AUG. 30, 2016 — Americans trust the U.S. military to protect lives and freedoms, but they cannot trust it to perform an honest accounting of its own budget. “The United States Army’s finances are so jumbled it had to make trillions of dollars of improper accounting adjustments to create an illusion that its books are balanced,” Reuters recently reported.
According to a report from the Defense Department’s Office of Inspector General, the Army “materially misstated,” or simply made up, accounting figures totaling $6.5 trillion for 2015. The errors eclipse the DOD’s total budget, which is $573 billion for 2016, because errors in one account cascade down to multiple levels of subaccounts as well.
”DOD and Army managers could not rely on the data in their accounting systems when making management and resource decisions,” the IG’s report concluded. In some cases, the Army simply did not maintain required data, in other cases data was woefully inaccurate and sometimes data was lost. For example, the Defense Finance and Accounting Services, which performs accounting functions for the DOD, was unable to produce accurate year-end financial statements for the Army “because more than 16,000 financial data files had vanished from its computer system,” Reuters noted.
In order to fill these gaps in the financial statements, DFAS staff engaged in what some employees refer to as “the grand plug”; in other words, pulling numbers out of the air to make things add up. “As a result,” the Reuters story observed, “there has been no way to know how the Defense Department — far and away the biggest chunk of Congress’ annual budget — spends the public’s money.”
These revelations call into question whether the Defense Department will be able to meet a deadline to be ready for a comprehensive audit by September 30, 2017. The long overdue audit would be the first in the history of the DOD, which for 20 years has flouted a law requiring all federal departments to conduct annual audits.
The DOD has a long history of waste and a lack of accountability. In recent years, it has wasted billions of dollars in doomed Afghanistan reconstruction efforts, spent $1 billion to destroy $16 billion worth of obsolete and unused ammunition and lost more than $500 million worth of weapons, aircraft, patrol boats and equipment given to Yemen, some of which might have fallen into the hands of terrorists.
Politicians plead for more defense spending “for the troops” with almost as much regularity as they seek more money for other programs “for the children.” But the DOD IG’s latest report, and many others preceding it, clearly illustrate that much of the Pentagon’s funding has nothing to do with the troops’ welfare or the readiness of our military services.
While both Hillary Clinton and Donald Trump have called for increased defense spending to “strengthen” our military forces, our hope is that these reports will not only reiterate the need for the Defense Department to undergo that long-delayed comprehensive audit, but also spur an honest discussion about its budget and the need to eliminate its wasteful spending and frivolous defense contracts.