After the Department of Defense (DOD) failed its fifth consecutive audit in November, House Oversight and Accountability Committee Chairman James Comer (R-Ky.) and the Government Operations Subcommittee and the Federal Workforce Chairman Pete Sessions (R-Texas) are looking into the DOD’s failure to prevent waste, fraud and abuse.
Republican congressmen are writing to Secretary of Defense Lloyd Austin requesting a staff-level briefing to learn more about the DOD audit failure, general financial management processes, and what the department is doing to put implement outstanding reform suggestions.
“The failure of the Department of Defense (DOD (DOD)) to prevent waste, fraud and abuse is under investigation by the Oversight and Accountability Committee. In November 2022, the DOD failed in its fifth consecutive audit because it was unable to account for 61% of its $3.5 trillion in assets.The two Republican lawmakers wrote in response to a recent Government Accountability Office report (GAO) that the Department of Defense (DOD) “continues to fail to appropriately account for hundreds of billions of dollars in government-furnished assets in the hands of contractors. Even though it receives nearly a trillion dollars a year, the DOD’s failure to properly track assets puts our military preparedness at risk and shows a blatant disregard for taxpayer dollars.
Pentagon comptroller and top financial official Mike McCord announced the findings of the department’s fifth annual audit to reporters in November 2022. “We failed to get an ‘A,'” he said. “The process is crucial for us, and it helps us improve. We don’t heal as quickly as we would like because of it.
The Department of Defense’s financial audit covers more than $7 trillion in assets, such as real estate and military equipment, and liabilities, such as legal claims and the costs of realigning or closing military facilities. basics. It is a compilation of 27 surveys across the company, including individual agencies and military departments.
For defense leaders and taxpayers, the purpose of the audit is to shed light on how the department spends its funds and track its assets, which are spread across all 50 states, Washington, D.C., seven territories and 40 nations. While not the only option for the DOD to monitor spending and uncover waste, fraud, and abuse, obtaining a clear financial audit opinion for each component could increase taxpayer confidence and service members.
According to the report, 16 of the 27 stand-alone audits determined they had multiple areas for improvement, while seven of the 27 had unmodified opinions, meaning the auditors found their financial statements to be generally compliant with accounting standards. accepted.
GAO’s high-risk list regularly showcases DOD’s contractor management and financial management. According to a January 2023 GAO report, the DOD failed to properly account for a significant amount of government-owned property given to contractors, including weapons, tools, and other defense-related items. In 2014, the DOD estimated that contractors had $220 billion in government-furnished assets in their custody, but the GAO believes the number is “seriously overstated.” The acquisition of DOD weapons systems, modernization of enterprise systems, and overall financial tracking all received numerous recommendations from the GAO.
“Serious questions about the Department of Defense’s handling of taxpayer funds have been raised, particularly as the Department of Defense’s budget approaches the thirteen-figure mark due to DOD’s financial mismanagement and its inability to adequately track weapons, equipment, and other defense items The DOD’s inability to create auditable financial statements that would allow adequate control of DOD’s financial management processes was hampered by the inability to solve these problems, according to the two Republican members of Congress.