For 45 years, the Defense Contract Audit Agency (DCAA) has ensured compliance with the terms of Defense contracts and supported contracting officers in the Defense Department. DCAA's work force is highly skilled and dedicated to continuing to do this job well.
Shay Assad, the department's director of procurement, calls DCAA "a vital part of the DoD acquisition process." At public hearings and other forums, the Commission on Wartime Contracting has commended DCAA for its aggressive audit support of contracting officers during overseas contingency operations. The agency also saves taxpayer dollars, with savings totaling more than $900 million so far this fiscal year.
Despite this record of accomplishment, DCAA's reputation has been tarnished in recent years by complaints involving poor audit quality and abusive management. Congress, the Government Accountability Office and the DoD Inspector General have all been highly critical. Many of the criticisms involved DCAA policies and metrics. These problems developed over many years and will not be fully resolved in one year. But we are acting aggressively to correct problems and to achieve meaningful improvements before the end of this calendar year.
To date, we have made progress in several areas:
Leadership. The management team at DCAA is being revamped. As the undersecretary of Defense (comptroller), I appointed a new director, Patrick Fitzgerald, who is a veteran of 30 years at the Army Audit Agency. To fill one of the key executive positions — the Regional Director for Western Region — we appointed an individual from outside DCAA who has had extensive experience in both the public and private sectors.
Mission statement. The DCAA mission statement has been revised, emphasizing the agency's role in making certain that taxpayer dollars are spent on contracts with fair and reasonable prices.
High-priority audits. DCAA resources are being directed to audits that pose the highest risk to the government and have the potential for saving taxpayers the most money. In addition, the independence of auditors is being strengthened. In December 2009, DoD established the first formal policy for resolving disagreements with DCAA audit recommendations. This policy promotes independence by allowing disagreements to be elevated to the undersecretary of Defense level for resolution, if necessary.
Audit quality. At DCAA, audit quality is defined as audits that are meaningful, timely and compliant with Generally Accepted Government Auditing Standards (GAGAS). All supervisors are encouraged to identify obstacles to compliance and to implement fixes, and auditors are required to complete GAGAS training. By Oct. 1, the highest-priority audits will be performed in full compliance with GAGAS.
Staffing and personnel policies. We recognize that DCAA's present workload exceeds the capacity of its staff. To close this gap, the agency hired 375 new auditors in 2009 and plans to hire more. Above the entry level, vacancies are being filled from within DCAA and, for the first time in recent years, outside the agency. DCAA is developing a human capital plan to focus its efforts.
We realize the ultimate success of DCAA depends on its skilled and dedicated work force. A concerted effort is being made to reach out to the work force.
As the new director, I have held more than 15 town hall meetings at various locations to interact with employees face-to-face. Employees are also being reached through e-mail and video.
To ensure that specific problems come to the attention of senior leaders, management of the agency hot line has been assigned to a member of the Senior Executive Service, and more personnel have been assigned to help resolve issues.
These actions will correct the problems that have undermined DCAA. It won't happen overnight, but we are heading in the right direction.
Robert F. Hale is undersecretary (comptroller) of the Defense Department. Patrick J. Fitzgerald is director of the Defense Contract Audit Agency.