Document: Blackwater Overcharged for Labor Costs

According to an audit performed for the State Department inspector general of Blackwater’s 2004 Iraq contract, it paid to be a guard for the private security firm. Page seven of the report — excuse my handwritten notes in the margins — shows that Blackwater charged the government for seven days’ pay per week, even though the guards only had to work six. That method of accounting “is considered acceptable,” the report says, if Blackwater properly accounted for its employees’ actual work. And, wouldn’t you know it: the company didn’t.

The proposed “daily” labor rates are computed to recover the seven days pay over six “billing” days. This method is considered acceptable as long as these individuals only actually work six days and Blackwater bills for the six out of seven days actually worked. Our review of timekeeping procedures (Appendix 1), however, disclosed that, at present, Blackwater only accounts for the number of days these individuals are physically present while deployed at their duty station and not the days actually worked.

Let’s look at that Appendix, shall we? It found that the company doesn’t believe in such encumbrances as time sheets:

The contractor does not employ the use of individual employee “time sheets” for labor performed in Iraq. Rather, the contractor uses a system whereby a “muster” sheet is prepared by the agent in charge (AIC), (detail leader) simply indicating whether the individuals are physically present at their duty station or in travel or in other status on a daily basis. At the end of every pay period, the muster sheet is transmitted to the assistant program manager at Blackwater in Moyock, NC. … The assistant program manager indicated that there have been instances where an individual was reported as being in-country at the duty station but was in fact in a travel status or otherwise not physically present at the duty station.

As a result, there is no individual employee certification of actual days worked or the hours actually worked. There is no approval of employees’ time other than, as the contractor explained, the muster sheet is e-mailed to Blackwater by the AIC.

Hey Josh, can we switch TPM to that style of bookkeeping?