Approving faulty audits

Sunday, July 27, 2008 | 2:06 a.m.

In the process of equipping the nation’s armed forces, the Pentagon repeatedly has been accused over the years of handing out bloated contracts, such as the one for the infamous $640 toilet seats purchased by the Navy in the 1980s. The best safeguard in place to protect taxpayers from even more wasteful spending is the Defense Contract Audit Agency — or so we thought.

The Government Accountability Office, the investigative arm of Congress, disclosed last week that auditors within the agency were pressured by their superiors from 2003 through 2007 to produce audits that downplayed overbilling or other shoddy business practices committed by seven unnamed defense contractors. The Washington Post, citing Senate sources, reported that the contractors included Boeing and Northrop Grumman.

The agency, which reports to the Pentagon’s financial manager, was found to have approved 14 audits that didn’t meet professional auditing standards. In one case, an auditor investigating a contractor’s billing system found the company may have overbilled the government by at least $3.5 million. That auditor was replaced by other auditors who gave the contractor an adequate grade even though their conclusions were not supported.

The Senate Homeland Security and Government Affairs Committee and the House Oversight and Government Reform Committee, which received the report, should direct the Pentagon’s comptroller to discipline the supervisors responsible for the faulty audits and make the necessary changes to ensure that the auditors do their jobs properly. The Pentagon also must work harder to rid itself of the culture of wasteful spending that has tarnished its image and gone on for too long.