Its Time to Audit the Pentagon

A Department of Defense internal review by its Inspector General shows that “the Office of the Assistant Secretary of the Army and the Defense Finance and Accounting Service Indianapolis did not adequately support $2.8 trillion in third quarter journal voucher [a written authorization prepared for every financial transaction, or for every transaction that meets defined requirements] adjustments and $6.5 trillion in yearend JV adjustments made to AGF [Army General Fund] data during FY 2015 financial statement compilation. […] In addition, DFAS Indianapolis did not document or support why the Defense Departmental Reporting System‑Budgetary, a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015.”[1]

In other, non-technical words, the Pentagon has not adequately accounted for $6.5 trillion for FY 2015 (and perhaps even further back) and are missing at least 16,513 for the third-quarter of FY 2015 alone.

In 2013, Reuters found out that “the Pentagon is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; thus it continues to spend money on new supplies it doesn’t need and on storing others long out of date. […] A review of multiple reports from oversight agencies in recent years shows that the Pentagon also has systematically ignored warnings about its accounting practices.”[2]

Back in 1996, Congress passed a law that would audit every federal agency[3] and in 2009, Congress said they would ensure that “the financial statements of the Department of Defense are validated as ready for audit by not later than September 30, 2017″[4] To date, the Pentagon/Department of Defense is the only agency that has failed to be audited. That the $8.5 trillion dollars in taxpayer money given to the Pentagon since 1996 has never been accounted for, at least in full.

There have been some small things that came up over the years, some of which the Fiscal Times compiled into a list last year. Spending $1 billion to destroy $16 billion worth of ammo it didn’t actually need. Not keeping tabs on $300 million to help fund the payroll of the Afghan National police. Failure to track $500 million worth of military equipment given to Yemen since 2007. Overcharged $1 billion by federal contractors (who dodged work hours and neglected safety requirements) for loose bolts and damaged aircraft. Spending $900 Million more than estimated on naval ships.[5]

I can go on about the wasteful spending, but in the end, I want to offer a solution. The Pentagon needs to be audit ready by September 2017, as I previously mentioned. If they aren’t, then I suggest that the Congress should not accept any new funding requests by the Pentagon until an audit is at least started. The Pentagon can get by with the $585 billion they requested for FY 2016. A small price to pay for 20 years and $8.5 trillion of unaccounted funds.



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