Report Contents
What OIG Audited
Between March 2017 and June 2018, the Office of Inspector General (OIG) issued a series of audit reports assessing the invoice review process used by four bureaus that relied on contracted support to conduct their missions in Iraq and Afghanistan: the Bureaus of Near Eastern Affairs (NEA), International Narcotics and Law Enforcement Affairs (INL), South and Central Asian Affairs (SCA), and Diplomatic Security (DS). At the time OIG conducted these audits, the combined value of the contracts reviewed was more than $6.6 billion.
OIG conducted this review to determine the (1) common challenges identified in its series of invoice review audits, (2) best practices across the bureaus that can be implemented across the Department of State (Department) to improve invoice review accuracy, and (3) invoice review practices of other U.S. Government agencies involved in overseas contingency operations that could be adopted by the Department to improve the efficacy of its invoice review process.
What OIG Recommends
OIG made seven recommendations to strengthen the invoice review process throughout the Department. On the basis of the Department’s responses to a draft of this report, OIG considers all the recommendations resolved pending further action. A synopsis of management’s comments regarding the recommendations and OIG’s reply follow each recommendation in the Audit Results section of the report. Management’s responses to a draft of this report are reprinted in their entirety in Appendices B through D.
What OIG Found
In its series of audits involving NEA, INL, SCA, and DS, OIG identified three common challenges that confronted these bureaus during the invoice review process. First, OIG found that NEA, INL, and DS experienced staffing shortages, which hampered their efforts to thoroughly review invoices. Second, OIG found that NEA and INL were not fully prepared to monitor contractor performance, which increased the risk that the Department paid for services that did not meet contract requirements. Third, OIG found that the use of cost reimbursable contracts had a significant effect on the workload of the invoice reviewers because of the complexity of the invoices.
In addition, OIG identified two best practices that, if adopted Department-wide, could improve the invoice review process and the accuracy of such reviews. First, CGFS independently conducts periodic quality control reviews to verify the accuracy of bureau invoices approved for payment. CGFS then communicates the results of these reviews directly to the bureau involved. This practice helps the Department recover improper payments, address weaknesses, and improve the invoice review process. Second, NEA developed and implemented contract-specific training that improved the accuracy of its invoice review process. This training enhanced reviewers’ familiarity with the contracts’ unique terms and conditions and contributed to increasing the accuracy of the review process.
In addition, DS implemented training for its invoice review personnel specific to the Worldwide Protective Service contract. OIG also found that the invoice review process of the Department of Defense and the U.S. Agency for International Development differed from that of the Department. Therefore, OIG did not identify any invoice review practices from either that could be adopted to improve the Department’s invoice review process.
Report Terms
Report Recommendations
OIG recommends that the Bureau of Administration, Office of the Procurement Executive, develop, implement, and issue guidance for the bureaus to use in modifying invoice review standard operating procedures, including the circumstances when it is appropriate to execute the modified procedures.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive, Office of Acquisitions Management, require contractors responding to task order solicitations under the new Diplomatic Platform Support Services contract to propose performance metrics against which they will be measured in the execution of the task order.
OIG recommends that, in exercising option years of task orders under the new Diplomatic Platform Support Services contract, the Bureau of Administration, Office of the Procurement Executive, Office of Acquisitions Management, review relevant considerations, including the security situation, and engage in an appropriate cost benefit analysis to determine if it would be feasible to convert cost reimbursable task order elements to firm-fixed-price elements.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive (A/OPE) and the Bureau of Comptroller and Global Financial Services form a working group to explore how best to keep A/OPE’s Contracting Officer’s Representative (COR) database up to date and share information between the COR database and the Global Financial Management System.
OIG recommends that the Bureau of Comptroller and Financial Services (CGFS) advise all relevant Department of State bureaus of the potential benefits of the CGFS invoice review quality control program to each bureau’s invoice review process and encourage the relevant Department bureaus to provide CGFS with relevant information regarding specific contracts, particularly at high-threat posts.
OIG recommends that the Bureau of Near Eastern Affairs update its Contracting Officer’s Representative and invoice review training modules to include information specific to the new Diplomatic Platform Support Services contract as it relates to task orders in support of U.S. Mission Iraq.
OIG recommends that the Bureaus of Near Eastern Affairs and South and Central Asian Affairs Executive Office direct the Regional Contract Support Office in Frankfurt, Germany, to provide Contracting Officer’s Representative training support to the Bureau of South and Central Asian Affairs staff performing at U.S. Mission Afghanistan.