Government Accountability Office investigations of the Department of Defense

Government Accountability Office investigations of the Department of Defense are typically audits in which the Government Accountability Office (GAO), the United States Congress’ investigative arm, studies how the Department of Defense spends taxpayer dollars. Since the GAO is accountable only to the legislative branch, it is in a unique position to investigate the military; no other agency can audit Federal departments with the same degree of independence from the President. However, the GAO is still subject to influence from powerful members of Congress.

Two examples of major GAO investigations in the 2000s were the audits of Operation Iraqi Freedom and Defense Department airline reimbursements.

Major investigations

Operation Iraqi Freedom

GAO investigations into Operation Iraqi Freedom revealed a number of accounting problems, ranging from the mundane to the severe. Pay irregularities were a chronic problem. According to a GAO report cited in "Computerworld", 450 of the 481 Army National Guard soldiers from six Special Forces units had at least one pay problem associated with their mobilization. The report found, "DOD’s inability to provide timely and accurate payments to these soldiers, many of whom risked their lives in recent Iraq or Afghanistan missions, distracted them from their missions, imposed financial hardships on the soldiers and their families and has had a negative impact on retention" [http://www.computerworld.com/managementtopics/management/itspending/story/0,10801,94392p2,00.html] .

The investigation also uncovered questionable procurement arrangements with Halliburton. According to a United Press International article published in "The Washington Times", the Kuwaiti-owned Timimmi Company had been serving hot meals to troops stationed in Iraq for $3 a meal. The contract was later reassigned to Halliburton, which raised the price to $5 a meal, subcontracted the meal services back out to Timimmi, and kept the 40% difference. GAO Analyst Neil Curtain exposed the problem in a Congressional hearing, noting, "Certainly that’s unfair to the taxpayer" [http://washingtontimes.com/upi-breaking/20040615-082100-3407r.htm] .

As the investigation into Iraqi Freedom progressed, it began turning up worse and worse procurement problems. GAO auditors caught the Department selling new chemical and biological protective garments on the Internet for $3 each. At the same time, the Pentagon was buying identical garments elsewhere for more than $200 apiece. Other accounting snafus resulted in the Army losing track of 56 airplanes, 32 tanks, and 36 Javelin missile command launch-units [http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/05/18/MN251738.DTL] .

The GAO found that the waste encountered in Iraq is symptomatic of a wider inventory-control problem. More than 200 inventory-control systems at the Defense Department still are not integrated. The GAO notes, "Poor communication between services within the Department of Defense and improper accounting results in the disposal of needed spare parts and the purchase of duplicative parts worth millions of dollars" [http://www.house.gov/defazio/102699DERelease.htm] .

Airline reimbursements

A more recent GAO investigation revealed $100 million in wasted airline fees. The Associated Press notes that the Defense Department spent an estimated $100 million for airline tickets that were not used over six years and failed to seek refunds even though the tickets were reimbursable. The Department also reimbursed employees for airline tickets that had been purchased by the Department. To demonstrate how easy it was to have the Pentagon pay for airline travel, the investigators posed as Defense employees, had the department generate a ticket and showed up at the ticket counter to pick up a boarding pass [http://www.usatoday.com/travel/news/2004-06-09-pentagon-flights_x.htm] .

The GAO also uncovered several incidences of airline-related fraud. One DOD traveler used a Department account number to pay for more than 70 airline tickets totaling more than $60,000. He then sold them at a discount to coworkers and family members for personal travel. Another employee admitted to "accidentally" claiming reimbursement for $10,000 worth of airline tickets that had been paid for by the Department.

GAO influence over Defense Department reform

Defense Department responses to investigations

There is evidence that GAO investigations are encouraging the Department to reform. The Halliburton contract was re-negotiated and assigned directly to Timimmi. And Dov Zakheim, chief financial officer for the Pentagon, said, "We are overhauling our financial management system precisely because people like [GAO Comptroller General] David Walker are rightly critical of it" [http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/05/18/MN251738.DTL] .

These audits appear to have been more effective at prompting reform than the Defense Department’s own initiatives. In 1989, the Department began attempting to unify more than 2,000 overlapping systems used for billing, inventory, and personnel. But after spending $20 billion, the initiative was abandoned. Gregory Kutz, director of GAO’s financial management division, noted the Pentagon’s weak fiscal control over its subsidiaries – the Army, Navy, Air Force, and Marines – saying, "The Pentagon’s inability to even complete an audit shows just how far they have to go" [http://nuclearfree.lynx.co.nz/trillionbuck.htm] .

Threats to GAO independence

Scholars believe, however, that the GAO’s authority could be undermined in the wake of a landmark case, Walker vs. Cheney. This Federal lawsuit pertained to a GAO investigation into the Bush Administration’s Energy Task Force. Vice President Richard Cheney refused to disclose which individuals and groups met with the Task Force, prompting Walker to sue for the information in Federal court. In December 2002, the court ruled for Cheney.

Congressional pressure persuaded Walker to abandon appeals. Having vowed to "go to the mat," he originally planned to pursue the case further. But according to OMBWatch, "Sen. Ted Stevens (R-AK), chairman of the Appropriations Committee, met with GAO Comptroller General David Walker earlier in the year, and sources have reported that sharp cuts in the GAO $440 million budget were threatened if the lawsuit was pursued further" [http://www.ombwatch.org/article/articleview/1360/1/108/] .

The GAO was designed to be independent, and Walker cites several factors insulating his agency from political pressure. In a Roll Call op-ed, he remarks, "To begin with, our location in the legislative branch gives us some distance from the executive branches we audit and oversee. Moreover, the head of GAO serves a 15-year term, which gives the agency a continuity of leadership that is rare in the federal government. . . . GAO’s independence is further safeguarded by the fact that its workforce consists of career civil servants hired on the basis of their knowledge, skill, and ability" [http://www.gao.gov/about/rollcall07192004.pdf] .

However, the GAO, like all federal agencies, is subject to Congress’ budgetary power. According to The Hill, "Walker did say . . . that several lawmakers have threatened in the past year to cut agency funding if it persisted with the controversial lawsuit. He also said the budget threat was among a number of factors that tipped his Feb. 7 decision to halt litigation" [http://www.hillnews.com/news/021903/cheney.aspx] .

It is difficult to tell whether curtailed GAO independence will threaten Defense Department reform. Some aspects of Defense Department accounting have resisted reform for decades. Danielle Brian, director of the nonprofit Project on Governmental Oversight, says, "Waste has become ingrained in the Defense budget because opposition to defense spending is portrayed as unpatriotic, and legislators are often more concerned about winning Pentagon pork than controlling defense waste" [http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/05/18/MN251738.DTL] .

But even Representatives who generally support Defense spending seem to be getting fed up with the problem. Representative Thomas M. Davis, R-Virginia, asked the Pentagon to present 11 documents relating to contracts in Iraq, among them papers that would prove whether Halliburton benefited from its association with Cheney. And Rep. John Duncan, R-Tenn., of the House Committee on Government Reform recently said, "I’ve always considered myself to be a pro-military type person, but that doesn’t mean I just want to sit back and watch the Pentagon waste billions and billions of dollars" [http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/05/18/MN251738.DTL] .

Supporters of the GAO investigations like to point out the disparity between the GAO budget and military expenses. The GAO’s Fiscal Year 2004 annual budget was $463.6 million [http://www.gao.gov/about/gglance.html] . In contrast, GAO reports show that the Defense Department’s 2,200 overlapping financial systems cost $18 billion a year to operate [http://nuclearfree.lynx.co.nz/trillionbuck.htm] .

References

*Abate, Tom: [http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/05/18/MN251738.DTL Military waste under fire: $1 trillion missing -- Bush plan targets Pentagon accounting] , San Francisco Chronicle, May 18, 2003.
*Brand, Peter and Bolton, Alexander: [http://www.hillnews.com/news/021903/cheney.aspx GOP threats halted GAO Cheney suit] , The Hill, Feb. 19, 2003.
* [http://www.usatoday.com/travel/news/2004-06-09-pentagon-flights_x.htm Defense Department drops $100M on unused airline tickets] , The Associated Press, 2004.
* [http://washingtontimes.com/upi-breaking/20040615-082100-3407r.htm GAO: Millions wasted in Iraq] , United Press International, June 15, 2004.
* [http://www.gao.gov/about/gglance.html GAO at a Glance] , GAO, 2004.
* [http://www.ombwatch.org/article/articleview/1360/1/108/ GAO Authority Undermined] , OMBWatch, Mar. 10, 2003.
* [http://www.house.gov/defazio/102699DERelease.htm Government Watchdog Highlights Pentagon Waste: Report Faults Poor Inventory Management] , Peter DeFazio, Fourth District, Oregon, Oct. 26, 1999.
*Verton, Dan: [http://www.computerworld.com/managementtopics/management/itspending/story/0,10801,94392,00.html GAO: Pentagon IT mismanagement wastes billions: The study outlines serious shortfalls that are also affecting Iraq military operations] , Computerworld, July 8, 2004.
*Walker, David M.: [http://www.gao.gov/about/rollcall07192004.pdf GAO Answers the Question: What's in a Name?] , Roll Call, July 19, 2004.