Oversight Committee Releases New Documents Showing Proposed Cuts to Naval Audit Service are “Not Justified”

Aug 16, 2021
Press Release
Committee Chairs Issue Statement After Congressional Investigation Leads Navy to Suspend Plan to Downsize Audit Workforce by 70%

Washington, D.C. (August 16, 2021)— Today, Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, and Rep. Stephen F. Lynch, Chairman of the Subcommittee on National Security, released new documents that directly contradict the Department of the Navy’s stated justification for its previous attempts to downsize the personnel strength and budget of the Naval Audit Service (NAS).

 

The Chairs also released a joint statement along with Rep. Adam Smith, Chairman of the Committee on Armed Services; Rep. John Garamendi, Chairman of the Committee on Armed Services Subcommittee on Readiness; Rep. Betty McCollum, Chair of the Committee on Appropriations Subcommittee on Defense, Rep. Jackie Speier, Chair of the Committee on Armed Services Subcommittee on Military Personnel, and Reps. Elaine G. Luria, Sara Jacobs, and Scott Peters after the Navy confirmed that it suspended its plans to downsize the NAS following congressional oversight:

 

“In response to congressional pressure, the Navy finally reversed course and agreed not to move forward with draconian cuts to the Naval Audit Service.  Sadly, former Acting Secretary Harker refused for months to adequately justify his proposed cuts before Congress—even as dozens of staffers retired or sought alternative career opportunities—which has likely caused significant and potentially irreversible damage to the Service. 

 

“We look forward to working with newly confirmed Secretary of the Navy Carlos Del Toro to right the ship and begin to rebuild the Naval Audit Service so that it can effectively carry out its critical oversight mission on behalf of the United States Navy and American taxpayers.”

 

Although the Navy previously claimed it was downsizing the Naval Audit Service due to concerns “about the size and cost of organizations that perform a variety of overlapping audits, inspections, and investigations,” documents obtained by the Committees show this claim was not justified.

 

These documents show that an independent, interim analysis conducted by the Institute for Defense Analyses (IDA) to “[a]ssess and analyze the potential of reducing or eliminating functions from the DOD and service audit agencies by 50-75 percent of their current resources,” found that reductions to the NAS were “not justified relative to the risk or savings” and would result in “[i]ncreased risk to Service mission and goals” and the “[r]eduction of an independent oversight function/accountability.” 

 

The IDA also found “no indications of duplication or redundant audits” across the Navy’s oversight entities and reported that “[t]here are well established groups and meetings within and across the audit agencies to de-conflict and eliminate duplication” and “[t]he scope and objectives of audits are adjusted to ensure no duplication.”

 

The documents released by the Committee also show that under the previous Administration, senior Navy officials discussed downsizing the NAS as early as May 2020—months before the IDA study was commissioned—and even discussed potential legislation to completely eliminate the agency.

 

Background

 

On May 27, 2021, Chairman Lynch and Reps. Luria, Jacobs, and Peters, sent a letter to Acting Secretary Harker requesting information about the Department of the Navy’s plans to reduce funding and drastically downsize staff for the NAS.

 

On June 29, 2021, Chairwoman Maloney, Chairman Smith, Chairman Lynch, Chairman Garamendi, Chair Betty McCollum, and Reps. Luria, Jacobs, Peters, and Speier sent a letter to Acting Secretary Harker urging the Navy to immediately suspend its ongoing cuts to the NAS.

 

On July 16, 2021, Acting Assistant Secretary of the Navy (Manpower and Reserve Affairs) Catherine Kessmeier issued a memorandum stating that the Navy “has suspended ongoing Naval Audit Service (NAS) workforce reshaping efforts and will not undertake involuntary placements on NAS employees.  As a result, the Civilian Placement Process (CPP)…is suspended indefinitely.” 

 

The Navy did not produce this July 16, 2021, memo to the Committees until August 5, 2021.

 

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117th Congress