The Pentagon Is Wasting Billions Of Dollars Because It Can’t Audit Its Own Contracts

Wednesday, May 22, 2013
By Paul Martin

David Francis, The Fiscal Times
May 22 2013

The Pentagon’s internal auditing arm charged with ensuring that DOD spends its money properly has a $574 billion backlog – leaving potentially tens of billions of overpayments to contractors on the table.

The Defense Contract Auditing Agency, a little-known federal agency with a budget of $573 million, charged with independently auditing DOD contracts, is in disarray. As the name suggests, its function is simple: to audit contracts made between DOD and private businesses.

But due to a series of costly personnel decisions, a dramatic rise in defense spending over the last decade, and a 24,000-audit backlog that seems nearly impossible to clear, the agency is under fire from lawmakers for failing to complete its mandate and failing to recover tens of billions in overpayments to contractors. Private contractors, meanwhile, complain that DCAA requirements slow the contracting process to a snail’s pace while burdensome and unnecessary requirements prevent companies from competing for federal dollars.

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