The Pentagon “failed” its first-ever audit last week, but Republican Rep. Mac Thornberry, Chairman of the House Armed Services Committee, said the failure is an opportunity for reform.
“Congress directed DOD to conduct this audit to better manage the resources we dedicate to national defense. The process is an opportunity to find problems and identify areas for future reform,” Thornberry said in a statement.
“As expected, this audit has uncovered a number of matters that Congress and the Pentagon must work together to address. We must take advantage of this opportunity to continue our reform efforts and make the Pentagon more efficient and agile. It should not be used as an excuse for arbitrary cuts that reverse the progress we have begun on rebuilding our strength and readiness,” he added.
A department-wide audit was required for the first time when Congress demanded it in the 2010 National Defense Authorization Act, although the requirement was first implemented in 1990.
Some 1,200 auditors scoured over accounting records in 600+ locations in the largest audit of its kind, costing some $367 million to complete, Reuters reported.
The findings of the 11-month long audit process were released last week in a 236-page report.
Deputy Secretary of Defense Patrick Shanahan said the audit’s findings demonstrate weaknesses in financial discipline, but was unsurprised by the result.
“We failed the audit, but we never expected to pass it,” he said. “It was an audit on a $2.7 trillion dollar organization, so the fact that we did the audit is substantial.”
— Reuters Top News (@Reuters) November 15, 2018
Although the audit process is not technically a pass or fail circumstance, it did reveal significant discrepancies that will need to be addressed moving forward.
“We need to develop our plans to address the findings and actually put corrective actions in place,” Shanahan said. “Some of the compliance issues are irritating to me. … The point of the audit is to drive better discipline in our compliance with our management systems and procedures.”
“If I’m a taxpayer what I want to see is, ‘that’s great, you did the audit and you have all these findings – how long is it going to take for you to fix those?’ ” Shanahan added.
Comptroller David Norquist said last year, “It is important that the Congress and the American people have confidence in DOD’s management of every taxpayer dollar,” according to The Hill.
Pentagon’s top financial chief Norquist said the audit cost $367 million & will cost $551 million addressing problems discovered by auditors, such as software, inventory concerns.
— Claudia Grisales (@cgrisales) January 10, 2018
“With consistent feedback from auditors, we can focus on improving the processes of our day-to-day work,” Norquist explained. “Annual audits also ensure visibility over the quantity and quality of the equipment and supplies our troops use.”
Norquist added at the time that the Pentagon projected at least $551 million would be needed to solve issues identified in the audit. However, he noted that the price of the audit and fixing solutions was preferable to “operating in ignorance.”