REPORT OF AUDIT - CIA-SPONSORED CONFERENCES AND RELATED ACTIVITIES

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06636470
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 16
• Document Creation Date: December 28, 2022
• Document Release Date: May 24, 2018
• Case Number: F-2016-02232
• Publication Date: February 24, 2014

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CENTRAL INTELLIGENCE AGENCY
Office of Inspector General
(U) REPORT OF AUDIT
(U) CIA-Sponsored Conferences and
Related Activities
Report No. 2013-0013-AS
24 February 2014
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(U) Report of Audit
(U) CIA-Sponsored Conferences and Related Activities
(U) EXECUTIVE SUMMARY
(U) The objective of this audit was to determine whether expenditures for
CIA-sponsored conferences and related activities were approved in accordance with
applicable federal laws and regulations and CIA policies and procedures. The audit was
initiated in response to heightened interest within the Executive and Legislative branches of
the Federal Government in eliminating excessive conference spending and promoting
efficiency in government.
(UHFOU0) Some conference-related expenses are not readily identifiable in the
the CIA's core accounting system. We requested that CIA components provide financial
and contract documentation to support expenditures associated with a sample of
ronferences held between 1 May 2012 and 31 March 2013. During that period, CIA
components spent an estimated million on reported conferences. CIA
components were not able to provide accurate and complete information to support the
final costs for of the conferences (31 percent). In some instances, final conference
costs differed significantly from the estimated costs entered in the
, which is used by the Chief Financial Officer to review and approve all
conference requests and estimated conference costs. For those CIA components that
were able to provide us information to support the final costs of their conferences, cost
information had to be constructed from a variety of sources. This report recommends
that guidance or procedures be promulgated to help ensure that conference-related
expenses are identified as such in
(S) CIA components awarded noncompetitive contracts for four of six conferences
we reviewed that involved contracts for conference support. Three of the four contracts
did not have adequate justifications to award the contracts noncompetitively because
there was no evidence that market research had been conducted to determine whether
other qualified and responsible sources for conference support existed. This report
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Assistant Inspector General for Audit
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(U) BACKGROUND
(U) The CIA defines a conference as:
A meeting, retreat, seminar, training activity, offsite, or event
that is funded in whole or in part with CIA appropriated funds.
This definition does not include regularly scheduled courses of
instruction conducted at a government or commercial training facility.'
(U) Conference costs include travel, lodging, food and beverages, per diem
allowance, and costs associated with obtaining the conference venue, speakers, supplies,
and services. Conference costs do not include the salaries of CIA employees or
contractors attending conferences.
(U) Federal Guidelines for Conferences
(U) The Federal Travel Regulation (FTR) includes guidance for planning
conferences.' The FTR states that agencies must use a government facility, if available;
consider alternatives to a conference, such as teleconferencing; and perform and maintain
records of cost comparisons of at least three sites.
(U) In May 2012, the Office of Management and Budget (OMB) issued
memorandum M-12-12, Promoting Efficient Spending to Support Agency Operations,
which requires agencies to initiate senior-level approval for all conference expenses in
excess of $100,000 and prohibits expenses in excess of $500,000 on a single conference
without a waiver from the agency head.
(U) ODNI Conference Guidance
(U) At OMB's request, the Office of the Director of National Intelligence (ODNI)
issued Intelligence Community (IC)-wide guidance in November 2011 for
conference-related activities and expenses financed with National Intelligence Program
(NIP) funds.' The guidance states that agencies should exercise discretion and strict
fiscal responsibility in determining whether NIP-funded conferences are necessary and
proper. The ODNI provided the following guidelines for conference planning:
� (U) Use IC-element facilities or no-cost government facilities unless
none are available or suitable for the conference.
2 (U) According to
maximum extent practicable.
3 (U) ODNI Memorandum: Eliminating Excess Conference Spending and Promoting Efficiency in Government
(E/S 00649, 15 November 2011; and attachment: 'Guidelines for National Intelligence Program (NIP) Funded
Conference Activities and Expenditures).
,he CIA is to follow the FTR to the
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� (U) Obtain approval from the IC element's deputy director or
designee when planning to conduct a conference in any commercial
facility, where the facility is charging the government a fee.
� (U) Maintain formal records for audit purposes reflecting final cost.
(U) In October 2012, the ODNI Chief Financial Officer (CFO) issued supplemental
guidance regarding NIP-funded conferences that requires the ODNI CFO to be notified of
any planned conferences (hosted or attended) where the .aggregate NIP costs are projected
to exceed $100,000 and requires IC agencies to maintain records of expenses of all
conferences costing over $100,000 for audit or review.
(U) Consolidated and Further Continuing Appropriations Act, 2013
(U) In March 2013, Congress enacted the Consolidated and Further Continuing
Appropriations Act, 2013 (P.L. 113-6) that requires the head of any Executive branch
agency to submit an annual report to the Inspector General regarding the costs and
contracting procedures for each conference held during FY 2013 costing more than
$100,000. In addition, the Act requires agencies to notify the Inspector General within
15 days of the date of a conference for any conference costing more than $20,000 during
FY 2013.
(U) CIA Conferencing Guidance
(U//FOU0) To comply with OMB and ODNI requirements concerning conferences,
the CIA's CFO issued a series of policies related to conference spending. The April 2012
policy states that all CIA-sponsored conferences scheduled to begin on or after 1 May 2012
must be held at a United States Government (USG) facility.' Agency components may
request a waiver of the requirement to use a USG facility from the CIA CFO through the
When requesting a waiver, a component is required to
provide a description of the conference, the number of attendees, the estimated cost of the
conference, and a description of the process used to select the non-USG facility. Waiver
requests are adjudicated by the Deputy CFO.
(UHFOU0) In March 2013, the CFO revised the April 2012 conference policy to
state that CIA components are to hold only mission-critical conferences and obtain
approval from the Executive Director in advance of holding a conference at a USG
facility when conference costs are expected to exceed $100,000.5 In April 2013, the CIA
policy was revised again to address the requirements of the Consolidated and Further
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Continuing Appropriations Act, 2013.6 The April 2013 guidance requires CIA
components to obtain approval via F7to host a conference at a USG facility when
conference costs are expected to exceed $20,000.
(U) CIA-Sponsored Conferences
(S) The CIA sponsored conferences held between 1 May 2012 and
31 March 2013 at a reported cost of
7
(U) Source: Response to Office of Inspector General datacall, April 2013.
(U) AUDIT RESULTS AND RECOMMENDATIONS
(IN/Fat:KM- Some Conference-Related Expenses Are Not Readily Identifiable
(UHFOU0) Some conference-related expenses are not readily identifiable in the
the CIA's core accounting system. We requested that CIA components provide financial
and contract documentation to support expenditures associated with a sample of
conferences held between 1 May 2012 and 31 March 2013. (See Exhibit B for a list
of the 7Conferences.) CIA components were not able to provide accurate and complete
information to support the final costs for of the conferences (31 percent). For
example:
� (S) A Directorate of Science and Technology (DS&T) component
reported a conference as having no cost. However, the cost of travel
associated with the conference and conference food totaled
attendees.
7 (U) Information on conferences was obtained from the sponsoring CIA components.
for
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� (S) A Directorate of Support component reported that a conference cost
for attendees. However, a review of documentation concerning
conference expenses revealed that at least in related travel costs had not
been included.
� (-S)-A National Clandestine Service component was unable to provide
complete expense documentation for a conference reported to cost
for attendees because component officials could not identify
travel costs.
(b)(1)
(b)(3)
(UHF-040) For those CIA components that were able to provide us information to
support the final costs of their conferences, cost information was not readily available to
the components, and total conference costs had to be constructed from a variety of
sources. Costs associated with individual conferences were charged to a variety of
budget line items (BLIs) using several budget object codes (BOCs). Travel expenses
incurred by conference attendees often could not be identified in and analysis of
information in the Travel, Reengineering, Integration, Automation and Development
(TRIAD) database was required to identify relevant costs.
(U//F4943)- Following issuance of a draft of this report, we met with CFO officials to
discuss CIA components' difficulty in identifying final costs incurred for conferences.
, CFO officials noted that, although final conference costs were not readily obtainable
from CIA components or through records of conference costs are contained in the
Agency's financial and budget systems, and Agency regulations do not require that
conference costs be maintained in a separate record system. The CFO believes that
current conference approval procedures, which require CFO review of all conference
requests and estimated conference costs through mitigate the risk of improper
spending on conferences.
(U//FOU0) We agree that the CFO's use of the database to approve
conferences in advance substantially satisfies OMB and DNI direction concerning senior-
level approval of conferences. However, the audit found that CIA components could not
always identify final conference costs, and, in some instances, final conference costs
differed significantly from the estimated costs entered in This leaves the CFO
with less assurance that current procedures are effective in controlling conference costs.
The CFO
advised us that the CIA's current budget restructuring effort will improve CIA's ability to
capture actual conference costs. However, the CFO cautioned that, even after budget
restructuring, certain conference-related expenses, for example the prorated cost of a
contractor involved in supporting a conference, may not be captured as conference costs
in and would have to be separately identified to determine the final cost of a
conference.
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(UHFOU0) Following our discussions with CFO officials, we made certain revisions
to the draft report and provided the revised report to the CFO for review and comment.
The CFO expressed concurrence with the revised report.
(U) Noncompetitive Procurements of
Conferencing Services Were Not
Adequately Justified
-(-S-)- CIA components awarded noncompetitive contracts for four of the six conferences
in our sample that involved contracts for conference support. Three of the four contracts
did not have adequate justifications to award the contracts noncompetitively because there
was no evidence that market research had been conducted to determine whether other
qualified and responsible sources for conference support existed. For example, the
justification for a noncompetitive contract valued at to organize a one-day
conference in with stated
that the vendor has unique expertise and that the contracting officer's technical
representative "does not believe" that other contractors could gain the required skill set
within a short timeframe.8 The justification for another contract, valued at to
arrange and host a conference in stated that no formal market
research was conducted because "we judge that [vendor name] is the best organized and
most competent possible contractor." A third justification was written for the
noncompetitive procurement of advisory services in biometric technologies. The
justification made no mention that the services would include the provision of a
conference, which was subcontracted to another vendor for binder the
noncompetitively awarded contract.
(U) The Competition in Contracting Act of 1984, as amended, and as implemented
by the Federal Acquisition Regulation, requires that all federal acquisitions in excess of
$3,000 be made on a competitive basis absent a justification for other than full and open
competition.9 The CIA Contract Manual (CCM) states that the CIA will conduct market
research to identify qualified sources and solicit offers from as many responsible sources
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8(U) According to the CIA Contract Manual (CCM), Subpart 142, Contract Administration and Audit Services, the
COTR assists the contracting officer in administering the technical aspects or other terms of the contract.
9(U) 41 U.S.C. 3301.
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as practicable.' The CCM also requires that all noncompetitive actions be justified in
writing; clearly stating the rationale with sufficient supporting data." Documented
market research is important to establish that the product or services are not available
from an alternate source.
(U) Contracts that are not competitively awarded are considered high-risk contracts
by OMB because the contracts do not provide for the potential cost savings that can be
achieved when open competition occurs. P.L. 113-6 reflects the heightened
Congressional interest in the contracting procedures used in procuring conference support
services, such as whether contracts are awarded on a competitive basis and whether cost
comparisons are made in evaluating contractors. Contracting officers should be directed
to ensure that market research is conducted to identify qualified sources and solicit offers
from as many responsible sources as practicable when obtaining conferencing support
and document market research to support noncompetitive contract awards.
(UHFOU0) In comments on a draft of this report, the Office of the Procurement
Executive expressed concurrence with Recommendation 2.
'�(U) CCM, Subpart 110, Market Research, defines market research as the collection and analysis of information
about capabilities within the market to satisfy customer needs and is an important indicator of whether opportunities
for competition exist. CCM, Subpart 106.101-70, Agency policy on limited full and open competition, states under
the authority of Section 8 of the CIA Act of 1949 and other applicable laws and regulations, the CIA limits the
number of sources from which it solicits bids or proposals to as many potential sources as practicable under the
circumstances.
11(U) CCM, Subpart 106.303-2, Content, and 106.304-71, Approval ofjustifications under $150,000.
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Exhibit A
(U) Objective, Scope, and Methodology
(U) The objective of this audit was to determine whether expenditures for
conferences and related activities were approved in accordance with applicable federal
laws and regulations and CIA policies and procedures. The audit topic was selected
during the Office of Inspector General's annual planning process in response to
heightened interest within the Executive and Legislative branches of the Federal
Government in eliminating excessive conference spending and promoting efficiency in
government.
(U) To accomplish the audit objective, the audit team performed a review of CIA
policies, identified conference expenditures, and reviewed CIA-implemented controls
over conference spending. Specifically, we:
� (U) Obtained an understanding of the CIA's policies and procedures
for monitoring and sponsoring conferences. We met or spoke with
officials from the Office of the Chief Financial Officer, Office of the
Procurement Executive, Directorate of Intelligence, and Directorate of
Support.
� (UHFOU0) Conducted a datacall via Lotus Notes to obtain a list of
conferences held between 1 May 2012 and 31 March 2013. Based on the
datacall, CIA components identified a population ofrconferences. We used (b)(3)
a risk-based sampling approach to determine the sample size and judgmentally
selected a sample of conferences. For each conference, we requested that (b)(3)
the component provide documentation to support the actual cost of the
conference. We recalculated the actual costs for each conference, verified
approvals and notifications within the and (b)(3)
reviewed documents such as agendas, attendee lists, and contracts for
conference support.
� (UNFOHO) Obtained a list of conferences held between 1 May 2012
and 31 March 2013 from We compared the list of conferences (b)(3)
from to the list of conferences from the datacall, and identified (b)(3)
Libonferences in that were not reported in the datacall. We used (b)(3)
risk-based sampling and judgmentally selected a sample of two
conferences. We recalculated the actual costs for each conference,
verified approvals and notifications withinr, and reviewed (b)(3)
documents such as agendas, attendee lists, and contracts related to the
conferences.
Exhibit A is UNCLASSIFIED/Ifett07
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� (U) Identified and reviewed applicable federal, ODNI, and CIA-issued
guidance.
(U) We conducted this performance audit from 18 March 2013 to 17 July 2013 and in
accordance with generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
(U) We discussed the draft audit report with the CFO and Deputy CFO, and their
comments have been incorporated in the final report. Comments on the draft report were
received from the Office of the Procurement Executive and were considered in
preparation of the final report.
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(U) Source: Response to Office of Inspector General datacall, April 2013.
Exhibit B is SECRF-T-41401-GRNT
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Exhibit C
Exhibit C is UNCLASSIFIED.
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Exhibit D
(U) Audit Team
(U//F0e) This audit report was prepared by the Financial Management Division,
Audit Staff, Office of Inspector General.
Exhibit D is UNCLASSIFIED//f&U&.
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