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Topline: The Division of Protection didn’t move its financial audit for the seventh 12 months in a row, violating federal legislation and admitting that the army has no clue what its $824 billion finances is definitely spent on.
Key information: The DOD didn’t “fail” its audit within the conventional sense. Impartial accountants gave the company a “disclaimer of opinion,” which means the army’s monetary information are so complicated and incomplete that there is no such thing as a technique to inform whether or not or not they’re correct.
The DOD has 28 subcomponents, together with 4 branches of the army and departments just like the Protection Menace Discount Company, which might be audited yearly. Fifteen of them obtained disclaimers — down from 19 final 12 months, although three of the audits are nonetheless in progress.
A disclaimer is issued when accountants discover too many “materials weaknesses” in monetary statements: points so extreme that they might trigger greenback figures to be inaccurate.
Even one materials weak point is sufficient to derail an audit. The DOD had 28 weaknesses this 12 months, the identical quantity as final 12 months.
The DOD’s first audit in 2018 recognized 20 materials weaknesses. Some have been corrected since then, however much more new ones have been uncovered.
Pentagon Audit
Open the Books
Background: A federal legislation from the early Nineties makes it unlawful for a federal company to fail an audit. But the DOD refused to even conduct an audit till 2018 and continues to be the one company to by no means move one.
Legislators threaten virtually yearly to remove a part of the Pentagon’s finances, reminiscent of within the Audit the Pentagon Act of 2023, however these payments hardly ever make progress.
The DOD says its purpose is to move an audit by 2028.
The Pentagon’s monetary points are partially on account of its multiplying forms. Every year, the Pentagon requests increasingly more cash for “operations & upkeep” for its day-to-day enterprise. The army requested $338 billion for it in 2025. In 2000, operations and upkeep solely value $175 billion, adjusted for inflation.
Energetic forces account for under $182 billion, or 21%, of the Pentagon’s finances request for subsequent 12 months.
Search all federal, state and native authorities salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.
Supporting quote: “Regardless of the disclaimer of opinion, which was anticipated, the Division has turned a nook in its understanding of the depth and breadth of its challenges,” Pentagon Comptroller Michael McCord stated. “Momentum is on our facet, and all through the Division there may be sturdy dedication — and perception in our skill — to realize an unmodified audit opinion.”
Abstract: If the U.S. goes to take care of the world’s most costly army, its value ought to be on account of its may — not due to horrible bookkeeping.
The #WasteOfTheDay is dropped at you by the forensic auditors at OpenTheBooks.com
This text was initially printed by RealClearInvestigations and made obtainable through RealClearWire.
