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Project on Government Oversight




Watchdog Says Defense Contract Audit Agency Resisting Meaningful Reform

March 2, 2010 


The Project On Government Oversight (POGO) sent a letter today to Senate committees urging them to continue to conduct oversight over the Defense Contract Audit Agency (DCAA), warning the committees that they feared that the reforms occurring at the agency were only superficial responses to political pressure.

The letter, based on concerns several DCAA auditors brought to POGO, focuses on whether DCAA is meaningfully addressing human capital management challenges that the Government Accountability Office found had a "detrimental effect on audit quality." In particular, the group cites DCAA headquarters' stonewalling a grassroots group established within the agency to analyze the promotion system as a possible indication that DCAA headquarters is not committed to fixing the agency's problems. The group was disbanded after DCAA management refused to give them the information they needed to test the promotion system, though a new group with a more limited methodology has been formed since this group was disbanded.

Additionally, POGO argues, the DCAA hotline for auditors to report management problems, established to ensure audit quality, may be serving as a tool for retaliation against the kind of independence in auditing that DCAA should be fostering by relying on managers that may be accused of wrongdoing to act upon the hotline's findings, presenting an obvious conflict of interest.

“The Pentagon thinks they got Congress off their back by removing the Director of the Defense Contract Audit Agency, but the problems at DCAA are far from solved,” said POGO Executive Director Danielle Brian.

Fearing that in the long run DCAA can never operate independently within the Department of Defense, POGO recommended Congress make DCAA part of an independent federal contract audit agency. In the short-term, POGO also urged the committees to address the agency's systemic problems by advising DCAA to restructure their hotline program to increase independence and continuing to pressure DCAA to hold accountable managers or supervisors that inappropriately changed audit opinions, facilitated "cozy" relationships with contractors, or created an abusive work environment. 

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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