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nitpicker

(7,153 posts)
Sun Apr 16, 2017, 06:26 AM Apr 2017

As Trump seeks defense-spending boost, watchdogs cite faulty Pentagon accounting

http://www.militarytimes.com/articles/as-trump-seeks-defense-spending-boost-watchdogs-cite-faulty-pentagon-accounting

As Trump seeks defense-spending boost, watchdogs cite faulty Pentagon accounting

By: Scot J. Paltrow, Reuters, April 15, 2017

WASHINGTON — President Trump is planning to increase U.S. defense spending by $54 billion next year. But a series of recent reports by the Defense Department Inspector General and the Government Accountability Office say that Pentagon accounting systems will struggle to track how the money is spent.

The reports found that the Pentagon remains unable to accurately track its $591 billion annual budget and experiences billions of dollars in accounting gaps and errors each year despite two decades of reform efforts. Taken together, the reports show that many of the endemic accounting problems exposed in a 2013 Reuters investigative series remain in place.
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The Pentagon’s continued accounting problems are drawing particular scrutiny now because the Defense Department faces a congressionally mandated legal deadline of Sept. 30, 2017, to become ready for its first audit ever. Unlike every other U.S. government department, the Pentagon has never undergone an audit because its financial records are in such disarray.
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The recent watchdog reports on the Defense Department found that it lacks a unified, functioning accounting system. As Reuters reported in its 2013 series, the Pentagon has hundreds of independent systems, built ad hoc and some dating from the 1970s, that are riddled with errors and incapable of sharing accurate data. Billions of dollars disappear from accounting records. The military has spent large sums building new systems meant to solve the problem, but so far they have not.

A March 16 Defense Department Inspector General report said the Navy could not find any records to back up how it had spent $866 million in the first quarter of 2016 in U.S. military operations in Afghanistan. The report said that as a result, there was no way to know what the money actually was used for.

A Navy spokeswoman, Lieutenant Kara YingLing, referred Reuters to the Navy’s official response to the report, which said the Navy agreed with the Inspector General’s conclusions but said its accounting problems will not be fixed until it begins using a new computer system in 2019. YingLing said the Navy is “on track” to help the Pentagon meet its Sept. 30 audit deadline.

The Feb. 9 GAO report said the Pentagon's continued bookkeeping errors affect the federal government as a whole. Defense spending makes up such a large part of the federal budget that the department's unreliable data skews accounting for the entire U.S. government, the GAO said.
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The GAO report noted that the Pentagon had hired large independent accounting firms for each of the military services to try to help them meet the Sept. 30 audit deadline. But the report said the firms have found so many problems that the ability of the Pentagon to meet the deadline remains in doubt.

A separate Defense Department Inspector General report issued on March 23, 2017, found that the Army continues to be unable to balance its checkbook. The report concluded that the problem for the Army grew worse in 2016. The report said that for October 2015, the Army had 177,921 discrepancies. The monthly numbers rose steadily to 790,551 for June 2016. The report did not give dollar amounts for those months.
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The report said that because rules require that the Army’s numbers exactly match in monthly reports to the Treasury, the Army and the Defense Finance and Accounting Service must find a way to make them match. Their solution was to enter made-up numbers to make it appear falsely that the Army’s numbers do match.
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As Trump seeks defense-spending boost, watchdogs cite faulty Pentagon accounting (Original Post) nitpicker Apr 2017 OP
Respective links to the GAO and DoD reports nitpicker Apr 2017 #1
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