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With trillions at play, Pentagon fails audit for sixth yr in a row

With trillions at play, Pentagon fails audit for sixth yr in a row

2023-11-17 10:52:28

The Pentagon

The Pentagon launched its newest audit this week. (US Military/Sgt. 1st Class Marisol Walker)

WASHINGTON — For the sixth yr in a row, the Pentagon has failed its annual audit, whereas contending it made incremental, year-over-year progress.

“Auditing the Division’s $3.8 trillion in property and $4.0 trillion in liabilities is a large enterprise… however the enhancements and adjustments we’re making each day on account of these audits positively have an effect on each soldier, sailor, airman, marine, guardian, and DoD civilian,” Michael McCord, the Division of Protection (DoD) Below Secretary of Protection and Chief Monetary Officer, wrote in a press release Wednesday.

The division unveiled its newest audit on Wednesday and, just like last year’s, it examined 29 standalone entities, from the Navy Retirement Fund to completely different navy businesses. Of these it gave solely seven an “unmodified opinion,” or clear audit, through which auditors decided their monetary statements had been offered pretty and that they adhered to accounting ideas.

Just one audit, the Medicare-Eligible Retiree Well being Care Fund, obtained an “certified opinion” this yr, which means auditors decided there have been misstatements, or doubtlessly undetected misstatements, however these didn’t adversely affect the monetary statements. 

Whereas there are nonetheless three excellent audits not but wrapped up, the DoD reported that the remaining 18 failed, together with the Protection Superior Analysis Tasks Company and Nationwide Safety Company.

“We’re working arduous to deal with audit findings in addition to suggestions from the Authorities Accountability Workplace,” McCord wrote. “The parts are making good progress leading to significant advantages, however we should do extra, and we can not do that alone.” 

The division has now failed each audit since 2018, the yr the primary audit came about. The audit is performed by the DoD’s Workplace of Inspector Normal together with an impartial public accounting agency.

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In 2020, then-Appearing Comptroller Thomas Harker signaled that by 2027 the Pentagon may start to go its annual audit, an verify McCord previously stated won’t be viable.

Whereas there may be numerous heavy lifting to do to get to a clear audit, McCord famous a number of steps ahead this yr and outlined further ones that may be taken to assist obtain a passing grade.

These further steps embody:

  • An Oct. 13 memo from Dense Secretary Lloyd Austin to the service secretaries and principal workers assistants emphasizing and reinforcing expectations for supporting the DoD monetary assertion audits;
  • Extra collaboration throughout DoD’s planners and programmers, the DoD monetary administration neighborhood, DoD management, the Workplace of Administration and Finances, and Congress “to make sure alignment of priorities and assets;” 
  • A name for lawmakers to go annual budgets on time and keep away from persevering with resolutions and shutdowns; and 
  • Asking protection contractors to pitch in by introducing “modern, time-saving enterprise options,” and bringing their property into audit compliance.

The decision for congressional assistance is a well timed one, coming simply hours after lawmakers agreed on a brand new persevering with decision that pushes the DoD’s funds battle to February subsequent yr — an everyday supply of frustration for senior Pentagon officers.

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