The Marines are good at many things, but they apparently fail at basic accounting according to a new report. When the Marine Corps announced two years ago that it would be the first military service to be audited by a Defense Department inspector general, they were touted as a stellar example to the other service branches—none of which had ever completed an audit.
Now, the validity of a “clean” financial audit of the Marine Corps’ finances is being called into question again following the new Government Accountability Office study.
The Defense Department’s inspector general, who oversaw the audit for fiscal 2012, "did not perform sufficient procedures, under professional standards, and consequently did not obtain sufficient, appropriate" evidence to "support the audit opinion," according to GAO investigators.
In addition, the service’s “budgetary activity” wasn’t thoroughly vetted by the Pentagon’s internal watchdog, nor was the reliability of the information adequately questioned, the report states.
The findings are the latest setback for the Marine Corps audit. DOD’s inspector general withdrew its unqualified opinion backing of the accounting exercise last March when the IG discovered transactions that were never included in the audit and never brought to the auditors’ attention. Since 1997, the GAO has been required to audit the federal government’s consolidated financial statements, but the watchdog agency has repeatedly said its reviews of the Pentagon are not based on accurate data.
That’s particularly troubling for DOD, which accounts for more than half of the government’s discretionary spending. In a choreographed bid to lower expectations, department officials have hinted to congressional lawmakers that the agency may not be able to meet a legally-mandated goal of being fully auditable by September 2017.
A handful of senators reacted to the report’s findings with increased disdain for the Pentagon.
“I often like to say that you can’t manage what you can’t measure; nowhere is that statement more true than at the Department of Defense, the largest federal agency,” Sen. Tom Carper (DE), the top Democrat on the Homeland Security and Governmental Affairs Committee, said in a statement.
He said the report is “more than just a disagreement among accountants; it raises questions about the Department’s basic financial practices and whether the department is being held to the high standards that taxpayers deserve.”
Senate Armed Services Committee chair John McCain (R-AZ) called the GAO report “troubling.”
“We’ve spent billions of taxpayer dollars and decades implementing financial management improvement efforts across the Pentagon,” he added. Yet many of the Defense Department’s well-known and longstanding problems stretching back 25 years still remain. We need results from the Pentagon, not more ‘lessons learned.’
Why This Matters:
Congressional Republicans are seeking additional funds to bolster the Pentagon’s current $585 billion budget to fight ISIS. Sloppy financial management like the Marine Corps audit won’t help them get more money.