Defense Audits Kept Behind Closed Doors

A Pentagon inspector general's report made headlines this summer by slamming the Air Force's purchase of 50 transport planes that jumped in price and remained unfit for combat duty five years after delivery of the first aircraft.

But the findings were old news to the Defense Department's own contract auditors. Internal Pentagon memos show that the auditors raised many of the same concerns about the plane, Lockheed Martin Corp.'s C-130J, in the late 1990s.

The memos on the rising costs had scant effect within the Defense Department, but "would have made a difference if they had been public," said a veteran auditor familiar with the C-130J.

In nearly all Pentagon acquisition programs, however, the auditors' work is routinely shielded from the public. Despite spending scandals that seem to afflict the military like a recurring virus, a fraction of the 40,000 audits performed annually faces outside scrutiny.

Officials say the procurement business requires confidentiality, but watchdog groups, whistle-blowers and some congressional critics don't buy it. They say the lack of disclosure at the little-known Defense Contract Audit Agency can allow millions in cost overruns, waste and fraud to fester for years before any corrective action is taken.

The auditors pore over acquisition proposals before contracts are awarded. They later examine billings and payments. If they discover evidence of fraud, they are required to report it to the inspector general. The auditors themselves have no enforcement power.

Other federal agencies, though not all, publicize most of their audits. They include the Government Accountability Office, which conducts audits for Congress.

The advocates for more disclosure say that the 3,500 defense auditors form a front line of resistance against rip-offs, and examine the full range of military contracts in the greatest detail. They also say the need for public access to the audits has become urgent because of the billions of dollars flowing to Iraq. But ferreting out the documents is harder under the Bush administration's post-Sept. 11 restrictions on access to defense-related material, they say.

And they contend that a decade-long push to streamline procurement has allowed contractors to undermine the auditors' mission.

"Things are much worse," said Dina Rasor, an investigator for the Military Money Project, a watchdog organization.