The Pentagon has failed its third-ever audit as its budget grows to record size – but the Defense Department comptroller wants taxpayers to know the agency will almost certainly have its books in order by 2027.
Interim Pentagon comptroller Thomas Harker defended the Pentagon’s third failure in a row since the agency began conducting audits in 2018 during a briefing on Monday, explaining “this is something that’s never been done for an entity of the size and complexity of the Department of Defense.”
“We’ve been clear that this is a journey that will require a sustained effort over several years,” Harker continued, predicting the Pentagon might be able to pass an audit in 2027 and deeming that a “reasonable” target for an entity with $2.9 trillion in assets.
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However, the Pentagon isn’t being audited as a whole – a ‘Pentagon audit’ actually comprises 24 smaller audits of the individual agencies that make up the Defense Department. Just seven of those agencies are expected to pass, Harker said – the same number as passed last year.
Harker had plenty of excuses handy for why the bloated agency failed its third audit, noting that the Department of Homeland Security – which has only existed since 2002 – took 10 years to pass an audit and complaining that “coronavirus-related travel restrictions” made things difficult for the auditors this year. He pinned the blame for the Marine Corps failing its audit despite making “a ton of progress” squarely on the pandemic, while praising the Defense Information Security Agency’s “working capital fund” for making improvements, expressing hope that the unit might even pass when its audit is completed in December.
While Harker is officially the top budget official at the Navy, he has been working double duty as Defense Department comptroller since July 2019 in the absence of a Senate-confirmed replacement for Elaine McCusker, who resigned after 18 months as acting comptroller when the White House withdrew her nomination for a permanent appointment.
Adding insult to injury, the failed Pentagon audit cost taxpayers $203 million in fees, paid out to public accounting firms. Harker insisted the changes inspired by the findings – “process improvements that we’re making around accountability for property accountability [sic], for inventory, that type of thing” – will save the Pentagon over $700 million.
Despite failing every audit since they began in 2017, Congress has continued to shovel money into the Pentagon at an unprecedented pace. Fiscal year 2020 saw the agency receive a record $738 billion, including allotments for cash-burning programs like the notoriously failure-prone F-35 jet that exceeded even President Donald Trump’s requests.
While federal law has required government agencies to be audited since 1990, no attempt was ever made to audit the Pentagon until 2017, despite the agency eating up more than half of every discretionary budget dollar. In 2016, it emerged that the department had tried to memory-hole an internal study exposing $125 billion in “administrative waste in its business operations” lest Congress use its fiscal ineptitude as an excuse to slash the budget. That the most expensive military in the world would spend a quarter of its gargantuan budget on administrative overhead was a national embarrassment.
Worse, a 2017 investigation found $21 trillion in “unsupported adjustments” for the Pentagon and the Department of Housing and Urban Development over the years 1998 to 2015 – a truly shocking sum of money. The finding implies the Pentagon has misplaced hundreds of times more taxpayer dollars than it has ever been legitimately allotted by Congress.
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Despite this pattern of eye-popping fiscal malfeasance, the Pentagon quietly asked Congress earlier this year if it could both classify its future spending plans going forward and be relieved of the responsibility of certifying their accuracy. The department has been legally required since 1989 to submit publicly-viewable estimates of the next five years’ defense spending annually, called a “Future Years Defense Program.”
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