oversight

Audit of the U.S. Office of Personnel Management's Federal Investigative Services' Adjudication Group

Published by the Office of Personnel Management, Office of Inspector General on 2016-06-17.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

        U.S. OFFICE OF PERSONNEL MANAGEMENT
           OFFICE OF THE INSPECTOR GENERAL
                    OFFICE OF AUDITS




                Final Audit Report
            AUDIT OF THE U.S. OFFICE OF PERSONNEL
            MANAGEMENT’S FEDERAL INVESTIGATIVE
              SERVICES’ ADJUDICATIONS GROUP
                                            Report Number 4A-IS-00-15-054
                                                    June 17, 2016




                                                              -- CAUTION --
This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit report may
contain proprietary data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available under the Freedom of
Information Act and made available to the public on the OIG webpage (http://www.opm.gov/our-inspector-general), caution needs to be exercised
before releasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.
            EXECUTIVE SUMMARY 

              Audit of the U.S. Office of Personnel Management’s Federal Investigative Services’ 

                                              Adjudications Group  

Report No. 4A-IS-00-15-054                                                                           June 17. 2016


Why Did We Conduct The Audit?              What Did We Find?

The objectives of our audit were to        We determined that the FIS Adjudications Group is following its
determine whether the Federal              procedures for adjudicating cases, has adequate oversight controls
Investigative Services’ (FIS)              over their random review process, has controls in place to train
Adjudications Group:                       their personnel, and is in compliance with the Intelligence Reform
     is properly adjudicating cases       and Terrorism Prevention Act of 2004 timeliness standards.
        according to their procedures;     Therefore, we did not issue a draft report and are not making any
     has adequate oversight               recommendations.
        controls over their random
        review process;
     has controls in place to ensure
        that their personnel are trained
        to perform their duties; and
     is in compliance with the
        Intelligence Reform and
        Terrorism Prevention Act of
        2004 timeliness standards.

What Did We Audit?

The Office of the Inspector General
has completed a performance audit of
the U.S. Office of Personnel
Management’s (OPM) Federal
Investigative Services’ Adjudications
Group. Our audit fieldwork was
conducted from January 28 through
March 29, 2016, at FIS’s office
located in Western Pennsylvania, and
OPM’s headquarters, located in
Washington, D.C.


 _______________________
 Michael R. Esser
 Assistant Inspector General
 for Audits
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              ABBREVIATIONS


    BAAO	      Background Investigations/Access National Agency
               Check and Inquiries Adjudications and Agency
               Oversight
    CAB	       Contractor Adjudications Branch
    FIS 	      Federal Investigative Services
    IRTPA 	    Intelligence Reform and Terrorism Prevention Act
    NACI	      National Agency Check with Inquiries
    NARA 	     National Agency Check with Inquiries Agency Referral
               Adjudications
    OIG 	      Office of the Inspector General
    OPM	       U.S. Office of Personnel Management




                          ii 
 


IV. MAJOR CONTRIBUTORS TO THIS REPORT
          TABLE OF CONTENTS


                                                                                                                           Page 

            EXECUTIVE SUMMARY ......................................................................................... i 


            ABBREVIATIONS ..................................................................................................... ii 


    I.	     BACKGROUND ..........................................................................................................1 


    II.	    OBJECTIVES, SCOPE, AND METHODOLOGY ..................................................5 


    III.	   RESULTS OF THE AUDIT .......................................................................................7 


    IV.	    MAJOR CONTRIBUTORS TO THIS REPORT ....................................................8 


            REPORT FRAUD, WASTE, AND MISMANAGEMENT





                                                           
 


IV. MAJOR CONTRIBUTORS
            I. BACKGROUND
                       TO THIS REPORT

This final report details the findings, conclusions, and recommendations resulting from our
performance audit of the U.S. Office of Personnel Management’s (OPM) Federal Investigative
Services’ (FIS) Adjudications Group. The audit was performed by OPM’s Office of the
Inspector General, as authorized by the Inspector General Act of 1978, as amended.

OPM’s FIS is responsible for conducting background investigations on Federal applicants,
employees, military members, and contractor personnel for customer agencies on a
reimbursable basis. FIS determines the eligibility of these individuals to hold security
clearances, or to be employed in positions with national security sensitivity, eligibility for
accession or retention in the Armed Forces, eligibility for an identity credential, or suitability or
fitness for employment for or on behalf of the Government.

FIS conducts approximately 95 percent of all personnel background investigations for the
Federal government. Federal agencies use the background reports of investigations, conducted
by FIS, to determine individuals’ suitability or fitness for Federal civilian, military, and contract
employment, as well as their eligibility for access to national security classified information and
access to Federal facilities and information systems. In addition, FIS provides investigative
systems training and conducts oversight evaluations of other agencies to review compliance
with Federal suitability and security regulations1.

FIS Adjudications Group

The FIS Adjudications Group (Adjudications) is located in Western Pennsylvania.
Adjudications is responsible for:

       	 Protecting the interests of the Federal government by taking suitability actions2 when
          serious issues3 are raised about the character and conduct of competitive service Federal
          applicants and employees, as a result of a background investigation or agency referral.
        Overseeing all FIS suitability decisions and activities including Applicant Suitability
          Determinations and Qualifications Fraud Investigations.
        Assisting the Office of General Counsel in processing appeals involving unfavorable
          OPM suitability decisions to the Merit Systems Protection Board.
        Providing materials and instructors for OPM suitability training courses.
        Ensuring FIS contract employees are properly investigated and meet fitness and national
          security requirements to perform work for or on behalf of FIS.


                                                            
1
  Regulations – to include 5 CFR part 731, Suitability, 5 CFR part 732, National Security Positions and 5 CFR part 1400, Designation of
  National Security Positions, Executive Order 10450-Security Requirements for Government Employment, April 27, 1953.
2
  Suitability Actions are outcomes which may include cancellation of eligibility; removal/ cancellation of reinstatement eligibility and
  debarment described in 5 CFR 731.204 and 205 and may be taken only by OPM or an agency with delegated authority.
3
  Serious suitability issues are issues dealing with misconduct or negligence in employment; criminal or dishonest conduct; material intentional
  falsification; refusal to furnish testimony; alcohol abuse or illegal use of drugs without evidence of substantial rehabilitation; knowing and
  willful engagement in acts or activities designed to overthrow the U.S. Government by force; or statutory or regulatory bars preventing lawful
  employment.



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For the suitability actions it takes, Adjudications operates in accordance with Title 5, Code of
Federal Regulations, Chapter 1 Subchapter B, Part 731. In order for OPM to take action on
cases, it must establish jurisdiction; meaning that OPM has regulatory authority to take these
actions including canceling eligibilities, directing removal, and imposing a period of debarment4
from Federal employment.

Adjudications also evaluates the fitness and clearance eligibility of contractor employees
working for FIS, and determines if they can be trusted to uphold the public trust and protect
national security. For actions assessing character and conduct issues, Adjudications uses fitness
standards equivalent to the criteria in Part 731. To assess issues affecting eligibility for access
to classified information or to perform work in a sensitive national security position, the
Adjudicative Guidelines for Determining Eligibility for Access to Classified Information,
established by the Assistant to the President for National Security Affairs, from Executive Order
12968, are used.

Adjudications consists of three branches:

1. 	 National Agency Check and Inquiries and Agency Referral Adjudications (NARA), which
     is responsible for:

         reviewing and adjudicating National Agency Check with Inquiries (NACI) Tier 1 5
          investigations and agency applicant suitability and debarment referrals;
        supporting OPM’s Office of General Counsel when OPM suitability actions are
          appealed;
        serving as subject matter experts for developing or updating training materials and
          instructing suitability courses;
       	 handling certain Federal agency objections based on character and conduct issues, which
          includes Administrative Law Judges6 and Veteran Passover requests involving
          individuals with a 30 percent or greater compensable disability7; and
       	 conducting internal random reviews on cases processed to determine if the appropriate
          jurisdiction and suitability determination was made. 

2. 	 Background Investigations /Access National Agency Check and Inquiries Adjudications and
     Agency Oversight (BAAO), which is responsible for:

       	 reviewing and adjudicating background investigations at levels more comprehensive
          than NACI/Tier 1 investigations;
       	 coordinating with Federal agencies that submit requests for background investigations
          when the subject is currently or was previously (in the last three years) debarred by
          OPM for suitability reasons;  
                                                            
4
  OPM, in its discretion, may, for a period of not more than 3 years from the date of the unfavorable suitability determination, deny that person
  examination for, and appointment to, covered positions.
5
  NACIs, now known as Tier 1 investigations, are investigations for low risk and non-sensitive positions.
6
  Objections are an agency’s request to remove a non-preference eligible from a certificate of eligibles for reasons of qualification, medical,
  and/or character or conduct concerns. When the objection is to remove an Administrative Law Judge from a certificate of eligibles and the 

  basis is character or conduct, these are processed by the FIS Adjudications, National Agency Check and Inquiries and Agency Referral 

  Adjudications branch.

7
  A passover is an agency’s request to pass over a preference eligible in order to select a non-preference eligible. .



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    	 providing support for Federal agency oversight through a limited review of Federal
       Agency adjudications on OPM background investigations cases closed with major issues
       but favorably adjudicated by the agency, to determine if adjudication was appropriate;
       issuing notifications to Federal agencies when it appears their favorable adjudicative
       action may not have been warranted; and  
    	 conducting internal random reviews on cases processed to determine if the appropriate
       jurisdiction and suitability determination was made.  

3. 	Contractor Adjudications Branch (CAB), which is responsible for:

    	 evaluating the fitness and clearance eligibility of individuals working (or seeking to
       work) in a contract capacity for FIS; granting access up to Top Secret as needed and
       providing continuous oversight;
    	 designating the sensitivity and public trust levels of all FIS contractors and vendors;
    	 exercising reciprocity, when appropriate, to grant access to OPM information systems
       and facilities for new applicants or scheduling the appropriate level of investigation;
       scheduling periodic update investigations;
     assisting OPM’s Security Office by adjudicating investigations conducted on staff
       within that office for suitability and clearance eligibility; and
     conducting internal random reviews on cases processed to determine if the appropriate
       fitness and national security determination was made.

Adjudications Training

The Executive Order 13467, titled Reforming Processes Relating to Suitability for Government
Employment, Fitness for Contractor Employees, and Eligibility for Access to Classified
National Information, named the OPM Director as the Suitability Executive Agent that is
responsible for developing and implementing uniform and consistent policies and procedures to
ensure the effective, efficient and timely completion of investigations and adjudications relating
to determinations of suitability and eligibility for logical and physical access.

In 2012, the OPM Director issued a memorandum titled National Suitability Adjudicator
Training Program. This memorandum required that all agencies provide training to all Federal
government Suitability Adjudicators in accordance with the National Training Standards it
established. FIS developed a training program that is compliant with the National Training
Standards and offers this training opportunity government-wide. Personnel from FIS
Adjudications support this program by providing instruction and subject matter input for the
training material.

In addition, FIS Adjudications ensures staff compliance with the National Training Standards
for Suitability Adjudicators, as well as the National Security Adjudicator Training Program that
was issued in 2012 by the Office of the Director of National Intelligence. FIS Adjudications
also provides on the job training for their Security Assistants and Adjudicators.




                                                 3	                     Report No. 4A-IS-00-15-054
 



Intelligence Reform and Terrorism Prevention Act of 2004

The Intelligence Reform and Terrorism Prevention Act (IRTPA) was passed by Congress to
help reform the intelligence community and the intelligence and intelligence-related activities of
the United States Government, and for other purposes. The law states that each adjudicative
agency should make a determination on at least 90 percent of all applications for a personnel
security clearance within 60 days after the date of receipt of the completed application for such
a security clearance by an authorized investigative agency. Such 60-day average period shall
include a period of not longer than 20 days to complete the adjudicative phase of the clearance
review. These timeliness standards are tracked and reported as required by IRTPA. Work
completed by the Contractor Adjudications Branch is required to be completed within these
timeliness standards.




                                                4                      Report No. 4A-IS-00-15-054
  


IV. OBJECTIVES,
II.  MAJOR CONTRIBUTORS
                SCOPE, ANDTO THIS REPORT
                          METHODOLOGY

 Objectives
 The audit objectives were to determine whether:

     1.	 FIS is properly adjudicating cases according to their procedures.
     2.	 Adjudications has adequate oversight controls over their random review process.
     3.	 Adjudications has controls in place to ensure that their personnel are trained to perform
         their duties.
     4.	 FIS is in compliance with the Intelligence Reform and Terrorism Prevention Act of 2004
         timeliness standards.

 Scope and Methodology
 We conducted this performance audit in accordance with generally accepted government
 auditing standards as established by the Comptroller General of the United States. These
 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.

 The scope of our audit covered closed cases that were reviewed for suitability determinations
 from January 1 through August 31, 2015. Specifically,

     Audit Area                   Total Universe                     Sample Size                Scope
 Case Review for                    1,640 Cases                        77 Cases           January 1 through
   Suitability                                                                             August 31, 2015
  Determination

 Oversight Review                  302 Reviews                       55 Reviews            April 1 through
                                                                                          August 31, 2015
      Training            36 FIS Adjudication Personnel            15 Adjudicators        January 1 through
                        Security Specialists (Adjudicators)                                 June 30, 2015


 We performed our audit fieldwork from January 28 through March 29, 2016, at FIS’s office
 located in Western Pennsylvania, and OPM’s headquarters, located in Washington, D.C.

 To accomplish our audit objectives noted above we:

     	 Interviewed FIS Adjudications personnel;
     	 Sampled closed cases and performed tests of Adjudications policies for making
        suitability decisions to ensure they are adhering to their process and to determine if the
        process is efficient;
      Sampled and reviewed training records; 

      Sampled and reviewed random reviews conducted on suitability determinations; and 




                                                  5	                     Report No. 4A-IS-00-15-054
 




    	 Sampled and reviewed random reviews conducted for favorable adjudications by other
       Federal agencies on OPM-conducted background investigations.

In planning our work and gaining an understanding of the adjudications process, we considered,
but did not rely on, FIS’s internal control structure to the extent necessary to develop our audit
procedures. These procedures were analytical and substantive in nature. We gained an
understanding of management procedures and controls to the extent necessary to develop our
audit objectives. The purpose of our audit was not to provide an opinion on internal controls, but
merely to evaluate controls over the processes included in the scope of our audit.

Our audit included such tests and analysis of FIS’s closed cases reviewed for suitability
determinations, including timeliness standards to conduct these reviews; training provided by
FIS; oversight reviews conducted on work performed by FIS Adjudications employees and other
Federal agencies; and other procedures as we considered necessary under the circumstances.

In conducting our audit, we relied to varying degrees on computer-generated data. Due to the
nature of the audit, we did not verify the reliability of the data generated by the systems
involved. However, nothing came to our attention during our audit testing utilizing the
computer-generated data to cause us to doubt its reliability. We believe that the data was
sufficient to achieve our audit objectives.

In performing our audit work, we used Excel to judgmentally select samples for testing in order
to accomplish our audit objectives. We selected the following cases reviewed from January 1 to
August 31, 2015:

    	 15 out of 1,005 NARA Stage 1 closed cases;
    	 7 out of 134 NARA Stages 2-5 closed cases;
    	 15 out of 77 BAAO Stages 1-5 closed cases;
    	 10 out of 39 Veterans Passover and Administrative Law Judges closed cases;
    	 20 out of 116 CAB reciprocity cases;
    	 10 out of 409 CAB scheduled background investigations cases for Personnel
       Investigations Processing System or Facility Access;
    	 27 out of 166 NARA random reviews conducted;
    	 18 out of 134 BAAO random reviews conducted; and
    	 10 out of 2,776 agency favorable adjudications reviews conducted.

We also judgmentally selected 15 out of 36 training records of Personnel Security Specialists
(Adjudicators) to determine if they were trained to perform their duties.

The samples selected during our review were not statistically based. Consequently, the results
from our samples were not projected to the various populations.




                                                6	                     Report No. 4A-IS-00-15-054
 


                III. RESULTS OF THE AUDIT

Our audit showed that the FIS Adjudications Group is following its procedures for adjudicating
cases, has adequate oversight controls over their random review process, has controls in place to
train their personnel, and is in compliance with the Intelligence Reform and Terrorism
Prevention Act of 2004 timeliness standards. Therefore, we did not identify any findings and no
corrective action is necessary.




                                                7                      Report No. 4A-IS-00-15-054
  


IV. MAJOR CONTRIBUTORS TO THIS REPORT


 INTERNAL AUDITS GROUP

             , Auditor

            , Auditor

           , Auditor-in-Charge


                , Senior Team Leader

                , Group Chief




                                       8   Report No. 4A-IS-00-15-054
        




                                                                                                                         



                                       Report Fraud, Waste, and 

                                           Mismanagement 

        


                                                  Fraud, waste, and mismanagement in
                                               Government concerns everyone: Office of
                                                   the Inspector General staff, agency
                                                employees, and the general public. We
                                              actively solicit allegations of any inefficient
                                                    and wasteful practices, fraud, and
                                               mismanagement related to OPM programs
                                              and operations. You can report allegations
                                                          to us in several ways:


                        By Internet: 	             http://www.opm.gov/our-inspector-general/hotline-to-
                                                   report-fraud-waste-or-abuse


                          By Phone: 	              Toll Free Number:                              (877) 499-7295
                                                   Washington Metro Area:                         (202) 606-2423


                           By Mail:                Office of the Inspector General
                                                   U.S. Office of Personnel Management
                                                   1900 E Street, NW
                                                   Room 6400
                                                   Washington, DC 20415-1100
                     
                                                                                                                         
                                                                                                                         


                                                              -- CAUTION --
This audit report has been distributed to Federal officials who are responsible for the administration of the audited program. This audit report may
contain proprietary data which is protected by Federal law (18 U.S.C. 1905). Therefore, while this audit report is available under the Freedom of
Information Act and made available to the public on the OIG webpage (http://www.opm.gov/our-inspector-general), caution needs to be exercised
before releasing the report to the general public as it may contain proprietary information that was redacted from the publicly distributed copy.

                                                                                                         Report No. 4A-IS-00-15-054