April 11, 2017

The governmentwide hiring freeze may prevent the Defense Department from eliminating a backlog of contract audits, Pentagon officials have warned Congress.

Despite staffing challenges, the Defense Contract Audit Agency has reduced its claims backlog by 75 percent over five years, said Anita Bales, the agency director. “We expected to be current by the end of fiscal year 2018 but need to assess the impact of the current hiring freeze,” Bales told the House Armed Services Committee’s oversight and investigations subcommittee. “We are really getting behind the power curve.”

Reducing the backlog results from closing many cases without an audit because they were considered low-risk, Bales said. “We don't audit everyone. We put them into a sample and we only do a sample of the low-risk.” About 14,000 cases have been closed without an audit.

The agency also has increased multiyear audits by 40 percent, which reduces the workload of single-year audits, she said. Multiyear audits might be better for the agency but have drawn complaints from some contractors. Bales said they are looking at the problem and are willing to change “if a data-driven cost benefit analysis demonstrates that single-year audits are more beneficial.”