Mr. President, I will speak as in morning business, so I am happy to yield now to the Senator from New Mexico. I am happy to do that. Mr. President, I ask unanimous consent to speak as in morning business. Mr. President, I thank my friend…
Mr. President, I will speak as in morning business, so I am happy to yield now to the Senator from New Mexico. I am happy to do that.
Mr. President, I ask unanimous consent to speak as in morning business.
Mr. President, I thank my friend from New Mexico. I know his service in this body is one that every American should admire. He is a good Senator for his State. He has been a warm and friendly senior Senator to this very junior Senator from Missouri. I appreciate his friendship very much.
Mr. President, yesterday there was an incredibly dark cloud that passed over Washington. I think the saddest thing about this very dark cloud is the fact that there wasn't an immediate outcry from every corner of this building and every office in the Pentagon. One of the most frustrating things about Washington is the attention span of so many in Washington and the search for the headline that is the most sensational. So it is no wonder that news about auditing doesn't bust out.
I come to the floor to try to emphasize the crisis we are facing right now in terms of the Pentagon and auditing of taxpayer dollars.
Let me briefly explain the two agencies involved. One is the Defense Contract Audit Agency. What is DCAA? That is part of the problem. Nobody knows what it is. Nobody knows what it does. DCAA is the auditing agency in the Department of Defense that is responsible for auditing the contractors. Think about that for a minute: 3,500 people are employed by this Agency, and they are our eyes and ears into contractor practices at the Department of Defense. We are talking serious money here. We are talking about hundreds and hundreds of billions--with a ``b''--of dollars.
One would think that if we have 3,500 people working full time to audit the contractors, we should all feel good about that and, frankly, before yesterday, I kind of felt good about it. As I learned about all of the auditors of the Department of Defense, I thought: I am glad we have an agency with the responsibility to get to the bottom of the prices that were charged by contractors, to get to the bottom of the money that comes out of our Treasury for contractors--until yesterday.
The other agency involved is the GAO. I know the initials ``GAO'' are thrown around all the time. Let me explain what GAO is. GAO is the Government Accountability Office. They are what I would call the papa bear of auditors in Government. They are the auditors who look at all parts of Government, many times in response to a request by Congress but many times in response to a hotline call they have gotten from people within Government.
They start getting hotline calls about the practices at DCAA. This is enough to worry an auditing agency, that they are getting hotline calls on an auditing agency. This is enough to get their attention. So GAO started this audit of the Defense Contract Audit Agency based on complaints to their fraud hotline.
Here is the allegation. Are you ready for this? Here is the allegation: that these audits were being changed with no factual basis at the direction of supervisors, without evidence to support the changes, to help the contractors. This is a wildly sensational claim within the world of auditing. This is the kind of claim that, frankly, most auditors would probably not take seriously because it is so outrageous. But because there had been so many calls to the hotline, GAO went to work, over 100 interviews, months and months of work, and yesterday they issued their report.
They looked at 13 different audits named in the complaints and found that in every single audit, favorable findings for the contractors had no backup in the workpapers. What does that mean? If you are an auditor, your job is to find the facts. Everything you put in an audit has to be backed up by what are called workpapers. That means that anybody at any time could go in and find the factual evidence to support every line in the audit. That is part of Government auditing standards.
What else did GAO find? You are not going to believe this. You are not going to believe how bad this is. They found that supervisors dropped findings and changed opinions without the evidence to support it. They found several instances where auditors were threatened if they did not change their findings to support what the supervisors wanted and if they did not change their findings to favor the contractors. GAO found this practice to be so pervasive at two of the three locations, they called it ``a pattern of frequent management actions that served to intimidate auditors and create an abusive environment.'' These auditors were intimidated by supervisors and made to tell them what they were telling GAO. So not only were the supervisors on the auditors to do findings favorable to the contractors, they got on them when they started talking to GAO. They intimidated them into telling them what they were telling the investigators, the auditors from GAO. Their supervisors made them feel their jobs were threatened.
At one location, auditors were sometimes given 20 days to finish an audit, and if it wasn't enough time to do the audit work, they said: Just do it; just do it with what you have.
Supervisors admitted to not reviewing the workpapers. That doesn't sound like a big deal, right? Who reviews workpapers? Let me tell you, in the world of auditing, it is a very big deal.
This is how an audit works. The field auditors gather the papers, the factual information, and then it goes through a series of reviews and checks. It is ultimate quality control in an audit. It is unheard of for an audit to be issued without review up the line. That review is how you cull the information that is incorrect and make sure everything in that audit is factual and objective.
Here is a very good example of how serious and systemic the problem is. DCAA actually agreed with a contractor, one of the five largest contractors in the country, ahead of time what items would be reviewed for the audit. It is like giving a kid the answers to the test. There is no point in doing an audit if you tell the auditee ahead of time: OK, we are going to test you on this.
Here is the amazing thing. Even with the inside information, the DCAA auditors found the process to be inadequate with the contractor. Did they issue an unfavorable opinion? Oh, no, they didn't issue an unfavorable opinion. Instead, the auditor was removed by a supervisor. The new auditor was threatened with personnel action if the audit was not changed to favor the contractor.
In every single one, all 13 audits that were reviewed, the GAO found that Government auditing standards were not followed.
There is a book in auditing called the Yellow Book. It is the bible of auditing. It is the generally accepted Government auditing standards, and every Government auditor is required to follow these standards. Once again, auditors have a lot of professional pride about the objectivity of their work and about the standards they follow. It would not be effective if you had auditors who were auditing the government in Michigan and auditors who were auditing the government in San Francisco and auditors who were auditing the Pentagon all using different methodology to do audits. So this standard is, in fact, revered within the Government auditing world.
Here is what is amazing. Thirteen audits were looked at. Did one of them not meet standards? No. Did two of them not meet standards? No. Every single audit failed Government auditing standards--13 of 13, 100 percent. This is mind-boggling, that we would have 3,500 people watching Defense Department contractors in this country and every audit that was looked at was failed by Government auditing standards. Nine of the thirteen had audit opinions changed without documentation and without workpapers to support the charges. Three had evidence that showed the DCAA auditor trying to perform his or her job and his independence impaired by his supervisors. Nine of the thirteen audits had conclusions that were not supported by the work performed by the auditors.
They got caught. They have gotten caught in what could be the biggest auditing scandal in the history of this town. And I am not exaggerating. I will guarantee you, as auditors around the country learn about this, they are going to have disbelief and raw anger that this agency has impugned the integrity of Government auditors everywhere by these kinds of irresponsible actions.
By the way, auditors are very conservative with other auditors. Every
auditing agency has peer review. By the way, GAO has always passed all of its peer review without any problem. But I know when we were getting peer reviewed when I was the State auditor in Missouri, it was a very nervous time because auditors come into your office from all over the country and they pore through your work. They go through your workpapers. They check all of your reviews. They, in fact, as an objective third party, look and make sure you are doing objective professional government auditing work. They are very conservative because it is peer to peer, right? It is hard to criticize your peers. It is hard to call out another auditor. That is why this is such a big deal. It is damning. This audit is damning of DCAA and the job it should be doing to protect Government taxpayers from the incredible waste and inefficiency in the contracting of the Department of Defense.
So when you get an audit, another part of the audit is you respond to the audit. The auditee gets an opportunity to speak in the audit. It is a very good thing because the auditee, if they firmly believe the audit is not justified, has an ability to give their side of the story. It also allows the opportunity to make sure you are exchanging information. So that response in the audit is also a part of Government auditing standards.
Let me tell you, when they got this audit, it was a dark day for them, and they had a choice. DCAA had a choice. They could have come forward and said: We have a big problem here and we have to clean house, and announced they were firing people in all of these offices and that supervisors were being fired and that they were going to clean up their act. That was one choice they had, to admit they had been caught in this scandal and to admit they would make it better. But what did they do? What did DCAA do as a result of this incredible audit report? They ``disagreed'' with the totality of the audit.
Here is what is so insulting about them disagreeing with the totality of the audit. They have no evidence to back it up. They have nothing to refute. The voluminous--this is not a small audit, this is page after page of documentation. They dispute the facts about the contractor being given prior notice that he would be audited in the above case even though there is clear evidence to support this conclusion in the DCAA workpapers.
They said, believe it or not--wait until you hear this:
They are currently operating at a satisfactory level of
compliance with Government auditing standards.
Satisfactory? Thirteen out of thirteen failing Government standards, and that is satisfactory? How dare they. How dare they say that is satisfactory. They flatly stated they don't believe any supervisors harassed or intimidated staff or willfully removed findings. The evidence is there. The fact they are denying the evidence is there shows the level of dysfunction in this auditing agency. They don't seem to be too concerned about zero percent of these audits meeting Government standards.
The Department of Defense has been on the high-risk list of this Government for more than a decade. Scandal after scandal has rolled out of the Department of Defense on contracting.
I took a trip to Iraq on contract oversight, and with an auditor's eye, meeting with the people who oversee the contracts in Iraq. And I will tell you conservatively--and auditors are very conservative-- conservatively, I think we have burned up more than $150 billion in pure contracting abuse.
We have had hearings where weapon system after weapon system comes in 100 percent more expensive, 3 or 4 years off time. And all this time we have been wasting hundreds and billions of dollars, the fox was in the chicken coop. The Defense Contracting Auditing Agency has been indicted in the strongest terms by their peers at GAO.
This situation demands hearings. And if somebody doesn't lose their job at DCAA before nightfall, the problem is more serious than anybody in this Chamber can possibly imagine. Because they think they can sweat it out. They think we are not going to pay attention. They think we are going to move on to the next headline, the next campaign stop. They think we are so worried about all the other problems that no one is going to notice this auditing agency has been disclosed and exposed as being fundamentally corrupt in the way they issue audits.
It calls into question every single audit done by this agency. And if we don't take it seriously, if we don't give it our attention, if we don't demand that the fox get out of the chicken coop, and we start taking care of taxpayer dollars, ultimately it is our national security. All of the needs we have for our men and women who fight for us, all the needs of our active military, all the technology we need to stay secure and safe, all of it is so important to our Nation. Yet what we have found out in the last 24 hours is no one is paying attention to the way we are spending that money. It makes me sick to my stomach.
I am angry. And I will tell you, this Senator is not going away on this issue. If I have to stand on this floor every day for the next 6 months, I will do it, to get someone fired at that agency and to get them to clean up their act.
Mr. President, I yield the floor.