The Department of Defense receives more discretionary money every year than any other federal agency. It has a total budget request of $705 billion for fiscal year 2022. Taxpayers deserve to know where, when, and how that money is spent.
Unfortunately, we haven’t received a full picture yet in the 31 years since Congress first required all federal agencies to conduct financial audits. The Pentagon has dragged its feet on this requirement for years and has failed to pass its first three audits since. Estimates suggest that the Pentagon won’t pass an audit until 2028. Lawmakers have regularly dangled carrots for the Pentagon before. Now it’s time to bring out the sticks.
Fiscal conservatives and progressive Democrats need not agree on the long-term direction of the defense budget to appreciate that the Pentagon’s audit failures are a major problem. Sen. Bernie Sanders, a progressive who wants to cut the defense budget, says, “We have got to end the absurdity of the Pentagon being the only agency in the federal government that has not passed an independent audit.” And Sen. Chuck Grassley, a conservative, says, “We’ve seen example after example of excessive and inefficient spending by the Pentagon, and every dollar squandered is a dollar not being used to support our men and women in uniform.”
These two lawmakers just teamed up with Senators Ron Wyden, a Democrat from Oregon, and Mike Lee, a Republican from Utah, two senators with very different political backgrounds, on a bill that would cut 1% of the budget of each part of the Defense Department that fails to pass its audit.
Consider this the “stick” to the “carrot” that lawmakers dangled for the Pentagon with the most recent defense policy bill. That legislation asks the comptroller of the Defense Department to offer guidance on “incentives” the Pentagon could offer, both to “individual employees” and to entire departments, for passing an audit.
While it was good to see lawmakers take the department’s three audit failures seriously, there’s reason to believe Pentagon-friendly lawmakers are letting civilian and military leaders off the hook. Members of Congress who put together the final defense policy bill that passed in January applauded the Defense Department just for finishing an audit.
It’s hardly an accomplishment, though, for the department to complete its first audit 31 years after Congress required it to do so. It’s equally concerning that Pentagon audits continue to show thousands of deficiencies that need correcting. For example, the very first Defense Department audit, completed in November 2018, led to 2,300 findings and recommendations, or “specific issues found by the audit,” that auditors said needed correction or improvement.
The Defense Department’s audit efforts have revealed the Defense Logistics Agency couldn’t account for $800 million in defense construction projects, $53 million worth of uninstalled missile motors at Hill Air Force Base in Utah improperly categorized as “not in working condition,” and 39 Black Hawk helicopters. As of the most recent audit process, completed in November 2020, only seven of the 24 audits were clean.
The Pentagon is improving, but this year said that it doesn’t expect a clean audit for another seven years.
This is where the Grassley/Sanders bill comes in. It would force civilian and military leaders to put more effort into achieving an “unqualified” (clean) audit opinion. Lawmakers don’t need to pat Pentagon leaders on the back just for completing an audit as the law requires them to do.
Andrew Lautz is the director of federal policy at National Taxpayers Union, a nonprofit organization that works on tax, budget, and spending policy on behalf of the nation’s taxpayers. Mandy Smithberger is the director of the Center for Defense Information at the Project On Government Oversight, an independent watchdog that investigates and exposes waste, corruption, abuse of power, and when the government fails to serve the public or silences those who report wrongdoing.
