While a 1996 law requires that all US federal agencies conduct regular spending audits, the Pentagon has failed to conduct a single one. US lawmakers have begun cracking down, forcing the Defense Department to comply by September 30 of 2017.
The deadline may be over a year away, but a report released by the Government Accountability Office (GAO) this month found that at its current rate, the US Navy will not have reached audit readiness in time.
The Navy accounts for roughly one quarter of the Defense Department’s budget, making it the second largest branch, but its current treasury balance gaping holes. The accounting process also frequently required human intervention, causing significant delays.
"Addressing these shortfalls is critical to achieving audit readiness," the report reads, according to Military.com.
Further complicating matters is the fact that transactions that lack sufficient information are placed in suspense accounts that become more difficult to track. A common problem across all Pentagon departments, a report from June found that the Navy had miscalculated its suspense account balances by as much as $57 million.
"Suspense accounts have been a long-standing problem at DoD," the latest report reads.
Financial transparency has been an ongoing problem. The Navy claimed that it was audit-ready in 2013, but was forced to improve its system after a report from the DoD Inspector General.
In response to the new GAO findings, Navy spokeswoman Lt. Kara Yingling stressed that the Navy would be ready by next year’s deadline.
"The Navy is making steady progress towards the congressional mandate for the department to achieve full audability by FY17," she said.
That will only account for a fraction of the Pentagon’s troubles, of course. Findings released by the inspector general last month show that the Pentagon has failed to account for an exorbitant amount of money.
"Army and Defense Finance and Accounting personnel did not adequately support $2.8 trillion in third quarter adjustments and $6.5 trillion in year-end adjustments made to Army General Fund (AGF) data during FY 2015 financial statement compilation," the report reads.
In other words, the Pentagon has no idea how it spent nearly $7 trillion.
