Accountability Lapses in Multiple Funds for Iraq

Statement

Accountability Lapses in Multiple Funds for Iraq

Statement of Rep. Tom Davis

Ranking Republican Member

Committee on Oversight and Government Reform

Thank you, Mr. Chairman, for calling this hearing to examine the complex range of vulnerabilities and management challenges raised by our extensive security and reconstruction activities in Iraq. We are pleased the Committee is continuing this line of oversight, begun when I sat in your chair. During the 108th and 109th Congresses, the full committee and our subcommittees held a total of 19 hearings focused on complex logistical support and reconstruction contracts. In those sessions, we tried to transcend the charged rhetoric and easy generalities that can swirl around this topic and focus instead on the hard realities of using last-century business systems in a war zone on the other side of the world. I hope today's hearing follows that constructive path.

It's worth the Committee's sustained attention because the bad news is: Inadequate DOD payment processes didn't start with the Iraq war, and they're unlikely to disappear when the war is over. The DOD payment system is an aging, leaky aggregation of legacy systems that don't always provide every possible assurance taxpayers' money is being well-spent. The Department of Defense Inspector General's office, which will testify on new audit findings today, reminded us in 2002 that DOD vendor payments here at home and abroad already suffered from longstanding and serious internal control weaknesses.

But spending in Iraq presents unique challenges and provides undeniable opportunities for worthwhile oversight. Few people operating in an active combat zone would refer to the documentation requirements of the financial management process as "mission critical" work. Similarly, no one should deny the imperative to tell American taxpayers how their money is being spent. So we need to balance these two truths and approach this issue with unclouded vision. We need to know what's gotten better, what's still being fixed and what's still broken. And we need to refine our understanding of the difference between audit report findings that take an unflattering snapshot of a complex process and the real meaning of those findings to the long-term integrity of systems handling huge disbursements of taxpayer dollars.

Without question, many processes used with relative success in peacetime operations here fall far short of expectations when deployed in an active combat zone. In Iraq, a highly unstable environment and consequent security overhead greatly compounded the scope of resulting cost, performance and oversight issues. The underlying causes: inadequate planning, a lack of sustained, high-level leadership, mismatches between requirements and resources, and an insufficient number of trained financial management personnel.

That last factor - not enough trained and experienced acquisition professionals - is by no means unique to Iraq and we should not let a focus on the war blind us to the government-wide need for veteran finance officials to watch over large, and growing, expenditures.

Today we will hear from the Department of Defense Deputy Inspector General for Audit, Ms. Mary Ugone. She brings an important perspective informed by a substantial body of audit and review work. The picture painted by that work is not pretty. A volatile environment, poor security, and an arcane, ill-suited regulatory structure, have produced a succession of transactions plagued by missing documentation and other lax fiscal controls. The IG findings remind us the truth of a war zone is gritty enough. There is no need to embellish, inflate or spin it. Thoughtful oversight will steer clear of hyperbolic exaggeration and oversimplification of complex processes in the search for meaningful reforms.

We look forward to her testimony and to a frank, constructive discussion.

Source