McCaskill: Contract Auditors Responsible For Shoddy Work Must be Fired

WASHINGTON, D.C. – Officials from the Defense Contractor Audit Agency (DCAA) faced tough questions today about the agency’s major deficiencies when they testified before the Homeland Security and Government Affairs Committee. A Government Accountability Office (GAO) report released today outlined continuing problems with the agency, and U.S. Senator Claire McCaskill demanded to know why, over a year after problems were first uncovered, those responsible have still not been held accountable.

Watch video of the hearing

“I used to be a prosecutor before I was an auditor, and in the criminal law we have ordinances, then we have misdemeanors, then we have felonies, then we have capital crimes. And criminal conduct ranges from one end to the other. In the world of auditing, what has been committed here is a capital crime. There can be no greater indictment of an audit agency than this GAO report,” McCaskill said.

Citing today’s GAO report that outlined the extent of the DCAA’s failures, McCaskill focused on one example among many. She read a section of the report about a DCAA audit of one of the five largest defense contractors in Iraq.

The contractor initially failed the lengthy review; however, after the contractor exerted pressure and persuasion over agency supervisors, the auditors took steps to reassess the contractor and changed the review. As part of the new review, an interim audit supervisor directed auditors to throw out documentation citing some of the worst violations by the contractor and alter sections of the review, including pasting the signature from the former supervisor on a new draft of work papers to make it appear as if the supervisor has approved them.

“In April 2007, SIGIR, the Special Inspector General for Iraq Reconstruction, reported that, in spite of being paid $3 million to complete the renovation of a building in Iraq, the contractor’s work led to plumbing failures and electrical fires in a building occupied by the Iraqi civil defense directory. Now, I have one simple question: has that interim audit supervisor been fired?” McCaskill asked.

McCaskill continued, “Has that interim audit supervisor, who told that auditor to commit fraud by copying and pasting a supervisor’s signature to work papers, have they even been demoted?”

Despite some attempt to clarify the circumstances, the DCAA officials admitted that fraud had occurred and no one had been fired or demoted, and in fact the interim supervisor has been promoted.

McCaskill also referenced the Walter Reed Army Medical Center scandal when the Washington Post reported in early 2007 that major failures within the organization had resulted in abysmal conditions for wounded service members. McCaskill recalled being impressed that Secretary Robert Gates held officials at the top of the organization accountable by firing the officer responsible for the entire Army Medical Command. McCaskill suggested the same brand of accountability was needed for DCAA.

“I admired Secretary Gates, and I really was beginning to believe that we had in the military now someone that understood that when you have a scandal, you must have accountability,” McCaskill said. “Let me say for the record, that no one has been demoted over this capital offense. No one has lost their job.”

McCaskill continued, “If somebody is not fired over this, I don’t think anyone should ever take this agency seriously again.”