OPENING REMARKS OF CHAIRWOMAN HARTZLER

Apr 6, 2017
Press Release
SUBCOMMITTEE ON OVERSIGHT & INVESTIGATIONS

WASHINGTON - Today, Rep. Vicky Hartzler (R-MO), Chairwoman of the House Armed Services Subcommittee on Oversight and Investigations, made the following remarks, as prepared for delivery, on the hearing titled “Evaluating the Defense Contract Audit Process.”  For hearing testimony and to watch the hearing live click here.

"Over the last 15 years, the Department of Defense has become increasingly reliant on the use of government contractors.  When used properly, this public and private partnership can both improve our national security and at the same time preserve limited government resources.

But, this work requires competent and timely oversight.  To that end, financial audits of defense contracts can play a vital role in ensuring that expenditures paid by the government for goods and services are fair and reasonable.  It also ensures that tax payers are getting the best bang for their buck.  

Within the Department of Defense, the Defense Contract Audit Agency (or DCAA) is charged with this critical mission.  Today’s hearing seeks to learn more about where the auditing process is working and identify any shortcomings with current accounting efforts.

I’m always looking for productive ways to improve government performance.  I look forward to hearing from our witnesses about their feedback on the current auditing system.

At the outset, I have several overarching questions about how the audit process is working within DCAA.  In particular, for years, DCAA has had a significant backlog of 'Incurred Cost Audits.'  These audits are meant to identify instances where the government might have overpaid.

  However, as I understand, it has been taking on average more than 2 years from the time DCAA receives the information necessary to conduct an incurred cost audit to the date the audit report is issued.  These delays can create problems for government contract managers.  Their efforts to recover improper costs are slowed.   It also means managers do not have important financial information available soon after an expenditure takes place, when the information is most important.

From a business perspective – this delay can also create economic burdens.  I look forward to hearing from our panel of industry experts on how these delays impact the private sector.   

I also have questions about how efficiently DCAA is performing these incurred cost audits.  Although they account for the most significant portion of total costs audited each year, these audits only account for a relatively small amount of reported savings.  I want to understand how much these audits are costing American tax payers compared to the return from that cost.  

On a related note, I’m interested to hear from our witnesses about how DCAA audit practices compare to what is commercially acceptable in the private sector.   Perhaps there are lessons to be learned outside of government that could improve defense contract audit performance.

The bottom line is simple:  we all want a fair, efficient, and timely auditing process that works for all interested parties.  I look forward to everyone’s views this morning in addressing these important topics."