Senate Committee Hearing Exposes Systemic Problems at DCAA

The Senate Homeland Security and Government Affairs Committee held a hearing [1] today to listen to witnesses describe systemic mismanagement and corruption at the Defense Contract Audit Agency (DCAA). The committee heard testimony from the GAO, the Pentagon inspector general's office, and the Defense Criminal Investigative Service (DCIS). The hearing comes on the heals of a GAO report released in July [2] that substantiated 14 of 14 whistleblower claims made against DCAA managers investigated by GAO.

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.