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October 6, 2022
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Why The Pentagon Keeps Failing Its Audit

With a budget of over three quarters of a trillion dollars, the Pentagon has found that passing a sweeping audit is a tricky proposition. Antiquated systems, huge budgets, and the sheer size of the Department of Defense have made passing the congressionally mandated audit a towering endeavor, but one that experts say is doable in time.

The Pentagon has failed another audit this year. But with $770 billion expected to be budgeted for 2022, the Department of Defense says it is working on keeping track of all this money.

“It took the Department of Homeland Security a decade to pass its audit, and it’s a fraction of the size of the Defense Department,” said Mackenzie Eaglen, a senior fellow with the American Enterprise Institute. “There is a bit out there that just because the department can’t pass the audit, it doesn’t know where it’s spending its money. And it does. But what it doesn’t do well is track it at an enterprise level.“

Since 1988 the budget has grown from over $634 billion in 2020 dollars to over $724 billion in 2020. But, the defense budget as a percentage of the total gross domestic product has actually dropped in the same period, from 5.7% to 3.5%, according to a Congressional Research Service analysis of Office of Management and Budget historical tables.

One example of an item found in the recent audit was a Navy warehouse that was not on the Navy’s property records and that housed aircraft parts worth $126 million, according to the Government Accountability Office.

“The financial system that you have in DOD right now is set up to control taxpayers’ dollars to guarantee that there is not going to be unauthorized use of it. So every dollar and cent is accounted for,” said Frederico Bartels, a senior policy analyst at the Heritage Foundation. “And there, you can see that by the ADEA violations being extremely low at DOD, there are still some but that’s part of doing business, it’s still lower than most federal agencies.“

Old systems for tracking funds, a slow bureaucracy, and the sheer size of the U.S. Defense apparatus have kept audits from passing since they began in late 2017.

The size of the budget is constantly a subject of debate, but for lawmakers to make informed decisions they need good data.

“This is the Pentagon,” said Rep. Barbara Lee, D-Calif. “They’re responsible for the security of the United States. If, in fact, their audit systems are outdated, if … they can’t do an audit and give us a picture of what they’re spending, I kind of worry about what they’re doing on the really important stuff.“

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Why The Pentagon Keeps Failing Its Audit

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