The Pentagon’s “irreceivables”

Congress wants the army to achieve “audit readiness” by September 30, 2017. Is that mission impossible?

The Pentagon’s lax accounting practices are notorious, says the Fiscal Times. But with US$6.5 trillion that can’t be accounted for, the word “lax” takes on a new meaning.

The Pentagon has never been required to complete an audit to account for the trillions of dollars in salaries, healthcare benefits, operations, facilities and equipment it pays for. But according to the Fiscal Times, that will change with a recent requirement by Congress that the army achieve “audit readiness” by September 30, 2017.

Mission impossible, claim many Pentagon watchers, since a Department of Defense inspector general’s report presented at the end of July “a jaw-dropping insight into just how bad the military’s auditing system is,” Reports the Fiscal Times.

For that report, the Defense Finance and Accounting Service (DFAS), the agency responsible for all Defense finance and accounting services, was unable to adequately document US$6.5 trillion in year-end adjustments to the army’s fund transactions and data.

Nothing in the inspector’s report points to fraud or theft, but the level of incompetence in documenting transactions reaches astronomical proportions. And what boggles the mind is that the massive shortcomings concern only FY 2015. “Army and Defense Finance and Accounting Service Indianapolis personnel did not adequately support US$2.8 trillion in third quarter adjustments and US$6.5 trillion in year-end adjustments made to Army General Fund data during FY 2015 financial statement compilation,” writes Lorin T. Venable, the assistant inspector general for financial management and reporting.