Pentagon Fails Audit for Sixth Year in a Row

Facts

• The US Department of Defense failed an independent audit of its accounting systems for the sixth year in a row, the Pentagon confirmed on Wednesday.¹
• Since the Pentagon began the practice in 2018 — the last government department to do so following a Congress requirement in 1990 — it has yet to pass. This year, auditors rated seven of the nearly 30 sub-audits as clean, the same figure as last year. One sub-audit was rated the next lowest level of 'qualified,' three were ongoing, and 18 received failing grades.²
• Nonetheless, Comptroller Michael McCord tried to reassure the public that there's progress despite the same topline rating. He said, 'Auditing the department’s $3.8T in assets and $4T in liabilities is a massive undertaking,' but 'the improvements and changes we are making every day as a result of these audits positively affect every soldier, sailor, airman, Marine, guardian and DOD civilian.'³
• McCord said that one area of progress was the Pentagon's movement towards balanced books with the US Treasury Department, a move that should help in preventing fraud. A second was the Pentagon's use of automated programs, or bots, for repetitive tasks in order to free up accountants’ time for more important work.²
• According to the comptroller, the use of robots for such tasks has helped save up to 600K man-hours in the Navy and Air Force alone.⁴
• The last development, he said, was more related to the battlefield. McCord said that after Russia's invasion of Ukraine last year, the Pentagon scrutinized its own stockpiles. He said that meant when the Israel-Hamas war broke out last month, the US knew exactly the makeup of its weapons and their conditions.²

Sources: ¹Reuters, ²Defense News, ³Stars and Stripes and ⁴Daily Caller.

Narratives

• Establishment-critical narrative, as provided by War on the Rocks. It's no surprise at all that the Defense Department has once again failed its yearly audit. Until the Pentagon tries to pioneer a new system of accounting for its vast assets and equipment — rather than continuously depending on outdated methods — it will repeat these failures year after year. Not only is the US military working with ancient auditing systems, but it's also spending more money to conduct these reviews — almost a billion dollars a year — than private companies who have no issues getting their books in order.
• Pro-establishment narrative, as provided by U.S. Department of Defense. The Defense Department is one of the largest organizations in the world and auditing its vast web of assets and equipment across the globe is an extremely difficult undertaking. While the department received the same topline grade as last year, it continues to make incremental progress toward a clean audit. While this doesn't mean the DOD has lost its assets, the Pentagon knows that its outdated auditing systems are causing an unnecessary mess and is working toward modernizing as quickly as possible.