As Washington’s yearly defense budget hurtles towards the $1 trillion mark, the DoD continues to operate with little to no oversight of its spending practices.
“We failed to get an ‘A’,” Mike McCord, the Pentagon’s comptroller and chief financial officer, told reporters last week, announcing the results of the Pentagon’s fifth-ever financial audit.
“I would not say that we flunked,” he added, despite his office acknowledging that the Pentagon only managed to account for 39 percent of its $3.5 trillion in assets.
With this failure, the Pentagon has kept its spot as the only US government agency to have never passed a comprehensive audit. It also highlights the US war department’s persistent lack of internal financial control, its poor budget estimations and rampant overspending.
The audit, which covered the department’s $3.5 trillion in assets and $3.7 trillion in liabilities, involved 1,600 auditors conducting 220 in-person site visits and 750 virtual site visits. The Pentagon inspector general and independent public accounting firms performed the audit, which was expected to cost $218 million this year.
Federal law since the early 1990s requires mandatory audits for all government agencies, and since fiscal year 2013 all but the DOD have been able to satisfy that requirement.
The sheer size and scope of the department — which makes up for more than half of the U.S. discretionary spending and has assets that range from personnel and supplies to bases and weapons — makes it difficult to audit.