To the surprise of no one, the Department of Defense announced this week that it has failed its first-ever comprehensive audit. Rep. Mike Turner (R-OH), the outgoing chair of the House Subcommittee on Tactical Air and Land Forces, said lawmakers knew “the outcome would paint a bleak picture of the financial controls and information systems at the Department of Defense.” But now that the first audit is complete, “we have a clearer picture of the failures at the DoD, we can take action to fix them, hold leadership at DoD accountable,” Turner said.
The audit wasn’t all bad news, though. Five organizations within the Department of Defense earned “unmodified opinions” – accounting-speak for a clean bill of health. Those organizations are: the U.S. Army Corps of Engineers – Civil Works, the Military Retirement Fund, the Defense Health Agency – Contract Resource Management, the Defense Contract Audit Agency and the Defense Finance and Accounting Services – Working Capital Fund, the Pentagon said. Auditors found no evidence of fraud, and all “major military equipment” was accounted for.
On the other hand, the Army, Navy, Air Force, Marines, Special Operations and Transportation commands all failed the audit, with multiple issues that need to be fixed. And information technology security at the Pentagon is a mess, the audit found, with multiple systems in operation that are vulnerable to hacking.
A 236-page financial report released Thursday, which is based on the auditors’ findings, is loaded with interesting facts and figures about the sprawling U.S. Defense Department. A few examples:
- The audit covered $2.8 trillion in Department of Defense assets, which account for more than 70 percent of the U.S. government’s total assets.
- Those assets include more than 585,000 buildings and structures worldwide.
- DoD operates 4,700 sites around the world, covering 26.9 million acres – roughly the size of Tennessee. The sites range from weather towers occupying a few square feet to the 3.5 million-acre White Sands Missile Range in New Mexico.
- The U.S. military owns 15,700 aircraft and more than 280 “battle force” ships.
- The Pentagon is one of the nation’s largest employers, with 1.3 million active personnel, 770,000 civilian employees, and 800,000 personnel in National Guard and reserve forces.
- The consolidated audit was performed by the Pentagon’s Office of Inspector General and was based on 20 standalone audits performed by independent accounting firms involving about 1,200 auditors.
- The auditors conducted over 900 site visits at 600 locations.
- The audit took nearly a year to complete, at a cost of $413 million.
- It found more than 2,000 problems that need to be addressed.
- The Pentagon said it expects to spend more than $500 million to fix problems identified in the audit.