Protection Division fails one other audit, however makes progress

The Protection Division has failed its fifth-ever audit, unable to account for greater than half of its belongings, however the effort is being seen as a “teachable second,” in accordance with its chief monetary officer. 

After 1,600 auditors combed via DOD’s $3.5 trillion in belongings and $3.7 trillion in liabilities, officers discovered that the division couldn’t account for about 61 p.c of its belongings, Pentagon Comptroller Mike McCord informed reporters on Tuesday. 

McCord stated the division has made progress towards a “clear” audit previously 12 months, however later added “we didn’t get an ‘A.’” 

“I’d not say that we flunked. The method is essential for us to do, and it’s making us get higher. It isn’t making us get higher as quick as we would like,” he stated. 

This 12 months’s final result was not sudden. 

Federal regulation because the early Nineteen Nineties requires obligatory audits for all authorities companies, and since fiscal 12 months 2013 all however the DOD have been capable of fulfill that requirement. 

The sheer dimension and scope of the division — which makes up for greater than half of the U.S. discretionary spending and has belongings that vary from personnel and provides to bases and weapons — makes it troublesome to audit.  

In December 2017, protection officers set out to scrutinize DOD’s books, the primary complete audit of the company in its historical past. That effort failed the following 12 months, and the 4 that adopted.  

The company had by no means anticipated to go, nonetheless, as a result of accounting points officers stated might take years to repair. 

As a result of accounting data wanted to finish the evaluation weren’t obtainable, all 5 audits obtained a “disclaimer of opinion,” although there have been enhancements every time. 

McCord, who served as Pentagon comptroller from 2009 to 2017 and once more since June 2021, stated the latest audit required 220 in-person web site visits and 750 digital web site visits by Pentagon officers and impartial public accounting agency personnel. 

What they discovered had been a number of new weaknesses in how DOD accounted for its belongings, which embody practically 2.9 million army personnel; gear and weapons together with 19,700 plane and greater than 290 ships; and bodily gadgets together with buildings, roads and fences on 4,860 websites worldwide. 

To interrupt up the work, the division holds 27 separate, smaller audits after which combines the data to get the larger image and forestall “having one thing on a document that doesn’t exist in actuality or having huge discrepancies.” 

McCord stated that whereas he prefers to give attention to the progress on this 12 months’s audit, every time “the progress is getting slightly more durable” as a result of “a lot of the decrease hanging fruit having been picked,” that means the easier points have already been weeded out.  

He famous that Ukraine’s ongoing battle with Russia has provided a DOD personnel “a really teachable second for us on the audit,” as it permits them to image the essential nature of exact monitoring of weapons and gear within the occasion of a battle.   

“That’s to me a very nice instance of why it issues to get this type of factor proper — of counting stock, realizing the place it’s and realizing when it’s [arriving],” McCord stated. 

“I’ve requested our folks to think about that was our of us, our women and men in uniform, who had been up in opposition to it,” he added.