Senate panel to hear from auditors at troubled Defense agency

Two veteran auditors are expected to provide an inside perspective on recently reported management problems at the Defense Contract Audit Agency during a Senate oversight hearing on Wednesday.

Paul Hackler, a supervisory auditor at DCAA, and Diem Thi Le, a senior auditor at the agency, are among the witnesses scheduled to testify at the Senate Homeland Security and Governmental Affairs session. Both cooperated with a recent Government Accountability Office investigation that found DCAA managers had improperly influenced some audits in favor of large contractors, a committee source said.

The hearing primarily will explore whether the agency overemphasizes job performance metrics and moves audits through the system too quickly without consideration of their size or relative importance, the committee source said. But the panel also will review the July GAO report.

The two auditors will be joined at the witness table by DCAA Director April Stephenson; Gregory Kutz, GAO's managing director of forensic audits and special investigations; and Gordon Heddell, the Defense Department's acting inspector general.

The IG is investigating the allegations raised in the GAO report. The Defense Business Board, an independent panel of corporate executives, has been asked to examine the overall performance of the agency, and DCAA is conducting its own internal investigation.

Stephenson can expect tough questions from committee member Sen. Claire McCaskill, D-Mo., a former Missouri state auditor. McCaskill has said she believes GAO may have uncovered the "biggest auditing scandal in the history of this town."

The senator has asked Defense to fire supervisors cited in the report immediately, including those who reportedly threatened DCAA employees with personnel action if they cooperated with the GAO investigation.

Committee chairman Joseph Lieberman, I-Conn., and ranking member Susan Collins, R-Maine, also have been highly critical of DCAA. Collins said in July that the "GAO investigation raises serious concerns about DCAA's ability to effectively fulfill its critical oversight mission."

The focus of the hearing appears to be shaped by complaints about performance metrics leveled by former DCAA employees. Nearly a dozen former staffers told Government Executive in August that the audit agency is beholden more to its metrics than it is to saving taxpayer dollars.

The employees recalled times where managers pushed unfinished audits -- often with serious overbilling mistakes -- out the door in order to meet internal quotas and timetables. Meanwhile, supervisors worried about audits written in the wrong font or with minor spelling errors, the employees said.

In a memorandum to her staff last month, Stephenson acknowledged that internal performance measures could have compromised the quality of the agency's audits at times.

The director wrote that the agency would reassess its metrics to determine if they are appropriate and if supervisors are implementing them correctly. DCAA officials also are conducting a comprehensive assessment of staffing to ensure the agency has the right number of employees and distribution of offices.

Both reviews are expected to be complete by the end of September.