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Proposed budget cuts for naval audit service not justified by internal records, lawmakers say

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For much of that year, then Acting Secretary of the Navy Thomas Harker championed a proposal to reduce the staff and mission of the Naval Audit Service as a way to save money. and eliminate redundancies in internal oversight, despite fears that such measures would hamper accountability within the sprawling Department of the Navy.

But a review by the Institute for Defense Analyzes, a nonprofit that operates three federally funded research and development centers, found that reducing or eliminating audit offices in each of the departments 50 to 75% was “not justified in relation to risk or savings.” Such a decision would result in “increased risk to the mission and objectives of the Service” while reducing oversight and accountability, according to published documents Monday by the House Committee on Oversight and Reform.

For months, members of Congress have asked Harker to produce internal Navy records to justify ousting the Naval Audit Service, which is said to have seen its team grow from 290 to 85 over the next several years.

Harker has defended the plan in comments to the press and letters to lawmakers, saying the mission of the internal oversight entity overlaps with other oversight offices in the Department of the Navy and Defense.

But IDA’s analysis found “no indication of duplication or redundant audits” in these oversight offices and noted that these entities meet regularly to resolve conflicts and eliminate duplication of their efforts.

Navy documents released by the committee on Monday also show that senior Navy officials discussed the idea of ​​downsizing the audit service as early as May 2020, months before the IDA report was commissioned, and also considered seeking legislation that would have eliminated the agency altogether.

Cuts to the audit service have been proposed as part of an effort to find additional funds that could be spent on shipbuilding.

But lawmakers and listeners who spoke to the Navy Times earlier this year pointed out that the agency’s modest $ 45 million annual budget is well worth the oversight it provides and is only a small fraction of the service’s overall budget request of $ 207.1 billion for fiscal year 2021.

The costly shipbuilding fiascos of recent years, including the littoral combatant, Zumwalt-class destroyers and the Gerald R. Ford aircraft carrier, have led lawmakers on both sides of the aisle to voice their skepticism about the service’s ability to manage such programs in the future, adding an additional need for engagements like the audit service, lawyers said.

In recent years, the Naval Audit Service has reported that overseas personnel are not prepared to respond to biological, radiological or nuclear incidents given the protective equipment available.

Auditors also discovered underperforming tech schools, an overpayment of benefits and nearly $ 5 million in potential fraud in fiscal 2020 alone, according to the most recent annual report.

The revelations that internal studies did not justify cuts in audit services came after lawmakers spent months asking Harker to produce documents to justify the plans.

Reached by phone on Sunday, Harker said the proposed cuts were one of many proposals to free up funds for shipbuilding and that he and his staff “were fully engaged” with House members seeking help. information on potential reductions.

For now, any effort to downsize the audit service appears to be on permanent hiatus.

A provision in the 2022 Tax Defense Policy Bill would protect the audit department from any staff or budget cuts until the Navy further investigates the matter and reports to Congress.

In a July 16 memorandum, the Acting Assistant Secretary of the Navy for Manpower and Reserve Affairs, Catherine Kessmeier, suspended all audit service “workforce shuffling” efforts that would have displaced employees of the audit service to other departments of the Navy.

The Navy did not provide this note to House and Armed Services oversight committees until Aug. 5, according to a statement from the leadership of those committees.

Despite the revelations and halting any future cut-offs of audit services, damage has already been done, the statement said.

Unfortunately, former acting secretary Harker refused for months to adequately justify his proposed cuts to Congress – even as dozens of staff retired or sought other career opportunities – which likely caused significant and potentially irreversible damage to the Service, ”the committees said in the statement.

“We look forward to working with (the new Secretary of the Navy Carlos Del Toro) to right the ship and begin to rebuild the Naval Audit Service so that it can effectively carry out its critical oversight mission on behalf of the US Navy. and American taxpayers, “he added. said the committees.

Geoff is a senior reporter for Military Times, focusing on the Navy. He has covered Iraq and Afghanistan extensively and was recently a reporter for the Chicago Tribune. He welcomes all kinds of advice at [email protected]

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