Pentagon Fails Sixth Audit in a Row, Claiming “Progress Sort of Beneath the Surface”

The U.S. military appears unfazed in its inability to account for billions of dollars. On Thursday, the Department of Defense failed its sixth consecutive audit — but hailed its “incremental progress.”

As the Pentagon budget nears a watershed $1 trillion — the largest of any federal government agency — it has never passed a single one of the annual audits mandated by Congress. In a press briefing, the Department of Defense said it had no timeline for passing an audit.

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“We’ve heard the same platitudes about audit progress for years,” said Julia Gledhill, an analyst at the Project on Government Oversight’s Center for Defense Information. “They’re meaningless, especially since the Pentagon can’t even commit to a timeline for achieving a clean audit.”

“We’ve heard the same platitudes about audit progress for years. They’re meaningless.”

Former Pentagon comptroller Thomas Harker, now the secretary of the Navy, had publicly set a deadline of 2027 for a clean audit, but officials have since distanced the military from that timeframe. “Former comptroller Harker signaled 2027 back in 2020, but the department has completely rolled that back,” Gledhill said. “There’s no incentive to improve.”

Beginning in 2017, the audits are conducted by the Pentagon inspector general along with independent public accounting firms. The Defense Department is auditing $3.8 trillion in assets and $4 trillion in liabilities.

The Defense Department insists that the latest failure shows growth, a claim for which there does not appear to be any evidence. The Pentagon failed as many of its sub-audits this year as it did last year.

“We keep getting better and better at it,” deputy Pentagon press secretary Sabrina Singh said of the audit failure during a press briefing Thursday. 

“I’ll just say that we remain a trusted institution,” Pentagon comptroller Michael J. McCord said during a separate press briefing about the audit. “We’ve made a lot of progress to date.”

When a reporter pushed back on McCord’s claim, he conceded that the number of unmodified opinions — instances when an auditor concludes a financial statement is presented fairly — was unchanged since last year.

“It was static from last year,” McCord said, “but we still believe that we have seen signs of progress that are going to get us more favorable in the future.”

McCord also acknowledged that the number of disclaimers, when auditees provide insufficient documentation to be audited, had increased. 

Despite these facts, McCord pointed to subtle forms of progress.

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“But yes, what I’m talking about is progress sort of beneath the surface of a pass-fail for the entire Army,” McCord said.

The Defense Department did not immediately respond to a request for comment.

President Joe Biden has requested a record $886 billion Pentagon budget for the next fiscal year, a request that the Republican Congress has sought to add another $80 billion to, even as they threaten a government shutdown over what they say is excessive government spending.

Asked by a reporter when the Pentagon expects to pass an audit, Singh said that she can’t predict the future, but that when the Pentagon did, she would let them know.

In a nod to the late Bush administration defense chief Donald Rumsfeld, the reporter cracked, “It’s a known unknown.”

“One the one hand, the Pentagon is far and away the most complex federal agency,” said William Hartung, a senior research fellow at the Quincy Institute for Responsible Statecraft. “But they have been legally required to pass an audit for decades and have clearly not made it a priority.”

“As long as the money keeps flowing and there are no consequences for failure,” he said, “we can expect the Pentagon to fail audits year after year with no end in sight.”