The Pentagon is infamous for never having passed an audit in the history of the department. Now, it’s celebrating getting close.
At a ceremony in the Pentagon’s Hall of Heroes late last week, Defense Secretary Chuck Hagel honored agencies within DOD that are close to accurately accounting for how it spends money. The Marine Corp became the first agency to successfully pass an audit by DOD’s Office of Inspector General late last year. Eight other agencies are expected to be able to pass one later this year.
"We're not where we need to be yet, but we've come a long way.” Hagel said.
The Marines were able to get their books in order by doing what a panel of outside business experts has been recommending the Pentagon do for years -- consolidate the massive number of systems used to track spending. The Marines did this by lowering the number of financial processes it uses from 790 to 59. They also created a system that allowed them to follow single transactions from start to finish.
These changes might sound like common sense, but inside the Pentagon they’ve been difficult to implement. Despite calls from lawmakers to shore up its books, DOD spending continues to be a mess. The Marines are one of the smaller agencies within the Pentagon accounting for just six percent of DOD’s $526 billion budget last year.
There are thousands, if not tens of thousands, of other redundant financial processes within the Pentagon that need to be consolidated or eliminated. Hagel’s goal is to have the entire department pass an audit by 2017.
"In the last 12 months, we have overcome challenges arising from a lengthy contract protest, sequestration and the government shutdown. While each of these events has created schedule delays, we have made significant progress and are regaining momentum. We plan to achieve audit readiness and excellence in financial management by focusing on processes, people and systems, and we're on the path to achieving audit readiness of all of our financial statements by 2017."
The irony that DOD was celebrating getting close to a goal was not lost on Hagel.
"I know it might seem a bit unusual to be in the Hall of Heroes to honor a bookkeeping accomplishment, but damn, this is an accomplishment, and I think it deserves a Hall of Heroes recognition," Hagel said.
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