The State Department has lost track of approximately $6 billion used to pay its contractors, according to a report from the department’s Inspector General.
An inability to file paperwork properly and a “lack of internal control at the department has led to billions of unaccounted dollars over the last six years,” State Department Inspector General Steve Linick said in a “management alert” made public Thursday.
Linick was appointed to his current position in 2013 after the State Department went without an IG for nearly five years, the longest that any federal agency has gone without a chief auditor, the Washington Post reported.
“The failure to maintain contract files adequately creates significant financial risk and demonstrates a lack of internal control over the Department’s contract actions,” the alert states.
The department’s mismanagement of contract funds and contract-related files started a little before Hillary Clinton was appointed Secretary of State. It continued throughout her entire tenure at the State Department.
The IG’s alert, which was published on March 20, but only made available this week, comes at a time when the federal government struggles with contracts and payments to private contractors, the Fiscal Times reported.
The government’s continued lack of oversight “exposes the department to significant financial risk,” Linick said. “It creates conditions conducive to fraud, as corrupt individuals may attempt to conceal evidence of illicit behavior by omitting key documents from the contract file. It impairs the ability of the Department to take effective and timely action to protect its interests, and, in turn, those of taxpayers.”
The IG memo continues, listing several examples of “of poor contract file administration.”
For example, the IG found during its investigation of contracts issued in support of U.S. operations in Iraq that 33 of 115 contracts have gone missing. The 33 missing contracts are worth a total of $2.1 billion.
And as for the remaining 82 contracts, auditors say at least 48 are missing the necessary documentation required under federal law, the Fiscal Times reported.
The IG recommended in its report that the State Department establish a system to maintain and organize all contracts and contract-related documentation. The State Department responded by agreeing with the auditor’s suggestion, saying that it will address its “vulnerability” in awarding and maintaining information on contracts.
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