Use of Unpaid Consultants by the DOD Exchange Services
INSPECTOR GENERAL DEPT OF DEFENSE ARLINGTON VA
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The Special Oversight Panel on Morale, Welfare and Recreation, Committee on Armed Services, U.S. House of Representatives requested this audit. The request was made in response to allegations that the Army and Air Force Exchange Service inappropriately engaged consultants who were financially affiliated with companies that did business with the exchange and as a result of the relationship, the exchange made improper procurement actions. The audit objectives were to review the propriety of the military exchanges use of consultants, determine whether the use of the consultants complies with prevailing ethics laws and regulations, and whether any related procurement actions were improper. The Army and Air Force Exchange Services use of unpaid consultants did not fully comply with existing laws and regulations. Army and Air Force Exchange Service did not require unpaid consultants to file financial disclosure reports, which could have assisted in identifying potential conflicts of interest. Further, by allowing the unpaid consultants to serve on its board of directors, the Army and Air Force Exchange Service may have created an advisory committee within the meaning of the Federal Advisory Committee Act, yet did not comply with that Acts requirements. As a result, the potential for, and the appearance of conflicts of interest existed. We did not, however, identify any improper procurement actions resulting from the use of the unpaid consultants. For details of the audit results, see the Finding section of the report, and see Appendix B for a discussion of the allegations.
- Economics and Cost Analysis
- Personnel Management and Labor Relations