Defense was unable to complete its first audit until 2018.

Defense was unable to complete its first audit until 2018. Jeremy Christensen / EyeEm

Republicans Want a Briefing on the Defense Department’s ‘Lax’ Financial Management

The Pentagon failed its fifth-ever audit in 2022, but department officials say they are making some progress. 

Two top Republican lawmakers are asking the Defense Department for a briefing on its “lax” financial management. 

The Defense Department failed its fifth-ever department-wide audit, which was released in November. In January, the Government Accountability Office reported that “serious control issues” are preventing Defense from having complete and accurate records on government-furnished property in the hands of contractors and, thus, “reliable and auditable” financial information on that property. The department’s financial management has been on GAO’s high-risk list since 1995, while its contract management has been on the list since 1992. 

“DoD’s lax financial management and inability to adequately track weapons, equipment and other defense articles have raised serious concerns about DoD’s stewardship of taxpayer dollars, especially as DoD’s budget approaches 13 figures,” wrote Reps. James Comer, R-Ky., chairman of the House Oversight and Accountability Committee, and Pete Sessions, R-Texas, chairman of the committee’s government operations and federal workforce panel, to Defense Secretary Lloyd Austin on Monday. “The committee requests a staff-level briefing on DoD’s failed audit, financial management practices generally, and what it is doing to implement outstanding recommendations for improvement.” The lawmakers asked to schedule this briefing by March 13. 

In 1990, Congress required financial audits for agencies, but DoD was not able to complete its first until fiscal 2018. “I would not say that we've flunked. The process is important for us to do, and it is making us get better,” said Michael McCord, the undersecretary of defense (comptroller)/chief financial officer, in November, upon the release of the fifth audit. “It is not making us get better as fast as we want.” Of the department’s 27 entities, only seven received a clean audit, which represented 39% of its total assets. 

GAO made three recommendations in its January report: to shore up Defense-wide guidance on government furnished property in the hands of contractors; ensure there are written procedures for how the Property Functional Council (which Defense established in 2018) and other oversight groups work; and develop a strategy, separate from the financial management one, to specifically outline Defense-wide actions to tackle the government property issues. Department officials agreed with one recommendation and partially agreed with two. 

Comer and Sessions also wrote in their letter that the Defense Department's adherence to GAO’s recommendations on “weapons systems acquisition, business systems modernization, and overall financial tracking,” as outlined in its May 2021 high-risk list, “will improve tracking of weapons and funds, including those sent to Ukraine.” The high-risk list comes out after two years and shows the progress and challenges agencies are having with the high-risk areas. 

A Pentagon spokesperson declined to comment on correspondence with members of Congress. 

The Pentagon achieving a clean financial audit has been an issue that’s garnered bipartisan attention over the years. 

For instance, in May 2021, Sens. Bernie Sanders, I-Vt., Chuck Grassley, R-Iowa, Ron Wyden, D-Ore., and Mike Lee, R-Utah, introduced a bill that would have required the Pentagon to pass a full, independent audit by fiscal 2022 and any department component that failed to do so would have to return 1% of its budget to the Treasury Department to help with deficit reduction. A bipartisan group in the House introduced a similar bill in June 2021. Neither bill received a vote. 

In March 2022, Grassley and Sanders wrote to the Commission on Planning, Programming, Budgeting and Execution Reform, part of the legislative branch that was established by the fiscal 2022 National Defense Authorization Act to examine the Defense Department, about the issue. 

On Tuesday, Grassley, Wyden and Sanders reiterated their call for their legislation following the release of a new GAO report, which they commissioned, finding that challenges with Defense’s financial management and business systems modernization “remain a key impediment to the department’s efforts to achieve a clean audit opinion.” GAO made nine recommendations; Defense officials agreed with seven and partially agreed with two. 

A press release from Grassley’s office said, “the senators will continue to actively examine legislative solutions to these ongoing problems.” 

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.