Prometheus 6

In 1981, a study by the U.S. Government Accountability Office found that this tiny conversion factor cost taxpayers $120 million a year in faulty payments to federal employees alone – not including employees like Davey at private contractors. Four years later, as the Reagan Administration attempted to rein in federal spending, Congress passed the Budget Reconciliation Act, which changed the calculation for federal employees.

But it exempted defense contractors for reasons that remain unclear.

Did Pentagon lose billions, pennies at a time?
40 years later, whistle-blower still unable to force accounting change
EXCLUSIVE
By Benjamin Shors
msnbc.com contributor
updated 8:21 a.m. ET, Fri., May 1, 2009

In 1969, an aeronautical engineer at North American Rockwell discovered a discrepancy in his paycheck: Every hour, he was being overpaid by roughly 2 cents, or one-third of 1 percent of his pay.

Spurred by an incentive program that rewarded employees for finding wasteful spending, Walter T. Davey submitted the discovery to his superiors and suggested a simple fix.

“It was so simple to correct,” said Davey, a 79-year-old retired Air Force colonel now living in Newport Coast, Calif., “just change a few digits in the coding software.”

A surreal experience followed: For decades, Davey has attempted to correct a calculation that he believes has cost taxpayers several billion dollars. He has alerted contractors, legislators, and federal auditors -- all to no avail, even though a 1981 federal report seemed to confirm his calculations. Through it all, he said, no one has challenged the numbers....

Legislators ignored Davey’s letters. Federal auditors deferred to Congress. Lobbyists “descended on it and tore it into a piece of Swiss cheese,” in the words of a former executive member of the Cost Accounting Standards Board, which is charged with reviewing accounting standards for high-dollar federal contracts.