For the seventh consecutive year, the Department of Defense (DOD) has failed to pass a clean audit.

Trying to put this failure in the best possible light, DOD Comptroller and Chief Financial Officer Michael McCord said during a press briefing on November 15, 2024, that, “This result was not a surprise and I know on the surface it doesn’t sound like we’re making progress, however that is not the case … I believe the department has turned a corner in its understanding of the challenges and, more importantly, in addressing those challenges.  Momentum is on our side.”

He listed some reasons for optimism that the DOD may achieve its goal of a clean audit by fiscal year (FY) 2028, as mandated by the FY 2024 National Defense Authorization Act.  The Defense Threat Reduction Agency had a clean audit in fiscal year (FY) 2024, bringing the total to nine out of 28 areas of the DOD to pass the test.  The Marine Corps became the first service to complete a clean audit in  FY 2023.  According to Comptroller McCord, “In addition to reporting entities that already had favorable audit opinions, $703 billion, or 82% of our DOD-wide, $856 billion balance is now free of material weaknesses.”  In FY 2021, only 7 percent of total funding was free of material weaknesses.

The DOD remains the sole federal agency that has not undergone a clean audit under the Chief Financial Officers Act of 1990.  One of the reasons for this ongoing failure is the inclusion of several areas within the DOD on the Government Accountability Office’s list of programs at high risk for waste, fraud, abuse, and mismanagement since 1995. 

While it is encouraging to see some progress, with approximately 16.3 percent of the federal budget going to the DOD in FY 2024, it is long past time for the DOD to right its fiscal ship.