April 2021 DOE IG Special Report: Internal Contractor Auditors at LLNL and Two Other Named Labs have a "fox-guarding-the-henhouse problem"
"The Department’s M&O contractors’ internal auditors are hired by, supervised by, paid by, and responsible to the contractors.25 In addition, the contractors’ audit executives typically have their personal bonuses tied to contract award fees.26 This creates a fox-guarding-the-henhouse problem. This design flaw is particularly problematic because an incurred cost audit is the single most critical audit measure available to control Federal expenditures and to ensure that Federal contractors are not overpaid, resulting in fraud, waste, or abuse.
26 The OIG has documented these bonuses at Lawrence Livermore, Idaho, and Oak Ridge National Laboratories."
https://www.energy.gov/sites/default/files/2021-04/DOE-OIG-21-26%20Amended.pdf
Comments
Chickens are coming home to roost, but we have a fox in the hen house.
Except these are Federal expenditures monitored by contractor staff with skin in the game, hence the "fox-guarding-the-henhouse" label, and the transition to independent M&O audits. Unpublished salaries, raises, and bonuses, what could go wrong...? Why would IG Federal expenditure conflict of interest reviews be limited to contractor auditors alone given other contractor employees can be influenced using the same financial incentives that also impact M&O Federal expenditures? A follow the money Pandora's box.
A bunch of pampered Ph.D.’s reduced to GS-15’s or below would be cheaper too.
Just out of curiosity but what makes a Ph.D pampered? I know it sounds good and Pol Pot would agree, I would just like see some evidence for this.
Another solution is to dump the for-profit contractors in favor of flat fee non-profit contractors. This would be cheaper and present fewer award fee driven temptations to cook the books or to purchase compliance.