Boeing (BA) May Lose Up to $271M In Revenues From Government Accounting Audit

Boeing Co. (NYSE: BA) may lose as much as $271 million for satellite launching services for the government if auditors from the Pentagon determine that the Company violated accounting rules.

The issues include:

• Improper billing of the U.S. Air Force from 2006 - 2008 for labor, quality control, and management;
  
  
• Support costs that were incurred in the Delta IV rocket program between 1998 - 2006.

The loss would include $82 milion already paid to Boeing (plus interest) and the $189 million that Boeing claims it is owed.

Dennis Muilenburg, President of Boeing Integrated Defense Systems Unit, said that the Air Force agreed to pay the costs associated with the Delta IV booster.

The Pentagon auditing agency began its new review of the Delta IV costs in September after the Defense Department’s inspector general concluded that a May 2006 audit approving the billing was “flawed” and “cannot be relied upon as a basis to negotiate fair and reasonable contract prices.”

A regional manager for the Pentagon auditor approved “a flawed audit that could have allowed Boeing to recover $271 million in unallowable costs,” Inspector General Gordon Heddell said in Sept. 23 testimony to Congress.

This will impact Boeing's revenue expectations of $17.52 billion for the Q409 if it goes through.

You May Also Be Interested In

• Boeing names Ryan Shedd as new SVP and controller
• Premarket movers: Crypto stocks rally, Ross Stores jump on upbeat forecast
• BAE Systems names Michael Loeffler as VP of supply chain