Oversight of the White House Communications Agency
Type of Activity
IG audit of Communications Support
Date of Activity
May 16, 1996, June 13 1996
When I arrived in WHCA in the mid-1960's, the term "Ranch" was the LBJ Ranch in Texas. Since then, we have had Santa Barbara and Crawford. Nixon was still the king of compounds, had three if you count Key Biscayne, San Clemente, and the other private retreat at Grand Cay, in the Bahamas. The WHCA budget to support Walkers Cay, Grand Bahama Island, and Grand Cay, along with the NASA sub-cable from the Cape to GBI was off the charts.
The large remote Detachments from the days of LBJ, Nixon, Reagan started to become flags for Congressional budget oversight. Those jobs and slots were justified based on disbursement of assets for quick response, and on paper were to eliminate TDY travel when the President went home for weekend! The permanent building leases, alarms, Long Lines, TTY, vehicles, maintenance, all added up and the original planned savings was almost non-existent.
There is little history on the actual budget for the Nixon compound built on Grand Cay with relay sites at Walkers Cay, Grand Bahama Island, and overseas cable head at Cape Canaveral. I would guess we spent more on the Bahamas retreat than actual costs of Key Biscayne. There was also another Coral Reef house owned by Bebe Rebozo in the Card Sound area that had many government "improvements". After Nixon and Key Biscayne and San Clemente, the budgets were under more oversight for future Presidents.
The White House Communications Agency is formally charged with providing telecommunications and other similar services to the President, First Lady, and staff. It has existed since the late 1940's, when it had a trivial budget and a staff of 30 people. Today, the White House Communications Agency has over 900 employees and over a $100 million budget.
The initial attempts to conduct oversight of this 900-person, $100 million-a-year White House-directed agency were made by Congress 2 years ago in 1994. Those attempts were met with repeated delays and White House stonewalling. Early last year, after meetings with the White House Counsel's office, GAO, and the Department of Defense IG's office, Congress finally received the approval to have an IG's investigation done going back 5 years.
WHCA has been a deep, dark hole over at the White House into which there has been spending nearly $100 million annually without any executive branch oversight. It has also become a pot of money devoted to many things-kind of a miscellaneous pot of money-that have nothing to do with telecommunications or the President.
The White House Communications Agency has had a totally unique mission, and the staff who serves there perform their duties exceptionally well and have done so for more than 50 years and for 11 Presidents, both Democrats and Republicans.
The DODIG’s report concluded that WHCA's budgets have gone largely unreviewed. Its annual performance plan has failed to meet DOD standards. Its acquisition planning has violated DOD regulations and resulted in wasteful purchases.
Finally, the DODIG concluded that WHCA is providing the White House with services and equipment which are outside way, outside of the scope of its mission of telecommunications support to the President of the United States.
Congressional hearings conducted on May 16 and June 13, 1996
The following individuals testified
HENRY L. HINTON, JR., ASSISTANT COMPI'ROLLER GENERAL NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVSION
ROBERT J. LIEBERMAN, ASSISTANT INSPECTOR GENERAL FOR AUDITING, DEPARTMENT OF DEFENSE
COL. JOSEPH J. SIMMONS IV, COMMANDER WHITE HOUSE COMMUNICATIONS AGENCY
EMMETT PAIGE, JR., ASSISTANT SECRETARY OF DEFENSE (COMMAND, CONTROL, COMMUNICATIONS, AND INTELLIGENCE)
Oversight of the White House Communications Agency, was the topic of these particular hearings that grew out of a Department of Defense Inspector General's investigation and the efforts by Congress to have the General Accounting Office investigate the allegations of waste and mismanagement at the White House communications Agency.
The DOD IG’s audit review primarily focused on FYs 1991 through 1995, but we did examine some documentation dated as far back as 1967 and as recent as FY 1996.
There were several areas of concern identified and without further correction and White House commitment, the problems will continue:
- $577,000 worth of missing equipment will remain unaccounted for.
- $300,000 software packages will be purchased yet sit unopened.
- $294,000 will be paid for services never provided.
- $784,000 in illegal contracts will continue to be let.
- $4.9 million unusable communications trailers will continue to be purchased.
- $2.1 million maintenance contracts will continue to be sole sourced to WHCA friends in total violation of Federal contracting law.
- services quoted at $35,000 will be billed at $91,000, and those bills will be paid.
- $14.5 million in outstanding obligations will remain unvalidated.
There is a clear need for reform according to the DOD IG. Operational control of WHCA remains at the White House, and the White House is uncommitted to reform and unwilling to discuss change.
The DOD Inspector General reported on issues beyond those that were noted in their preliminary work.
For example, the Inspector General reported that WHCA's inventory of short-haul telecommunications equipment and services, such as circuits and maintenance, was neither complete nor accurate because WHCA failed to record some of the equipment and services, terminate the equipment from the inventory, or update costs. The Inspector General's April 1996 report found that WHCA had made little progress in correcting deficiencies identified in its earlier November 1995 report and the inventory remained auditable.
The DOD Inspector General's detailed examination identified $7.8 million in services (audiovisual, news wire, and stenographic services) and the procurement of camera equipment that the Inspector General found were outside of WHCA's mission.
For example, WHCA's Audiovisual Unit provides flags at presidential events, develops, and prints photographs of the President and First Lady, and mounts and frames photographs. WHCA also provides stenographic services for the White House Office of the Press Secretary. WHCA has tried unsuccessfully since 1971 to transfer funding for these services to the White House or the General Services Administration, but the White House has prevented the transfer.
Also, the White House deploys Department of Defense moneys to fund an elaborate frame shop in the basement of the White House, which frames any staffer's pictures. It funds stenographic services, audiovisual services, photos and emblems, podiums, and other non-telecommunications expenditures. WHCA's activities are undertaken pursuant to a number of laws and regulations.
These activities range from providing communications support, such as nonsecure voice, secure voice, and recorded communications, to other support, including automated data processing and construction of presidential podiums. The IG did not determine the cost of the activities or how they were funded and reported since the White House would not release the necessary documents.
The DOD Inspector General's detailed review disclosed that since 1991, WHCA had provided communications support to the Secret Service on a non-reimbursable basis and failed to report to the Office of the Secretary of Defense all costs for providing communications support to the Secret Service. WHCA had not charged the Secret Service for the support because a 1989 WHCA and Secret Service memorandum of agreement did not clearly delineate reimbursable and non-reimbursable communications support to be provided. As a result, from 1990 to 1995, the Secret Service did not reimburse DOD for annual communications support totaling $4.3 million and Congress was not informed of communications support totaling $3.2 million that WHCA had provided to the Secret Service. Because DOD absorbed costs of support to the Secret Service, the Secret Service's budget was augmented by $4.3 million.
The DOD Inspector General's detailed review disclosed that WHCA expended $4.9 million on a mobile communications system known as the Air Transportable Integrated Communications System (ATICS) that did not meet operational needs. According to the WHCA "Enterprise Architecture Document, February 3, 1995, WHCA had planned to use the mobile communications system to provide telecommunications support on most Presidential trips. WHCA specified that the mobile communications system must fit on C- 141 and C-5 aircraft but did not consider the additional equipment normally carried on the aircraft. As a result, the mobile communications system and all WHCA equipment needed to support the President do not fit on one C-141 air craft. In addition, the design of the communications system does not allow WHCA personnel to operate efficiently. Because it was determined that the communications system did not meet all operational needs, WHCA did not exercise contract options to purchase additional communications systems .
DETAILS OF THE DOD IG AUDIT REPORTS
Finding A - About $7.8 million in services and equipment provided to the White House were not within the scope of the White House Communications Agency telecommunications mission as presently defined and should be funded by the Executive Office of the President.
Response: A Memorandum of Agreement between the White House Office of Management and Administration and Assistant Secretary of Defense, Command, Control Communications and Intelligence validated and expanded DISA's functional oversight over the White House Communications Agency to include responsibility for funding managing, contracting, and purchasing of audiovisual, news wire, and stenographic services and camera equipment to the Executive Office of the President. DISA will sample services provided to determine if these services are as provided for in the Memorandum of Agreement.
Finding B - The White House Communications Agency was not reimbursed for permanent support to the Secret Service, as required by law, and understated support costs to Congress by $3.2 million. The Secret Service did not reimburse about $4.3 million for support and, because DoD absorbed support costs, the Secret Service budget was augmented by that amount.
Response: This finding was addressed in a Memorandum of Understanding between the White House Communications Agency and the Secret Service was revised to specify permanent and temporary support provided to the Secret Service and which support is reimbursable or non-reimbursable. DISA will review the support provided to the Secret Service to make sure it agrees with the provisions of the revised Memorandum of Understanding. It should be noted that a change of the DoD Appropriation Act of 1996 has changed all support to the Secret Service to be on a non-reimbursable basis.
Finding C - The White House Communications Agency managers did not maintain control over repair parts inventories and contracting officer's representatives did not document maintenance data.
Response: DISA will review the management of maintenance operations and verify that the White House Communications Agency has fully implemented the existing maintenance management system, turned in excess repair parts, updated lists of equipment under maintenance contracts, and used vendor service reports to assess the cost-effectiveness of maintenance contracts.
Finding D - The White House Communications Agency lacked accountability for non-expendable property on hand and had excess expendable supplies valued at about $226,000. Property valued at about $577,000 was not accounted for and is at risk for potential waste or loss.
Response: DISA will evaluate the White House Communications Agency's procedures for receiving property and recording it in the property book. DISA will also perform tests necessary to determine if information in the property book is accurate and current.
Finding E - The inventory of base communications equipment and services is neither complete nor accurate. Consequently, the inventory could not be audited, and White House Communications Agency could neither review and revalidate communications requirements nor assess the cost effectiveness of configurations for equipment and services.
Response: DISA will determine if the White House Communications Agency has implemented efficient and effective procedures to conduct a complete ana accurate inventory of short-haul equipment and services and to maintain required inventory records.
Finding F - The White House Communications Agency paid for leased long-haul telecommunications circuits and equipment that were no longer needed.
Response: DISA will ensure that the White House Communications Agency terminates unneeded long-haul circuits and equipment and establishes a review and revalidation program for equipment and services.
Finding G - The White House Communications Agency did not validate bills for long-haul telecommunications equipment and services before verifying that the bills were accurate.
Response: DISA will verify that the White House Communications Agency has established effective bill validation procedures to make sure that payments would not be made for terminated services or services ordered but not installed.
Second Report: Report No. 96-100, April 29, 1996:
Finding A - DISA exercised limited administrative, financial, and operational oversight responsibility for the White House Communications Agency.
Response: This process has been streamlined in the March 1996 Memorandum of Agreement that I signed, specifying the oversight responsibility for the White House Communications Agency. DISA will evaluate procedures established to ensure that DISA provides the required administrative, financial, and operational oversight of the White House Communications Agency.
Finding B - The White House Communications Agency did not comply with contracting and payment procedures and did not estab1ish duties and responsibilities to ensure the most cost-effective methods of leasing telecommunications equipment and services.
Response: The White House Communications Agency is holding discussions with the Defense Information Technology Contracting Office (DITCO), an operating unit of DISA (regarding contracting support) and with the Defense Finance Accounting Service - Pensacola (regarding payment functions). Interim procedures have been established with the U.S. Army Information Systems Command to ensure that a for mal contract is in place before communications vendors provide telecommunications equipment and services to WHCA. DISA will monitor these actions for proper implementation and later follow-up to see if the actions correct any reported deficiencies.
Finding C - The White House Communications Agency could not validate outstanding unliquidated obligations totaling $14.1 million for telecommunications equipment and services. Of note, the $14.5 million figure has been reduced to $4.5 million today.
A March 1996 memorandum of agreement between the White House Office of Management and Administration and the Assistant Secretary of Defense for Command, Control, and Communications and Intelligence again assigned these functions and the associated funding to WHCA.
The DOD IG’s audit was performed in two phases, with two reports, because of the volume of audit tests required to review all WHCA activities, the lack of previous coverage, and the need to report initial audit results in a timely manner. We had a positive working relationship during the audit with WHCA and the other organizations involved, and the DOD IG obtained access to all information that was requested.
The audit found that WHCA did a superior job in accomplishing its operational mission of supporting the Office of the President. It also found no evidence of theft, or gross malfeasance, and management controls were generally adequate. However, the audit did identify areas that needed improvement and opportunities to cut future operating costs. Some of the problems that were identified, such as duplicate payments, unneeded circuits, and invalid unliquidated obligation balances, are similar to what we have found at many other DoD organizations. WHCA funds the contract for the stenographers, they do not control the stenographers. In addition to developing and printing photographic film, WHCA pays for camera equipment used by the White House photographers. We estimated that providing such services and equipment that are not usually considered telecommunications cost the DoD about $7.8 million in FY 1995.
In conclusion, both a comprehensive audit and a more formal, explicit delineation of responsibilities were long overdue for WHCA Although management controls were generally satisfactory, there were deficiencies in several areas that needed attention. More systematic oversight is important in the future to assist WHCA in being as efficient and effective as possible. The DOD IG will work closely with DISA and WHCA to make sure that the problems found in the audit get fixed.
Besides the obvious improvements in procedures for accountability and oversight, the stipulations in the Memorandum of Understanding represent some profound changes and a great opportunity. The previous relationships were somewhat limiting, because of the distinction made between operational support and oversight by all members of the team, including the White House, DoD, DISA, and WHCA. That distinction has changed, with this Administration permitting, for the first time, the DoD Inspector General to perform a thorough review of the operations and administrative functions of WHCA. The reinforced and well-defined relationship between the WHCA and DISA provides an opportunity to optimize the suite of capabilities and services provided to the White House. The Director, DISA, can use the expertise and the capabilities developed to support the President. This will ensure a continuous capability for our National Command Authorities that has served the country well over the last thirty-three years.