Pentagon fails sixth audit in a row

According to the chief financial officer of the Defense Department, the Pentagon failed its annual audit six years in a row.

According to Comptroller Mike McCord, who spoke with reporters on Wednesday, out of 29 sub-audits conducted by the department this year, only seven were successful. This is the same number as last year.

He said that 18 students were given failing grades and three others received “qualified” ratings, which is a step below passing. Three are still in progress, while the other two have been reassessed.

The overall audit must pass all sub-audits.

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McCord stated that “there are signs of progress” but overall, “it is not enough.”

Secretary of Defense Lloyd Austin believes that we should be moving faster and doing better. However, a successful audit will still take years to complete.

Since the early 1990s, federal law requires audits of all government agencies. The Pentagon began auditing its own operations in 2018 and only made incremental improvements each year.

In this round, 1,600 auditors conducted 700 site visits to examine the $3.8 trillion assets and liabilities of DOD. The audit found that DOD assets cannot be accounted.

Due to its sheer size, the Pentagon has a difficult time auditing. The Department of Defense accounts for more than 50% of discretionary expenditures in the United States. Its assets are diverse, including personnel, bases, weapons, and supplies.

McCord admitted last year that audits “are getting a bit harder” because “a lot of the lower hanging fruits have been picked”, meaning that simpler issues had already been resolved.

The trend of audit failures has been noted by lawmakers, and earlier in the year a group of bipartisan senators introduced legislation that would ensure DOD will pass a clean audit for next year. The bill comes after repeated concerns by Congress regarding fraud, waste and abusive practices at the Pentagon.

When asked Thursday if the failed audit sent a negative message to U.S. enemies and allies, Pentagon deputy Press Secretary Sabrina Singh responded that the effort was “a continuous and ongoing process.”

She told reporters that, “While the results weren’t what we wanted, it is certain that we learn each time an audit passes.”