Defense auditors express optimism about new job standards

Employees at the Defense Contract Audit Agency reacted with cautious optimism this week to the release of new and revised job performance standards.

In a Sept. 30 memorandum, DCAA Director April Stephenson told employees that after roughly three weeks of review, the agency decided to scrap 18 of 19 performance measures. In addition, a scorecard that was used to compare data from one region to another was eliminated and Webmetrics -- a program that managers used to monitor performance -- was disabled.

"The key to successful performance measures is to measure the right performance," Stephenson wrote. "The wrong type of behavior and/or results may occur if the wrong performance measures are used, or if the correct performance measures are used improperly."

DCAA will implement 11 new standards -- only eight of which will have measurable goals. Auditors will have "limited authority" to deviate from the measures as needed and supervisors were instructed to treat the new performance measures as "agency averages" that should be used as staff targets rather than applied to individual employees.

More than a half dozen current and former DCAA staffers, each of whom requested anonymity, told Government Executive that the agency appears to be on the right path.

"The bad performance standards seem to be gone, but there seems to be resistance by some managers," said one 19-year veteran of DCAA. "[Stephenson's] standards and attempts seem to be genuine, but we are not dancing in the street yet. There have been many years of bad history between labor and management."

Auditors also said they were pleased by the removal of the metrics they considered the least effective. Those included the six-12-six timeline (six months to obtain an incurred cost claim, 12 months to perform the audit, and six months to settle), dollars examined per hour and incurred cost productivity. The time allowed to perform a given audit will now be based on risk assessments, rather than on a pre-determined ratio.

"To me, that was one encouraging change, but I will believe it when I see it," said one 25-year employee. "They are eliminating a bunch of other crazy things they track, which add no value."

Auditors blamed DCAA's unpopular performance metrics that emphasized speed over quality for problems highlighted in a July report from the Government Accountability Office. GAO found that managers had improperly influenced audits to favor large federal contractors.

"Quality audits must never be sacrificed for any reason," Stephenson wrote in the memo. "Emphasizing productivity over quality has never been the agency's intent. Performing audits timely and efficiently is important, but performing audits in accordance with generally accepted government auditing standards is most important."

Veteran auditors found plenty to criticize about the new benchmarks. Some complained that goals related to timeliness of issuing reports appeared somewhat arbitrary. One argued that a requirement for auditors to achieve 100 percent compliance with government auditing standards for continuing professional education is redundant and would only be used to beef up the agency's success rate.

"The GAO and various state certified public accountant licensing requirements must be met or the person is not allowed to perform audits," said a retired auditor who spent 25 years in the Philadelphia area. "This measure is really just giving themselves a one-inch putt to make."

Auditors also expressed concern that the memo made no mention of holding accountable supervisors found to have engaged in misconduct.

"Unless there is a major shake-up of upper management, there won't be any real changes," said one veteran auditor. "There is a lot of duck and cover going on right now hoping this storm will blow away after the election. There is a lot of skepticism among the grunts that any positive change will occur."

Stephenson said she has been advised by DCAA attorneys not to discipline anyone associated with the scandal until GAO and the Defense Department inspector general complete investigations.

But a retired DCAA employee who now works for another Defense agency said Stephenson's reforms won't make a difference unless unethical managers are punished soon.

"The inclusion of, or lack of, performance metrics did not cause the worst scandal ever to hit DCAA in its 43-year history," the ex-auditor said. "It was the absence of integrity, lack of management judgment and the failure to follow prescribed standards of professional conduct on the part of certain DCAA supervisory and management employees."

Stephenson encouraged DCAA staffers to provide feedback on the new metrics through a pair of new internal Web sites. She said the new performance measures will be re-evaluated after six months.

In a separate internal memo on Wednesday, Stephenson said she has asked the Defense comptroller's office for additional auditors, supervisors and managers. The agency has yet to hear back, and Defense did not respond to a request for comment.