Hotline Allegation Regarding the Failure to Take Action on Material Management and Accounting System Audit Findings
Abstract
We conducted this review to determine the validity of a DoD Hotline complaint alleging that the contracting officer at a Supervisor of Shipbuilding, Conversion and Repair (SUPSHIP) facility failed to take action on audit findings reported by the Defense Contract Audit Agency (DCAA) involving a DoD contractor's Material Management and Accounting System (MMAS). The complaint also alleged that DCAA management at a field audit office did not take appropriate action to protect the Government's interests. We substantiated the allegation that the SUPSHIP contracting officer did not take action on significant MMAS deficiencies reported in multiple DCAA audit reports since 1996. As a result, the Government likely paid millions of dollars in excess material inventory carrying costs and other charges, which are not recoverable. In 2008, DCAA estimated that the Government incurred $27.7 million annually in excess inventory carrying costs on one of the deficiencies involving the failure to appropriately time-phase material costs, as Standard 2 requires. We did not substantiate the second allegation that DCAA field office management failed to take appropriate actions to protect the Government's interests. We recommend that the Commander, Naval Sea Systems Command, take appropriate administrative action, including personal accountability, for the failure of SUPSHIP to take action on the reported MMAS deficiencies. In consultation with DCAA, we also recommend that SUPSHIP promptly evaluate the adequacy of the contractor's plan for correcting the deficiencies.
Document Details
- Document Type
- Technical Report
- Publication Date
- May 29, 2013
- Accession Number
- ADA581039
Entities
People
- Randolph R. Stone
Organizations
- Office of the Inspector General, U.S. Department of Defense