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Naval Audit Service cuts still pushed by Navy Department, despite lawmaker opposition

As President Joe Biden prepares to release the basics of his first budget as soon as this week, the Navy appears to be holding fast on plans to reduce the size of one of its main internal oversight offices, to the chagrin of some on Capitol Hill.

News of Big Navy’s plans to slash the Naval Audit Service by as much as 70 percent in the coming years first emerged in February.

It has prompted pushback among some lawmakers, including U.S. Rep. Elaine Luria, a Virginia Democrat who serves as vice chairman of the House Armed Services Committee. Luria wrote to Harker in February seeking answers and more information on the proposed cuts.

In a March 22 response to Luria, Harker wrote that the Navy was “concerned” about “the size and cost” of oversight offices such as the audit service, offices of inspectors general and other oversight entities, and the overlap of their mandates.

As a result, the Navy plans to “reshape” the audit service and disperse its employees to jobs elsewhere in the Department of the Navy, Harker wrote.

At the same time, Harker said the audit service “remains a critical oversight activity of the Department,” and that the service “will perform targeted audits of interest for the Secretary of the Navy, focusing on areas of largest impact to the DON mission that, consequently, provide the largest returns on investment.”

“The DON is fully committed to our audit and oversight mission,” Harker wrote.

But in an interview with Navy Times this week, Luria, a retired surface warfare officer, said such a move “doesn’t sit well,” and that she and other lawmakers still have questions regarding how the department will fill the gaps left by a reduced audit service.

“I do intend to follow up and request a clear plan for how they’re going to cover all the responsibilities and functions performed by the Naval Audit Service,” Luria told Navy Times.

She added that she wants the Navy to show its work when it comes to cost savings and how using external firms or contractors would be preferable and more cost efficient.

“You still need the same functions of oversight and audit,” Luria said. “There’s still a lot of unanswered questions.”

“Removing that, especially at a time when, in my opinion, we need to grow our Navy and increase defense spending, it’s a question of accountability for taxpayers,” she added.

Luria said she is considering legislation that would block such cuts and takes issue with the way Navy leaders have attempted to push the cuts through.

“There wasn’t any notification to Congress about this abrupt change,” she said. “It was brought to our attention by employees of the Naval Audit Service, and it was very unclear to them what was happening.”

The Naval Audit Service could face a 70-percent cut to its funding in the next two fiscal years, raising concerns about oversight of the Department of the Navy. (Navy)
The Naval Audit Service could face a 70-percent cut to its funding in the next two fiscal years, raising concerns about oversight of the Department of the Navy. (Navy)

Luria added that “more extensive analysis” is needed regarding why the audit service cuts are being pursued.

In a statement to Navy Times this week, Harker’s spokeswoman, Lt. Ashley Nekoui, said the department is committed to strong oversight.

“Like other services and organizations within the DoD, the Department of the Navy continually looks at its organizational structure and workforce to ensure alignment with DoD and DON priorities, mission objectives and readiness requirements,” Nekoui said. “The secretary appreciates the Congresswoman’s interest and looks forward to continued communication pertaining to naval efforts.”

The audit service’s budget is $46.1 million this fiscal year, and cuts are being pursued as part of a “Stem to Stern” initiative announced by former acting Secretary Thomas Modly as a way to free up $40 billion for shipbuilding in the coming years.

In recent years, the Naval Audit Service has reported that overseas personnel were not prepared to respond to a biological, radiological or nuclear incident given the protective equipment on hand.

Auditors unearthed underperforming technical schools, overpayment of benefits and nearly $5 million in potential fraud in fiscal 2020 alone, according to a recent annual report.

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