The U.S. Department of Defense confirmed on Friday that the Pentagon failed its seventh consecutive audit and failed to give a full account for its $824 billion budget. Despite the seventh consecutive audit failure, Pentagon officials claimed that the Department of Defense has “turned a corner” and is “making progress” toward a clean audit in the next few years.
In a Friday press release, the Department of Defense announced that it had released the results of the Pentagon’s seventh annual financial audit, which included a disclaimer of opinion, indicating that the auditors were not provided with enough information to give an accurate opinion of the department’s financial accounts for the year.
According to the press release, the audit was completed by the Department of Defense Office of Inspector General and independent public accountants. Of the Pentagon’s 28 reporting entities for financial audits, 15 received disclaimers, one received a qualified opinion, 9 received an unmodified opinion, and three opinions are still pending.
Under Secretary of Defense (Comptroller) and Chief Financial Officer Michael McCord indicated on Friday that the Department of Defense is making significant progress toward a clean audit.
“Despite the disclaimer of opinion, which was expected, the Department has turned a corner in its understanding of the depth and breadth of its challenges,” McCord said. “Momentum is on our side, and throughout the Department there is strong commitment—and belief in our ability—to achieve an unmodified audit opinion.”
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Under the National Defense Authorization Act, the Pentagon is required to achieve an unmodified audit opinion by the end of 2028.
In Friday’s press release, McCord said that while “significant work” and “challenges” continue to face the Pentagon’s effort to achieve a clean financial audit, the department’s annual audit process works as a “catalyst for Department-wide financial management reform.”
During a press briefing on Friday, McCord discussed this year’s audit, saying, “I do not say we failed, as I said, we have about half clean opinions. We have half that are not clean opinions. So if someone had a report card that is half good and half not good, I don’t know that you call the student or the report card a failure. We have a lot of work to do, but I think we’re making progress.”
McCord explained that the Pentagon needs senior leadership commitment, continued investment, and support from Congress, financial auditors, federal regulators, and military and civilian personnel to achieve the department’s ultimate goal of a clean audit.
McCord concluded, “An unmodified audit opinion has always been the Department’s primary financial management goal, and with their help, I know it is achievable.”
