Audits Preventing Taxpayer Overcharges Impeded by Pentagon Cuts

April 3, 2013

U.S. budget cuts may delay the Defense Department’s plan to eliminate a $400 billion backlog of unaudited contractor bills by next year, a Pentagon official said.

The Defense Contract Audit Agency has frozen hiring and will lose about 5 percent of its workforce, or 250 employees, this year as the Pentagon absorbs $41 billion in automatic reductions, said Patrick Fitzgerald, the office’s director.

“It’s going to make it more challenging,” Fitzgerald said in an interview about efforts to work through the backlog. “I’m not willing to give up on that goal yet, even though we’ve got some budget challenges. I think we can still come very close to getting to that goal.”

The backlog of unaudited expenses has more than quadrupled since 2005 as awards surged because of the wars in Iraq andAfghanistan. Contractors that have been snared in the audit backlog wouldn’t get paid until their requests are approved, which might put millions of dollars on hold for years.

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