According to the IG report, DOD did not provide reliable Guam realignment costs for the U.S. Congress.
Of the total amounts reviewed, Department of the Navy personnel understated obligations and expenditures by $7.5 million and overstated them by $15.2 million, resulting in a total error value of $22.7 million, the IG report disclosed.
Thus, the IG said Congress cannot ensure that Guam realignment costs are properly allocated for future years, and Congress will not have reliable historical cost data for planning future military realignments.
In a memorandum to the Naval Inspector General, DOD assistant inspector general Patricia A. Marsh wrote that DOD “did not accurately identify and report these obligations and expenditures.”
She further stated that “Guam realignment costs are expected to grow to at least $4.2 billion in future fiscal years.”
The performance audit was conducted from April 2010 through April 2011.
Inaccurate
According to the report, DOD officials did not accurately identify and report 2009 obligations and expenditures for the realignment in its annual report.
Specifically, Department of the Navy personnel did not accurately identify 36 obligations, resulting in an understatement of obligations of approximately $7.3 million, and adequately support 9 obligations, resulting in an overstatement of obligations of approximately $1.9 million.
Additionally, Navy and Defense Finance and Accounting Service personnel did not accurately identify two expenditures, resulting in an understatement of expenditures of $228,043, and adequately support 28 expenditures, resulting in an overstatement of expenditures of approximately $13.3 million.
This occurred because Assistant Secretary of the Navy (Financial Management and Comptroller) personnel did not adequately coordinate the identification and reporting of 2009 obligations and expenditures.
Specifically, ASN (FM&C) personnel did not establish a contingency code for Guam realignment in the official accounting systems; establish adequate financial policies and procedures, including the retention of supporting documentation; and adequately monitor the coordination of the identification and reporting of obligations and expenditures.
Reiterates GAO
The IG report reiterates comments made by a General Accountability Office report and recent discussions by the Senate Armed Services Committee, which called for a delay and freeze on all funding for the buildup until DOD provides a master plan, detailing an accurate account of how much the Guam buildup will cost.
The acting Assistant Secretary of the Navy (Financial Management and Comptroller) agreed with the recommendations in the report, but did not provide a completion date for the planned actions. Therefore, the IG expects comments by July 17.
IG recommendations
To assure more accurate data, the IG report recommended that the Assistant Secretary of the Navy should coordinate with the Department of the Navy and the Defense Finance and Accounting Service to review obligations and expenditures for the Guam realignment and provide corrected obligations and expenditures; establish a contingency code for the Guam realignment; establish adequate financial policies and procedures; establish procedures to retain all supporting documentation; and conduct periodic quality assurance reviews.
The IG’s objective in undertaking the report was to determine whether DOD could accurately identify and report obligations and expenditures for the Guam realignment.
It also sought to determine whether DOD properly maintained supporting documentation.
The IG also reviewed the Department of the Navy’s 2009 obligations of approximately $60.3 million and expenditures of approximately $35.6 million reported in the “Interagency Coordination Group of Inspectors General for Guam Realignment Annual Report,” released Feb. 1, 2010.
