Senator McCaskill Calls for Terminations, Congressional Hearings on DCAA Scandal

Senator Claire McCaskill has sent Defense Contract Audit Agency (DCAA) chief April Stephenson (pdf) and Defense Secretary Robert Gates (pdf) letters demanding accountability at the troubled contract oversight agency which ensures that contractors do not bilk taxpayers. DCAA oversees contractors not just for the Defense Department, but for agencies across the government.

Congress' investigative arm, the Government Accountability Office (GAO), issued a scathing report yesterday that substantiates allegations that DCAA management would change audit results to suit contractors and intimidated auditors who raised concerns.

Sen. McCaskill has demanded that supervisors who harassed concerned employees be terminated.

McCaskill, the former state auditor of Missouri, said in her speech on the Senate floor today, "[The DCAA has] gotten caught in what could be the biggest auditing scandal in the history of this town, and I'm not exaggerating here. I will guarantee you, as auditors around the country learn about this, they're going to have disbelief and raw anger that this agency has impugned the integrity of government auditors everywhere by these kinds of irresponsible actions."

POGO has long paid attention to the role of the DCAA in contract oversight. For example, please see our 2002 report, Pick Pocketing the Taxpayer: The Insidious Effects of Acquisition Reform, for details on how the agency's staffing has been gutted. Statistical data recently released on May 2008 DCAA staffing shows that the agency's staffing levels have even declined since our report, despite a spike in contracting, much of it related to the wars in Iraq and Afghanistan.

POGO has also discovered that the GAO report yesterday was not the first time that DCAA audits have not been compliant with Generally Accepted Government Auditing Standards (GAGAS). In three separate NASA Office of Inspector General reports in fiscal years 2001 and 2002, DCAA did not follow these auditing standards.

We continue to pay close attention to current investigations into this critical agency.