It really was a textbook model oversight hearing held this morning by the Senate Homeland Security and Governmental Affairs Committee. The subject was "Expediency Versus Integrity: Do Assembly-Line Audits at the Defense Contract Audit Agency Waste Taxpayer Dollars?" As readers of this blog know, the DCAA has come under intense scrutiny lately following the release of a GAO report that questioned the independence of DCAA auditors. The GAO's findings were corroborated by several auditors who spoke to the Federal Times yesterday. Chairman Joe Lieberman (I-CT) pointed out that this was exactly the kind of hearing the Committee was created to hold. He couldn't be more right, and kudos to him for holding it.
After the GAO's Gregory Kutz testified, the whistleblower witnesses were very compelling as they described the retaliation they suffered for sticking to their guns and not buckling under pressure to limit negative audit findings when scrubbing government contract numbers.
The three Senators--Lieberman, Susan Collins (R-ME), and Saint Claire McCaskill (D-MO)--all asked serious, probing questions, not only about the specific instances uncovered by the GAO's investigation, but also about the larger context that allowed this all to happen.
"Who was your customer?" was the question repeatedly asked of the auditors by the Senators. The answer was always "the contracting officer" or "the program office," but never the taxpayer.
The devastation wreaked upon the government through the "reinventing government" juggernaut of the '90s is showing its ugly legacy in the push to make the DCAA focus on finishing their audits quickly and making their "customer" happy, rather than saving the taxpayer money.
Whistleblower auditor Diem Thi Le described her early years at the agency as "the good old days," when saving money was the mission, while whistleblower auditor Paul Hackler said that the DCAA is currently "broken."
DCAA Director April Stephenson promised the Committee that she was committed to changing the metrics currently used by the DCAA to measure performance, since the metrics are all about speed and customer satisfaction and not about saving the taxpayer money.
I was also pleased to see everyone agree that it is appropriate to consider whether the DCAA should be removed from the Pentagon. It is becoming increasingly appealing to consider making it an independent Federal Contract Audit Agency, which not only could bolster its independence, but maybe that agency could also take over the work of auditing oil leases, a task which is being monumentally bungled amidst salatious misconduct over at the Department of Interior.
During the hearing, I received a barrage of emails from frustrated DCAA auditors who were watching a webcast of the hearing from their desks around the country. The general consensus of these emails was that the current DCAA management is not up for the job, that they have grown up with and accepted this upside-down system, and that it will take outsiders to fix it. My response to all of you beleaguered auditors out there is that I think we need to wait and see if April can accomplish this total overhaul with the benefit of the Senate's diligent oversight. Don't forget that the long knives are out for the DCAA--and not from the good guys. New people are almost certainly going to come from industry, and that kind of change is not what any of us would want.
-- Danielle Brian
If change does not come about in DCAA, keep writing and calling Sen. McCaskill's office, GAO and the DoD Hotline. Not only are we the little people at DCAA who have to deal with the mismanagement but we are taxpayers also and tired of seeing our tax dollars wasted by DCAA management in the bloated empire they have built.
Posted by: Dan | Sep 22, 2008 at 08:10 PM
Calling Mission Control Center-DCAA Fort Belvoir! Come in Ft. Belvoir! We have a big problem.
Unlike DCMA, which has both a uniformed military chain of command structure, as well as a civilian chain of command structure; the chain of command of DCAA is composed entirely of Federal civil service employees.
At a DCMA resident office the Commander is a high ranking military officer; perhaps one rank below a General or Admiral. His or her Deputy is a Federal Civil Service GS-14 or 15 Employee. [Military officers may have priorities, which differ from those of the civil servants.]
At a DCAA resident or branch field audit office (FAO) the FAO Manager is a GM-14. DCAA has always had a strict top down bureaucratic command system. Therefore, by definition action items at an FAO regarding the success or failure of audits would in part be a flow down from the DCAA regional offices and/or DCAA headquarters.
The number one problem for DCAA upper management/DCAA legal: How can they take any disciplinary action against any DCAA supervisors, or DCAA branch managers, or resident auditors; when these subordinates were only doing what their superiors told them to do? [Isn’t that like double jeopardy?].
Everybody have their e-mail files backed-up? Also you better keep a copy on a CD at home.
Posted by: | Sep 15, 2008 at 05:04 PM
Yeah, Franklin. TQM is wrong. It should have never been applied whole cloth from simple industry dynamics to more complex government service dynamics. There is a difference: commericial industry is profit oriented and government service is not. This blind obedience to industry concepts and buzzwords is a joke and just a specialty of those brilliant CMU grads in DCAA management. Cycle time, TQM, PWT, productivity, metrics, six sigma, workload management -these are all covers for not doing the basic audit work. All flash and no substance. Who cares if the PCO and ACO are the customers if pleasing them means wasting taxpayers money and professional credibility? Audits are not widgets.
Posted by: Yeah, huh | Sep 12, 2008 at 11:53 PM
WHO IS THE CUSTOMER ? Yes, the requestor of the audit, the PCO or ACO. That is basic TQM. OK, maybe the final customer is the taxpayer. That is a stretch. Can TQM be wrong?
Posted by: Franklin | Sep 12, 2008 at 06:16 PM
The whole "Who is your Customer" issue sounds exactly like DCMA also. In the current eyes of DCMA, the "customer" is the service Program Office rather than the taxpayers. DCMA has completely turned their back on their role as an independent contract administration organization.
Posted by: Gov Worker | Sep 12, 2008 at 03:52 PM
April does not "Get It." Remove her! She has been basically running the show for four years. Reed was asleep at the wheel. Do you think April shed a tear for the lives she ruined? Karma is brutal. She is no leader. " How many have their CPA or plan to sit for it?" That's April's Idea of leadership, she became Reed. Give me a break. How many in DCAA SES have an ounce of common sense? Clean house or better yet, let us all become an agency like GAO. The top dogs will fight this like crazy because most of them could not do an audit if they're lives depended upon it.
Posted by: Frank | Sep 12, 2008 at 10:23 AM
Ms. Brian--The idea of an independent "FCAA" is one which some years back was noised around our offices, but which may have some merit especially in the light of the situation at MMS, which will probably be the next DVD offered by the Girls Gone Wild franchise.
I also understand your concerns that any "outsider" fix may be worse than the present situation. However, the recent "fixes" implemented by DCAA (both before and after the GAO report came out) haven't done anything but make the problem worse.
As an example, on August 28 DCAA HQ issued guidance revising signature authority for audit reports and memorandums. Previously, depending on the type of audit and the findings, the branch manager/resident auditor was required to sign only reports of a "sensitive nature" (significant questioned cost, system deficiencies, etc.). Under the new guidance, the BM/RA must sign ALL audit reports.
Though this sounds like a good idea, let's not forget that in the GAO report, it was the BM/RA who was directing the reports to be changed in the first place. Now they are getting even more authority to continue the same practices as before.
Posted by: Mark Reeder | Sep 12, 2008 at 09:30 AM
To the prior commenter who states we should not criticize Ms. Stephenson as she inherited Bill Reed's mess, let's not forget that she has been a member of the DCAA SES group during the whole time that "metric-mania" has taken over the agency. If she was so interested in supporting the taxpayer, she could have spoken out and then left for greener pastures but she stayed within DCAA, tacitly supporting the culture that exists today. Only when she now feels that she may be made the sacrifical lamb in all this does she attempt to change her tune (though, by reading her written testimony, it's clear that she has no clue what the problem is or how to fix it).
Posted by: Mark Reeder | Sep 12, 2008 at 09:15 AM
Dear Readers,
I must respectively disagree with all those who would personally attack Ms. April Stephenson. People give her a chance remember she was appointed head of the agency that she has dedicated her life to less than one year ago. Speaking as someone who has spoken to her on a number of occasions I say to you with conviction that she has the attitude and ability to correct what appears to me to have been a bad culture created within one region and not the culture of the entire agency or anything that she would want to see. I'm telling you she get it. She understands that the metrics used within DCAA are not indication of the quality of work performed on an audit. What really bothers me and is sad to see is people making fun of and attacking her on such a level knowing that she has just stepped into and facing the brunt of the biggest scandal the agency has ever endured. She has been run over by a Mack Truck here people. Give her a chance to get up she'll get to the bottom of this and DCAA and the taxpayers will be better off as a result. The spotlight is on, and over time the record will speak for itself.
Posted by: | Sep 12, 2008 at 01:28 AM
April, April, April! We don’t agree with the totality of the report? It didn’t happen, It didn’t happen, It didn’t happen, but in your testimony you pose and then proceed to answer the question “So, why did this happen? You proceed to answer; through discussions with the management team you discovered those managers/supervisors made a decision not to comply with GAGAS or Agency guidance because they felt pressured to meet the due dates.
April you say you’ve been advised or instructed by DCAA attorneys not to take any disciplinary action against the supervisors cited in the report at this time. I ask would you be seeking the advice of the DCAA attorneys if this were a trainee or just a senior auditor that had explained they lied about what their examination disclosed because they felt pressured to meet their due date? Never mind! You would not even be involved. That “management team” led by the DRD would have administered the discipline appropriate with out consulting you or the attorneys.
I have heard nothing but great things about you from people that know you personally. I respect the opinion of those people because I respect those people. However, there has been a pattern, we people far less intelligent than you are able to see. Think DRD very hard! Talk to others that have worked for and with PIP queen. Then and only then the Western Region nightmare will go away.
You have a fine RD he is a stand up individual that balances appreciation with expectation. Don’t place responsibility for this at his doorstep.
Best of luck to you in your endeavor to save the Agency from further ridicule and embarrassment.
Posted by: DAN | Sep 11, 2008 at 11:08 PM
You can't trust the watchers so you set watchers over the watchers then watchers over the watchers of the watchers and where does it end? Are you getting a better deal now than you did before. The last generation of Air Force fighters took 3 years to develop, the F-22 took 25 years. That's twice as long as it took to develop the B-2 bomber, a much bigger airplane with the same generation of stealth as the F-22. It took twice as long and cost twice as much both to develop and on a per lb basis for the aircraft itself. Is that progress?
Here's an idea. Instead of coming up with yet one more bureacracy to watch the other failed bureacracies, why don't we provide financial incentives for programs to succeed instead of paying contractors more to feign incompetence? Would you be stupid enough to hire a contractor to rennovate a room in your house under a contract that required you to reimburse that contractor for all the costs they might incurr plus a profit on every day it took to get the job done? Of course not. No one is that stupid, unless you get us all together as the United States of America. Apparenly then we become that stupid because that's exactly how the US government pays contractors. Hmm, so let's see, back in the '70s when we didn't pay contractors a profit on development costs it only took 3 years to develop a fighter. Once we started paying profit on development the same job takes 25 years. Probably just a coincidence. What we really need is yet one more bureacracy.
Posted by: Dfens | Sep 11, 2008 at 11:02 PM
April was reduced to the blind bureaucrat that she is right on the live streaming feed. She has no clue how to fix this mess, mainly because she does not think its a mess. Wow, more RAM's and management will really fix the problem!!!! As it is we have too many people doing non value added work now, so lets add even more causing more grief. And it's not that we have too much work and too few to do it. We could stop performing many meanigless system audits but no we will say we are overworked. Get rid of the bloat in the Regions and HQ's now. Look at all the SES people in this agency, they all need to go. They all drink the Kool Aid. DCAA 's culture is cancer.
Posted by: Ken | Sep 11, 2008 at 08:24 PM
I respectfully disagree. It is election time. Change is in the wind for some of those who lead, and those who serve on this Congressional Committee. The Government and many of its employees have been harmed, and in my opinion it would be a mistake to allow DCAA to just internalize this stuff into the future.
Some at the highest levels of DCAA Management by the top down control of the staffing and locations of field audit offices, and the assignment of work effectively sold us out to the defense contractors and their consultants and other enablers; and have no fear of being held accountable by either the DoD IG or the DOJ. (The preparation of the memo dated August 31, 2007 to the Santa Ana Branch Office auditor trying to perform his duties by a team of lawyers at DCAA Headquarters must have exhausted them. The research! The clever cites! The careful wording! What a disgrace!)
The DoD IG Hotline may immediately betray you to whomever you are reporting to them. This is not the first time by any means! If there is any reprisal against you it is a given DCAA will do nothing (except maybe to prepare some false reports about it); and the US Attorney's Office will decline prosecution.
Most importantly defense contractors have misallocated and shifted costs from commercial contracts to Government contracts on a massive scale.
The new DCAA Director's approach to the GAO findings appears to follow Sun Tzu's Art of War Strategic Military Power edict, which states that "in general, commanding a large number is like commanding a few. It is a question of dividing up the numbers." Thus adding more DCAA managers, and reducing the span of control of the DCAA supervisors might guarantee even tighter internal controls over any "loose cannons". As stated by Sun Tzu: "thus one who excels at warfare seeks victory through the strategic configuration of power, not from reliance on men".
Posted by: | Sep 11, 2008 at 09:47 AM
Who invited Eddie Haskell to the Senate Hearing this morning? Wait, that's not Eddie; That's April Stephenson, The DCAA Director. Golly! Wally! She kept parroting, "That's unacceptable", "That's Unacceptable", "Unacceptable!" , "That's unacceptable" many times. I guess that means something. That was her predecessor's favorite word for backsliding auditors that didn't make his performance metrics; almost every manager that's wanted to get ahead in the agency has used it on their subordinates. Now, Eddie, uh, I mean April reuses the word today on those that would meet her metrics up until 10 am EST this morning - "That's Unacceptable!" , "That's Unacceptable!" I wonder if the June Cleavers in the Senate, IG, Press and NGOs will buy it. I think they have. What did Eddie say when she became the DCAA Director in the Bulletin to her employees. Quoth the Director:
"I am sure that some of you are thinking...what is the philosophy of the new Director? How will DCAA change under her leadership? What will be the new areas of emphasis? Relax - I am not looking to make major changes in the Agency. I am a process-oriented person and believe that we have sound processes in place..."
Wow, Wally, now that everyone believes the Agency is broken; Eddie now wants to change everything with a million focus groups and studies that so far have told her to increase management. Wasn't DCAA management the problem? Wow...how does Eddie do that, Wally; I mean sell you garbage that you don't need and make you like it and want more? I guess, if DCAA oversight hadn't screwed over taxpayers for billions, Eddie, uh, April would not be necessary to sustain the cronies in charge of DoD.
The way of the world, Beaver!
Posted by: Beaver Cleaver | Sep 11, 2008 at 12:32 AM
Dear Readers, 9/10/2008
As a follow-up and as I have briefly and more thouroughly read this Article that I hope my prior reply will soon be able to be posted, please allow me to mention and to remind that in response to this subject matter of this Hearing as 'Expediency versus Integrity" and the mention of the implied enthusiam and mention of US Senator Lieberman referencing ' this is the kind of Hearing this Committee was created to hold', that alomost a decade ago the Honorable Judge Judith Dent spoke at Harvard Law School Federalist Society with other Honorable Judges and said from my memory ' Our Legal Judicial system is corrupt and almost unrecognizable..... what should be decided on the merits is routinely sacrificed for political expediency... the reason this has come about is because we have desended to nihilism.'.
POGO, please submit my blog reply responses to this Committee with my/our again request for this Committee to immediately apply the hope and Integrity that we have been tirelessly and painstakingly awaiting for from this Committee with and for the Approval, Passage and implementation of the WPA that many proper and forthright People and Organizations have worked tirelessly and painstakingly with highest of commendable proper and forthright determination for the Approval, Passage and Implenmentation of the/this superb and excellent and muxh needed Federal Employee Whistleblower Protection Act.
Thank you and all for your time and Consuderation.
Sincerely,
Axel
Posted by: Axel | Sep 10, 2008 at 09:59 PM
Dear Readers, 9/10/2008
I did not know of or view these mentioned very important and serious Hearings. It appears absolutely unmistakeably clear to me and I would assume any reasonable person would completely agree that if in truth and fact that if as mentioned in this POGO Article that this US Senatorial Congressional Governmental Affairs Senatorial Committee of SENATORS JOSEPH LIEBERMAN and Senator SUSAN COLLINS are in any way serious about any concerns at all towards this Hearing they would immediately recommend to have the implementation ot the EXACT BILL THAT WAS APPROVED WITH VETO PROOF MAJORITY BY OUR US CONGRESSIONAL COMMITTEE YEARS AGO which is the FEDERAL EMPLOYEE WHISTLEBLOWER PROTECTION ACT that has been blocked and deliberately prevented from passage in their US GOVERNMENT ETHICS and AFFAIRS for many years.
Please note that Mr. Kohn of the National Whistleblower Center and Mr. Devine of the Government Accountability on 11/2003, 5 years ago!!, along wth other panels of Testimony, Testified directly and submitted with submissions to inculde the exact same FEDERAL WHISTLEBLOWER FEDERAL EMPLOYEE LEGISLATION that is stalled today in this exact US ETHICS AND GOVERNMENTAL AFFAIRS Senatorial Committee with the exact same US Senators LIEBERMAN AND COLLINS Presiding.
Again, I ask POGO directly to do your best to submit or bring to the attention of this/my blog acknowledgement reply to your/this Article to this Committee at your discretion if it will assist in the immediate and long overdue approval, passage and implementation of the unamiously and veto proof approved Congressional House WPA version with the full Jury Trials and with full Federal Court access, with full local district Federal Appeallate Court Access and the CIA, FBI and Intelligence Agency inclusion.
Also, I would also ask POGO to submit upon MR. Devine at GAP approval, the Sabersky Plan as a additional, complimemtary and/or interim consideration in respect and regard to the endeavors of our US Legislatures and those whom have advocated to properly and forthrighty worked for the approval, passage and implementation of this necessary and extraordinary, superb and excellent, proper and forthright FEDERAL EMPLOYEE WHISTLEBLOWER PROTECTION ACT.
Hopefully what I have written will allow this Senatorial Committee and our US Legislatures to immediately release from blockage this excellent WPA Legislation to allow the necessary hope to become a foreseeable reality and especially to restore the Fidelity, Bravery and Integrity in our Democracy and to uphold our US Constitution and most importantly our US Laws and Legal System that has been devasted, compromised and seemingly unrecognizable within at least the recent decade.
My continued best wishes to POGO and all within their hope for outr endeavors towards proper and forthright Oversight and Accountability in the days ahead and hopefully within the immediate future.
Thank you and all for yoru time and consideration.
Sincerely,
Axel
Posted by: Axel | Sep 10, 2008 at 09:09 PM
I don't think it's fair to criticize Stephenson. She's only been there a few minutes.
Posted by: DCAA Watcher | Sep 10, 2008 at 08:28 PM