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The Pentagon Can't Account for Several Hundred Million Dollars It Spent

February 5, 2018 in Blogs

By Jacob Sugarman, AlterNet

An internal audit exposes the Defense Department's disastrous book-keeping.

In December, Donald Trump signed a $700 billion defense bill into law, ramping up the size and strength of the U.S. military. The $80 billion spending increase alone is enough to finance tuition-free public colleges and universities. The budget also comfortably covers the nearly $1 billion that one of the Pentagon's leading agencies can't seem to account for.

According to a new report from Politico, the Defense Logistics Agency has failed to produce documentation for $800 million worth of construction projects. And that's just what we know of. As an internal audit from the multinational accounting firm Ernst & Young reveals, the Department of Defense's financial book-keeping is “so weak that its leaders and oversight bodies have no reliable way to track the huge sums it's responsible for.”

The DLA employs as many as 25,000 and processes upwards of 100,000 budget requests from the Army, Navy, Air Force, and Marine Corps each day. Politico notes that the agency is a one-stop shop for orders ranging from poultry and pharmaceuticals to precious metals and aircraft parts.

Given its enormity, one might assume the DLA would be subject to strict oversight. In fact, just the opposite is true. Not only are the financial records for the agency incomplete, but the Department of Defense itself has never undergone a full audit, despite commanding as much as $2.2 trillion in assets.

“DLA is the first of its size and complexity in the Department of Defense to undergo an audit so we did not anticipate achieving a 'clean' audit opinion in the initial cycles,” an agency spokesman said in a statement. “The key is to use auditor feedback to focus our remediation efforts and corrective action plans, and maximize the value from the audits. That’s what we’re doing now.”

Ultimately, the DLA's accounting (or lack thereof) reflects a larger culture of profligacy across the U.S. military. By the Pentagon's own internal analysis, the Defense Department blew as much as $125 billion on “administrative waste” in 2015—a report it had buried for fear Congress might slash its budget. But …read more


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