Anti-Fraud Agency Fakes Documents By Larry Margasak Associated Press Writer Tuesday, June 5, 2001; 3:40 p.m. EDT WASHINGTON �� The Pentagon agency charged with exposing fraud destroyed documents and replaced them with fakes to avoid embarrassment when its own operations were audited, an internal inquiry found. The incident last year cost the government thousands of dollars and "could adversely affect the confidence of the public" in Defense Department audits, says the report obtained by The Associated Press. The records destruction occurred as the Pentagon inspector general's work was about to be reviewed by Internal Revenue Service auditors � part of a routine program where one U.S. inspector general checks the work of another. The unsuspecting IRS reviewers found "no problems" with the Pentagon's audit work after poring over the phony documents, the internal report said. The document destruction was substantiated in the report, written by an inspector general's employee assigned to investigate her own agency. "It's a very sad day indeed when the watchdog gets caught cheating," Sen. Charles Grassley, R-Iowa, wrote Defense Secretary Donald H. Rumsfeld in demanding to know more about the incident. The inspector general's office and the Defense Department public affairs office declined to comment on the incident. Grassley, chairman of the Senate Finance Committee, began investigating the destruction recently after a Pentagon whistleblower brought it to his attention. While the inspector general is supposed to root out government fraud and waste, the report said the 983 hours spent creating the fake documents cost taxpayers $63,000. "As soon as we became aware of the allegation and findings, we immediately withdrew our previous opinion," said David C. Williams, the inspector general for the IRS. As a result, Pentagon audits must include a disclaimer that the work fails to meet established audit standards. The IRS auditors had selected eight Defense Department audits for review, and senior Pentagon auditors realized that working papers for one of them � a 1988 audit report � would never get a passing grade, the report said. "Instead of submitting it and suffering the consequences, a decision was made to destroy all the original work papers and to re-create an entirely new set," Grassley wrote Rumsfeld. He said 12 to 15 officials in the Defense Department inspector general's office were involved, including senior auditors. The Pentagon report concluded, "The backdating of the re-created working papers misled the ... review team to believe the ... papers were ... done at the time of the audit." Grassley and the internal report said the official who prepared the originals was directed to sign the fake papers even though that auditor did not create the substitutes. "At some point, the majority of original working papers were destroyed," the report said. The President's Council on Integrity and Efficiency, an organization of federal inspectors general, is investigating the incident � so far, only looking at potential changes in audit procedures. The incident "has some negative repercussions to the image" of inspectors general, said Gaston Gianni Jr., vice chairman of the council and the inspector general at the Federal Deposit Insurance Corp. Grassley said he's not satisfied with the internal Pentagon review. He wrote Rumsfeld it "may have been unwise" for the Pentagon's deputy inspector general, Robert Lieberman, to have one of his senior deputies conduct the internal investigation and then conclude that Lieberman was not implicated. The senator also said that disciplinary actions were under consideration only for lower-ranking auditors and their immediate supervisors, but not senior officials. � Copyright 2001 The Associated Press Back to the top Miroslav Antic, http://www.antic.org/ ==^================================================================ EASY UNSUBSCRIBE click here: http://topica.com/u/?bUrHhl.bVKZIr Or send an email To: [EMAIL PROTECTED] This email was sent to: [email protected] T O P I C A -- Register now to manage your mail! http://www.topica.com/partner/tag02/register ==^================================================================
