June 11, 2015 / 5:09 PM / in 4 years

Pentagon watchdog reassigns audit chief after Reuters report

NEW YORK (Reuters) - The U.S. Defense Department Inspector General is reassigning one of his top deputies just weeks after Reuters reported that the deputy had forced staff to sign off on a disputed audit of the Marine Corps.

Jon Rymer (C), inspector general for the U.S. Department of Defense, greets senior leaders from the Fort Bragg, North Carolina-based 82nd Sustainment Brigade-U.S. Central Command Materiel Recovery Element and engineers from the Little, Rock, Arkansas-based 489th Engineer Battalion during a tour of a deconstruction site on Kandahar Airfield, Afghanistan, in this handout photograph taken on January 11, 2014 and obtained on May 15, 2015. REUTERS/Sgt. 1st Class Jon Cupp, 82nd SB-CMRE Public Affairs/U.S. Army/Handout via Reuters

In a Wednesday email to staff, Inspector General Jon Rymer said Daniel Blair, deputy inspector general for audits, would be reassigned to the lower-ranking position of deputy chief of staff.

Blair for five years has been in charge of all audits by the Pentagon's Office of the Inspector General, an independent watchdog agency that monitors Defense Department operations and programs. In his new position, he will have responsibility only for internal administrative tasks, such as the office's finances and information technology. An inspector general spokeswoman gave Reuters a copy of Rymer's email. (Read "U.S. Defense Department auditor signed off on flawed Marine Corps books" here)

Reuters reported on May 20 that an inspector general audit team in 2013 had found serious flaws in the Marine Corps’ accounting. The team found that the Marines’ books contained so many errors that they deserved a “qualified” opinion, an official label meaning that the auditor can’t vouch for the validity of the accounts.

In the article, Reuters reported that a series of internal email messages and other documents showed that Blair had pressured the team to disregard its own conclusions and give the Marines a “clean” opinion, as requested by an outside accounting firm hired to do much of the basic audit work.

The Inspector General’s Office on Dec. 20, 2013, issued a clean opinion on the Marine Corps audit. But in March 2015, it officially withdrew that opinion, citing what it said was newly discovered evidence of sums unaccounted for. As Reuters reported, the withdrawal also coincided with a Government Accountability Office investigation of the audit. The GAO has not yet issued a report on its inquiry.

In a statement emailed to Reuters, Rymer said he reassigned Blair because “I wanted to add more management depth to our internal” financial management as part of a larger restructuring.

Blair could not be reached for comment.

Bridget Serchak, the inspector general’s spokeswoman, declined to comment on whether Blair’s reassignment was linked to the Reuters report that he had successfully pressed the audit team to assent to an opinion it believed was unjustified.

The audit of the Marine Corps’ 2012 financial records was the first of planned attempts to audit the books of all of the military services, which have been unable to produce reliable accounts for decades. The Marine Corps audit was seen as a test of whether the Defense Department would be able to meet a 2017 deadline set by Congress to account for the hundreds of billions of taxpayer dollars it receives each year.

In his email to staff, Rymer said that he was beginning a search for a replacement deputy inspector general for audits, and that a current senior staff member would serve in the interim as acting deputy for audits.

Edited by John Blanton

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