[Congressional Record Volume 140, Number 63 (Thursday, May 19, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 19, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                           DOD ACCOUNTABILITY

  Mr. GRASSLEY. Mr. President, yesterday, I spoke briefly about 
financial mismanagement at the Department of Defense [DOD] and the need 
for accountability.
  I focused on the recon file at the Defense Finance and Accounting or 
DFAS center in Denver, CO.
  The recon file is being used to hide at least $11 billion of 
unmatched disbursements.
  Comptroller of DOD, Mr. Hamre has ordered DFAS to reduce unmatched 
disbursements by 50 percent next month, because they leave DOD accounts 
vulnerable to theft and abuse.
  Well, that goal may be met.
  But DFAS will follow a twisting and devious path to get there.
  DFAS will do it by burying unmatched disbursements in subterranean 
vaults, like the recon file.
  I am bothered by Mr. Nabil's recon file for another reason.
  It is a new disguise for another problem DFAS was directed to fix.
  Mr. Nabil's recon file is nothing more than a roll-up of 
discrepancies between the accounting records maintained at the base 
level and those maintained at the departmental level.
  In 1991, DFAS got caught with its hands in the same cookie jar.
  DFAS and the Air Force got caught taking $649.1 million from the M 
accounts to force Denver's books into balance--to plug a gaping hole.
  After that was exposed, we were led to believe DFAS had fixed the 
problem.
  When I raised the issue last year, my friend Senator Inouye assured 
me: ``The Air Force has acted to address the errors in its bookkeeping 
system.''
  The late Donald J. Atwood, who was the Deputy Secretary of Defense at 
the time, said exactly the same thing.
  This is what Mr. Atwood had to say in a document dated April 14, 
1992, and I quote:

       On February 18, 1992, the DOD Comptroller directed DFAS to 
     correct the Air Force departmental-level accounting records 
     so that they agree with supporting records at the 
     installation level as well as any related Treasury records. * 
     * * DFAS [is] expected to eliminate systemic problems such as 
     those that led to the $649 million error experienced by the 
     Air Force.

  Mr President, this looks like one more directive that DFAS failed to 
honor.
  DFAS has an unblemished record of noncompliance.
  The IG has completed the review of remaining M account balances 
requested by Senator Inouye.
  Of the $574 million in obligations examined, the IG found that $440 
million or 76.5 percent were invalid; that is, not supported by 
documentation.
  The $469.1 million was used as a DFAS/Air Force plug figure to 
conceal the disappearance of a lot of money.
  That money remains unaccounted for to this day.
  Even worse, the IG discovered that DFAS Denver is still using 
mathematical equations to generate phony, artificial ledger entries.
  This kind of simulated accounting work means the books are out of 
whack again--big time.
  Accounting practices at DFAS Denver are a disgrace.
  Comptroller General Bowsher has repeatedly stated: ``Such accounting 
practices are inexcusable and must not be tolerated.''
  Senator Glenn says: ``Someone has to be held accountable on this.''
  Comptroller General Bowsher agrees. Deputy DOD IG Vander Schaaf 
agrees. We have a consensus: senior officials in accounting and finance 
are responsible.
  I think the Director of DFAS, Mr. John P. Springett, and the Director 
of the DFAS center at Denver, Mr. John S. Nabil, need to be held 
accountable.
  If others should be held accountable in their place, we need to 
identify who they are. And I don't mean GS-5 accounting clerks. I mean 
people further up the line--way up the line.
  If not them, then who is it.
  A quick review of Springett's and Nabil's job descriptions and DOD 
Directive 5118.5 governing DGAS tells me that both officials are 
responsible for the deepenig DOD financial crisis.
  I quote from those documents:
  Mr. Springett is the ``principal DOD executive for finance and 
accounting.'' He ``exercises command and control over the six operating 
centers.''
  Mr. Nabil is ``the principal advisor and assistant'' to Mr. Springett 
and top manager at the Denver center.
  Mr. Springett and Mr. Nabil are in charge. They make the decisions. 
They run the show. They are accountable.
  And they get paid exceptionally well for shouldering so much 
responsibility.
  Together, they receive combined annual salaries including bonuses, 
totaling over a quarter of a million dollars--$252,765 to be exact.
  Obligations come with the high pay: Honor the DFAS mandate; balance 
the books; clean up the mess; and above all, guard the people's money.
  That money is entrusted to their care and must be treated with total 
respect.
  Mr. Springett and Mr. Nabil collect the big pay checks, but they do 
not honor their commitments and obligations.
  That is the lesson learned from a slew of recent IG reports, Mr. 
President. And the obvious next step is to hold them accountable.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa yields the floor.
  Who seeks recognition?
  Mr. DOMENICI addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from New 
Mexico [Mr. Domenici].
  Mr. DOMENICI. Mr. President, I know Senators are waiting. I have been 
waiting, also. Let me just ask, is it imperative that the Senator 
proceed immediately? If not, I ask for 8 minutes as in morning 
business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________