For Immediate Release


Keith Rutter
Phone: 202-347-1122

Federal Government Needs Strong, Independent Auditor to Oversee Billions in Contract Spending, POGO Tells Senate Panel

WASHINGTON - The responsibility of auditing the hundreds of billions of dollars spent
each year on defense and civilian contracts should fall to a single,
independent agency that is outside of the Pentagon’s chain of command, the
Project On Government Oversight (POGO) told a U.S. Senate panel today.

Rather than creating a new bureaucracy, Congress could simply expand the
duties of the existing Defense Contract Audit Agency (DCAA), while making it
independent of the Department of Defense (DoD), POGO Director of Investigations
Nick Schwellenbach told the Senate Homeland Security and Governmental Affairs
Committee’s Subcommittee on Contracting Oversight.

Unlike most agencies, a new Federal Contract Audit Agency
(FCAA) could save more money each year by uncovering waste and fraud than it
would cost to run it. The FCAA would provide a needed check on contractors,
ensuring that the government is not overcharged for goods and services.

An independent, central auditor would be more efficient
than the current system, under which  contract audits are performed by the DoD’s DCAA,
small auditing offices in other agencies, contracted auditors, and various
Inspectors General. Non-DoD agencies, which currently can utilize the DCAA for
a fee, would have a greater incentive to use a central auditor.

It is essential that a new FCAA be given enough resources
and authority to succeed. The DCAA is woefully understaffed, and there are also
concerns that it is “risk-averse,” not having issued a subpoena to a contractor
in more than 20 years.

“Contract auditors provide a great return on investment and
save far more money than they cost,” Schwellenbach said. “We believe an FCAA makes
sense, but even if DCAA remains within DoD, it needs to be as strong as

Testimony of Nick Schwellenbach, February 1, 2010.

For more information on government contract audits, click here.


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The Project On Government Oversight (POGO) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more effective, accountable, open and honest federal government.

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