Internal Auditing in the Department of the Army and the Office of the Secretary of Defense

The internal audit function of the Department of the Army needs strengthening so its auditors can keep top management informed as to how operations are conducted and how recommendations for improvements are carried out. During fiscal years 1973 through 1976, the Army Audit Agency issued about 3,260 audit reports which identified opportunities for hundreds of millions of dollars in savings to the Department and contained many recommendations for achieving lower costs and increased efficiency. The audit functions should be raised to a higher level in the Army's organization. The auditors should be given freedom to identify and select activities for audit. At present, a committee composed of persons responsible for operations to be audited reviews and revises the Audit Agency's selection of activities to be investigated. In addition, Army auditors are restricted from auditing combat readiness and other tactical activities. These restrictions should be removed. The chief of the Audit Agency should be a civilian rather than a military officer, as is the case at present. There is a need for more effective use of the audit staff. The Army's audit followup system would be strengthened by placing this responsibility with the Army Audit Agency. This would permit auditors who are already located in the field and who are familiar with the reported conditions to evaluate the adequacy of corrective actions taken. (SC)