Recommendation No.

1. Resolved. This recommendation can be closed when we receive a copy of the: (1) Office of Acquisition Management's (FA) final guidance issued to all Contracting Officer Technical Representatives (COTRs); (2) FA's comprehensive review of the COTR program within the DEA, as well as the DEA's revisions to the program as a result of the review; and (3) FA's training agenda or other documentation for the May 2002 COTR training that shows that training was provided on the issues raised during our audit.
2. Resolved. This recommendation can be closed when we receive a copy of the FA's: (1) written procedures for the Contracting Officer's/Contract Specialist's review of contractor invoices, and (2) checklist for reviewing the contractor invoices that shows the issues raised during our audit will be part of the review.
3. Resolved. In its response to the draft audit report, the DEA stated that it would include: (1) an estimated maximum hourly rate of [DELETED] in a modification to the FY 2002 reimbursable agreement, and (2) an estimated maximum hourly rate in all future agreements with the [DELETED].
   
   We believe that the DEA's response is a positive step towards strengthening the reimbursable agreements with the [DELETED]. However, we do not believe that a single maximum hourly rate can be appropriately applied to all personnel categories allowed by the agreement because different types of personnel are not generally compensated the same. For example, part-time linguists are generally paid less than full-time linguists and a program administrator is generally paid more than linguists. Therefore, we believe that the DEA should establish maximum hourly rates for each type of personnel allowed in the agreements. This recommendation can be closed when we receive a copy of the modified FY 2002 reimbursable agreement and the FY 2003 agreement showing the DEA included maximum hourly rates for each personnel category in the reimbursable agreements.
4. Resolved. This recommendation can be closed when we receive a copy of the modification to the FY 2000 agreement that retroactively increases the total amount allowed from $1,500,000 to $1,611,842.33.
5. Unresolved. In its response, the DEA stated that there was no documentation to support our contention that a linguist was billed to both the Department of Defense (DOD) and to the DEA. The DEA stated that the cost ($771.99) for the linguist in question was billed to the DOD only.
   
   We disagree with the DEA's contention that the linguist in question was billed to the DOD only. The documentation provided to us during the audit clearly showed that the linguist was paid by the DEA as well. Included in the documentation for FY 1999 voucher number 253, the [DELETED] provided a list of linguistic personnel and their associated earnings submitted and paid by the DOD. The list showed that the linguist earned $275.08 for the pay period ended December 25, 1998, and $496.91 for the pay period ended January 8, 1999, for a total of $771.99. As such, the DEA did not pay the [DELETED] for these earnings on FY 1999 voucher number 253. However, on FY 1999 voucher 254, the DEA retroactively paid the $771.99 in earnings for the linguist. Since the DEA acknowledged in its response that the linguist's earnings were paid by the DOD and did not provide any documentation to show the payment on FY 1999 voucher number 254 was subsequently recouped from the [DELETED], then we must conclude that the linguist's earnings of $771.99 were paid by both the DOD and the DEA and must be remedied. As such, this portion ($771.99) of the recommendation remains unresolved. This portion of the recommendation can be resolved and closed when we receive documentation showing that the DEA has: (1) recouped the $771.99 for the linguist funded and paid by the DOD or (2) provided additional documentation to conclusively show that the linguist's earnings were not paid by both the DOD and the DEA.
   
   In its response to the draft audit report, the DEA also stated that although the technical and administrative support positions that we questioned were not included in the statement of work until October 1, 1999, the technical and administrative support work and costs billed by the [DELETED] were always in support of the DEA's linguistic services in furtherance of Title III criminal investigations. The DEA further stated that the reimbursable agreement included both direct and indirect costs and that the technical and administrative support costs were indirect costs. Therefore, the DEA contends it was appropriate to pay these costs.
   
   Since the DEA stated that the technical and administrative support positions billed by the [DELETED] were always in support of the DEA's linguistic services and since we do not dispute this statement, then we consider this portion ($268,704) of the recommendation resolved. This portion of the recommendation can be closed when we receive documentation showing that the DEA either: (1) modified the FY 1997, 1998, and 1999 reimbursable agreements to authorize payment for the technical and administrative support positions billed by the [DELETED], or (2) waived the $268,704 paid for these positions.
6. Unresolved. In its response to the draft audit report, the DEA stated that the State of [DELETED] laws provide that part-time employees may not exceed 1,560 hours in a 12-month period and do not require that the weeks or months be worked consecutively. The DEA further stated that based upon their review, there is no indication that any part-time employees billed by the [DELETED] exceeded the 1,560 hour limit. The DEA did state that the language in the FY 2002 statement of work would be simplified to read: "The total number of hours worked by each part-time employee shall not exceed 1,560 hours in a twelve-month period."
   
   We do not dispute that the State of [DELETED] laws allow part-time employees to work up to 1,560 hours per year and do not require that the weeks or months be worked consecutively. However, the State of [DELETED] laws do not control how many hours that part-time employees can work and be paid for under each reimbursable agreement's incorporated statement of work. While the [DELETED] must employ and pay part-time workers in accordance with the laws of the State of [DELETED], the amount that the [DELETED] can bill the DEA for those costs are governed by each reimbursable agreement's incorporated statement of work. In FY 1998 and FY 1999, the statements of work provided that part-time employees shall not exceed 19 hours per week. We found that in FY 1998, the [DELETED] billed and was reimbursed $12,742.15 for hours by part-time employees that exceeded the 19 hours per week limit. In FY 1999, the [DELETED] billed and was reimbursed $38,136.44 for hours by part-time employees that exceeded the 19 hours per week limit. Beginning in FY 2000, the DEA changed the statement of work to allow part-time employees to work up to 19 hours per week or not more than a total of 9 months per year if they worked more than 19 hours per week. We interpreted the added requirement to limit the part-time employees to working no more than 9 months out of the year when they worked more than 19 hours per week. Based on this interpretation, the [DELETED] billed and was reimbursed $2,824.58 in FY 2000 and $9,380.15 in FY 2001 for excess costs when part-time employees worked more than 9 months during the year. Since the added requirement is ambiguously worded, and the DEA has agreed to simplify the wording in FY 2002 agreement, we consider the $12,204.73 questioned for FYs 2000 and 2001 to be remedied. However, the $50,878.59 that we questioned for FYs 1998 and 1999 still needs to be remedied.
   
   This recommendation can be closed when we receive documentation showing that the DEA either: (1) modified the FY 1998 and 1999 reimbursable agreements to authorize payment for the excess hours worked by part-time employees, (2) waived the $50,878.59 paid for the excess hours worked, or (3) recouped the $50,878.59 in questioned costs.
7. Resolved. In its response to the draft audit report, the DEA stated that the intent of the FY 1998 reimbursable agreement was for the [DELETED] to obtain tickets, provide travel advances, process travel vouchers, and subsequently bill the DEA for the actual amount of travel expenses paid. The DEA also stated that the FY 1999 and subsequent agreements clarified the travel costs that DEA would pay.
   
   We agree that the DEA took positive steps and clarified the travel payments allowed in the FY 1999 and subsequent agreements. Since the DEA stated that its intent was to also pay for travel costs in the FY 1998 agreement, we consider this portion ($5,983) of the recommendation resolved. This portion of the recommendation can be closed when we receive a copy of the modification to the FY 1998 agreement that retroactively authorized the travel costs paid under the agreement.
   
   In its response to the draft audit report, the DEA also stated that the FY 1999 travel for technical support personnel was in direct support of Title III monitoring, transcribing, and translating issues and in furtherance of the DEA's Title III criminal investigations. Therefore, the DEA believed that the costs ($29,009) for travel by the technical support personnel were appropriate.
   
   As stated in our response to the DEA's response for recommendation 5, we do not dispute that the FY 1999 travel by the technical support personnel was in direct support of Title III monitoring, transcribing, and translating issues and in furtherance of the DEA's Title III criminal investigations. As such, this portion ($29,009) of the recommendation can be closed when we receive the documentation requested under recommendation 5 as it relates to the technical and administrative support positions billed by the [DELETED]. In its response to the draft audit report, the DEA explained that the $7,237 that we questioned for travel by two civilian Spanish linguists in FY 1999 was for travel that was arranged and telephonically approved by a DEA [DELETED] Unit.
   
   We do not dispute that the travel for the two Spanish linguists may have been arranged and telephonically approved by the DEA. However, neither the DEA nor the [DELETED] provided documentation during the audit, such as a record of telephone conversation or other evidence, to support such approval. This portion ($7,237) of the recommendation can be closed when we receive either: (1) documentation such as a record of telephone conversation or other evidence showing the DEA telephonically approved this travel, or (2) a signed statement from the DEA official that approved the travel stating that he/she did so but did not maintain records of the telephone conversation.
   
   In its response to the draft audit report, the DEA provided the following comments concerning the $2,934 in travel costs that we questioned for FYs 2000 and 2001. Specifically, the DEA stated that:
   
   

   • the travel ($601) for a [DELETED] person on January 26, 2000 occurred prior to the effective date (March 13, 2000) of the requirement for travel to be approved in writing by the DEA.
   • the travel ($141) by an Arabic linguist to the DEA's Orlando, Florida Resident Office on August 5, 2000 was performed on one day's notice and was telephonically authorized by a DEA [DELETED] Unit Chief.
   • the travel ($2,192) by a Vietnamese linguist to the DEA's Houston Division Office on April 9, 2001 was approved in writing by a DEA [DELETED] Assistant Special Agent in Charge.
   For the [DELETED] linguist travel, the travel occurred on January 26, 2000. According to the FY 2000 reimbursable agreement, the effective date of the agreement, which included the requirement for travel to be approved in writing by the DEA, was October 1, 1999. However, the agreement was not approved by the DEA and the [DELETED] until March 2000. Since the DEA did not ensure timely approval of the agreement, it cannot hold the [DELETED] liable for the travel not being approved in writing before the agreement was approved. Therefore, we consider this portion ($601) of the recommendation closed. For the Arabic linguist travel, the DEA provided no documentation, such as a record of telephone conversation or other evidence, to show the travel was telephonically approved. This portion ($141) of the recommendation can be closed when we receive either: (1) documentation such as a record of telephone conversation or other evidence showing the DEA telephonically approved this travel, or (2) a signed statement from the DEA official that approved the travel stating that he/she did so but did not maintain records of the telephone conversation. For the Vietnamese linguist travel, documentation was not provided during the audit to show the travel was approved in writing by the DEA. However, the approval document provided with the DEA's response to the draft report is adequate to close this portion ($2,192) of the recommendation.
8. Closed.
9. Resolved. In its response to the draft audit report, the DEA stated that as noted in its response to Recommendation 3, the terms of the FY 1998 and FY 1999 statements of work were based on average hourly rates and total estimated costs.
   
   We agree that the terms of the FY 1998 and 1999 statements of work were based on average hourly rates and the [DELETED] billed at rates that exceeded those average hourly rates. We can close this recommendation when we receive documentation showing that the DEA either: (1) modified the FY 1998 and 1999 statements of work to allow the higher average hourly rates billed by the [DELETED] or (2) recouped the $7,295 in questioned costs.
10. Resolved. In its response to the draft audit report, the DEA stated that after discussion with the [DELETED], it agreed that certain employee's performance deserved recognition and that the DEA agreed to reimburse the monetary awards paid to 14 civilian linguists that were billed on public voucher number 99-252. The DEA further stated that it disallowed the awards for four State administrative employees and allowed three additional awards on public voucher number 99-256. The DEA stated that the average amount of the awards paid was $327 and that 8 of the 17 awards were for $225 each. The DEA stated that the small number of awards given and the nominal amounts clearly indicate that the [DELETED] was not taking advantage of the reimbursable agreement. The DEA further stated that although the FY 1999 statement of work did not contain a provision allowing monetary awards, that it did include benefits as part of estimated costs and that awards are considered benefits. The DEA stated that this ambiguity was clarified in the FY 2000 statement of work by incorporating specific language for paying monetary and non-monetary incentive awards.
    
    We do not dispute that the [DELETED] employees were deserving of the awards and we do not contend that the [DELETED] was trying to take advantage of the reimbursable agreement by claiming the awards. We also agree that the DEA took positive steps to clarify the ambiguity when it developed the FY 2000 agreement. We can close this recommendation when we receive documentation showing that the DEA modified the FY 1999 agreement to allow the payment of awards.
11. Resolved. In its response to the draft audit report, the DEA stated that the $17,600 paid to the [DELETED] for the administrative costs allocation for FY 2000 is an accurate amount based on the established rate of 1.1 percent and the actual reimbursed amount of $1,611,842.33.
    
    Had the FY 2000 agreement been properly modified to increase the allowable costs, then the $17,600 paid for administrative costs would have been correct. The DEA stated in its response to Recommendation 4, that they have not been able to locate the signed modification to the FY 2000 agreement. Without a signed modification, the FY 2000 agreement was limited to $1,500,000 in actual costs. The FY 2000 agreement allowed an administrative allocation of 1.1 percent of the actual costs. Therefore, the administrative allocation was limited to $16,500 ($1,500,000 times 1.1 percent). The DEA stated in response to Recommendation 4 that it would retroactively modify the FY 2000 agreement to increase the allowable costs. We can close this portion ($1,100) of the recommendation when we receive documentation showing the FY 2000 agreement was properly modified.
    
    In its response to the draft response, the DEA also stated that FY 1998 was the first full year the reimbursable agreement with the [DELETED] was in place and that prior to entering into the agreement the percentage of the [DELETED] overall administrative cost allocation could not be projected. Therefore, the DEA agreed to offset the State of [DELETED] administrative costs to support the agreement by funding one-half of the salary of a State administrative assistant who was spending half her time on personnel, accounting, and procurement functions to support the new civilian linguist reimbursement program. The DEA further stated that when the [DELETED] had sufficient history to develop the administrative cost allocation, it found that paying half the salary of the administrative assistant fell short by $4,704 of the administrative cost applicable to the agreement.
    
    We believe that the DEA's explanation for why it paid the $4,704 in administrative costs for FY 1998 is reasonable. Therefore, we can close this portion ($4,704) of the recommendation when we receive documentation showing the DEA modified the FY 1998 agreement to allow the payment of administrative costs.
    
    
12. Unresolved. In its response to the draft audit report, the DEA stated that all [DELETED] civilian employees assigned to the reimbursable agreement are covered by the Fair Labor Standards Act and applicable State of [DELETED] employment laws, rules, and regulations regarding overtime. The DEA stated that the employees must be compensated for hours worked in excess of 40 hours per week. The DEA also stated that the State of [DELETED] employment laws prevail and all overtime and compensatory time billed by the [DELETED] was in compliance with the State of [DELETED] laws. The DEA further stated that of the total 17 instances in question where overtime was paid to civilian personnel during FYs 1998, 1999, 2000, and 2001, the overtime was worked by 14 different employees, totaled less than 55 hours, and no one individual worked more than 16 hours in overtime. The DEA stated that this clearly indicates that overtime hours were worked only on those occasions necessary to meet the DEA requirements.
    
    We do not dispute that the overtime hours worked by the [DELETED] personnel were in support of the DEA's requirements. We also do not dispute the DEA's contention that all the overtime and compensatory time billed by the [DELETED] was in compliance with the State of [DELETED] employment laws. However, we do dispute the DEA's contention that the State of [DELETED] laws govern how the DEA will reimburse the [DELETED] for overtime and compensatory time worked by [DELETED] employees. While the [DELETED] is required to pay its employees for overtime and compensatory time in accordance with the State of [DELETED] laws, the DEA and the [DELETED] can include provisions in the reimbursable agreement that limits how much of the overtime and compensatory time will be reimbursed by the DEA. The DEA and the [DELETED] provided such limits in each of the reimbursable agreements. Specifically, in the FY 1998 agreement, the DEA agreed to reimburse the [DELETED] for overtime of full-time civilian personnel only. However, the DEA paid three invoices to the [DELETED] that included $554 for overtime incurred by part-time linguists. In the FY 1999, FY 2000, and FY 2001 agreements, overtime reimbursements were not allowed. Instead, these agreements allowed that full-time civilian personnel were to be compensated for working overtime hours with an equal number of compensatory hours off. However, we found that in FYs 1999, 2000, and 2001, the DEA paid seven invoices to the [DELETED] that included $798 for overtime. We also found that in FYs 1999 and 2000, that the DEA paid 12 invoices to the [DELETED] that included compensatory time at one and a half times the number of overtime hours worked instead of an amount equal to the number of overtime hours worked as required by the agreements. The extra time claimed and paid on these 12 invoices totaled $1,654. Since the agreements limited the reimbursable amounts for overtime and compensatory time and these limits were exceeded, the $3,006 paid to the [DELETED] for unallowable overtime and compensatory time should be remedied.
    
    This recommendation can be closed when we receive documentation showing that the DEA either: (1) modified each statement of work for the FY 1998, 1999, 2000, and 2001 reimbursable agreements to authorize payment for the questioned overtime and compensatory time, (2) waived the $3,006 in questioned overtime and compensatory time, or (3) recouped the $3,006 in questioned costs.
13. Resolved. In its response to the draft audit report, the DEA stated that in FY 2001 the [DELETED] instituted a policy for [DELETED] management staff to review the public vouchers and documentation that are prepared by the [DELETED] accounting staff prior to forwarding the public vouchers to the DEA for payment. The DEA stated that language was incorporated into the FY 2002 statement of work to formally require the [DELETED] management to review and sign each invoice for accuracy and completeness prior to forwarding the invoice to the DEA for payment. The DEA also stated that it had drafted a checklist for reviewing the [DELETED] public vouchers that includes the verification that:
    
    

    • employees' names belong to the DEA reimbursable agreement.
    • any "out of cycle payroll processing" fees are incurred at the DEA's request.
    • any travel expenses have the appropriate [DELETED] signature on the Request for Out of State Travel Authorization forms and the authorization is attached.
    • the State Employee Travel reimbursement Request and accompanying receipts are attached.
    • written approval for overtime is attached.
    The procedures drafted by the DEA for reviewing the [DELETED] invoices and overseeing the reimbursable agreement are a positive step towards ensuring that the costs claimed by the [DELETED] and paid by the DEA are in accordance with the terms of the reimbursable agreements. However, the checklist for reviewing the [DELETED] invoices needs to be expanded to insure the improper payments that we noted during the audit are not repeated. Specifically, the checklist should contain items for reviewing invoices to ensure that:
    
    

    • the total payments under the agreement do not exceed the total costs allowed under the agreements and that modifications to increase the agreements are approved, signed, and documented in the agreement files; and
    • costs billed by the [DELETED] are specifically allowed by the agreements before being paid.
    This recommendation can be closed when we receive a copy of the final expanded checklist for reviewing the [DELETED] Public Vouchers.