From the Washington Post:

Government, Inc. by Robert O’Harrow, Jr.

September 10, 2008


It’s So


Government Inc. is rattled.

It turns out the problems at the Defense Contract Audit Agency are worse than even the GAO’s critical report some weeks ago suggested.

Could the subversion of independence and objectivity and professional culture be as widespread as seems possible at the DCAA now?

In testimony today on Capitol Hill, witnesses spoke about how the DCAA, the hardcore agency responsible for rooting out and stopping fraud, waste and abuse, had come to think of itself as a partner of the federal agencies and, oh my goodness, even the contractors it is supposed to oversee.

Auditors and investigators told dark tales about DCAA supervisors pressing hard to meet deadlines at the expense of oversight; of changing audit findings repeatedly in favor of corporations; of punishment and harassment for auditors who try to stand up to practices that violate auditing standards and federal acquisition regulations.

Here’s a way to see prepared testimony of witnesses. Included are thoughts from the DCAA director April Stephenson, who acknowledged shortcomings identified by the GAO’s inquiry.

“DCAA is committed to ensuring that the agency is above reproach — that all of its audits are performed in accordance with auditing standards, that its culture promotes the kind of vigilance and quality that protects the interests of the American taxpayers,” Stephenson said.

Here’s a story from The Post today that also does not bode well.

Some excerpts:

“DCIS investigators found that managers deleted material from audits without auditors’ knowledge. The managers issued “clean” audit reports without supporting documentation, according to material to be disclosed at the hearing. The DCIS investigators also confirmed that pressure to issue audits on deadline contributed to problems.

“The GAO probe found that three DCAA offices under scrutiny had repeatedly diverged from standard accounting practices in their audits. In some cases, agency supervisors allowed contract officials and contractors to subvert DCAA’s independence and “improperly influenced” the scope and findings of audits. The GAO investigators also turned up evidence that managers had tried to intimidate or silence auditors, according to a recent report.

“Greg Kutz, GAO managing director for forensic audits and special investigations, said the problems at DCAA may be widespread. “It’s clear that the issues go beyond the 14 audits that we investigated,” he said in an interview.”

Dear gentle readers, we’re talking about dysfunction, even corruption, at the core of the government’s oversight system.

Is the procurement system out of control? If you really want to get worked up, check out this memo from a DCAA boss to an auditor who testified at today’s hearing.