GAO Report Details Disturbing Lack of Independence of Pentagon Contract Auditors

The GAO has released a report [1] written as part of its investigation into complaints that the Defense Contract Audit Agency (DCAA) acted improperly in making some contractor audit decisions. Specifically, GAO looked into whistleblower allegations that, in 14 audits of seven contractors, DCAA worked to suppress findings of contractor waste, fraud, and abuse.

...we substantiated the allegations and auditor concerns that (1) workpapers did not support reported opinions, (2) DCAA supervisors dropped findings and changed audit opinions without adequate audit evidence for their changes, and (3) sufficient audit work was not performed to support audit opinions and conclusions. In addition, we also found that contractor officials and the DOD contracting community improperly influenced the audit scope, conclusions, and opinions of some audits—a serious independence issue....Moreover, during our investigation, DCAA managers took actions against their staff at two locations, attempting to intimidate auditors, discouraging them from speaking with our investigators, and creating a generally abusive work environment.

Not only did DCAA supervisors work hand-in-hand with contractors to create audit findings favorable to the contractors, but they followed the military-industrial complex handbook to the letter by trying to keep whistleblowers from opening their big yaps. Of course there's really nothing new here. The Pentagon has made a habit of making life hard [2] for those dedicated civil servants who would prefer not to see DoD turn into an outright racket.

But, hey, Magic of the Market^® and all that.