Pentagon auditors altered documents, report says

WASHINGTON -- Pentagon auditors spent 1,139 hours altering their own files in order to pass an internal review, say investigators who found that the accounting sleuths engaged in just the kind of wasteful activity they are supposed to expose.

When the auditors in the New York City office learned well in advance which files a review team would check, they spent the equivalent of more than 47 days doctoring the papers and updating records from several audits, the Defense Department's inspector general concluded. Administrative staff, audit supervisors and other employees also participated in the scheme.

The fabrication at the Defense Contract Audit Agency "certainly violates the spirit and intent" of government auditing standards and rules on ethical conduct, according to the inspector general's report.

The defense agency, which audits government contracts, is the same one that recently reported that Vice President Dick Cheney's former company, Halliburton, may have overcharged the Army as much as $61 million for gasoline in Iraq.

The audit agency ran up some charges of its own when its auditors worked on altering the records.

The task of rewriting the files was so daunting that auditors came in from other offices to help make the changes, costing taxpayers more than $1,600 in travel expenses.

New rules to prevent fraud

The agency "is supposed to be the watchdog for defense contracts," said Sen. Charles Grassley, R-Iowa. "Altering audit work papers could undermine the accuracy of the Pentagons cost reports. Falsifying official reports is a crime, and those involved must be held accountable."

To stop any fabrications in the future, the review teams only give 48 hours advance notice of the files they want to inspect. The advance time under the old policy was much longer.

Discipline was proposed for the manger who directed the alterations, but was never imposed because the official resigned, the report said.

Daniel Tucciarone, executive officer of the audit agency, said a second senior management official who "had not been forthcoming and acted inappropriately to conceal information" was punished.

Tucciarone told the AP that the agency took "appropriate disciplinary action in all cases" but added that federal privacy law prevented him from releasing such information about individual employees.

The revisions were so pervasive that the work continued even after the review team arrived to inspect the auditors' files. The New York branch manager directed a senior auditor to delete electronic backup files of original documents, the inspector general said.

The report said agency employees believed that "upgrading" the working papers was a normal and acceptable practice and that they did not try to hide what they were doing.

The inspector general uncovered the file deletions following a tip to a fraud, waste and abuse hot line.

This is not the first time that Pentagon anti-waste investigators were found to have altered documents.

The AP reported in 2001 that the inspector general's office itself destroyed documents and replaced them with fakes to avoid embarrassment in a review of its work.