The audit in question was on a contract proposal by Boeing involving the Delta IV rocket system. Because of what the IG calls a flawed audit and "lack of auditor independence," the DCAA approved $271 million in improper payments from the Air Force to Boeing, $101 million of which was paid before the IG stepped in and ordered payments halted.
In late 2005, the DCAA manager on the project actually attended a meeting with the brass of the Air Force office who had gotten the Delta IV contract -- also attended by a Boeing representative, according to the IG report. The meeting, as it turned out, was a brainstorming session to push forward on the Air Force's "top priority" of acquiring an "unqualified" audit report from DCAA.
After that meeting, the DCAA manager in question (who is not named) directed the auditor on the case not to pursue a key line of inquiry. In its own bureaucratic language, the IG concludes that the resulting audit isn't worth the paper its written on. The report finds the audit manager failed to "protect the interests of the Government."
A few highlights from the GAO report:
DCAA auditors spent 530 hours to support an audit of a nonexistent billing system and reported adequate system controls.
One auditor told GAO he did not perform detailed tests because "the contractor would not appreciate it."
Here's Sen. Claire McCaskill (D-MO) unloading on officials from the DCAA last week after that GAO report was released:
Other senators, too, have demanded greater accountability from the DCAA, but it's not clear what specific steps are being taken. We're looking into it and will let you know when we find out.