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Chief Pentagon Auditor Forced from Post

The Pentagon's chief auditor was forced from her post Monday following sharp criticism from lawmakers over failures to hold defense contractors accountable for overcharges and poor performance.

April Stephenson, director of the Defense Contract Audit Agency since February 2008, has been reassigned to a new position inside the Pentagon and replaced by a senior civilian Army official, according to internal e-mail messages.

While the Defense Department cast the shift as a desire to bring a fresh perspective to an organization critical to stemming waste and fraud in military spending, mounting concern on Capitol Hill with the agency's management practices and independence was a major factor in the decision.

Among the problems were repeated failures to meet government auditing standards, a lack of planning and supervision, auditors being pressured to rush their work to meet productivity goals, and audit findings being changed to favor contractors without evidence to support the switch.

Many of the problems existed before Stephenson took over as director.

In an e-mail sent Monday to agency employees, Pentagon comptroller Robert Hale said the director of the Army Audit Agency, Patrick Fitzgerald, will replace Stephenson effective Nov. 9.

Hale said Fitzgerald has nearly 30 years of audit experience. Fitzgerald also has been heading an oversight committee created by Hale to monitor DCAA.

Hale doesn't give a specific reason for why Stephenson is being removed, but he does mention reports highly critical of the agency from the Government Accountability Office and the Pentagon inspector general.

The e-mail says Stephenson will take a senior position in Hale's office.

In an e-mail to her staff, Stephenson called 2009 a "challenging year" during which improvements were made in how the agency operates.

A report issued in September by the GAO said investigators reviewed 69 audits by DCAA and found 65 of them had serious deficiencies.

At a Sept. 23 hearing by the Senate Homeland Security and Governmental Affairs Committee, Democrats and Republicans said they were out of patience with the agency.

The committee chairman, Sen. Joe Lieberman, I-Conn., said Monday that replacing Stephenson "is an important first step, but that alone will not solve DCAA's deep-seated organizational problems."

Sen. Claire McCaskill, D-Mo., chairwoman of the subcommittee on contracting oversight, said an overhaul is long overdue.

"There is a culture at DCAA and the Defense Department that has allowed the agency to go so far down this very wrong path," she said.