Defense audit agency shifts control of California field office to Central Region

The head of the Defense Contract Audit Agency has temporarily transferred control of a Western field office that has been the source of multiple whistleblower complaints to the agency's Central Region, Government Executive has learned.

DCAA Director April Stephenson last week announced the Peninsula Branch Office in Mountain View, Calif., about 30 miles south of San Francisco, will temporarily move out of DCAA's Western Region and into the Central Region, which is headquartered in Irving, Texas. DCAA field operations are split among five regions with identical management structures based on geography.

Stephenson announced the change in an Aug. 6 memorandum and in a teleconference with staffers from the Western and Central regions. Sources called the shift, which also entails bringing in a leader from a St. Louis office within the Central Region, unprecedented.

"As you are all aware, the Peninsula Branch Office manager position has been vacant for some time," Stephenson wrote in the memo. "In addition, I am aware that the [field audit office] is somewhat in a state of unrest. This makes it difficult to ensure the proper audit and personnel management of the FAO. As a result, I have decided to temporarily fill this position through a detail of 180 days of an existing FAO manager, Ms. Martha McKune of the St. Louis branch office."

The Peninsula Branch Office has been without a permanent manager since the previous supervisor transferred out in May. McKune's detail begins on Aug. 17.

One senior auditor in the California office said he was told that McKune will fly back and forth from St. Louis to the Bay Area on the weekends. The staffer also is concerned that the long-distance leadership could slow the process of reviewing and issuing audit reports.

"This is a waste of taxpayer money to fly these Central Region managers and personnel … back and forth from the West Coast when we have competent applicants for the job in the Bay Area that were not selected," the senior auditor said.

Upon the start of McKune's assignment, the Central Region will assume the audit and personnel management of the Peninsula Branch Office, Stephenson wrote. Several day-to-day functions at the office also will transfer to the Central Region, including human resources and most employee welfare programs, she said. Other jobs such as payroll processing and accounting will remain on the West Coast.

"While I realize this is a departure from normal FAO operations, I ask each of you to embrace this change and remain flexible and professional during the transition and future management of your FAO," Stephenson concluded.

Auditors in the Peninsula Branch Office, however, were skeptical. Some noted that the Central Region's former director had a lengthy history of harassment complaints. "I have neither seen nor heard of anything similar before and I am a manager with many years in," one auditor said.

Another senior auditor in the office expressed his concerns directly to Stephenson in an e-mail obtained by Government Executive through a third party.

"I do not know of all the issues going on here, but the solution seems to be an indictment of the whole Western Region management if it has no one within it able to improve things here," the auditor wrote shortly after the Aug. 6 teleconference.

Stephenson responded that the office required a "different approach," partly because of "some baggage" related to the Western Region management.

"Consequently, I thought of an innovative approach of reassigning the office to a different region," the director said. "My hope is that improvements in the office environment can be made and some of the 'issues' with prior management can be put behind. Think of it as a clean slate of sorts."

In recent years, Peninsula Branch Office auditors have filed multiple harassment and intimidation complaints with the Government Accountability Office, Defense Department inspector general and Office of Special Counsel against DCAA supervisors in the Western Region. But GAO's July 2008 report on DCAA management problems did not specifically mention the office.

Stephenson has promised to take personnel action against managers found to have been abusive once the Defense IG releases its report on the harassment and intimidation complaints. It is unclear when that will happen.

GAO is planning to release a follow-up report on auditing deficiencies at DCAA in the next few months. Investigators examined 37 audit reports issued between 2004 and 2006 and reportedly found problems with the agency's adherence to government auditing standards in each.