Security Newswire

$6 Billion Goes Missing at State Department

The State Department has lost $6 billion used to pay its contractors.

In a special “management alert” made public, the State Department’s Inspector General Steve Linick warned “significant financial risk and a lack of internal control at the department has led to billions of unaccounted dollars over the last six years.

The lack of oversight “exposes the department to significant financial risk,” the auditor 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 tum, those of taxpayers.”

In the memo, the IG detailed “repeated examples of poor contract file administration.” For instance, a recent investigation of the closeout process for contracts supporting the mission in Iraq, showed that auditors couldn't find 33 of the 115 contract files totaling about $2.1 billion. Of the remaining 82 files, auditors said 48 contained insufficient documents required by federal law, said the Fiscal Times.

The auditor recommended that the State Department establish a centralized system to track, maintain and retain contract files, said the Fiscal Times.

The department responded and said it concurred with the recommendations to address the “vulnerability” in its contracting process, said the Fiscal Times.