Forces lose millions in ‘black assets’
Equipment is so secret that details are censored
Canada’s special forces are having trouble keeping track of millions of dollars worth of sensitive equipment that they use — and in one case had no idea of the extent of the missing “black assets,” as they are known, according to a new Defence Department audit.
The nature of the equipment in question is censored from the audit done by the department’s Chief Review Services. But much of it is considered so secret that details about the gear is not even shared with the Defence Department or Canadian Forces.
The Canadian Special Operations Forces Command, or CANSOFCOM, calls such equipment “black assets.” Other equipment, which can be openly discussed are labelled as “green” assets.
“Sample stock counts revealed that CANSOFCOM’s inventory system did not accurately reflect all account holdings or their value for reasons including inaccurate price information, discrepancies in quantities, and a significant amount (in quantity and value) of assets that had never been recorded in accounts,” the audit noted.
“One unit estimated that between $8 million and $10 million of its assets (both green and black) had yet to be reflected in its accounts, including some expensive and (censored),” it added.
Another unit did not have access to CANSOFCOM’s specialized computer system to record its black assets so at the time of the visit by auditors the unit supply staff “did not know the extent of assets — nature, quantity or value,” the report, produced in March, pointed out. A censored copy of the report was just released publicly.
The audit was conducted to assess whether the proper financial man- agement practices and controls were in place for CANSOFCOM, whose headquarters are in Ottawa.
The command was created in 2006 to oversee the counter-terrorism unit Joint Task Force 2, based in Ottawa, a special operations aviation squadron at Canadian Forces Base Petawawa, a special operations regiment, also at Petawawa, and a specialized unit that deals with weapons of mass destruction. That unit is located at CFB Trenton.
Annual funding for CANSOFCOM is around $200 million.
The command’s equipment purchases are much smaller in quantity and cost than the regular Canadian Forces, but its units tend to acquire leading-edge technology in areas ranging from weapons targeting systems to surveillance sensors to detection gear for nuclear, chemical and biological weapons.
The audit determined that financial controls are in place for the command but that additional work is needed to ensure all of CANSOFCOM’s assets are reflected in the inventory system and departmental financial statements.
The other problem that still has to be worked out is the issue of listing equipment, quantities and financial data on the Defence Department’s computing systems.
Although such systems have the needed security to handle classified information, CANSOFCOM staff has voiced concerns that there is not enough protection and that special forces information could be compromised.
The special forces have gone as far as trying to hide some purchases because of such concerns.
But the auditors noted, “While CANSOFCOM staff had made efforts to conceal some of these transactions they later learned it was likely drawing more attention to the information they were trying to protect.”
The Defence Department has known about such security concerns since 2005 but has not yet dealt with the problem.
The auditors called this finding “both serious and significant,” adding that other organizations in the Canadian Forces dealing with sensitive material might also have the same problems or issues.
CANSOFCOM spokeswoman Lianne Wallace stated in an email that both the command and DND take the findings of the audit seriously
“CANSOFCOM has developed a thorough action plan to address the report’s recommendations, all of which are already being implemented,” she noted.
Work is underway to ensure the command’s assets are reflected in DND financial statements, while at the same time endeavouring to protect security, she added.