The Pentagon's $1 Trillion Problem

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The Pentagon's $1 Trillion Problem
by Scot Paltrow May 2008 Issue
The Defense Department has spent billions to fix its antiquated financial systems. So why does the Pentagon still have no idea where its money goes?

On a winter afternoon in Indianapolis, Jessica Hilligoss, a young Defense Department worker, types long strings of numbers and letters into a computer, helping the United States armed forces transfer the billions of dollars it draws each week from the Federal Reserve to contractors, vendors, and military and civilian personnel.

Her job is to review invoices for everything from construction projects to lawnmowing, and to approve payment. Within a few days, another computer system—behind locked doors in the building's basement—deposits the money in the recipients' bank accounts.

The size of nearly 28 football fields, with a facade of alternating red stucco and white cement tiles, the three-story operations center is the federal government's third-largest office building, after the Pentagon and the Ronald Reagan Building, and the place where a big chunk of the Iraq war's soaring price is paid. The center doles out more than $104 billion annually, making it Defense's largest disburser.

Theoretically, when Hilligoss authorizes a payment, the department should be able to instantly track where the money goes and which program it was spent on, in order to make sure the right amounts are paid to the right recipients at the right times. But it doesn't work that way.

more:http://www.portfolio.com/news-markets/national-news/portfolio/2008/04/14/Pentagons-Accounting-Mess#page1