Pentagon contracting audit chief removed following critical Senate hearing

Introduction

The head of the Defense Contract Audit Agency (DCAA), April G. Stephenson, is being removed, according to an e-mail she wrote today to DCAA employees. And at least some observers see the move as a result of misdirected anger from Congress. Her removal comes after a contentious September hearing focused on Government Accountability Office findings of widespread deficiencies in DCAA audits conducted before Stephenson’s tenure as director of the DCAA.

One knowledgeable observer, who requested anonymity, told PaperTrail, “The Director of DCAA has been scapegoated for weaknesses in the contract audit system, both real and imagined.” DCAA is supposed to make sure that contractors are billing the government correctly for costs. The observer said Stephenson deserves much credit for policy changes that received significant pushback from the contracting community.

However, during the September hearing, Stephenson bore the brunt of criticism from members of the Senate Homeland Security and Government Affairs Committee. “I can’t understand why the management of this agency hasn’t been completely changed,” Republican Senator Tom Coburn of Oklahoma said at the hearing.

She is being reassigned to the office of Robert Hale, the Defense Department’s comptroller. She had been in the DCAA position for just over a year. Her last day in the position is November 8.

Some improvements at DCAA occurred after Stephenson launched a review of the agency’s metrics system, which had previously provided incentives for DCAA field offices to produce many audits quickly — a high-quantity, rather than high-quality approach. Another policy change removed barriers for DCAA employees to submit referrals of suspected fraud and other behavior to Defense Department criminal investigators, which PaperTrail first reported earlier this year.

Criminal investigators are indeed looking into problems related to the original 2008 GAO report on DCAA audits in California. The Defense Department inspector general’s office has launched investigations into at least one senior Defense Department official, government sources have told PaperTrail. The report states that the Defense Criminal Investigative Service “continues to investigate the actions taken by acquisition officials relating to the” Evolved Expendable Launch Vehicle program, which provides space-launch capabilities for the Air Force.