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For Immediate Release
September 8, 2010

Grassley to Gates: Defense IG Audits Need Changes In Order to Root Out Waste

        WASHINGTON -- Senator Chuck Grassley today released an in-depth oversight review detailing numerous breakdowns in the auditing process used by the Department of Defense Office of the Inspector General (OIG).  Grassley sent the findings and recommendations to Secretary of Defense Robert Gates.


        In a letter to Gates, Grassley praised the Secretary's efforts to eliminate wasteful spending at the Defense Department, but said reliance on the Pentagon bureaucracy to eliminate waste is questionable.


        "Those are the very same powerful Pentagon 'fiefdoms' that created the problem in the first place and the very same ones that Eisenhower warned us about 50 years ago.  You need a better mix of weapons in your arsenal to get the job done. You need independent back-up and audit support from the Office of the Inspector General," Grassley wrote.

        "The Secretary's initiative is a real opportunity to get the Defense Department's fiscal house in order and show the American people we are serious about getting the spending under control in Washington.  The Inspector General should be the taxpayers' first line of defense against waste, fraud and abuse in the department," Grassley said.

        Grassley's review of the OIG Audit Office led him to conclude that the office has strayed far from the core mission spelled out in the Inspector General Act and the Audit Office is not well positioned to assist the Secretary in his hunt for waste.

        "What we found was that the underlying problem at the Defense Department appears to be an antiquated accounting system that hinders the ability and willingness of the OIG Audit Office to conduct quality, full-scope contract audits. A full-scope audit should connect all the dots between the contract and payments.  Unfortunately, instead of adapting and hitting the 'reset' button, the OIG Audit Office appears to have rolled over and given up. Top managers in the Audit Office repeatedly stated that doing contract audits are 'too difficult ..... We can't do it.'  The Audit Office needs to do a better job of identifying and planning audits that aim to significantly and immediately improve financial accountability at all levels of the department," Grassley said.

        Key findings of the oversight review include:
        •       A broken accounting system that produces inaccurate and incomplete financial data.  In most instances, there is no audit trail to follow, and the no audit trail scenario hinders and obstructs the completion of credible audits.
        •       A downhill slide in audit production and increasing audit costs.
        •       A system that creates outdated and irrelevant reports.
        •       A lack of focus on the core mission of the Inspector General: to detect, report, and deter waste, fraud, abuse and outright theft of taxpayer money and make meaningful recommendations for corrective action.

        Grassley has a long history of oversight of the Department of Defense.  In the mid-1980s Grassley famously drove his car to the Pentagon after being stonewalled by Defense Department officials who wouldn't allow him to speak with a certain department employee about a highly critical report.  The Senator didn't back down and he eventually uncovered out-of-control spending on spare parts such as $750 toilet seats and $695 ashtrays for military airplanes.  Grassley's discoveries helped pass the Kassebaum, Grassley, Boschwitz amendment which froze the Defense Department budget for a year at a time when President Reagan was trying to ramp up the defense budget.

        The letter to Gates and full oversight review can be found on Grassley's website, http://grassley.senate.govClick here to read a copy of the letter to Gates and click here to read the full review.