If this were baseball, Pentagon accountants would be walking back to the dugout from home plate, bat resting on slumped shoulders.

For the third straight year, the Department of Defense (DOD) has failed to pass a clean audit. On November 16, 2020, the Pentagon’s latest review of its 24 agencies and $2.9 trillion in assets turned up one additional subgroup, the Defense Information Systems Agency, which came back clean.  Along with the six that passed last year, seven of the DOD’s 24 agencies have thus far returned clean audits.  The Pentagon now estimates that the remainder of its agencies will not be able to pass a clean audit before 2027, 37 years after it was required to do so by law.

The DOD remains the sole federal agency that has not undergone a clean audit under the Chief Financial Officers Act of 1990.  The necessity for the Pentagon to get its financial house in order is revealed on a regular basis.  Approximately 17 percent of the country’s overall outlays went to defense spending in FY 2020, and numerous problems have cropped up over many years.

A July 26, 2016 DOD Inspector General (IG) report noted that the Defense Financing and Accounting Service, which provides payment for military and civilian personnel and retirees, could not adequately document $6.5 trillion worth of year-end adjustments to general fund transactions and data.  The books are so bad that areas within the DOD have been on the GAO’s list of programs at high risk for waste, fraud, abuse, and mismanagement since 1995.

The most recent financial review did manage to pay for itself.  Hiring outside accounting firms cost the Pentagon $203 million, and identified approximately $700 million in savings.

Acting DOD Comptroller Thomas Harker stressed patience, but this is hard to reconcile with the fact that this problem does not exist in any other federal agency.  It is hard to imagine members of Congress allowing such persistent financial ineptitude to exist anywhere else. 

Without consistent pressure from lawmakers, the DOD might never cross the line.  Take note, 117th Congress.