INTEGRITY INDEPENDENCE EXCELLENCE

U.S. Department of Defense
Report No. DODIG-2019-004
NOVEMBER 2, 2018
DoD Oversight of Bilateral
Agreements With the
Republic of the Philippines
i

DoD Oversight of Bilateral Agreements With the Republic
of the Philippines
Objective











Background























November 2, 2018




















Finding












1
For this report, an ACSA transaction represents an agreement made with the
Republic of the Philippines using an ACSA order form for the sale of logistic
support, supplies, and services.
Background (cont’d)
ii

DoD Oversight of Bilateral Agreements With the Republic
of the Philippines
























Recommendations

































Management Actions Taken
















Finding (cont’d)
iii

DoD Oversight of Bilateral Agreements With the Republic
of the Philippines







































































Management Actions Taken (cont’d)
iv
Recommendations Table
Management
Recommendations
Unresolved
Recommendations
Resolved
Recommendations
Closed
Director for Logistics, Joint Staff None 1.a 1.b
Commander, U.S. Pacific Air Force None
2.a, 2.b, 2.c, and
2.d
None
Commander, U.S. Marine Corps Forces, Pacific None 3.a and 3.b None
Commander, U.S. Pacific Fleet None 4.a 4.b and 4.c
Note: The following categories are used to describe agency management’s comments to individual recommendations.
Unresolved – Management has not agreed to implement the recommendation or has not proposed actions
that will address the recommendation.
Resolved – Management agreed to implement the recommendation or has proposed actions that will address
the underlying finding that generated the recommendation.
Closed – OIG verified that the agreed upon corrective actions were implemented.
v


 










INSPECTOR GENERAL
DEPARTMENT OF DEFENSE
4800 MARK CENTER DRIVE
ALEXANDRIA, VIRGINIA 22350-1500
vi












vii
Contents
Introduction



Finding. The Directorate for Logistics Did Not Have
Visibility of the Logistical Support Sold Through
the Use of the Bilateral Agreement With the
Republic of the Philippines




 


 
Appendix 

 
 
Acronyms and Abbreviations 
Introduction
1
Introduction
Objective



,
Background




.
2












2
The U.S. Government has a Mutual Logistic Support Agreement with the Republic of the Philippines. In this report,
we will refer to that agreement as a bilateral agreement. Mutual Logistic Support Agreement is the Republic of the
Philippines‑preferred term for the bilateral agreement with the United States. However, because DoD criteria uses the
term ACSA instead of Mutual Logistic Support Agreement, we will use the term ACSA.
Figure 1. Armed Forces of the Philippines Receiving Equipment from the United States
Source: Joint United States Military Assistance Group.
Introduction
2
ACSA Criteria





3












.
5









6



.
7



,,.
3
DoD Directive 2010.9, “Acquisition and Cross‑Servicing Agreements,” April 28, 2003, certified current as of
November 24, 2003, and incorporating Change 1, effective September 30, 2016. In this report we will use DoD
Directive 2010.9. Our audit fieldwork was conducted prior to the issuance of DoD Directive 2010.09, “Acquisition and
Cross‑Servicing Agreements,” April 28, 2003, incorporating change 2, August 31, 2018.
4
For this report, an ACSA transaction represents an agreement made with the Republic of the Philippines using an ACSA
order form for the sale of logistic support, supplies, and services. An ACSA order form can include multiple line items.
Each line item is comprised of a specific type of logistic support, supplies, and service. For instance, a line item can
include 1,000 gas masks sold.
5
DoD 7000.14‑R, Financial Management Regulation, Volume 11A, “Reimbursable Operations Policy,” July 2010.
6
CJCSI 2120.01D, “Acquisition and Cross‑Servicing Agreements,” May 21, 2015.
7
Chapter 138, subchapter I, sections 2341‑2350, “Acquisition and Cross‑Servicing Agreements,” title 10, United States
Code (2017). This law enables the DoD to enter into agreements with a foreign government or regional international
organization.
Introduction
3
ACSA Roles and Responsibilities











.
‑





 

 

 

AGATRS





.





Introduction
4
.








ACSA Transaction Selling Process






8





.


.



..
8
Standard Form 1‑3a, “Acquisition and Cross‑Servicing Agreement/Mutual Logistics Support Order Form,” June 5, 2017.
Introduction
5
Figure 2. ACSA Order Form
Source: U.S. Army Pacific.
U.S. Indo-Pacific Command Area of Responsibility for
ACSA Transactions














Introduction
6









Table. ACSA Line Items October 1, 2016, through May 31, 2018
Service
Components
Commands
Line Items
Identified by
USINDOPACOM
Dollar Amount
Identified by
USINDOPACOM
ACSA Order
Forms With
Line Items
Identified
by Service
Component
Commands
1
Dollar Amount
Identified
by Service
Component
Commands
Line Items
Visible
to the
Directorate
for Logistics
in AGATRS
2
Proof of
Reimbursement
Visible to the
Directorate
for Logistics in
AGATRS
2
U.S. Pacic
Air Force
57 $5,139,555 40 $3,595,136 None $0
U.S. Marine
Corps
Forces
Pacic
15 7,288,225 None 0 None 0
U.S. Army
Pacic
1 882,880 1 882,880 1
882,880
U.S. Pacic
Fleet
1 525,346 1 525,346 None 0
Total 74 $13,836,006 42 $5,003,362 1
$882,880
1
The service component commands idened three line items that were not included in the list provided by
USINDOPACOM. The three addional line items were valued at $53,699.
2
On June 5, 2018, the Directorate for Logistics provided an AGATRS report of all ACSA line items reported by the service
component commands from October 1, 2016, through June 5, 2018.
Source: DoD OIG‑developed based on information provided by USINDOPACOM, USPACAF, USPACFLT,
USARPAC, and the Directorate for Logistics.
Review of Internal Controls



9

9
DoD Instruction 5010.40, “Managers’ Internal Control Program Procedures,” May 30, 2013.
Introduction
7










Finding
8
Finding
The Directorate for Logistics Did Not Have
Visibility of the Logistical Support Sold Through
the Use of the Bilateral Agreement With the
Republic of the Philippines

























Finding
9
The Directorate for Logistics Did Not Have
Visibility of Logistical Support Sold to the
Republic of the Philippines




















Service Component Commands Officials Did Not
Understand AGATRS and Designate ACSA Finance
Program Managers
,



ACSA Officials Did Not Understand How to Build, Track, and
Manage Transactions in AGATRS




The Directorate for Logistics
was unaware of 76 of the 77
ACSA line items executed with
the Republic of the Philippines
from October 1, 2016, through
May 31, 2018.
Finding
10








.





,
,
.














.







USPACAF and USPACFLT service
component commands did
not develop or administer an
ACSA training program for its
command officials.
USMARFORPAC followed its own
internal methods for processing
ACSA transactions and did not
use AGATRS as a cradle‑to‑grave
system, as intended.
Finding
11







USPACAF, USPACFLT, and USMARFORPAC Did Not Designate a
Primary ACSA Finance Program Manager




















The Joint Staff Did Not Require Quarterly
Summary Reports






Finding
12













The DoD Did Not Have Visibility of ACSA Transactions
Sold to the Republic of the Philippines

,













To allow Directorate for Logistics
officials to rely solely upon AGATRS
for accurate information, all ACSA
transactions need to be documented
and maintained in AGATRS.
Finding
13
Recommendations
Recommendation 1
We recommend that the Director of Logistics, Joint Staff:
a. Update Joint Knowledge Online-training to reflect the most recent updates
to the Acquisition and Cross-Servicing Agreement Global Automated
Tracking and Reporting System.
b. Request that the United States Indo-Pacific Command report to the
Joint Staff Directorate for Logistics, the Mutual Logistics Servicing
Agreements/Acquisition and Cross-Servicing Agreement transactions
with the Republic of the Philippines from October 1, 2016, through
July 31, 2018, including the dollar value, current reimbursement status
(opened or closed), and amount reimbursed.
Management Actions Taken













,





‑

.
Finding
14
Recommendation 2
We recommend that the Commander, Pacific Air Forces:
a. Develop service component-specific training programs for all Acquisition
and Cross-Servicing Agreement command officials.
b. Designate an Acquisition and Cross-Servicing Agreement Program
Manager and ensure that the individual completes the Joint Knowledge
Online-Training that will provide access and the basic instruction for the
Acquisition and Cross-Servicing Agreement Program Manager to build,
track, and manage transactions in the Acquisition and Cross-Servicing
Agreement Global Automated Tracking and Reporting System.
c. Designate an Acquisition and Cross-Servicing Agreement Finance Program
Manager and ensure that the individual completes the Joint Knowledge
Online-Training that will provide access and the basic instruction
for the Acquisition and Cross-Servicing Agreement Finance Program
Manager to build, track, and manage transactions in the Acquisition
and Cross-Servicing Agreement Global Automated Tracking and
Reporting System.
d. Input and track all Acquisition and Cross-Servicing Agreement
transactions from October 1, 2016, to present, and all future transactions,
including the 57 line items the United States Indo-Pacific Command
identified, in the Acquisition and Cross-Servicing Agreement Global
Automated Tracking and Reporting System.
Management Actions Taken










.





Finding
15












Recommendation 3
We recommend that the Commander, Marine Corps Forces, Pacific:
a. Designate an Acquisition and Cross-Servicing Agreement Finance Program
Manager and ensure that the individual completes the Joint Knowledge
Online-Training that will provide access and the basic instruction
for the Acquisition and Cross-Servicing Agreement Finance Program
Manager to build, track, and manage transactions in the Acquisition
and Cross
‑Servicing Agreement Global Automated Tracking and
Reporting System
.
b. Input and track all Acquisition and Cross-Servicing Agreement
transactions from October 1, 2016, to present, and all future transactions,
including the 15 line items the United States Indo-Pacific Command
identified, in the Acquisition and Cross-Servicing Agreement Global
Automated Tracking and Reporting System.
Management Actions Taken









Finding
16




Recommendation 4
We recommend that the Commander, Pacific Fleet:
a. Develop and maintain service component-specific training programs for
all Acquisition and Cross-Servicing Agreement command officials.
b. Designate an Acquisition and Cross-Servicing Agreement Finance Program
Manager and ensure that the individual completes the Joint Knowledge
Online-Training that will provide access and the basic instruction
for the Acquisition and Cross-Servicing Agreement Finance Program
Manager to build, track, and manage transactions in the Acquisition
and Cross-Servicing Agreement Global Automated Tracking and
Reporting System.
c. Input and track all Acquisition and Cross-Servicing Agreement
transactions from October 1, 2016, to present, and all future transactions,
including the one line item the United States Indo-Pacific Command
identified, in the Acquisition and Cross-Servicing Agreement Global
Automated Tracking and Reporting System.
Management Actions Taken













Appendix
17
Appendix
Scope and Methodology





.

























.

.
Appendix
18

 

 
 

 


Use of Computer-Processed Data

Prior Coverage


.

.

  
DoD OIG
‑









Appendix
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




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
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Army
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









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20
Acronyms and Abbreviations
Acronyms and Abbreviations
ACSA Acquision and Cross-Servicing Agreement
AGATRS ACSA Global Automated Tracking Reporng System
CCMDs Combatant Commands
CJCSI Chairman of the Joint Chiefs of Sta Instrucon
CJCS Chairman of the Joint Chiefs of Sta
USARPAC U.S. Army Pacic
USINDOPACOM U.S. Indo-Pacic Command
USMARFORPAC U.S. Marine Corps Forces, Pacic
USPACAF U.S. Pacic Air Forces
USPACFLT U.S. Pacic Fleet
Whistleblower Protection

Whistleblower Protection safeguards DoD employees against
retaliation for protected disclosures that expose possible waste, fraud,
and abuse in government programs. For more information, please visit
the Whistleblower webpage at http://www.dodig.mil/Components/
Administrative‑Investigations/Whistleblower‑Reprisal‑Investigations/
Whisteblower‑Reprisal/ or contact the Whistleblower Protection
Coordinator at Whistleblowerprotectioncoordinat[email protected]
For more information about DoD OIG
reports or activities, please contact us:
Congressional Liaison
703.604.8324
Media Contact
public.aff[email protected]; 703.604.8324
DoD OIG Mailing Lists
www.dodig.mil/Mailing‑Lists/
Twitter
www.twitter.com/DoD_IG
DoD Hotline
www.dodig.mil/hotline
DEPARTMENT OF DEFENSE │ OFFICE OF INSPECTOR GENERAL


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