Office of the Inspector General (OIG)

OIG Semi-Annual Report to Congress:
October 1, 2006 - March 31, 2007


Table of Contents


Foreword

The National Archives and Records Administration’s (NARA) core mission is to serve democracy by safeguarding and preserving the records of the Federal Government. The challenges are many, and the resources constrained. That is why the Office of Inspector General (OIG) is committed to demonstrating leadership to this agency by not only identifying waste, fraud, abuse, and mismanagement but also defining viable strategies and solutions for bringing about operational improvements. We aspire to protect NARA’s flank from those who would attempt to steal from our holdings, attack our computer network, squander taxpayers’ funds or otherwise inflict damage upon NARA. Likewise, we attempt to occupy the high ground and educate and support those who assume a similar posture. In this reporting period, our educational outreach program resulted in the recovery of 161 Civil War-era records stolen from our holdings in Philadelphia. Our Archives Recovery Team (ART) was successful because two responsible citizens living in Gettysburg, Pennsylvania, acted as our sentinels and alerted us to the trafficking of NARA holdings over the Internet. Thus, they secured their place on the high ground. This is a success that should be celebrated, for the strategy and related educational outreach program mapped out by this office worked in textbook fashion. This is only one example of the accomplishments of our investigative staff but indicative of the outstanding service they provide on a daily basis to your National Archives. Furthermore, our audit staff continued to provide NARA with independent expertise, and skilled and valuable support in areas that include financial stewardship, IT and holdings security, and program controls and oversight such as those relating to the processing of records accessioned into NARA’s holdings. They work not to find fault or denigrate NARA staff but to facilitate constructive change designed to elevate the agency’s performance and protect its varied and critical programs. I am proud to serve as the Inspector General and wish to take the opportunity to thank those NARA employees who supported our efforts. As one employee assigned to the Office of Presidential Libraries recently penned, “It is comforting to know that the OIG has our back.” That kind of feedback from the rank-and-file of this great institution resonates with us. The OIG has taken, and will continue to unflinchingly take to the high ground and hold firm for what is right. In so doing, we are proud to “have the back” of committed NARA employees and the American public.

NARA holds records, artifacts, and images that constitute the essential evidence of our democracy, and who we are as Americans. Many of the records amongst our millions of cubic feet of holdings are intrinsically of archival significance; sadly they are also highly marketable if illicitly removed from our holdings. We hold retirees' military and civilian records and other records that contain vast troves of private information that could and have been used for identity theft and other nefarious purposes. NARA maintains extensive holdings of highly classified records including those that are most sensitive to our national security. The high risk of compromise to elements of these holdings requires continual vigilance to ensure proper control of them. We have begun to accession and hold the initial elements of an enormous and growing wave of electronic records that in their digital state are vulnerable to exploitation by persons or entities who gain unauthorized access to them. NARA, as any other agency, also maintains large quantities of assets and enters into major procurements that require audit and investigative oversight to mitigate the potential for fraud.

As the Inspector General, my statutory duty is to provide audit and investigative coverage to this entire agency; detect and report upon waste, fraud, abuse, and mismanagement; and offer recommendations and suggestions designed to bring effectiveness and efficiency of operations to NARA. By accepting the position of Inspector General six years'ago, I accepted this responsibility and sought to secure the capabilities and resources to fully honor this challenge. I have used semiannual reports, budget submissions, and other vehicles to seek additional resources for my office while fully recognizing that NARA is an agency that has serious budget challenges. I invite Congress and the Executive Branch to become more intimately involved in the challenges this office faces as we attempt to honor the provisions of the Inspector General Act passed by Congress and signed into law by the President.

 

Paul Brachfeld
Inspector General

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Executive Summary

This is the 37th Semiannual Report to the Congress summarizing the activities and accomplishments of the National Archives and Records Administration (NARA) Office of Inspector General (OIG). A summary of NARA’s top challenges is provided under the section titled “Top Ten Management Challenges.” The highlights of our major functions are summarized below.

Audits

In this reporting period, the Audit Division continued to examine the security of NARA’s Information Technology (IT) systems and assess economy and efficiency of NARA’s programs. This work had positive impact upon agency operations and related controls in these critical areas. Recommendations directed to NARA officials will, upon adoption, translate into reduced risk for the agency and increased levels of security and control over NARA’s financial assets, programs, and operations.

We issued the following audit reports during the reporting period:

  • Audit of the Processing of Records Accessioned into NARA. This audit, which sought to determine whether NARA was making records available to the public in a timely manner, found that NARA is constrained in its ability to provide efficient and effective access to, and information about, NARA holdings, and in its ability to meet its mission of ensuring public access to records as soon as legally possible. This condition is the result of large backlogs of inadequately processed records and records awaiting adequate description and entry into the Archival Research Catalog (ARC). NARA management is aware of the backlogs, having initiated a study known as the Workload Analysis Study (WAS) that revealed the enormity of the processing backlog in textual records. This study of processing found that only 36 percent of textual holdings are adequately processed (i.e., ready for efficient and effective use by the public), meaning that 1.85 million cubic feet of records require additional processing to be considered appropriately processed. The study places the cost for complete processing of these records at a staggering $1.57 billion. Additionally, our review of Performance Management and Reporting System (PMRS) statistics show that just over half of NARA’s traditional holdings are described in ARC. While this meets NARA’s strategic goal of having 50 percent of traditional archival holdings described in an online catalog, it still leaves more than 1.6 million cubic feet of traditional archival holdings not described in ARC, making it more difficult for the public to learn about and use these holdings. We made two recommendations to management that, upon implementation, will assist that agency in its efforts to make more records available to the public in a more efficient and effective manner. Management concurred with both recommendations. (Audit Report #07-06, dated February 28, 2007)

  • Review of Archives II File Server Disk-Space Utilization. Our audit, which assessed whether digital media computer files took up a significant amount of server disk drive space, and whether the storage of these types of computer files by NARA users complied with agency policy, disclosed that disk storage space on the Archives II Novell file servers was not adversely impacted by huge volumes of potentially inappropriate files. The percentage of disk space occupied by the types of media files for which information was provided by Office of Information Services officials was 6.83 percent, leaving 93.17 percent available for other types of files, such as, word processing files, spreadsheets, and databases. However, while our review did not disclose that a large amount of disk space was occupied by media files, we did find that potentially inappropriate files were stored on the servers in violation of NARA policy and, possibly, U.S copyright laws. As a result, valuable disk storage space that could be used to store Government-related data was taken up by potentially inappropriate data, possibly resulting in additional expense to the agency to acquire additional storage space for Archives-related material. We made one recommendation, with sub-recommendations, that when implemented, will assist the agency in freeing valuable disk storage space, previously taken up by inappropriate data, that could be used to store Government-related data. Management concurred with all but one recommendation and initiated corrective action. (Audit Report #07-02, dated December 4, 2006.)

  • Audit of Suitability Determination of Contract Employees. Pursuant to the Archivist’s request, the OIG conducted a review of suitability determinations for contract employees to determine the percentage of contractors hired by NARA who had felony convictions, and to examine NARA’s process for evaluating contractor employment suitability. Our audit revealed that 7 percent of the contractors whose files we reviewed contained documentation of prior felony arrests. Likewise, our review revealed that controls over the suitability determination process itself require improvement. The existing procedures for conducting suitability determinations within NARA need to be formalized. Similarly, contractor suitability determinations are inadequately documented. These aforementioned conditions have resulted in NARA hiring individuals who may not have been hired if NARA had a formalized and stringent suitability policy. The lack of such a policy potentially places NARA employees and records at undue risk. We made one recommendation for improvement of the process. Management concurred with the recommendation and began implementing corrective action. (Audit Report #07-03, dated November 28, 2006.)

  • Audit of Management Controls for Safeguarding NARA’s Specially Protected Records and Artifacts (SPRA) Stored in Secured Stacks, Vaults, and Safes.Our review found that while NARA has established management controls at all locations included in our review, these controls were not always adequate to safeguard and secure SPRAs. Therefore, these items were at risk of loss or theft. Specifically, our audit disclosed the following: not all SPRAs have been identified; a complete list of SPRAs was not maintained by an office in the Pacific Region and an office in the Great Lakes Region; access to records meeting the definition of SPRAs was not restricted to authorized archives operational staff; annual inspection procedures for large record series were inadequate to identify lost or missing documents; and annual inspections of SPRAs were either not performed or not performed adequately. To address the findings in this report, we made five recommendations to strengthen management controls over SPRAs. Management concurred with the recommendations and took corrective action to address the report findings.(Audit Report #07-01, dated October 12, 2006.)

  • Audit of NARA’s Fiscal Year (FY) 2006 Financial Statements.Clifton Gunderson LLP (CG), a public accounting firm, audited NARA’s consolidated balance sheet as of September 30, 2006, and the related consolidated statements of net cost, changes in net position, financing, and the combined statement of budgetary resources for the year then ended. CG issued NARA its first unqualified opinion on the FY 2006 financial statements and a qualified opinion on the FY 2005 financial statements for the effects of adjustments, if any, as might have been necessary had they been able to perform adequate audit procedures on obligations and outlays related to investments. CG reported one material weakness in information technology and two reportable conditions concerning reporting obligations and payroll controls. (Audit Report #07-05, dated December 6, 2006.)

  • Audit of NARA’s Hurricane Katrina – Related Mission Assignments.The Department of Homeland Security (DHS) asked all Federal agencies’ OIG to review the effectiveness and efficiency of the mission assignment process at their agency as part of their larger review of mission assignments that Federal Emergency Management Agency (FEMA) provided to other Federal agencies in the aftermath of Hurricane Katrina. DHS will use the information gathered from Federal agencies to improve the mission assignment process. Based on our audit, NARA’s mission assignment, received from FEMA, was clear and approved in a timely manner. In addition, NARA had effective controls over the mission assignment implementation process, and controls were in place for monitoring the mission assignment process internally. NARA staff provided progress reports to supervisors on-site or after key events. However, controls over communicating progress to FEMA could be improved as progress reports were not submitted to FEMA on a monthly basis. Additionally, while controls were in place to effectively manage and account for the $434,350.20 spent on the mission assignment, bills were not promptly submitted to FEMA for reimbursement, and more than half of the credit card information was not provided to FEMA for their reporting purposes. To address the weaknesses we noted and to better manage mission assignments, NARA took action to designate an employee as the agency’s External Coordinator for Disaster Preparedness and Response.(Audit Memorandum #07-04, dated November 20, 2006.)

  • Evaluation of NARA’s FY 2006 Management Control Program.Our review of individual offices’ assurance statements found that they were adequately supported and complied with the intentions of the FMFIA and OMB Circular A-123. Furthermore, we found that the individual offices’ assurance statements accurately reflected the results of internal and external reviews. However, as noted in our October 30, 2006, response to the Archivist’s agency assurance statement to the President, we do not believe that the agency’s FMFIA statement accurately reflects NARA’s material risks in FY 2006. Specifically, we noted that the agency chose not to identify NARA’s Preservation Program and Information Security Program as Material Weaknesses, although they were identified as such by the OIG and the risk has not been mitigated.(Audit Memorandum #07-07, dated February 27, 2006.)

Investigations

During this reporting period, the Office of Investigations opened 24 investigations, closed 18 investigations, recovered 200 records (in addition to 500,000 pages of records recovered from a former Presidential administration official), and executed 1 search warrant. The Office of Investigations received 116 complaints and closed 73. At the close of the period, there remained 28 open complaints and 40 open investigations.

The Office of Investigation completed investigations in areas including:

  • ATheft and recovery of Military, Indian, and Civil War Records
  • Theft and Recovery of Celebrity Passport Photographs
  • Theft and Recovery of a President Tyler Pardon
  • Contract Fraud and False Claims
  • Fraudulent Use of a Government Credit Card
  • False Fire Alarms
  • Tampering with a Government Identification Card

Regrettably, having an insufficient number of investigative agents—currently three—continues to hamper our efforts in meeting our statutory mission of preventing and detecting fraud and abuse in the programs and operations of the National Archives and Records Administration. The Archives consists of nearly 3,000 personnel located at 36 facilities throughout the country. With its far-reaching and indelible footprint on virtually every other Federal agency, as well as the presidential libraries, the Archives provides a tremendous area of operations for the Office of Inspector General. Due to limited resources and a grossly understaffed office, our ability to perform proactive investigative activity, or manage the numerous and complex investigations necessary at an agency of this breadth remains severely constrained. But for the impressive abilities of our assembled team, the successes we have achieved in the present environment would not have been possible.

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Management Assistance

During the reporting period, the OIG

  • Fully implemented the Archival Recovery Team (ART) incorporating NARA management, archival experts, and the Office of General Counsel in the recovery of lost, stolen, and missing holdings at the National Archives. To further facilitate this directive, an investigative archivist was detailed to the OIG to provide subject-matter expertise throughout the recovery process. This detail has exceeded expectations, and the OIG began the process of incorporating the investigative archivist permanently into the OIG staff.

  • Worked with the Archivist of the United States, the Office of General Counsel, and the Department of Justice to resolve issues related to OIG access to a NARA system that may have held information that was potentially covered by executive privilege.

  • Worked with NARA’s Space and Security Management Division on the use and deployment of a video surveillance system at the main Archives facility in Washington, DC, as well as on a case of a former employee threatening current NARA staff and facilities.

  • Worked with NARA’s FOIA and Privacy Officer to implement an updated Privacy Act routine use notice in order to facilitate a pending OIG Office of Investigation peer review. Additionally worked with the Office of General Counsel on facilitating access to an OIG Report of Investigation by the Washington, DC Bar Counsel, and a case dealing with the release of a Report of Investigation into mishandling of classified material and a NARA surveillance video.

  • Participated as a non-voting member on NARA’s Identity Theft Task Force committee.

  • Provided continued input into NARA’s Information Security Program Handbook regarding handling incidents involving classified material, particularly when notification of the OIG becomes necessary.

  • Referred 10 cases from the Archival Recovery Team to the Office of General Counsel pursuant to NARA Directive 1462.

  • Worked with NARA’s Public Affairs Officer managing multiple press inquiries directed to OIG regarding releasable Reports of Investigation and a case of stolen and recovered documents from NARA.

  • Worked with the Office of Presidential Libraries on the recovery of approximately 500,000 pages of material from a former Presidential administration official.

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Introduction

About the National Archives and Records Administration

Mission

The National Archives and Records Administration serves American democracy by safeguarding and preserving the records of our Government, ensuring that the people can discover, use, and learn from this documentary heritage. Further, the agency ensures continuing access to the essential documentation of the rights of American citizens and the actions of their government and supports an understanding of our democracy, promotes civic education, and facilitates historical understanding of our national experience.

Background

NARA, by preserving the nation’s documentary history, serves as a public trust on which our democracy depends. It enables citizens to inspect for themselves the record of what the Government has done. It enables officials and agencies to review their actions and helps citizens hold them accountable. It ensures continuing access to essential evidence that documents the rights of American citizens, the actions of Federal officials, and the national experience.

Federal records reflect and document America’s development over more than 200 years and are great in number, diverse in character, and rich in information. NARA’s traditional holdings amount to 28.4 million cubic feet of records. These holdings include architectural/engineering drawings, maps, and charts; moving images and sound recordings; and photographic images. Additionally, NARA maintains 543,564 artifact items and 10.5 billion logical data records.

NARA involves millions of people in its public programs, which include exhibitions, tours, educational programs, film series, and genealogical workshops. In FY 2006, NARA hosted 3 million museum visitors while responding to 1.2 million written requests from the public. In addition, NARA responded to 10 million Federal agency reference requests, 21,419 Federal agency requests for appointments to review records, and provided records management training to 4,234 individuals. NARA publishes the Federal Register and other legal and reference documents that form a vital link between the Federal Government and those affected by its regulations and actions. Through the National Historical Publications and Records Commission, NARA helps to preserve and publish non-Federal historical documents that also constitute an important part of our national heritage. NARA also administers the Nixon Presidential Materials Project, and 11 Presidential libraries that preserve the papers and other historical materials of all past Presidents since Herbert Hoover.

Resources

In FY 2007, NARA was appropriated an annual budget of approximately $331 million and 2,808 Full-time Equivalents (FTEs), which included appropriations of $281 million for operations, $45 million for the Electronic Records Archives (ERA) program, $9.1 million for repairs and restorations of facilities, and $5.4 million for grants. NARA operates 36 facilities nationwide.

About the Office of Inspector General (OIG)

The OIG Mission

The OIG’s mission is to ensure that NARA provides the American people with ready access to essential evidence by providing high-quality, objective audits and investigations, and serving as an independent, internal advocate for economy, efficiency, and effectiveness.

Background

The Inspector General Act of 1978, as amended, established the OIG's independent role and general responsibilities. The Inspector General reports to both the Archivist of the United States and the Congress. The OIG evaluates NARA's performance, makes recommendations for improvements, and follows up to ensure economical, efficient, and effective operations and compliance with laws, policies, and regulations. In particular, the OIG

  • assesses the effectiveness, efficiency, and economy of NARA programs and operations
  • recommends improvements in policies and procedures to enhance operations and correct deficiencies
  • recommends cost savings through greater efficiency and economy of operations, alternative use of resources, and collection actions
  • investigates and recommends legal and management actions to correct fraud, waste, abuse, or mismanagement

Resources

The FY 2007 OIG budget is approximately $2,060,300 for operations. The OIG now has 16 FTEs. At full staffing, in addition to the Inspector General and 3 support staff, 7 FTEs are devoted to audits, 4 to investigations, and 1 serves as counsel to the Inspector General. During the period, a program auditor position and IT auditor position were vacated, bringing the total number of vacant auditor positions to 3. Additionally, the AIGI position was vacated and the counsel was detailed to that position. Currently, the OIG is in the process of filling the vacant positions. The OIG is seeking additional audit and investigative resources to support the work of this office as defined in the FY 2007 and FY 2008 budget submissions to the Archivist.

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Office of Inspector General Activities

Involvement in the Inspector General Community

President’s Counsel on Integrity and Efficiency (PCIE) and Executive Counsel on Integrity and Efficiency (ECIE) Legislation Committee. The Inspector General (IG) served as one of two ECIE representatives to the Legislation Committee. The Legislation Committee assists the IG community in effectively carrying out its duties as specified in Executive Order 12085. In particular, these responsibilities are to identify, review, and discuss areas of weakness and vulnerability in Federal programs; conduct operations to uncover fraud, waste, and abuse; and develop plans for coordinated, Government-wide activities that address these problems and promote economy and efficiency in Federal programs and operations.

PCIE and ECIE Investigations Committee. The IG served as one of two ECIE representatives to the Investigations Committee. The mission of the Investigations Committee is to advise the IG community on issues involving investigative functions, establishing investigative guidelines, and promoting best practices. The Investigations Committee relies on its Investigations Advisory Subcommittee to assist it in these efforts. The goal, therefore, is to continuously enhance professionalism within our investigator community.

Council of Counsels to Inspectors General (CCIG). The OIG counsel participated in meetings of the CCIG and communicated regularly with fellow members. Multiple topics were raised, discussed, and addressed including defining open and closed investigations and when reports of investigation are available for release to the public; the disclosure of information to the Department of Justice when such information contains potentially privileged information; OIG policy government-wide regarding the use of the Grand Jury in OIG investigations; and authority delineated under the Inspector General’s Act of 1978, as amended, to access an agency system.

Federal Audit Executive Council (FAEC). The Assistant Inspector General for Audits (AIGA) continued to serve as an ECIE representative to the FAEC. During the period, the AIGA attended the FAEC’s meeting to discuss topics such as financial statement audit issues, revisions to the PCIE External Peer Review Guide, opinion reports on internal controls, and information security.

PCIE Information Technology Working Group.The Office of Investigations assigned an OIG analyst to build and develop a computer forensics lab and participate in the PCIE IT working group addressing computer forensics and standards throughout the Inspector General community. Computer Forensic programs have aided in the prosecution of numerous “cyber-crime” and traditional OIG investigations. Because of the success and growth of the field, attention to the reliability of the findings and the procedures has become an issue in the eyes of the forensic and legal communities. To address this issue, the PCIE IT working group set out to develop standards for computer forensics performed within the OIG community. NARA’s computer forensics analyst took an active role in the working group, which determined that the best way to establish these standards was to incorporate them within the Quality Assurance Review (QAR) process, and as a result, developed questions for the QAR that are specific to computer forensics.

Response to Congressional Items

The OIG responded to multiple congressional requests for materials during the reporting period from committees that included the House Committee on Government Oversight and Reform, United States Senate Committee on Foreign Relations, United States Senate Committee on Finance, and the United States Senate Committee on Homeland Security and Governmental Affairs.

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Audits

Overview

This period, we issued:

  • 5 final audit reports
  • 2 audit memorandums

We completed fieldwork on the following assignment:

  • an audit of energy usage to assess NARA’s energy management efforts and to determine whether NARA can take additional measures to reduce rising energy costs.

We also continued work on the following assignments:

  • an audit of the process of accounting for and safeguarding library artifacts to determine whether sufficient management controls exist to safeguard and account for those artifacts
  • aan audit of NARA’s Purchase Card program to determine the adequacy of management controls over the program
  • a review of NARA’s Mail Management program to determine whether controls are adequate and whether NARA is in compliance with Federal mail management policy and procedures

Audit Summaries

Audit of the Processing of Records Accessioned into NARA

The NARA Office of Inspector General (OIG) performed an audit of NARA’s processing of textual records to determine if NARA was making records available to the public in a timely manner.

We found that NARA is constrained in its ability to provide efficient and effective access to, and information about, NARA holdings. This condition is the result of large backlogs of inadequately processed records and records awaiting adequate description and entry into the Archival Research Catalog (ARC). This condition was formally conveyed to external stakeholders for the first time via NARA’s revised Strategic Plan for 2006–2016 but has yet to be defined as a Material Weakness by the Archivist.

NARA management is aware of the backlogs, having initiated a study known as the Workload Analysis Study (WAS) that revealed the enormity of the processing backlog in textual records. This study of processing found that only 36 percent of textual holdings3 are adequately processed (i.e., ready for efficient and effective use by the public), meaning that 1.85 million cubic feet of records require additional processing to be considered appropriately processed. The study places the cost for complete processing of these records at a staggering $1.57 billion. Even the minimal cost of processing to allow the public to request and view these records (e.g., the cost associated with intellectual control, description, FOIA, and declassification–excluding holdings maintenance and preservation) is $848.5 million. Additionally, our review of Performance Management and Reporting System (PMRS) statistics show that just over half of NARA’s traditional holdings are described in the ARC. While this meets NARA’s strategic goal of having 50 percent of traditional archival holdings described in an online catalog, it still leaves more than 1.6 million cubic feet of traditional archival holdings not described in ARC, making it more difficult for the public to learn about and use these holdings.

We made two recommendations to build upon management action taken to date in an effort to make more records available to the public in a more efficient and effective manner. Management agreed with both recommendations and initiated corrective action. (Audit Report #07-06, dated February 28, 2007.)

Review of Archives II File Server Disk-Space Utilization

The purpose of this effort was to identify the amount of server disk drive space used by digital media computer files on the eight Novell file servers located at the National Archives at College Park. Specifically, we determined if media files (i.e., music, video, audio files, etc.) took up a significant amount of server disk space, and whether the storage of that type of computer file by NARANet (NARA’s computer network) users complied with NARA policy. The review was performed after we received an allegation during our monitoring of the Novell Software Upgrade Project that a large percentage of server disk storage space was occupied by inappropriate files, including music, movies, and pornography. We were also concerned that some of the files might contain copyrighted material.

To accomplish the objective, we analyzed and summarized information pertaining to disk space and music, video, and audio files stored by NARANet users on NARA’s Archives II Novell file servers (Adams, Federal Register, Jefferson, Madison, NARA, Suitland, Van Buren, and Washington). We also reviewed U.S. copyright laws and examined guidance contained in NARA 802, Appropriate Use of NARA Office Equipment, dated August 27, 2004.

Our review disclosed that disk storage space on the Archives II Novell file servers was not adversely impacted by huge volumes of potentially inappropriate files (e.g., movie files, music files, etc.). The percentage of disk space occupied by the types of media files for which information was provided by Office of Information Services officials was 6.83 percent, leaving 93.17 percent available for other types of files, such as word processing files, spreadsheets, and databases. However, while our review did not disclose that a large amount of disk space was occupied by media files, we did find that potentially inappropriate files were stored on the servers in violation of the provisions of NARA 802, Appropriate Use of NARA Office Equipment, August 27, 2004, and, possibly, U.S copyright laws.4 As a result, valuable disk storage space that could be used to store Government-related data was taken up by potentially inappropriate data, possibly resulting in additional expense to the agency to acquire additional storage space for Archives-related material.

We made one recommendation, with sub-recommendations, that when implemented by management, will assist the agency in freeing valuable disk storage space, previously taken up by inappropriate data, that could be used to store Government-related data. (Audit Report # 07-02, dated December 4, 2006).

Audit of Suitability Determination of Contract Employees

In accordance with a request from the Archivist of the United States, the OIG conducted a review of suitability determinations for contract employees. The Archivist was concerned about the potential risk when contractors with felony criminal convictions were given access to NARA’s permanent records. The review was conducted to determine the percentage of contractors hired by NARA who had felony convictions, and to examine NARA’s process for determining contractor employment suitability. Suitability refers to a person’s character, reputation, trustworthiness, and fitness to perform the job for which he or she is hired.

To accomplish this review we selected a sample of 177 suitability files for contractors assigned to Archives I and Archives II. As a result of our review and analysis, we identified that 7 percent of the contractors whose files we reviewed contained documentation of prior felony arrests.5 Likewise, our review revealed that controls over the suitability determination process itself require improvement. The existing procedures for conducting suitability determinations within NARA need to be formalized. Similarly, contractor suitability determinations are inadequately documented. These aforementioned conditions have resulted in NARA hiring individuals who may not have been hired if NARA had a formalized and stringent suitability policy. The lack of such a policy potentially places NARA employees and records at undue risk.

Implementation guidance for Homeland Security Presidential Directive (HSPD)–12, requires that contractors within NARA be subjected to the National Agency Check with written Inquiries (NACI) or other suitability or national security investigation prior to receiving a permanent identification badge. NARA uses criteria contained in 5 CFR 731 to make suitability determinations for contract employees. These Federal regulations allow for persons with criminal convictions to be hired for Federal employment when certain factors are considered.

To address the reported weakness, we made one recommendation that, upon adoption, will help ensure that controls over NARA’s suitability program are sufficient to protect NARA employees and records. Management agreed with our recommendation and started corrective action. (Audit Report #07-03, dated November 28, 2006.)

Audit of Management Controls for Safeguarding NARA’s Specially Protected Records and Artifacts (SPRA) Stored in Secured Stacks, Vaults, and Safes

The objective of the audit was to determine whether controls were adequate to properly safeguard specially protected records and artifacts. NARA defines “specially protected records and artifacts” (SPRAs) as records and artifacts having considerable historical, intrinsic, legal, and/or monetary value, and that are at the greatest risk of theft, especially for resale, thus requiring special protection. We examined SPRAs stored at NARA’s College Park, Maryland facility (Archives II), Presidential libraries, and regional archives throughout the country.

We found that while NARA has established management controls at all locations included in our review, these controls were not always adequate to safeguard and secure SPRAs. Therefore, these items were at risk of loss or theft. Specifically, our audit disclosed the following: not all SPRAs have been identified; a complete list of SPRAs was not maintained by an office in the Pacific Region and an office in the Great Lakes Region; access to records meeting the definition of SPRAs was not restricted to authorized archives operational staff; annual inspection procedures for large record series were inadequate to identify lost or missing documents; and annual inspections of SPRAs were either not performed or not performed adequately.

We recommended that NARA review and revise where necessary the current process for reviewing all archival record holdings; ensure that regional records operations maintain a complete list of all SPRAs; take necessary measures to have SPRAs in secure storage space in compliance with NARA guidance; issue guidance for performing annual inspections of SPRAs, and assign responsibility for ensuring that the inspections are performed; and ensure the annual inventories are performed by two staff members. Management agreed with our findings and began corrective action. (Audit Report #07-01, dated October 12, 2006.)

Audit of NARA’s Fiscal Year 2006 Financial Statements

Clifton Gunderson LLP (CG), an independent public accounting firm, examined and reported on NARA's consolidated balance sheet as of September 30, 2006, and the related consolidated statements of net cost, changes in net position, financing, and combined statement of budgetary resources for the year then ended.

CG issued an unqualified opinion of the FY 2006 financial statements and a qualified opinion on the FY 2005 financial statements for the effects of adjustments, if any, as might have been necessary had they been able to perform adequate audit procedures on obligations and outlays related to investment.

CG reported certain matters involving internal control and its operations that were considered to be reportable conditions, one of which was deemed a material weakness. The material weakness was reported in information technology. CG reported weaknesses in logical and physical access controls, the entity-wide security program, system software, and service continuity. These weaknesses collectively constitute a material weakness. Reportable conditions were reported in the review of obligations area and payroll as a result of concerns over the maintenance of supporting documentation, validation, and authorization of payroll transactions. The material weakness reported in FY2005 relating to investments was corrected and resolved.

CG made 21 recommendations to correct the material weakness and reportable conditions. Management concurred with most of the recommendations and agreed to initiate corrective action. However, management did not agree with the assessment that the information technology weaknesses collectively constitute a material weakness.

We monitor CG’s performance of the audit to ensure the audit is conducted in accordance with the terms of the contract and in compliance with government auditing standards and other authoritative references, such as OMB Bulletin No. 01-02, Audit Requirements for Federal Financial Statements. We are involved in the planning, performance, and reporting phases of the audit through participation in key meetings, discussion of audit issues, and reviewing of CG’s work papers and reports. Our review disclosed no instances where CG did not comply, in all material respects, with the contract or government auditing standards. (Audit Report #07-05, dated December 6, 2006).

Audit of NARA’s Hurricane Katrina–Related Mission Assignments

The Department of Homeland Security (DHS) asked us to perform an audit to determine the efficiency and effectiveness of the mission assignment process at NARA. The objectives of our audit included assessing whether mission assignments were clear and approved in a timely manner; NARA had controls in place to effectively manage and account for mission assignment funds; NARA had controls over the mission assignment implementation process, including staff availability and expertise; and NARA had controls over monitoring the mission assignment process, including coordinating and cooperating with FEMA and monitoring NARA services provided.

One mission assignment, with funding up to $600,000, was issued by FEMA to NARA in response to Hurricane Katrina in October 2005. The purpose of NARA’s mission assignment was to assist Louisiana in recovering and preserving records containing legally sensitive material. NARA reported to FEMA on October 4, 2006, that all tasks had been completed for the mission assignment. As of September 15, 2006, NARA billed FEMA for $434,350.20 for travel, service contracts, and other materials.

Our review concluded that the mission assignment was clear and approved in a timely manner. In addition, NARA had effective controls over the mission assignment implementation process and controls were in place over monitoring the mission assignment process internally. The Preservation Programs (NWT) staff provided progress reports on-site or after key events to NWT supervisors. However, controls over communicating progress to FEMA could be improved as progress reports were not submitted to FEMA on a monthly basis. Additionally, while controls were in place to effectively manage and account for the $434,350.20 spent on the mission assignment, bills were not promptly submitted to FEMA for reimbursement and more than half of the credit card information was not provided to FEMA for their reporting purposes.

NARA did not submit bills, progress reports, and credit card information to FEMA in accordance with DHS guidance. Due to poor communication between NARA programs, it was unclear who was responsible for submitting online progress reports to FEMA and requesting a bill to be prepared for reimbursement from FEMA. As a result, FEMA was not kept up to date on the progress of the mission assignment, and NARA could have been reimbursed for funds expended in a more timely manner and had funds available for other use.

Subsequent to the issuance of the Audit Memorandum, management designated an employee in NWD as the agency’s External Coordinator for Disaster Preparedness and Response. This employee will be the point of contact for external requests for NARA assistance in all areas relating to disaster response, as well as ensuring that NARA develops partnerships with stakeholders who have concerns about emergency preparedness. As a result of this action taken by management, we made no recommendations. (Audit Memorandum #07-04, dated November 20, 2006).

Evaluation of NARA FY 2006 Management Control Program

The purpose of our evaluation was to determine whether there was sufficient evidence that NARA complied with the requirements of the Federal Managers Financial Integrity Act (FMFIA), OMB Circular A-123, and NARA 114, Management Controls, to support the Archivist’s fiscal year 2006 assurance statement to the President and Congress.

Our review of individual offices’ assurance statements found that they were adequately supported and complied with the intentions of the FMFIA and OMB Circular A-123. Furthermore, we found that the individual offices’ assurance statements accurately reflected the results of internal and external reviews. However, as noted in our October 30, 2006, response to NARA’s FMFIA statement, we do not believe that the agency’s FMFIA statement accurately represented NARA’s internal control environment in FY 2006. Specifically, we noted that the agency chose not to report NARA’s Preservation Program and Information Security Program as Material Weaknesses, although they were identified as such by the Office of Inspector General (OIG). (Audit Memorandum #07-07, dated February 27, 2006).

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Investigations

Overview

During this reporting period, the Office of Investigations opened 24 investigations, closed 18 investigations, recovered 200 records (in addition to 500,000 pages of records recovered from a former Presidential administration official), and executed 1 search warrant. The Office of Investigations received 116 complaints and closed 73. At the close of the period, there remained 28 open complaints and 40 open investigations.

Investigation Highlights

Recovery of Stolen Passport Photographs

The OIG investigated the theft of 10 passport photographs and substantiated that the photographs were stolen from Department of State records held at NARA’s Washington National Records Center in Suitland, MD. The passport photographs were of well-known American celebrities. It remains unknown how the subject, now deceased, came to possess the photographs. The subject was alleged to have been employed by a contractor, but the contractor had no record of him being a current or former employee. Efforts to verify his employment as a contractor at NARA were unsuccessful.

Recovery of Robert E. Lee and W.D. Pender Letters

Two letters listed on NARA’s Missing Documents web page, http://www.archives.gov/ research/recover/missing-documents.html, were recovered during the reporting period. The letters included one from Robert E. Lee, dated December 8, 1851, and a second from W.D. Pender, dated December 9, 1857. The letters had been stolen by a researcher who had taken more than 100 Civil War era records from the National Archives, Washington, DC. Including these two letters, the OIG has recovered 45 of the stolen records. The researcher plead guilty to Theft of Major Art Work (18 U.S.C. § 668) and served two years in prison.

Recovery of Bureau of Indian Affairs Record from Trash

An accessioned Bureau of Indian Affairs record was recovered from the trash at NARA’s main archives facility in Washington, DC. It was unsubstantiated as to who disposed of the record, and whether or not it was disposed of intentionally or accidentally. Security has amended post orders to state that containers will also be safeguarded along with the document(s) at the scene of disposal.

Recovery of Civil War Records

Responding to a tip from a Gettysburg publisher that a NARA intern was selling NARA records on the Internet, the OIG obtained and executed a search warrant at the subject’s residence in Philadelphia. That search lead to the recovery of 88 accessioned National Archives records as well as subsequent recovery of another 73 documents the subject had already sold. The intern pled guilty to a felony theft and is awaiting sentencing.

Contract Fraud/False Claims

An OIG investigation at the FDR Presidential Library proved that the supervisory contract guard was falsifying sign-in/sign-out sheets, as well as contractor time cards. This misconduct resulted in the supervisory position being vacant at times, guard posts being left unattended, some guards working unauthorized double shifts, and guards visiting exhibits, reading, and doing personal business on laptops while on duty, in violation of the contract. This case was declined for criminal prosecution with the assurance NARA would attempt to recover losses. Two guards were terminated, one NARA employee resigned in a related spin-off case, and the contract was refined to better reflect the security guard duties. Costs of recovery are pending.

Other Office of Investigation Activity

Archival Recovery Team

The Office of Investigations fully implemented the Archival Recovery Team, or ART, during the reporting period. The team consisted of a dedicated 1811 series Special Agent and a detailed Investigative Archivist. This was the first assignment of a professional archivist to the OIG staff. The Investigative Archivist position provided archival expertise to OIG’s ongoing efforts at recovery of material alienated from the National Archives. This detail has far exceeded expectations, and our intent is to make the position a permanent one in the next reporting period. In December 2006, the ART attended the Professional Autograph Dealers Association show in Alexandria, VA, and met with dealers and collectors about the recovery of alienated records.

Computer Forensics Laboratory

With the proliferation of computers and related technology, the OIG recognized the importance of finding and analyzing valuable evidence located on the computers and networks of the subjects of our investigations. To that end, the Office of Investigations assigned an OIG analyst to build and develop a computer forensics lab and participate in the PCIE IT working group addressing computer forensics and standards throughout the Inspector General community. Computer Forensic programs have aided in the prosecution of numerous “cyber-crime” and traditional OIG investigations. Because of the success and growth of the field, attention to the reliability of the findings and the procedures has become an issue in the eyes of the forensic and legal communities. To address this issue, the PCIE IT working group set out to develop standards for computer forensics performed within the OIG community. NARA’s computer forensics analyst took an active role in the working group, which determined that the best way to establish these standards was to incorporate them within the Quality Assurance Review (QAR) process, and as a result, developed questions for the QAR that are specific to computer forensics.

Investigation Updates

Attempted Compromise of NARA Server

The National Archives and Records Administration Intrusion Detection System reported an attempt by a remote computer to capitalize on a known Windows vulnerability by uploading an exploit to the Case Management Reporting System (CMRS-02) server. Update:This case is pending a prosecutive decision.

Alleged Wire Fraud, Theft of Public Money, Money Laundering

A NARA employee and a NARA contractor allegedly stole approximately $900,000 from NARA. The contractor was removed from the contract. The employee resigned in lieu of termination. Update: This case is pending indictment.

Alleged Theft of Military Service Records

An active duty Sergeant in the U.S. Army was found to have removed multiple Official Military Personnel Folders from the National Personnel Records Center in St. Louis, MO. Upon recovery of the records, OIG referred the case to the servicemember’s command. The servicemember has transferred out of St. Louis. Update: A military court-martial determination is pending.



OIG HOTLINE

The OIG Hotline provides a confidential channel for reporting fraud, waste, abuse, and mismanagement to the OIG. In addition to receiving telephone calls at a toll-free Hotline number and letters to the Hotline post office box, we also accept e-mail communication from NARA’s internal network or the Internet through the Hotline e-mail system. Walk-ins are always welcome. Visit http://www.archives.gov/oig/ for more information, or contact us:

  • By telephone - Washington, DC Metro area: (301) 837-3500 Toll-free and outside the Washington, DC Metro area: (800) 786-2551
  • By mail - NARA OIG Hotline P.O. Box 1821 Hyattsville, MD 20788-0821
  • By e-mail - oig.hotline@nara.gov

The Office of Investigations promptly and carefully reviews calls, letters, and e-mail to the Hotline. We investigate allegations of suspected criminal activity or civil fraud and conduct preliminary inquiries on non-criminal matters to determine the proper disposition. Where appropriate, referrals are made to the OIG audit staff, NARA management, or external authorities.

The following table summarizes Hotline activity for this reporting period:

Cases Opened* 116
Referred Outside the OIG 23
Complaints Closed Pending Response from NARA 13
Complaints Closed Final 60
Complaints Open to Investigations 20

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Top Ten Management Challenges

Under the authority of the Inspector General Act, the NARA OIG conducts and supervises independent audits, investigations, and other reviews to promote economy, efficiency, and effectiveness and prevent and detect fraud, waste, and mismanagement. To fulfill that mission and help NARA achieve its strategic goals, we have aligned our programs to focus on areas that we believe represent the agency’s most significant challenges. We have identified those areas as NARA's top ten management challenges. These challenges are listed below.

1. Electronic Records Archives (ERA)

NARA’s challenge is to build a system that will accommodate past, present, and future formats of electronic records. By September 2007, NARA plans to have initial operating capability for ERA with planned incremental improvements that will eventually result in full system capability. The challenge will be to deliver and maintain a functional ERA system that will preserve electronic records for as long as needed.

2. Electronic Records Management (ERM)

NARA directs the Electronic Records Management (ERM) initiative, one of 24 Government-wide initiatives. The ERM initiative will provide guidance to agencies in managing and transferring to NARA, in an increasing variety of data types and formats, their permanent electronic records. NARA and its Government partners are challenged with determining how to manage electronic records and how to make ERM and e-Government work more effectively.

3. Improving Records Management

NARA’s mission is to ensure that Federal agencies can economically and effectively create and manage records necessary to meet business needs; that records are kept long enough to protect rights and assure accountability; and that records of archival value are preserved and made available for future generations. NARA must work with Federal agencies to make scheduling, appraisal, and accessioning processes more effective and timely. The challenge is how best to accomplish this component of our overall mission and identify and react to agencies with critical records management needs.

4. Information Technology Security

The authenticity and reliability of our electronic records and information technology systems are only as good as our IT security infrastructure. Each year, the risks and challenges to IT security continue to evolve. NARA must ensure the security of its data and systems or risk undermining the agency’s credibility and ability to carry out its mission.

5. Expanding Public Access to Records

In a democracy, the records of its archives belong to its citizens. NARA’s challenge is to more actively inform and educate our customers about the services we offer and the essential evidence to which we can provide access. Of critical importance is NARA’s role in ensuring the timeliness and integrity of the process of declassifying classified material held at NARA.

6. Meeting Storage Needs of Growing Quantities of Records

NARA-promulgated regulation 36 CFR Part 1228, “Disposition of Federal Records,” Subpart K, “Facility Standards for Records Storage Facilities,” requires all facilities that house Federal records to meet defined physical and environmental requirements by FY 2009. NARA’s challenge is to ensure compliance with these regulations internally as well as by other agencies that house Federal records.

7. Preservation Needs of Records

The Archivist has identified preservation as a material weakness under the Federal Managers’ Financial Integrity Act (FMFIA) reporting process. NARA cannot provide public access to records to support researchers’ needs unless it can preserve them for as long as needed. As in the case of our national infrastructure (bridges, sewer systems, etc.), NARA holdings grow older daily and are degrading. NARA is challenged to address this condition and related challenges.

8. Improving Financial Management

By inclusion under the Accountability of Tax Dollars Act of 2002, NARA is required to prepare audited financial statements in compliance with prescribed standards, subject to independent audit. NARA’s challenge is to present timely, accurate, and useful financial information for making day-to-day operating decisions; supporting results-oriented management approaches; and ensuring accountability on an ongoing basis.

9. Physical Security

The Archivist has identified security of collections as a material weakness under the FMFIA reporting process. NARA must maintain adequate levels of security to ensure the safety and integrity of persons and holdings within our facilities. This is especially critical in light of the new realities that face this nation, post–September 11, and the risks that our holdings may be pilfered, defaced, or destroyed by fire or other natural disasters.

10. Strengthening Human Capital

The GAO has identified human capital as a Government-wide high risk. NARA’s challenge is to adequately assess its human capital needs in order to effectively recruit, retain, and train people with the technological understanding and content knowledge that NARA needs for future success.

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Reporting Requirements

STATISTICAL SUMMARY OF INVESTIGATIONS
Investigative Workload
Complaints received this reporting period 116
Investigations pending at the beginning of the reporting period 34

Investigations opened this reporting period

24

Investigations closed this reporting period

18

Investigations carried forward this reporting period

40

Categories of Closed Investigations

Fraud

1

Conflict of Interest

0

Contracting Irregularities

2

Misconduct

3

Larceny (theft)

11

Other

1

Investigative Results

Cases referred - Accepted for prosecution

3

Cases referred - Declined for prosecution

3

Cases referred - Pending prosecutive decision

4

Arrests

1

Indictments and informations

1

Convictions

1

Fines, restitutions, and other civil and administrative recoveries

0

NARA holdings recovered

200

Administrative Remedies

Employee(s) terminated

0

Employee(s) resigned in lieu of termination

2

Employee(s) suspended

0

Employee(s) given letter of reprimand/warned/counseled

1

Employees taking a reduction in grade in lieu of administrative action

0

Contractor (s) removed

2

 

Requirement 5(a)(6)
LIST OF REPORTS ISSUED
Report No. Title Date Questioned Costs Un-supported Costs Funds Put to Better Use
07-01 Audit of Management Controls for Safeguarding NARA’s Specially Protected Records and Artifacts 10/12/2006 0 0 0
07-02 Review of Archives II File Server Disk Space Utilization 12/04/2006 0 0 0
07-03 Audit of Suitability Determinations of Contract Employees 11/28/2006 0 0 0
07-04 Audit of NARA’s Hurricane Katrina-Related Mission Assignments 11/20/2006 0 0 0
07-05 Audit of NARA’s Fiscal Year 2006 Financial Statements 12/06/2006 0 0 0
07-06 Audit of the Processing of Records Accessioned into NARA 02/28/2007 0 0 0
07-07 Evaluation of NARA’s Fiscal Year 2006 Management Control Program 02/27/2007 0 0 0


AUDIT REPORT(S) WITH QUESTIONED COSTS

Category

Number of
Reports
DOLLAR VALUE

Questioned
Costs
Unsupported
Costs

A. For which no management decision has been made by the commencement of the reporting period

1

$236,335

$0

B. Which were issued during the reporting period

0

$0

$0

Subtotals (A + B)

1
$236,335
$0

C. For which a management decision has been made during the reporting period

1
$236,335
$0

(i) dollar value of disallowed cost

0
$0
$0

(ii) dollar value of costs not disallowed

1

$236,235

$0

D. For which no management decision has been made by the end of the reporting period

0
$0
$0

E. For which no management decision was made within 6 months

0

$0

$0

 

Requirement 5(a)(9)
AUDITS REPORTS WITH RECOMMENDATIONS THAT FUNDS
BE PUT TO BETTER USE
CATEGORY NUMBER
DOLLAR VALUE

A. For which no management decision has been made by the commencement of the reporting period

0 $0

B. Which were issued during the reporting period

0 0

Subtotals (A + B)

0
0

C. For which a management decision has been made during the reporting period

0
0

(i) dollar value of recommendations that were agreed to by management

0
0

Based on proposed management action

0
0

Based on proposed legislative action

0
0

(ii) dollar value of recommendations that were not agreed to by management

0
0

D. For which no management decision has been made by the end of the reporting period

0
0

E. For which no management decision was made within 6 months of issuance

0
0

secutor

REQUIREMENT

CATEGORY SUMMARY

5(a)(3)

Prior significant recommendations unimplemented

None

5(a)(4)

Summary of prior referrals

None

5(a)(5)

Information or assistance refused

None

5(a)(10)

Prior audit reports unresolved

None

5(a)(11)

Significant revised management decisions

None

5(a)(12)

Significant revised management decisions with which the OIG disagreed

None

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