{"database": "press", "table": "releases", "rows": [["https://web.archive.org/web/20140221043323/http://www.grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=47565", "Grassley Reports on Possible Audit Misconduct at Defense Department", "2013-11-22", "2013", "2013-11", "Republican", "House", "IA", "Charles Grassley", "G000386", "web.archive.org", null, null, "legacy", "WASHINGTON \u2013 Senator Chuck Grassley today said that the Department of Defense\u2019s flagship accounting agency, the Defense Finance and Accounting Service (DFAS), likely did not earn clean opinions on its own financial statements despite claims to the contrary, putting the Secretary of Defense\u2019s audit readiness initiative in jeopardy.  \n\u00a0  \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In addition, the Office of the Inspector General (IG) seems to have turned a blind eye to the problems within the Defense Finance and Accounting Service.\u00a0 The IG appears to have buckled under pressure from the Defense Finance and Accounting Service when it attempted to conduct oversight of the troubled agency\u2019s financial statements required by the Chief Financial Officers Act.\u00a0 Because of all the bungling and ethical missteps on these audits, the independence and integrity of the Inspector General\u2019s audit process may have been compromised.  \n\u00a0  \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Grassley released the findings and recommendations in a staff oversight report.\u00a0 These have been forwarded to Secretary of Defense Chuck Hagel and Defense Department Inspector General Jon Rymer in a joint letter today.  \n\u00a0  \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u201cAudits are a primary oversight tool for rooting out fraud and waste in the government.\u00a0 To protect taxpayers, these government audits must be as good as they can be,\u201d Grassley said.\u00a0 \u201cEffective audit reporting is the key to pinpointing long-standing accounting deficiencies that allow waste and theft to go undetected and unchecked.\u00a0 Hard-hitting audits should help senior management separate the wheat from the chaff and apply mandated cuts where they are needed most. But, as long as the Inspector General\u2019s audit shop remains weak and ineffective, the probability of rooting out much fraud and waste during sequestration is very low.\u00a0 And, instead of helping identify where savings can be made, it looks like the Defense Finance and Accounting Service may be trying to hide its own problems by pretending their books are in order and then running roughshod over anybody who dares to question their \u2018clean\u2019 audit.\u201d  \n\u00a0  \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In April 2012, Grassley began receiving allegations of misconduct regarding the Defense Finance and Accounting Service opinion audits.\u00a0 Grassley staff initiated a review of official records of those audits with the guidance of Certified Public Accounting (CPA)-qualified government auditors.\u00a0  \n\u00a0  \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u201cDiscoveries in these documents, when coupled with verbal and written interviews of knowledgeable officials, tell the story of what really happened.\u00a0 And it\u2019s not a pretty picture.\u00a0 If this snapshot is characteristic of the work being produced by that office, we have a problem,\u201d Grassley wrote to Hagel and Rymer.\u00a0 \u201cTo make matters worse, the Inspector General -\u00a0 the institution that exists to root out fraud, waste and abuse \u2013 appears to have played the role of silent enabler in the alleged misconduct.\u00a0 It\u2019s a disgrace to the Inspector General community.\u201d  \n\u00a0  \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Click here to read the letter to Hagel and Rymer.\u00a0 Click here to read the report.  \n\u00a0  \n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Here is a summary of Grassley\u2019s findings in the report.  \n\u2022\u00a0\u00a0\u00a0 A CPA firm awarded \u201cclean\u201d opinion audits on financial statements produced by DFAS since fiscal 2002.\u00a0 The Inspector General took a two-year snapshot and examined the firm\u2019s opinions, but the Inspector General didn\u2019t report on whether they met prescribed audit standards, as required by the contract, policy, and law, due to a series of ethical and legal blunders.  \n\u00a0  \n\u2022\u00a0\u00a0\u00a0 The work performed by DFAS was substandard.\u00a0 The outside CPA firm rubber-stamped DFAS\u2019 flawed practices using defective audit methods.  \n\u00a0  \n\u2022\u00a0\u00a0\u00a0 The IG was steamrolled by DFAS and possibly other forces and pressured not to call foul on the outside CPA firm.\u00a0 Instead of exposing poor practices by both DFAS and the CPA firm, the IG tried to cover its tracks.  \n\u00a0  \n\u2022\u00a0\u00a0\u00a0 The bungled opinion audits of DFAS have the potential for undermining the credibility of the Secretary of Defense\u2019s audit readiness initiative and the independence and integrity of the audit process may have been compromised.  \n\u00a0  \n\u2022\u00a0\u00a0\u00a0 DFAS\u2019 apparent inability to accurately report its own internal \u201chousekeeping\u201d accounts of $1.5 billion casts doubt on its ability to accurately report on the hundreds of billions of dollars the Defense Department spends each year. If the department\u2019s central accounting agency can\u2019t earn a \u201cclean\u201d opinion, then who in the department can?  \n\u00a0  \nHere are Grassley\u2019s recommendations in the report.  \n\u00a0  \n\u2022\u00a0\u00a0\u00a0 The Department of Defense Chief Financial Officer should \"pull\" the DFAS Working Capital Fund financial Statements for fiscal 2008 and 2009 and remove those audit opinions from official records.  \n\u00a0  \n\u2022\u00a0\u00a0\u00a0 The Office of the Inspector General needs to undertake an independent audit of DFAS' financial statements for fiscal 2012 and/or 2013 and determine whether those statements and the CPA firm's opinion report meet government audit standards as required by the IG Act.\u00a0 This work needs to include the verification of the fiscal 2012 beginning account balances.\u00a0 The OIG examination should be coordinated with and reviewed by the U.S. Government Accountability Office (GAO).\u00a0 Consistent with this recommendation, the Office of the Inspector General has already initiated a \"Post Audit Review\" of DFAS' fiscal 2012 financial statements. And at Grassley's request, the GAO has agreed to independently validate the results of that work to ensure that it meets all applicable standards. This work is ongoing.  \n\u00a0  \n\u2022\u00a0\u00a0\u00a0 The Inspector General should address and resolve any allegations of misconduct involving DFAS officials and make appropriate recommendations for corrective action.  \n\u00a0  \n\u2022\u00a0\u00a0\u00a0 Grassley will refer allegations of misconduct by OIG staff to the Integrity Committee of the Council of the Inspectors General on Integrity and Efficiency for further review and resolution as provided under the IG Reform Act of 2008.  \n\u00a0  \n-30-", 1, "2026-03-30T12:14:52Z", "2026-03-30T12:14:52Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://web.archive.org/web/20140221043323/http://www.grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=47565"], "units": {}, "query_ms": 1.766870031133294, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}