Northrop Grumman Corp. was paid at least $206,000 by Navy contracts officials for "questionable" travel billings to a golf outing and international air shows, according to an audit by the Pentagon's inspector general. While Northrop Grumman subsequently reduced its billings by that amount after inquiries by the inspector general, "there is a potential for additional unallowable expenses charged" by the contractor, according to the Dec. 23 audit report. The billing and payment of travel to a golf outing and to air shows in Paris and Singapore are emblematic of "serious problems with the overall management" of a $1.8 billion contract to develop the Navy's first high-altitude drone for long-range surveillance, the report said. The development contract is the first part of a potential $19 billion program for 68 aircraft.

Altogether, Navy contracting officials didn't thoroughly review or validate 39 bills to ensure Northrop Grumman was entitled to $329.3 million in payments so far, and haven't made sure the contractor has an adequate inventory system to safeguard millions of dollars in government-furnished equipment, according to the audit report.

"As a result, the program is at risk for increased costs, schedule delays and not meeting the needs of the warfighter," it said.