THE LEDGER-STAR
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, August 12, 1994 TAG: 9408120790
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: WASHINGTON LENGTH: Medium: 61 lines
When the government doesn't pay its bills on time, the law says it must punish itself by forking over an extra 7 percent.
Congressional auditors recently did a spot-check of nine Pentagon contractors and found the late-pay penalties were running in the neighborhood of $16,000 a day.
Add the cost of other bookkeeping blunders - like paying too much - and the tab at those nine companies exceeded $22,000 a day.
``The sloppy accounting is sort of staggering,'' Senate Governmental Affairs Committee Chairman John Glenn said Thursday. ``The Pentagon does not seem to have control over the checks it writes.''
The nine contractors together were owed $87.6 million, according to a General Accounting Office report released by Glenn.
``Given the magnitude of waste in this small sample, I am concerned that we are just looking at the tip of a very large iceberg,'' he said.
Pentagon spokeswoman Susan Hansen said Pentagon Comptroller John Hamre is working to improve the bookkeeping at the Defense Department.
Hamre told Glenn's committee in April that he was trying to fix and streamline the way checks were processed. ``We have inherited a troubled system,'' he said at the time.
But lawmakers have grown weary of waiting.
The Senate on Thursday added to its 1995 defense spending bill a set of deadlines for the Defense Finance and Accounting System to figure out how to match what it pays against what contractors are owed.
``This kind of thing must come to a screeching halt,'' said Sen. Charles Grassley, R-Iowa. ``We were assured that DFAS would fix the problem but it hasn't been fixed.''
The Pentagon last year found it was unable to match $19 billion worth of disbursements with specific contract requirements.
Grassley said the deputy inspector general for the Pentagon suggested the financial documentation might be so bad that the government could have to give up trying to make an accurate accounting.
``If DOD asks Congress for authority to write off $10 to $20 billion in unmatched disbursements, I think heads should roll,'' Grassley said.
The new GAO report was an offshoot of an earlier investigation that itemized a variety of bookkeeping problems, including $1.4 billion in overpayments that contractors voluntarily returned in the first nine months of 1993.
The new probe involved an examination in February and March of the books at nine companies that do work for the Pentagon.
There were bookkeeping problems at all nine; Pentagon officials had been notified of the problems at all nine; and nothing was done to fix problems at any of them, the GAO said.
KEYWORDS: PENTAGON MILITARY SPENDING U.S. CONGRESS
DEFENSE BUDGET MILITARY BUDGET
by CNB