Committee Condemns Defense Contract Auditing Agency for Lack of Integrity in Audits

By Ravi Bhatia-Talk Radio News Service

The Senate Homeland Security and Governmental Affairs Committee Wednesday hosted a hearing in response to findings issued by the Government Accountability Office (GAO) that highlighted, for the second straight year, allegations regarding the integrity of audits issued by the Defense Contract Auditing Agency (DCAA).

While members of the committee claimed to be “irritated” by the findings, DCAA Director April G. Stephenson and U.S Under Secretary of Defense Robert Hale were only asked to supply the committee with monthly reports of their activities.

“We’re talking about contracts that are worth hundreds of billions of dollars,” Senator Susan Collins (R-Maine) said. “It appears that virtually nothing has changed since we had a hearing last year. We can’t be here next year with another GAO report.”

Collins, along with Senate Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman (D-Conn.), issued statements detailing the allegations brought by the GAO against the DCAA. Senator Roland Burris (D- Ill.), Senator Claire McCaskill (D-Miss.), and Senator Thomas Coburn (R-Okl.) also participated.

According to GAO Managing Director Gregory Kutz, the DCAA spent 530 hours supporting an audit of a nonexistent billing system for a research and development grantee, reporting “adequate system controls.” The agency also dropped five “significant deficiencies” found in an accounting system audit for an Iraq reconstruction contractor. For the same contractor, supervisory auditors directed audit staff to delete and generate audit documents.

The supervisory auditor who approved the documents would later be promoted to Western Regional Quality Assurance Manager for the agency.

Lieberman recommended the creation of a DCAA independent of the Department of Defense, the department under which the agency currently resides and currently provides all contract audits for.

“This committee’s lost it’s patience, really,” he said. “There’s too much on the line. Auditors [are] trying to do too much, and they’re doing it badly.”

According to the GAO report, approximately 3,600 auditors audited approximately 30,000 cases last year.

In response to the allegations that little had changed in the DCAA since last year, Stephenson said, “We completely changed the way in which we conducted performance majors.” She also claimed, in a statement released prior to the hearing, that the DCAA has completed “50 specific improvement actions” and is taking the GAO’s findings “very seriously.”