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Project on Government Oversight

DCAA Responds to GAO Report on Auditing Controversy

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August 12, 2008

POGO has obtained a 19-page letter from the Western Regional Director at the Defense Contract Audit Agency (DCAA) that was submitted in response to a GAO report which concluded that DCAA management pressured auditors to alter their reports on defense contractors.  Although commenters on POGO’s blog and elsewhere have raised valid questions about the GAO's investigation, we're not entirely convinced by some of the assertions made in the DCAA's response either.

For instance, the Western Regional Director claims that the original findings on the defense contractors had to be changed due to a lack of supporting documentation.  But there wasn't much evidence to support the final audit either.  In fact, at two DCAA locations, the GAO found that:

"...(1) working papers did not support reported opinions, (2) DCAA supervisors dropped findings and changed audit opinions without adequate evidence for their changes, and (3) sufficient audit work was not performed to support audit opinions and conclusions."

Also, in response to the GAO's claim that DCAA management intimidated auditors and created an "abusive environment," the Western Regional Director claims that "management is not aware of any factual data that supports the GAO statements relating to the 'abusive environment.'"  But as many whistleblowers can probably attest, while there isn't always written evidence of intimidation or abuse, other forms of retaliation can be just as damaging.

In a strongly worded letter to Senator Claire McCaskill (D-MO) from July 25th, a DCAA auditor pointed out that this 19-page response was conspicuously absent in the final GAO report.

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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