Proposed Audit Annex to the Memorandum of Understanding Between the U.S. and the United Kingdom

GAO has two objections to the proposed agreement between the United States and the United Kingdom concerning the audits of non-U.S. contracts and subcontracts. The annex draft envisions a complete reciprocal delegation of audit responsibility, but GAO cannot agree to the delegation of its audit authority in the event that the audit authority of the Department of Defense is delegated to foreign audit agencies. It is in the best interest of the United States that responsible U.S. audit agencies have a direct role in contract audits. GAO further objects to the proposed agreement because there is no mention concerning the right of access by GAO to the audit workpapers. Whenever audits are performed by the Defense Contract Audit Agency, GAO has a statutory right of access to the workpapers. GAO wishes to have the right to accompany the auditors of the United Kingdom and to have access to the books and records of United Kingdom contractors.