A June report by the Defense Department’s Inspector General uncovered that the Army made $2.8 trillion in wrongful adjustments to accounting entries in one quarter alone in 2015, $6.5 trillion for the year raising concern that US taxpayer dollars are going unaccounted for as the military branch resorts to a cooked book scheme at a time of fiscal stress.
The report concluded that the Army’s 2015 financial statements “materially misstated” the reality and that a number of the accounting entries were "forced adjustments" rendering the statements useless because "DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions."
The new report addressed the Army’s General Fund, the larger of its two main accounts, which held assets of $282.6 billion in 2015. According to the IG’s report, the Army lost or failed to maintain data while much of the information they kept on file was inaccurate.
"Where is the money going? Nobody knows," said Franklin Spinney, a retired military analyst for the Pentagon who has vocally criticized the US Defense Department’s planning or lack thereof.
Many in the Defense Department worry that an accurate accounting may reveal serious problems with how money is presently allocated potentially devolving in a scandal over misappropriation of funds and, at minimum, undercutting public confidence that the government is operating properly and effectively.
The 2016 Defense Department budget sits at $573 billion with more than half of the annual budget coming in the form of congressional appropriations. The failure on the part of the Army to maintain its financial records in proper order may have ripple effects for the entire US defense establishment.
Congress set a September 30, 2017 deadline for the Department of Defense to undergo an audit, but the Army’s massive accounting issues raise doubts whether the deadline will be met, or if they will ever be able to truly document where taxpayer dollars were spent or why.
In an emailed statement to Reuters, an Army spokesman said the military branch "remains committed to asserting audit readiness" by the deadline and is taking steps to address the problems. He also countered that "though there is a high number of adjustments, we believe the financial statement information is more accurate than implied in this (IG) report."
According to a retired Defense Inspector General official, Jack Armstrong, the financial reporting failures of the US Army are not new, but rather were occurring back before he retired in 2010.
"They don’t know what the heck the balances should be," said Armstrong saying that employees at the Defense Finance Accounting Services (DFAS) comically refer to the preparation of the Army’s year-end statements as "the grand plug." The former official explains that “Plug” is jargon for just inserting made-up numbers from the top of your head.
By comparison, Bernie Sanders' "College for All" plan which was blasted by rivals as unrealistic and "too expensive" called for an investment of only $75 billion per year to ensure a tuition free education at public colleges and universities for every student in the country. Ouch.