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.
The US Department of Defense has, for the fifth straight year, failed to pass a financial audit, with only seven out of the Pentagon’s 27 military agencies receiving a passing grade.
“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.
A clear example of this is the F-35 program, which has gone over its original budget by $165 billion to build a plane tasked to perform many different tasks, none of which it does well. More here.
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.
