U) Congressional Engagements

A. U) Briefings(U) Pursuant to section 103H of the NationalSecurity Act of 1947 as amended, the IG has astatutory obligation to ensure that the congressionaloversight committees are kept fully and currentlyinformed of significant problems and deficiencieswithin the programs and activities of the DNI.During this reporti ng period, the IC IG Counsel,through the Legislative Counsel fac ilita tedseveral congressional engagements with the IG Deputy IG, and each of the AIGs on a variety oftop ics of interest to the congressional 011ersightcommittees. The IC IG staff provided staff briefingson congressionally directed actions (COAsl,IC IG initiatives o performing administrat iveinvestigations with regard to leaks of class ifiedinformation, the IC IG s Joint Accountability Review,IC IG budget and reso urce planning and re cent

IC IG inve stigations of congressiona l interest.

B. U) legislation Impacting the I IG

U I / F . During this reporting period, theIC r V ~ ~ dseveral proposals for the IntelligenceAuthorizationAct for FY 2014 to include proposalsre lating to IC IG personne l authorit ies, lawenforcement ret irement benefit s. budget authoritiesand protections for sensitive IG materials. The IC IGwill ensure that any such proposa ls are submitted tothe congressional committees for consideration in theIAAFY 2014 bill .

U / n addit ion, the IC IG engaged withcongressional committees on enacted legislat ionand other reviews ol interest, including the ImproperPayments E imination and Recovery Act of 2010 the Fore ign Intelligence Surveillance Act of 19 8Amendments Act of 2008 and the Reducing OverClassificat ion Act of 2010.


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(U) The IC IG Audit Division (Audit) conducts

program, compliance, and financia l audi ts andevaluations of CONI and IC programs related toinformation technology, procurement, acquisi tions,internal conlrols, financial sta tements, andfinancial manageme nt.

(U) During this reporting period, Auditcomple ted 3 projects and issued reportscontaining 12 recommendations to strengtheninternal controls over information technologyand 2 recommendations to standardize reciprocityof sec urity clearances within the IC. As of31 March 2013 the Audit staff had sixon-going audits .

A (U) Completed Audits

1. u JfllffOJFiscal Year2012 ConsolidatedFederal InformationSecurityManagementAct ASMA)of2002 Capstone Report for theIntelligenceCommunityElements lnspectorsGeneral AUD-2013-002,November2012).(UI/FgJJO) The objective of th is eva luat ion wasto Collect and summarize the FY 2012 FISMAreport submissions from the IC elemen t DIGsoperating or exercising cont rol of National SecuritySystems. Based on those subm iss ions, all DIGsnoted that a Risk IMNcement program had beenestablished that met the FY 2012 IG FISMAmetricrequirements. Of the remaining 11 informat ionsecurity program CISP) areas, 10 DIGs noted thatthe Incident ~ ~ r l Reporti,. and Syslemlnventocy J)fograms also met lhe FY 2012 IG FISMAmetric requirements .

U I F9 t f 1 G sidentified weaknesses in allISfYareas . The majority of weaknesses were in:Continuous Monltori,., s of Action andMilestDnes,ConlincencJ ' - 'nlrc, and SecurityCapital ~ n n i n aThe causes for the programweaknesses or the lack of a J)fogram varied bysecurity program area but some of the mostcommonlynoted reasons Included: assessments ofsecurity controls; Identifying costs for remediatingweaknesses; development and documentationof informat ion technology infrast ructurerecovery strateg ies, plans , and PfOCedures ; anddocumentation of policies and procedures for a

V. (U) Audit Division

U}is the Assistant Inspection

GeneralforAudits.a positionI has held sincethe incepion of the ICIG joined the DONIOIG

Audit Divisionin Febujaryiolf 7 r.iolr.toijlo.ningODNIDIG, he served1for 20 years in severa l leadership oles from TeamLeader to AuditP ogram Drector forFinancial andAccountingSystems.Asa member of the DoDI G Imanaged large DoD-wide multi-faceted program andoperational audits and directedlarge and complexaudits of financial and account ing systems. Iholds a Master of Science in InformationManagement a Bachelorsdegree in and is agraduate of the Advanced Management Program

sec urity cap ital plann ing and Investment controlprocess.

2. U) Fiscal Year20121ndependent EvaluationofODNICompliance with the federal InformationSecurityManagement Act FISMA)of2002AUD-2012-008, December 2012).U ~ The ob ject ive of Ihis evaluation was

to provide an independent review of the ODNI sinformat ion secu rity program and pract ices asrequ ired by FISMA. Specifically, the p urpose wasto determ ine the adeq uacy of the ISPs for theMiss ion Support Division (MSO) and the IC Chief

InformationOfficer CIC CIOl.

CU/IFQLJ(1)Two metr ic ISP areas , Identity and~ M a n ~ r e m e n tand Security Tralnlrc, werenot applicable to our evaluation bec ause DONIfollowed the Central Intelligence Agency CCIAlprocesses and those metrics were rev1ewed duringthe CIA IG s eva luat ion. A third metric catego ry,Remote Access I Q ~ t was not evaluatedbecause CONI did not have a remote accessrequirement in FY 2012. Of the remaining 9 metriccategories, Incident Response nd Reportlna andContractor Systems had an established program that

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met the Department of Homeland Secu rity (DHS)program attribute requirements.

(U//FOUO)Consequen tly, for the rema ining 7 metriccategories, Audit identified areas for improvementand produced 12 recommendations for ODNl lSPsas follows:

1 Continuous Monitoring Management

2. Security Conftguration Manage ment

3. Risk Management

4. P lan of Action and Milest ones

5. Contingency Planning

6. Security Capital P anning

7. Systems Inventory

3. UJ Auditof Intelligence CommunitySecurityClearance Reciprocity(AUD-2012-005,December 012).

(U//F 0) The IC IG initiated thi s aud it in responseto a DA in the M for FY 2010. This auditexamined whether there were policies and processeswithin the lC that facilitated t imely rec iproc ity ofpersonnel security clearances. Specifically, Audit

ssessed the time required to obtain a reciprocalsecurity clearance for three categories ofIC personnel:

1 An employee of the IC who was detailedor assigned to another element of the lC(detailees and ass ignees);

2. An employee of the lC who was seekingpermanent employment with anotherelement of the lC


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7 UHISIAA I 301 PUB OI lU .1 1 6S I I 1 l o c l 1 2 7 1

u s c ~ ~...

was te disposal prac tices of the larges t IC elemen ts

with exclusively intellige nce-related miss ions . Thisstudy is a joint effort with partic ipat ion from CIA,DIA, NGA, NRO, and NSA DIGs. The study has twoobjectives:

1. To iden tify and assess the security ofelectronic waste disposal pr ac tices inthe IC, including the potentia l forcounterintelligen ce exp loitat ion ; and

2. To identify me thods to improve thesec urity of d isposal pract ices , includi ngste ps to prevent the fOI ensic exploitat ionof electron ic was te.

Audit will subm it its study to the Intell ige nceOversight Committees in May 2013 .

3. U) Evaluation ofthe Implementation of theReducing Over-Classification Act by the ODNI.

(U) The Red uc ing Over-Classificatio n Act (the Act>of 2 010 requ ires the IG of each U.S. Governmentdepartment 01' agency with an oHicer or employeewho Is aut horized to make original class if icatio ndecis ions to conduct two evaluat ions of thatdepartment , agen cy, or component. The firstevaluation is due by 30 September 2013, andthe sec ond is du e in 2016 . S pecific objectivesidentif ied by the Act are to:

Assess whether applicable classHicationpolic ies, procedures, rules, and regulat ionshave been adopted, foll owed, andeffectively adm inistered ; and

Identify policies, procedures , rules ,regulations, or management practices

that may be cont ributing to per sistentmisclassification of material.

(UJ Audit Is conducting this evaluat ion inconjunction with a Governmen t-wide eHort ledby the DoD DIG. The evaluat ion focuses onimplement ation of the Act by the ODNI.

(UJ Audit will issue its report by the end ofFY 2013 .

4. U) Fiscal Year2013/ndependent Evaluation

of ODNICompliance with the Federal InformationSecurity Management Act FISMAJof 2002.

(UJ FISMA, wh ich is l i l l e Il l of the E-GovernmentAct of 2 2, requires the age ncy or an indepen dentexternal aud itor to perform an annual independ entevaluation of the a gen cy s ISP and practices .>

(UJ The ob ject ive of th is eva luat ion is to determ inethe adequacy of the ISP and practices for ODNIinternal operat ions . In add ition, Audit will followup on steps taken to address the recommenda tionsmade in the FY 2 12 FISMA Report.

(UJ Audit will issue its report by the end ofFY 2013 .

5. UJ 2013 CongressionallyDirected ActionCDAJto Perform a Follow-upAssessment ofthe AuditabilityPlans forCIA, 0/A, NSA, NGA,andODNI.

UJ The IC IG initiated this asses sment in res ponseto a COA in the Classified Annex of the Intell igenceAuth OI ization Act for FY 2013 that required theIC IG to perform a follow-up review using thesame terms of reference required in the FY 2011Act for an aud itabi lity strategy review. The IC IGreviewed IC elements FY 2011 p lans and providedrecommended improvements in a r eport delivered tothe committees in February 2012 .

(U//Fcr{jO) This followUPreview has th e followingo i ~ s

a) to assess whether recommendedImprovements from the 2012 Audita bilityReview were impleme nt ed ;

bl to determine if the IC Chief FinancialOfficer completed the steps to Improveagencies corrective action plans asoutlined in the 12 February 2012Management Response letter;

c) to assess whether current aud itabil ityplans address known agency aud itimpediments and implem ent appropr iateinternal controls ;

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d) to eva luate resources allocated by theagencies to Imp lement the ir aud itabil ityplans ; and

e) to assess the likelihood that theaudit ability plans can e executedwhereby an Independent Auditorcan render an unqua lified opinion onthe FY 20 16 Financial Statement s .

Ul Audit will subm it its report to the comm itteesby July 2013 .

6 IU)Auditof he Internal Controls over theOfficeof he DirectorofNationalIntelligence sPayroll

U) The IC IG initiated this audit in response to theDONI Chief Management Ollicer 's CMOlrequestfor the IC IG to conduct financial -related aud itsin preparat ion lor audits of the DONI's financialstatements . The internal controls over payroll arekey in the preparat ion of the DONI's f inancialstatements and relat.ed note disclosures .

U I This aud it has the following ob jectives :a) to determine whether the DONI h s

designed and implemented internalcontrols to prcwide reasonable assurancethat payroll activity is completely andaccurately recorded in the accountingsystem .

bl to determine whether the DONI h sdesiSned nd Imp lemented internalcontrols to prcwide reasonab le assurancethat p yroll ac tivity and related d isclosuresare presented in the DONI's financialstatements in accordance wi th Departmentof Treii3Uryand OMS form and contentrequ irements .

cl to determ ine whether the DONI h sdesigned and Implemented internalcontro ls to provide reasmable assurancethat the OONI is in compliance withre levant laws and reaulalions.

U) Audit will submit its report in Seplember 2013 .

1 D

~ ~ S O= ~N~ - - - - - - _ j


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VI. U) Inspections Division

U l The IC IG Inspections Division (INSP)

conducts inspect ions, reviews, and evaluationsto improve ODNI and IC-wide perfotmance andintegrati on. The division examines infotmationaccess, co llaboration, collection, and analysis:IC programs and issues: and cotnpliance withlaws and regu lations .

U l INSP also encourages the use of theIC IG Complaint Intake Process, t Hotline, as aconfidential and reliable source lot IC emp loyeesand cont ractors to report fraud, waste , and abuse.

U I F O During this reporting period, INSPcotn Sieted one Component lnspeclion and threeSpecia l Reviews. The Component Inspection coveredfour primary areas:

1. Mission performance

2. Manageme nt effectiveness3. Resource management

4. Enterprise oversight

(U//Frllit ) During this reporting period INSPinitiafed Special Review inspections. SpecialReviews are accelerated assessments that usequestionnaires and data call responses with limitedinterviews of component staff.

U I As of 31 March 2 13 , INSP had oneongoing Special Review and one CDA-related issueinspection that w s being planned concurrently w ithfive partner OIG offices, contingent upon passage ofthe FY 2013 Defense Appropriations bill.

A. U) Completed Inspections1. U) Officeof Partner Engagemen t PE)INS-2012-002,August 2012).

U / / F This Special Review occurred duringJune and July 2 12. It was conducted to supportthe transition of PE office leadership to ensuretimely and relevant input to the incoming Director.

S RN

U --currently servesas AssistantInspector General for Inspections. l n . 1 6 yearsas a CIAofficerin the Directorate of Intelligence, p e r f o r m e d and managed a varietyof activities ranging from all-source intelligenceanalysis and targeting to magery analysis. In2 0 0 5 joined the Officeof the DeputyDirector of National Inte ligence for Collection as aSenior Advisorworkingon multi-source collection

(U/ p6(J'Ol As part of this review, we notedobservational challenges in the following areas:personnel concerns regard ing otganizat iona lst ructure and PE direction; mO ale; PE leadershipeffect iveness, communications , and transparency ;human capital policy; and professiona l developmentissues.

(UIIFpOcl l We noted the following commendables:worklotceperception ot effective m ission fulfillment :immediate supervisor 's effectiveness: qua lity wotklife balance: and PE compliance with ElcecutiveOrders, regula

tions, s tatutory requ irements,

anddirectives.

2. UJ OfficeofLegislative Affairs {OLAJINS-2012-003 October 2012).

T h is Component Inspection occurredo May through September 20 12. Completioncoincided with a change in OL.Aoffice leadership,thereby affording timely and re levant i nput to theincoming Directot . We validated challenges in the

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(UI/F ) e noted the following commendab/es:is e adjudication and congressional responsecoordination, responsiveness facilitated byimmediate access to the DNI and ODNI leadersh ip,and ODNI staff Senate confirmation support.

commendables in the followingmiSSIOin-rocusea workforce, measurement ofperformance, and NCTC s internal

training program.

4. U) Officeof the ChiefFinancialOfficer CFO)ofthe IC INS-2013-001, March 2013).

T h is Special Review was conducted duringJanuaty and March 2013. Completion of thereview coincided with a planned succession inCFO leadership . We validated in the

2

(U) e noted the followingcommendables:workforce morale and skills and ODNI IntelligencePlanning, Programming, Budget ing, and Evaluationcollaboration.

B {U Ongoing Inspections

U) InformationSharing Environment Office{/Sf)INS-2013-003 March 2013).

(U/IFOUO) INSP is currently conduct ing a SpecialReview of the ODNI ISEOffice. We will issue ourreport by the end of FY 2013.

C {U Other Inspection ActivityU) Management ReferralU / At the end of the previous report ing

period, we issued a management referral to theIC CIO regarding an allegation of potential conflict oran unnecessary redundancy between two informationtechnology initiatives-CIA s QUANTUMLEAP andNCTC s INITIATE program s. During the currentreporting period, the IC CIO assessed the twosystems and determ ined that redundant capabilitiesand data existed . According to the IC CIO, thatredundancy was warranted in order to sa tisfy themiss ion needs of both CIA and NCTC and theirdiffering legal authorities to collect, process, exploit,and store U.S. Persons and law enforcement-felateddata. The IC CIO endorsed this finding to the IC IG

in December.


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b3 50 usc 3024(m )(1), b6 VII U) Investigations Division

(U//Fnu { he IC IG Investigations Division INV)n allegatio ns of violations of crimina l

laws and ad ministra tive regu lations arising from thecon duct of IC and ODNI employees and contractors .INV has unique authority to investigate programsan d activities ac ross the IC within the respons ibilityand authority of the DNI. INV also plays aprincipa l role in conducti ng IC-wide administra tiveinvestigatio ns into unauthorized disc losures ofclassi fied information.

(U//Fnrl{ , During this report ing period, INVh a ~ 7 5investigations (67 new and 8 legacyODNI OIG) of which 46 were closed. Dlt he 46closed investigations, 26 were substa ntiated andinvolved violations, such as labor mischarging,em ployee misconduct , and misuse of Governmen tequipment. Of the 26 su bstantiated inves tiga tions,23 were labor mischarging cases that resulted in anest imated 1,007,532 in potential recoveries forthe Government . s of 31 March 20 13, INVhad 29open investigations.

A U) Selec t Completed lnvestiKationsU I INV investigated the following cases and

ob tained dec linations of crim ina l prosecution fromthe U.S. Attorney s Office, Eastern Districtof Virginia.

1 U/ 1mproperUse ofGovernmentResources INV-2012-0001 November2012).(U//For(o ) An ODNI Senior DH1 ial allegedlym i s d - G o v e r n m e nt reso urces for persona lbenefit, engaged in unau thorized contacts w ithforeign na tionals, and attempted to improperly

obtain a security clearance lor a private citizenthrough the use of a no-cos t contract. The employeeresigned for reasons unrelated to the investigationbefore it was com pleted. INVsubsta ntiated theallegations and referred the completed investigationto ODNI Security.

2 UJ Misuse ofGovernment Equ pmen t ViolationofODNIand CIAPolicyINV-2012-0006, Dctober2012).U / D ) n ODNI Government employee allegedly

maile false claims; misused Government equipment ;

U - is the Assistant iG or Investigationsfor he IC G I has almost three decades ofFederal and mlitary service that include a widerange of operational and legal duties.I served atvarious times as an attorneyin hree independentICagenc ies for over 1 years before joining the ICIGn November 2011.1 has also deployedto servein combat operations as a mobilized ArmyReserve

and violated ODNI regulations governingprepub lication review, outside activities , and med iacontacts. Inves tigators discovered that the subjectwas operating a personal website on Governmentt ime using Government systems through which hesolicited and received donations. In addi tion, thesubject used Government systems to contact severalmedia outlets lor personal gain and to communica tewith foreign na tionals. INVsubstantiated theallegation s and referred the completed investigat ionto OONI Secur ity and ODNI s CMO. The emp loyee smanagement iss ued him a tetter of reprimand thatrest ric ts him from receiving a promotion, bonus,award, or step increase for three years.

3. UJ LaborMischargingINV-2012-0051 November2012).

( U INVsubstantiated allegations tha t acontractor allegedly billed the Government forover 70 0 hours of labor that was not performeddur ing a 14-mont h period. In addition to billing theGovernment for hours the contrac tor was not P


19/52

VII. U) Investigations Division

per day , to inc lude the adminis trati on of a distance

educatio n course beina tauaht for a local university.INVreferred the matter to the Head of ContractingActivity for appropriate recovery.

4. {U/JFDJftJ;Labor MischargingI N Vi f ll ~ 0 4 4November 2012).U IF INV substan tiated allegations that a

cont ractor billed the Government over 200 hours oflabor performed outside of the SCOpe of the contractdur ing a 5-month period. In add ilion to mischa'l ing,INVdetermined that the experience doc umentedin the subject's resume did not meet the minimumreq uirements of th e task order of the con trac t andthat the s ub ject w s using Government systems andbilled t ime to write a ncr;el. INV referred the matterto the Head of Contracting Activity for appropriaterecovery.

5. U) LaborMischargingINV-2012-0060 March 2013).

(U/I fod o l INV subStantiated allegati ons that ac o ni ; : ;c t ~billed the Government for near ly 300hours of labor performed outside of the scope olthe contract during a 5-month period. Investigatorsdiscovered that the subject routinely took extendedlunches and worked from horne without COTRapproval. INVreferred the matter to the Head ofContractina Activity for appropriate recovery.

6. U) LaborMschargingINV-2012-0065, March2013).

I U I F INV subStantiated allegati ons that acontractor billed the GoYemmen t for over 400 hoursof labor that was performed outside of the scope ol

the con tract workingfrom home) du ring a -yearperiod. INV referred the matter to the Head ofContract ing Activity for appropriate recovery.

7 U) LaborMischargingINV-2012-0068and INV-2012-0069,

March2013).

(UIIF Pi fOl INV subStantiated allegatio ns that twoem i oyees who are the owners and only emp loyeesof a subcontract ing firm mischa'l ed 1,691 hourscombined . The subjec ts admitted to all ol the hoursin question . he subjects engaged in a businessen terprise while charging the Governme nt for non-

4

work related matters to inc lude running a busin ess

for horse saddle padding . Further review foundseveral quest ionable financial prac tices by thesubjects and their company to include leasing threeBMWsfor personal use and thousands of dollarsin artwork. After the case was closed, the matterwas referred to the Head ol Contracting Activity forappropriate recovery and to the IRS.

B. U) Other l n v e s t i ~ r t i v eActivities

1. U) Unauthorized Disclosure Cases.

U) INVperformed a cursory review of a groupof "cold" ONCIXunauthor ized disclosure filesdat ing from 2004 to 2012 . The purpose of thisreview was to identify the charact er scope, andcommon procedures used in the former casesto determine where any supplemental IC IGadministrat ive inquiries might be incorporated intoexisting processes. On the bas is o f tha t review, INVestablished interna l standard operating procedu resfor the administration of any supplementa l inqu iries .While conducting that file review, IC IG nvestigatorsnoted two recent cases that warranted furtherinquiry. Neither case was substa nt iated .

2. U) Joint IC G/DoDIGAccountabilityReview.(U) In response to the Senate Select Committeeon Intelligence concerns regarding emp loyeeaccountability for misconduct, we partneredwith OoO IG to conduct a joint review on thedisciplinary actions tak en In response to misconductsubStantiated by the IG. This review com mencedin July 20 12 and the report is in fina l draft.

3. U) IC G Counter FraudInvestigations Program.

U) INV undertook an initiative to proactively iden tifyfalse billings by ODNI contractors. This involvedrunning a data interrogat ion program and conduc tinginvestigations to identify and address false ly blUedcosts. INVsuccessf ully orchestrated a subStantia lincrease in the scope and amount of rec urring dataava ilable for analysis th rough this program. Anadded benefit was the est ablis hment of a singlesource for the information , thereby achievingsign ifican t process improvement.


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4. U) /C /GHotline.

UJ The IC IG Hotline and intake process providesa confident ial means for IC employees, contrattOIS,and the public to report fraud, waste, and abuse .The intake process includes secure and commercialHotline phone numbers, U.S. mail, anonymoussecure Web application submissions, and walk-ins.

U) During this reporting period, the IC IG internalHotline rece ived 70 contacts from IC personnel. TheIC IG external Hotline received 77 contacts from thegeneral pub lic .

5. U) SubpoenaUse

U) INVobtained extensive COlporate reconds , usingits newly acquired administrative subpoena power,from an OONI sub-contractor whose employeesengaged in labor mischarging.

5


21/52

VIII. U) I IG ounsel b3 50 usc 3024m) 1), b6

U//F: Ol In accordance with Section 103H of the

Na ional Security Act of 1947 as amended, theIC IG has a separate Counsel who reports directlyto the IG. The IC IG Counsel provides independent,objective, and confidential legal adv ice on avariety of legal and policy issues that Impact theIC IG mission. The Counsel manages three mainportfolios : Legal and Policy Reviews, LegislativeReviews, and Congressional Engagements.

A U Letal and Policy Reviews(U) During this reporting period, the Counselcontinued outreach efforts to the IC IGstaff, ODNIcomponents, and other IG Counsel counterparts toeducate them on the establishment of the IC IG.Because the IC IG has broad statutory authority toident ify and review IC-wide issues. th e IC IG Counsel

continued to foster working relationships with theCounsels to other IC IGs on cross-jurisdictionalissues arising from IC IG projects, including theSecurity Clearance Reciprocity Review. the Study ofIC Elements Electron ic-Waste Disposal Practices,and the Review of IC Discipline and AccountabilityPra ctices .

U / Counsel also worked closely with ODNI sOff1ce of General Counsel (OGC) on pertinentFreedom of Information Act and Privacy Actli tigation involving IC IG investigative materials.This close collaboration allowed OGC to present abalanced litiga tion strategy that protected sensitiveIG sources while ensuring that public-intere stequit ies were considered . Counsel worked closelywith the Office of Civil Libert ies and Privacy ondeveloping records management policies for IC IG

records to ensure that Privacy Act systems of recordswere updated .

U / F O l To ensure legal sufficiency, the IC IGCou 1worked with the IG, the Deputy IG, and theA s to review plans , projects, and reports .

B. LeKiSiative Reviews(U) The IC IG has a statutory obligation to makeappropriate recommendations for legis lation thatpromote economy, effic iency, and effectiven ess in

6

(U) has servedas the Counselto the ICIGsince it was established in 2011. Prior to that, sheservedas a Senior Advisor to the former DONIOIGandworkedon the legislation establishing the Office ofthe ICIG. As Counsel conductslegal and policyreviews, provides legal guidanceon pertinent IG matters, servesas liaison tocongressional staff and members, and chairs the IC IGForumCounselsCommittee. n addition upportsCIGIEefforts by representing the IC G on the CouncilofCounsels to Gs, as well as teaching legal classesforthe Federal law Enforcement TrainingCenter - has servedin the ICsince 2000 in severalsupport and advisory positions including the NCTC,

where. analyzed the legal and regulatoryaspectsof strategic counterterrorism plans and the CIA, where servedas an Ass stant GeneralCounsel, assistingwith the stand-up of the ODNI.

as expertise in National Security Law as well aslaws impacting the mission of IGs, ncluding theInspector General Actof 1978, he Inspector GeneralReformActol2008, and the Intelligence CommunityWhis leblowerProtection Act.

the administration and implementation of programsand ac tivities within the responsib ility and authorityof the DNI. To meet that obligation, IC IG Counseloversees a dedicated Legislative Counse l that workswith t he ODNI OGC and the OLA to review legislativeproposals that impact the DNI:s m ssion. Moreover,

the Leg islative Counsel works with the Council ofCounsels to Inspectors General (CCIG) as well as theCIGIE Legislative Committee to ensure that the IC IGand staff are aware of legislative proposals impactingthe Federa l IG mission .

(UI/FOum(; uring this reporting per iod, the IC IGr e v i ~ e r al proposals lor the IAAfor FY 2014 .Those proposals included enhan cements to theIC IG statutory authorities that included protectionof IG materials and IC employees. Working throughthe IC IG Legislative Counse l, the IC IG Counsel was

SE CR ET NOFORN


22/52

able to ensure that IC IG equities were cons idered

in proposed legislation as well as other criticalcongressional engagements such as the Freedomof Information Amendments Act of 2012 andthe manner by which oversight committees bringpotential investigative matters to the attention ofthe IC IG.

C Conaressional Enaaaements

(U) The IC IG has an obligation to ensure that th econgressional oversight committees are kept fullyand currently informed of significant problems anddeficiencies within the prc:wams and activit ies ofthe DONI. Accordingly, the IG tasked the IC IGCounsel to create a robust congressiona l outreachprogram. Section IVof this report , high lightsseveral engagements with congressiona l oversightcomm ittees dur ing this reporting period .

D Special Counsel ProjectsU) During this reporti ng period, the President

tasked the ONI with implementing PresidentialPolicy Directive-19 (PPD19l, Protect ngWhis leblowers withAccess t o Classified Information(10 October 2012), which protects IC and FederalGovernment employees with access to classifiedinformation from repr isal actions for makingprotected disclosures. Given the investigativeexpertise and experience with whistleblowerissues, the ONI asked the IC IG o serve as thepoint-of


23/52

IX. U) Intelligence Oversight b3 50 usc 3024m )(1 ), b6

U The IC IG has established a position

of Senior Advisor on Intelligence Overs ight (10) toassess the need for ~ p n d i n gthe IC IG 10 portfolio.To further this assessment, the Senior Advisor on10 will serve as the principa l ad visor to theIC IG for the independent overs ight of intelligen ce,counterintell igence, and intelligence relatedactivities in the IC: represent the IC IG with theassistance of Counse l, to the Presiden t s IntelligenceOvers ight Board lOB): provide adv ice and guidanceon 10 to other IC element OIGs and ensure thatIntelligence activ ities performed by IC elementsare conducted In compliance with Executive Order12333 , as amended, and other related Federallaws, Executive Orders, and policies or directives .The Senior Advisoron 10 will accomp lish theseobjectives by ma inta ining liaison and coordinat ionwith appropr iate IC oversight organizations andengaging in IC wide or CONIspecific 10 projectsand evaluations.

U Pursuant to Execut ive Order 13462, theONI designated the IC IG as a responsible oHicefor reporting 10 matters arisi ng within the CONI tothe lOB. During this reporting period, the 10 staffsubmitted two quarterly reports to the lOB. s of3 1 March 2013, 10 had two ongoing evaluations .

A. U) Completed Reports1 (U) ThirdQuarter Calendar Year2012Report to the 108.U) For the third quarter of CY 2012, 10 had

no reports from within the DONIof intelligenceactivities that we had reason to believe wereunlawful or cont rary to Executive Order orPresidentia l Direct ive.

2. UJ Fourth Quarter Calendaryear 2012Report to the 108.U) For the fou rth quarter of calendar year 20 12,

10 had no reports from withi n the CONI ofintelligence activities that we had reason to beli evewere unlawfu l or contrary to Executive Order orPres iden t ial Directive.

8

U) is the Senior Advisorto the ICIG n

ll n l t e l l i g ~ e n l c e O v er s i g h t .On a Joint DutyAssignment

is establishing a capa blitytoevaluate whether intelligence data is handled inaccordance with ExecutiveOrder12333 restrictionsdesigned to protect privacy has 30 years ofICexperience in analytic, staff, and managementassignments. includingworkon National IntelligenceEstimates, an AmericanPoliticalScienceAssociationCongressiona l fellowsh

B U) OnJDing Evaluat ions

1. (U/JJOuO Evaluation of the NationalCounterterrorismCenter QualityAssuranceProcess to Nominate US Persons to TIDE(10-2013-001).U As a follow-up to the 2012 1C IG

Inspection of the NCTC. 10 is con duc ting a limited ,focused eva luation of the NCTC quality assuranceprocess to ascerta in whether nominations containedsuHicient l n t o nfor watchlisting of U.S. Persons.

2. (UtJ8 / 0) Special ReviewofNROCrimesReporting Process. {10-2013-002).U 0 ) On behalf of the NRO DIG, 10 is

conducting a specia l review of NRO compliancewith laws, po licies, and procedures to iden ti fyand report admiss ions of crimes mad e by NROcontractors, Government civilians, and militarypersonnel during polygraph sessions . The NRO DIGrecused themselves due to the ir role in the crimesreporting process .

SECRET NO F ORN


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X. U) IC Inspectors General Activities

A. U) IC I Forum

(U/IFOJJ6) The statutory IC IG FOJum wass t ~ ~y the IAAfor Y 2010. The IG

chairs the Forum, which is composed of IGs withc:wersigttt responsib ilities for IC elements . The IC IGAssistant Inspectors General (AIGs) cha ir the Forumcommittees. Forum members collaborate on IC-wideprojects; share Information and best practices;resolve jurisd ictional issues; and facil itate accessto emp loyees , cont ractors, and other materia ls thatmay be of assistance to Forum members . The IGuses the Forum to understand and prio ritizeIC-wide projects, to seek key IG stakeholder buy -inon projects, and to deve lop strategies on how to bestleverage limited IG resources across the com mun ity.

U IC IG sen ior manage rs lead t he ICForum Committees. The Committees engaged m thefollowing activities during this report ing per iod :

Dtplllin Commltlle The Deputies metto collaborate on issues Impacting theIGs from both an IG and an IC perspect ive.The Deputies focused on CIGIEstandards,data calls, tra ining opportunities, IC IGConference plan ning, and the IC IG AwardsProgram .

Alldlt Commlaae The Audit Com mittee metthree times and me mbers discussedon-going audit projects, the development ofwork plans, status of IC-wide COAs, andpreparation f or aud itabi lity. Or. Ron Rossbriefed committee mem bers onManaging Information Sec urity R isk .

lrrftstipdons Commltlle The Investiga ti onsCommittee met to d iscuss investigative

best pract ices , joint investigationproced ures , reti rement benefits for criminalinvest iga tors, and training opportunit iesfor investigators. Subs tantive di scuss ionsrelative to th e Counter Fraud Investigati onsand Recoveries Program revealed thatsevera l IC OIG s were runn ing similarprograms , prompting the crea tion ofa subcommittee that is exploringopportunities for informat ion sharing(common databa se) , c ons is tent policies,and joint investigations.

lnspldlons Commltttt The Inspection sCommittee met and d iscussed work plans;agreed to establish a community of interestsi te for inspec tor training opport unit ies;plann ed for a possible Y 2 013COA-related Inspect ion of Conferences;d iscussed IG qualitative dataana lysis tool s; a nd discussed 2012management challenges.

Counsels Commltlll The Counse lsCommittee met severa l times andd iscussed jurisdict iona l issues forIC-wide projects , leg islat ive impacts tothe IC IG community miss ion ,congr ess ional correspondence,and tra ining opportunities to bettereducate the IG workforce.

B. U) The Council of the InspectorsGeneral On lnteerity and Efficiency CIGIE)U) The IC IG is a sta tutory member of the

CIGIE. The IC IG active ly partic ipates in CIGIEmeetings and has representatives who mat eriallypart icipate in eac h of the si x CIGIE committees :Information Technology, Inspections a ndEvaluations, Investigations , Legislation, Professio na lDevelopment, and Audit

U) The IC IG co-hosted this year s 14t h AnnualCIGIE Awards Ceremony, wh ich recognized the workof OIG employees across the Federa l G011ernment.

C. U) Conferences and AwardsU/IFO kfOl The IC IG hosts an Annual IC IG

Conf ence and Awards program to provide anopport un ity for members of the IC IG comm un ityto collaborate on pressing IC-wide issues , discusscommon concerns, share best practices to impr 011eIG opera tions ac ross the comm unity, and recognizeIG professionals throughout the IC who have madeextraordinary con tribution s to the m iss ions andobjec tives se t forth in the U. S. Nat iona l IntelligenceStrategy and those of the ir respect ive IG offices.This year s confere nce and awa rds program wasschedu led for 30 October, but was cancell ed due to

19


25/52

b3 50 usc 3024(m)(1 ), b6

hurricane San FY 2013 awardees were:

IC IG lifetime Achievement Award -

IC IG Leadership Award-

IC IG Audit Award -Rules of Engagement Team (CIA)

IC IG Inspect ions Award - ssessment o ecurity W thi n the Departmento Defense Team (DoD)

IC IG Invest igations Award-

IC IG Collaboration Award -IC DIG Collaboration Team (multiple agencies)

D U) IC-Wide Trainin i(Ul The IC IG act ively participated in a wide rangeof coordinatio n and collaboration activities des ignedto increase its knowledge of and contribution toIG v i g within the Federal Government.

(U/IFO ) The IC IG hosted an IC-wide train ingsemi r for IG professionals on FOIAand PrivacyAct. This one-day trai ning featured br iefings fromthe Department of Justice Officeof lnlormationPolicy and DONI sCivil libe rt ies and Privacy OffiCe.Those briefings were t1ilored for IG Investigators,attorneys, and informat ion managementprofessionals. Pa rticipants learned how basic FOIAand Pr ivacy Act princ iples Impact the IG miss ion inan IC environment.

The IC IG and his Counsel providedlega l tra ining to criminal and ad misitrat iveInvestigators at CIGIE s IG Academy. That tra iningcovered workplace searches, emp loyee rights, andadministrative investigat ions.

(UIIFOI:J6i The Investigations Division is leading ajoin nit iative with CIGIE to examine the feas ibilityof conducting a n IC cent ric Bas ic Non-CriminalInvestigator Training Program. CIGIEwould tailor thecourse for investigators from IC DIGs.

2

E U) IC IG Peer Review Activities

U I F During this reporting per iod, theNRO DIG Inspections Division cornple led a p rreview J the NGADIG Inspections Division.

(U/IF f{UO)

joined the IC lG as theExecut ive Director for IG Community Standards

b r i n g s Yer three decades of intelligenceexperience to the IC IG primary role is to workclosely with the IC tG Forum , the DoD IG, and CIGIEto establish and implement a comprehensive pee rreview program for members of the IC IG forum .


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U) Appendix A: Statistical Overview

(U) Au' Jt StaffU If pO Ol The Audit Staff completed three projects

and issued reports containing 12 recommendationsto strengthen internal controls over informationtechno logy and 2 recommendations to standard izereciprocity of security clearances within the IC. Atthe end of the report ing period the Audit staff hadsix on11oing aud its.

U) n s t o nStaffutlf x o l The Inspection Staff completed four

inspections. At the end of the reportillll per iod the inspect ion staff had two ongoing inspect ions.

(U) Investigations Staff

U f The Investigations Division completedwork on 46 cases . At the en d of the report ingperiod the Investigations Dvision had 29open cases .

U) Intelligence Oversight StaffU I f ~The Intelligence Oversight staff

completed two reports to the Intelligence OversightBoard. At the end of the report ing period 10 hadtwo ongoing specia l evaluations.

2


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S RU) Appendix 8: Summary of Audits

1 JULY 2012-31 March 2013

U)Audit Numller

U) Completed Audris

IC-Widt

lllfonaallonTtcllaoiOO

lnfon1111ionTtcllllaloaY

UJ OnRorng Audri s

FinancialManapmtnt

IC.Widt

lnlonnadonTechno tau

F a c i a l

AUD-201200 1

AUD-2012008

AU0-2013002

- --'-'---

U)udrl Trtle

(U) Audit of lnttlllpnct o m ~ n l t yStcUrlty Clttrlllct Rtclproc:lty

(UJ fiscal Yttr 20121ndtptncllllt Evallllllon of OONI Complianctwllh lilt FtdtrallnfarmationSIICllrlty Mana&_. ct (ASMA) of2002

(UJ Fiscal Yu r 2012 CallsalldalttlFtdmllnfarmatlllll Steurity "'-act mllll l Ad of 2002 CapllanReport lor lila lm.llipac. Apnclts ' lnspKlars 6tnml

(U) Rntew of lila Of let of Ortctor of Natlonlllllltl ll.&tnce's fY 2012 COmplianceWi111 tiltlmproptr PaymtntsEllrnlnatlon 111d Rtccmry Act (ll'fliAI of 2010

U~ d yof Electronic Wlllll Disposal Pract lcn In lllllnltlli&tnct Cornnnlllity(UJ EValuation of the ~ o fthe "'leducln&DYw-Glaulftcatlaa Act" by lilt DONI

(U) Flscll Yttr 20131ndtptndtnt En luatlon of DONICampllaaca wi111111t FtdtlllllnlormatlonStcurlty c t (FISMAI of 2002

(UI Audltlllllltyfollow-up: 2013 Conar11s1on11Olrtcttd ActlDII COAl to Plfform a follow-upAutssrnent of tilt AudllabllltyPltns for CIA, OIA,NSA, N A, and DONI

(UJ Auditof tilt ln tna l Controls crttr 1111 Office of the Oree1ar of Natlanallnltlllac's Payroll


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(U) Appendix C: Summary of Inspections1 JULY 20 12 - 3 1 March 2013

U ) lnSIJecllon Number ) lllSIIettiOn T1tle

Ul Completed lrlSJlectons

INSP 2012.oo2 Ul Offtet of Partner EAJII. nl~ o n n tInspections

INSP 2012-ooJ (U) Offtce of Llflllatlvl Affairs

1NSP 2012 004 U) IUtioNI Countl rttnoli lll Center

1NSP2013-001 UJ Officeof the Chief fin1ndai Officer of1f t C

(Ul Ongomg Inspections

Component lnljlections lNSP 2013-002 U) lnforlllltionSllllll EIIYiromnentOffice

- - 23


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(U) Appendix D: Summary of Investigations1 JULY 2012-31 March 2013

U : C.1se U) CLOSEO lnvest lg.ll iOIIS

Numhcr

(Ul C ~ s c lU I CLOSED lnve Stlga li OIIS

Number

2011..()()29llnlutllorlnd Commitment of Gcmmment Funds 2012.()053 ubor i ~ e h a r a l n a(Unsubstantiated)(Sullstantllttd )

2012-0054 ubor ischaflina CSullmntL1ted)2011-0038 CQntract Fraud (Unsubstantiated)

2012..()()55 Labor Mlschaflina (Substantiated)2011..()()52 Medluii.Uve Abuse U n s u b s u n t l ~ )

2012-0056 ubor MiscllarJi111csubslartiltedl2012..()()01 Misuse of cmmrnent R ~s (SubstantL1ted)

2012.()058 Labor Mlscllaraina (Substantiated)

2012..()()05Ratffk:atlonI Acquisitionlmproprletlu(Unsubstantiated) 2012.()059 ubor Misdlaralna (UnsubstantL1ted)

2012-ooo6Misuse of liovement Equfpmtllt, T&.AFraud 2012-0060 ullor Mischaraln&(Substantiated)(Substantiated)

2012-0061 Ubor MI1Chu&l (Subst llle d)2012..()()10 Coatract Fraud (UnsllllltatL11ed)

2012-0065 Labor Mlsc:llqina (Substantiated)2012.0018 Reprisal (Unsubstantiated)

2012-0066 Labor Mfscharalna(Substantiated)2012..()()19 RatlflcatfOCIa AcquisitionDispute (Unsubstantllted)

2012-0067 Labor Mischaralnl (Substantiated)2012..()()30 Uuutllorlzed Disclosure CUnlllllstantiated)

2012-0068 Labor Mischaraina (Substantiated)2012..()()33 UnautllorlzedDisclosure (Unsubstantiated)

2012-0069 ubor Mlschar&lna(Subsoolialed)2012..()()38 UnaU111orfudDisclosure (UnsubsOOliated)

20 13..()()08 Labor Misdllrafftl (Unsubstantlated)2012..()()39 lnteiQpnce Oversllllrt Maner (Unsubstantiated)

201Hl012 Labor Mlschaflifll (Referral)20 12.Q043 LabarMlscharalna (Substantiated)

2013.()(113 Labor Mlschaflina Referral)2012-oo44 LaborMisclwalnl (SullsOOliated)

2013.()(117 Labor Mischaflin (Substantiated)

2012-0045 Labor Mlschuatnc CUnsubstantllted) 2013.()(118 Labor M J ~ e h a f l l n a(Substantiated)2012-()046 Labor Mlscllllfllnl(Unsubstantlllld)

2013..()()19 Labor M i ~ e h a r l f n aSubstantiated)2012..()()47 Labor Mlschar&lncCUnsubstantllted)

2013..()()20 Labor Mlschua lna (Substmtllted)2012-0048 Labor Misclwatal (Subsootllted)

2013..()()21 LlllarMlschartinl CSu bsootL11ed)2012-0049 Labor l ~ eh a f l i n aCSubsootiatedl

2013.()(122 l.abllf Mlscharaln&(Subst L1ted)2012..()()50 Labor MIIChaf'll111(Unsubstantiated)

2013..()()23 Labor Mlscharaina (Sullsootllted)2012-0051 Labor MIIChai'J:in&(Substantiated)

4


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(U) Appendix E: Ongoing Investigations

(U) OPEN lnvesllgaliOns

UJ Cnmmal and P1ohthtted Acts

FIISI Claims - Dvtrtlmt Fraud

False ClaiiiS- Tll111 and Attendance

Misconduct- En ploy

UnautllortztdDsclosUit

U) Tutat 0 0 ~lnvtstllltions

As of 3 1 March 20 13

U) Numhe1 ol Cases

25

29

5


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U) Appendix F Management ChallengesU) The followlna Information is taken from the IC IG

Report No. ICIG-MA-2013-001 , 2012 M ..ementn Perlotrnlnce Chii MgeS for the IntelligenceCommunity To identity IC challenges, the IC IGreviewed each IC element s specific ma nagementchallenges, as identified by their respecttve OIG.

Agency

-

26

The tables below reflect the categor ies thoseDIGs cited, as well as those ca tegories su pportedby our office s previously published CapstoneReports , includ ing the Federal Information Secur ityManagement Act of 2002 F ISMAland Continuity oOperations COOP) Capstone reports .

lb 1 4g


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(U) INFORMATION ASSURANCE' . .

(SI NFJ S letlllt Challenge

-- --- 7


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) CQUISITIONS ND CONTR CT M N GEMENT

. .

gency

gency

8

I : M SJ etillc Challenge


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U l LEADERSHIP MANAGEMENT ND ACCOUNTABILITY

Agency

U) INFRASTRUCTURE

Agency

S/1Nf) SpeCific Challenge

Sii N ) Spec1flc Challenge

- - - - S H

9


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Agency

U) HUMANCAPITAL

U NUCLEAR

Agency

3

- SH NF) SpeCifiC Challenge

S.'/NF Spec1hc Challenge

S E R R N


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U) Appendix G Status of Recommendations

Ul FISCALYEAR2011 INDEPENDENT EVALUATIONO DONICOMPLIANCEWITH FISMA ISSUED DEC 2011)

Summary of CLOSED Recommendations

Recommendation eef Responsible Corrective Action

lb3 50 usc 3024 i) 1 ), b5l . - - - - - - - 31ST RN


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U) FISCAL YEAR 2011 INDEPENDENTEVALUATIONOF ODNICOMPLIANCEWITHFISMA ISSUED DE 2011) ontmuetl

u m m ~ r yof CLOSED Reconnnenctat10n s

Reco endation

b3 50 us c 30 24 i)1 ). b5

eel Responsible Corrective ctionOffice

33


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Wl CAPSTONE REPORT PHASE I INTELLIGENCECOMMUNITYCONTINUITYO

OPERATIONS


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) REPORT O INSPECTION INTELLIGENCECOMMUNITYOFFICE O EQUALEMPLOYMENTOPPORTUNITYAND DIVERSITY HOD)ISSUED JAN 2012 )

Summary of CLOSED Recommendations

Rec 111111endatlon eel Responsible Corrective ctionOffice

- b3 50 usc 3024 i)1 ), b5

S5


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Ul REPOR T OF INSPECTION INTELLIGENCECOMMUNITYOFFICE OF EQUAlEMPlOYMENTOPPORTUNITY ANDDIVERSITYtEEODl ou t uwelftiSSU0 JAN 20 12

Summary of C OSED Recommendat ions outmue l

Recommendltlon

36

eel Responslb le Corrective ctionOffice

r.b :3..-5 cO:--:-U-::S 'C--::-0' 2,...4 ( ') .

(1 ), b5


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U) REPORT OF INSPECTION INTELLIGENCECOMMUNITYOFFICE OF EQUAlEMPlOYMENTOPPORTUNITYANDDIVERSITY EEDDI contuwedISSUED JAN 201 2

Summary of ClOSED Recomrnenda ron s ontmued

Recommendation eel

----Responsible Corrective ctionOffice

(UJ REVIEWOF THE OFFICE OF THE DIRECTOR OF NATIONAlINTElLIGENCE'S COMPliANCE WITHTHE IMPROPERPAYMENTS ELIMINATIONAND RECOVERYACT OF 2010(ISSUED MAY 2012 1

Summary of OPEN Recornrnenda ron s

Recommendation eel Responsible Corrective ctionOffice

. . . . . . . . t: - : b 3 : : - 5 ; : - ; 0 : : - : U : - : - : S : : : - : C ~ 3 0 : : - : : 2 : - = - 4 - ; ; ; i ) : o 1 , b5 S E C A N 7


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I


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U) REPORT OF INSPECTION OFFICE OF THE CHIEF FINANCIALOFFICER OF THE IC(ISSUED MARCH2013)

Summary of OPEN Recommendations

Recommendation eel Responsible Corrective ActionOffice

(U) REPORT OF INSPECTION: NATIONALCOUNTER TERRORISMCENTER(ISSUED November 2012)

Summary of OPEN Recommenrla lons

Recommendation Rec Responsible Conective ActionOffice

--' ____ ______ ......__ _ _ . _ _

b3 50 usc 3024( i)(1 ), b5

S N39


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U ) REPOR TOF

INSPECTION:OFFI E OF

LEGISLATIVE AFFAIRSOSS UlD Octoller 20121

Sunuu;uy of OPEN Reco mmendatio ns

Rt


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SECRE T NOFORN

lUIIFOUOlAUDITREPORT O INTELLIGENCECOMMUNITYSECURITY CLEARANCERECIPROCITYISSUfD Occcmher 2012)

Summary of OPEN Recomrnemtatrons

Recommendation

4

eel

b3 50 usc 3024 i)1 , bS

Responsible Corrective ctionffice


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U //FO \ i lJ ) FISCALYEAR 201 2 INDEPENDENT EVALUATIONOF DONI COMPLIANCE illi TilE FEDERALINFORMATIONSECURITY MANAGEMENTACT OF 2002 I SS UED Dec cmhcr 201 2)

u m m ~ r yof OPEN R e c o m m e n l ~ l i o n

Rec endation eef esponsible omctlve ction

-;:::: :::;:::;:;::::=:::::; .. _ _ _ . . . ~ - - - - b3 50 usc 3024 i)1 ), b5

S N

4


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{U//FIJl.JOIFISCALYEAR 2012 INDEPENDENT EVALUATIONOF DONI COMPLIANCEWITHTHE FEDERALINFORMATIONSECURITY MANAGEMENTACT OF 2002 ISSUED Oecemher 2012) contmuecl

Su Jryof OPEN e c o m m e n d a t i o n ~co rtmucrl

Recommendation eel

Summary of CLOSED Recommemlat1ons

Recommendation eef

b3 5 usc 3024 i)1 ). b5

Responaible Corrective ctionOffice

Responsible Corrective ctionOffice


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(U//FGUO)FISCAL YEAR 2012 INDEPENDENTEVALUATIONO OONI COMPLIANCEWITHTHE FEDERALINFORMATIONSECURITY MANAGEMENTACT O 2002 ISSUED Oecemher 2012) onlmue l

Summary of CLOSED Recommendations con mued

Recommendation eef Responsible Comc tive Actionffice

lb3 50 usc 3024 i)(1 ), b5 l

. 5S


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U) Strategic Goals and Objectives

6

0 {U) GOAL 1 Establish IC IG FoundationU) Develop policy, staffine. and trainine documentation.

Ul Pub lish an IC IG Strategic Plan and a Concept of Opera tions.

0 {U) G O A L 2 : Implement and Fulfill IC IG's OD N I MissionU) Prepare , plan , develop, and implement a solid foundation for the susta,nme nt of ODNI

focused inspec tions, aud its, and investigations

U) Develop a communication and outreach plan.

U) Incorporate continuous imJl ovement of economy, efficiency, effectiveness,and integration into ODNI operations .

0 {U) G O A L 3: Implement IC IG's IC Wide MissionIU) Lead and leverage the IC IG Forum to develop a foundation and the Pf ed uresfor IC-wide inspections , audit s, and investigations .

U) Establish a comJl ehensive ICwide peer review Jl ogram .

U) Develop a communicat ion and outreach plan for IC-wideefforts.


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intelligence community inspector general report (july 2012-march 2013)

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