WASHINGTON— Homeland Security and Governmental Affairs Committee Chairman Joe Lieberman, ID-Conn., and Ranking Member Susan Collins, R-Me., said Wednesday continued systemic weaknesses at the  Defense Contract Audit Agency (DCAA), three years after they were first brought to light, were unacceptable. The Senators suggested that the DCAA might need to be separated from the Department of Defense (DOD) to ensure its independence.

At a hearing titled “Defense Contract Audit Agency: Who Is Responsible for Reform?” the Government Accountability Office released a report requested by Lieberman, Collins, and Subcommittee on Contracting Oversight Chair Claire McCaskill, D-Mo., that marks the fifth report by GAO, the DOD Inspector General, or the Defense Business Board critical of the auditing standards of DCAA.

 “The Committee has run out of patience,” said Lieberman.  “Too much is on the line and the time for incremental changes is over.  Each and every audit that GAO reviewed failed to meet auditing standards.  That is not an aberration or a case of a few employees not knowing what to do.  That indicates systemic issues within the agency. I expect strong leadership from the DOD so that our Committee will not be sitting here a year from now discussing the same old problems.  We need to identify the root causes and get on to the solutions that the taxpayers demand and certainly deserve.”

            Collins said: “The Department of Defense and other federal agencies rely on DCAA to detect waste, fraud, and abuse. It is, therefore, unacceptable for this federal policing agency to continue to have significant performance failures.  With more than a little frustration, I note that we are here almost one year to the day since the Committee’s last hearing on this very same topic—DCAA’s poor performance.  I think it’s important for the witnesses to know why we feel so strongly and why there’s such a sense of outrage among all of us” on the Committee.  She said the auditors’ job is to provide critical oversight on contracts worth billions of dollars, “an enormous investment” of taxpayer dollars, and that the goods and services involved go to support American troops in harm’s way.  “We have to get this right,” Collins said.  “We cannot be back here again next September,” asking the same questions about the same structural flaws.

In September 2008, the Committee held a hearing detailing consistent quality problems and a troubling work environment in DCAA’s Western Region.  The senators requested that GAO expand its inquiry to see if the problems existed in other regions as well.

The DCAA has over 300 offices and approximately 3,800 auditors throughout the world conducting over 30,000 audits a year, covering $501 billion in proposed or claimed contracts costs in 2008.

            Witnesses were: Gregory D. Kutz, Managing Director, Forensic Audits and Special Investigations, U.S. Government Accountability Office; The Honorable Robert F. Hale, Under Secretary of Defense (Comptroller) and Chief Financial Officer, U.S. Department of Defense; The Honorable Gordon S. Heddell, Inspector General, U.S. Department of Defense; and April G. Stephenson, Director, Defense Contract Audit Agency, U.S. Department of Defense.