The Defense Department announced Thursday that it has completed an agency-wide audit that cost hundreds of millions of dollars and was required more than 20 years ago by Congress. It failed.
“But we never expected to pass it,” Deputy Defense Secretary Patrick Shanahan told reporters at the Pentagon.
The audit has yet to be released and the Office of Inspector General’s report on its findings is expected to be completed Thursday, according to Pentagon officials.
Since the audit began in December 2017, Shanahan said the Pentagon has received preliminary findings and has been developing plans on how to take corrective actions based on them.
Some issues revealed by the audit include inventory accuracy and complying with cybersecurity discipline, Shanahan said.
The compliance issues found in the audit are “irritating,” he said. “Some of those things frustrated me because we have a job to do, we just need to follow our procedures.”
After Shanahan’s briefing with reporters, his spokesman Lt. Col. Joe Buccino attempted to clarify the audit’s findings.
“The audit is not a ‘pass-fail’ process,” he wrote in an email. “We did not receive an “adverse” finding – the lowest possible category – in any area. We did receive findings of ‘disclaimer’ in multiple areas. Clearly more work lies ahead of us.”
Congress has required a Defense Department audit since the early the 1990s, but the federal government’s largest agency had never fully undertaken one. The 2014 National Defense Authorization Act required the department to be ready for an audit by 2017.
The Pentagon’s Chief Financial Officer David Norquist told the House Armed Services Committee in January that the audit would cost $367 million and an estimated 1,200 auditors were to look into the count, location and condition of military equipment, real property and inventory. The audit examined security vulnerabilities in the Pentagon’s business systems, validated the accuracy of personnel records such as promotions and assessed whether the department’s books and records present a true and accurate picture of financial health, he said.
The audit was “on a $2.7 trillion organization, so the fact that we did the audit is substantial,” Shanahan said.
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