Navy News, news from Iraq - Navy Times

Report: Problems with America Supports You

About $9.2 million in appropriated funds were inappropriately funneled to the independent newspaper Stars and Stripes to finance a Pentagon program aimed at telling troops how well they are supported by the general public, the Defense Department Inspector General has concluded.

And a senior Pentagon official conducted that program, America Supports You, in a “questionable and unregulated manner,” producing “results that were not consistent with the program’s objective,” the IG report said, adding that the official had “too much authority and control over the ASY program.”

Stars and Stripes officials also “lost visibility” of $4.1 million in appropriated funds — those authorized by Congress for specific programs. The IG’s Dec. 12 report also concluded that about $1.9 million from Stars and Stripes’ nonappropriated fund account was spent to subsidize expenses of the ASY program.

Stars and Stripes, which falls under Pentagon public affairs management but is editorially independent, is supported primarily with nonappropriated funds. Pentagon policy bans the use of nonappropriated funds, raised through the on-base sale of goods and services, from being used for or to support public affairs activities.

The audit also found that the Pentagon public affairs directorate provided “inadequate oversight” for an $8.8 million contract with an outside public relations firm. The audit questions the “nature of work, cost and competitive process” of the contract, said Bob Hastings, assistant secretary of defense for public affairs.

In addition, a senior Pentagon official was directly involved in raising money for a private fund of the same name that was created to independently back the ASY program. Such activity is prohibited by a Joint Ethics Regulation that says Pentagon employees “shall not officially endorse or appear to endorse membership drives or fundraising for any non-federal entity” save for approved programs such as the Combined Federal Campaign.

That official — the person mostly to blame for the problems, the audit concludes — was Allison Barber, former deputy assistant secretary of defense for public liaison. In that position, Barber oversaw internal communications, including Stars and Stripes, and public liaison.

Barber, who is not named in the audit report, resigned early in October after most of her responsibilities were transferred to a newly created position, Hastings said. She did not leave over the fund transfer issues raised by the audit, he added.

The audit report also concludes that Stars and Stripes officials “spent ASY program appropriated funds on [their] own needs” and “failed to perform their fiduciary responsibility ... by permitting the unauthorized expenditure of nonappropriated funds outside the purpose of the nonappropriated fund entity.”

At the time, the transfers angered Stars and Stripes reporters and editors, who said the association undermined their congressionally mandated independent status with their readers, mostly U.S. troops, government employees and contractors, and family members.

Asked whether he was concerned that a negative public perception may linger, Hastings said, “Perceptions are very real. And I recognize that. I don’t believe, from talking to the Stripes people and the public affairs people, that the integrity of the paper has been compromised.”

Readers’ views could differ, he acknowledged.

Hastings oversees Pentagon programs for public and internal information and community relations, and leads the worldwide U.S. military public affairs community. He took his job, also a political appointment, in March, well after the audit of the America Supports You program was initiated in May 2007. His predecessor, Dorrance Smith, had overseen the division since January 2006. Barber had served in her job since 2001 and is credited with creating America Supports You, which was launched in November 2004.

“The report didn’t ask the question why it was done,” Hastings said of the funds transfers. But he said that nonappropriated funds “are a simpler contracting mechanism than appropriated funds. Also, Stars and Stripes’ contracting office worked for public affairs. So I don’t think there was anything devious about it.”

Hastings pointed out that the audit was administrative, not criminal, in nature. “It’s an audit of management practices,” he said. He declined to speculate on any future actions the audit report’s conclusions could spark but said the IG will not conduct any other audits or investigations of ASY.

But he noted that the report recommends that the undersecretary for personnel and readiness, which oversees nonappropriated funds, “review and initiate appropriate action” for Stars and Stripes officials who allowed the unauthorized use of its nonappropriated funds.

In addition, the agency recommended that the Pentagon comptroller ask Washington Headquarters Services to conduct a preliminary investigation into potential violations regarding Stars and Stripes purchases with ASY funds, and the reprogramming of appropriations for ASY.

No action was recommended with regard to the deputy assistant secretary of defense for public liaison.

Hastings has directed widespread changes since taking his post. ASY’s contract is no longer administered by Stars and Stripes, and its activities are largely conducted in-house under the oversight of Hastings’ community relations directorate. And he has separated contract management and oversight functions, appointing a new contracting officer representative and program manager, and directed staff policy and ethics training.

Hastings also said he has placed America Supports You back on its “original footing.” Auditors concluded that the program had developed a focus of building and soliciting support from the public, school children, corporations, celebrities and the media to promote or “brand” ASY.

Now, Hastings said, ASY’s mission is simply “to communicate, to the military and their family members, what the American public is doing to support them.”

“ASY remains an important and necessary program,” Hastings said. “It remains a valid program that we will continue to perform.”

At the same time, he said, “I take the report ... very seriously. We’re working very hard to ensure everything is completed above board, and we’re in line with all policy, laws, regulations and guidance.”