Tag Archives: Department of Defense Audit

Audit Reveals Department of Defense Agency Lost Track of Over $800 Million

As President Trump prepares to ask Congress to boost military spending for fiscal year 2019, new Department of Defense audit results have sparked questions about defense agencies’ spending and reporting habits.

According to Politico, an audit of the Defense Logistics Agency conducted by independent auditor Ernst & Young discovered that the agency could not produce records explaining how it had spent over $800 million on construction projects. Additionally, the agency’s books mistakenly listed that it had $46 million in computer equipment that it actually did not, while failing to list records of over $100 million in computer equipment that the agency currently relies on for daily functioning. The DLA’s general ledger did not match spending records held at the Department of the Treasury.

A statement by the Defense Logistics Agency read, “DLA is the first of its size and complexity in the Department of Defense to undergo an audit so we did not anticipate achieving a ‘clean’ audit opinion in the initial cycles. The key is to use auditor feedback to focus our remediation efforts and corrective action plans, and maximize the value from the audits. That’s what we’re doing now.”

The DLA has an annual budget of around $40 billion, processes over 100,000 orders per day for all branches of the military and many federal agencies, and employs over 25,000 people.

The audit concerned spending for the fiscal year ending September 30, 2016.

“If you can’t follow the money, you aren’t going to be able to do an audit,” Said Senator Chuck Grassley (R-Iowa). “I think the odds of a successful DoD audit down the road are zero. The feeder systems can’t provide data. They are doomed to failure before they ever get started.”

The Trump administration plans to ask Congress to increase defense spending to $716 billion in 2019, The Hill notes.

The audit comes as a part of a first-ever full audit of the Pentagon.

“Beginning in 2018, our audits will occur annually, with reports issued Nov. 15,” said Defense Department Comptroller David L. Norquist in a December 2017 press conference announcing the new audit policies launched by the Trump administration. “It is important that the Congress and the American people have confidence in DoD’s management of every taxpayer dollar… With consistent feedback from auditors, we can focus on improving the processes of our day-to-day work. Annual audits also ensure visibility over the quantity and quality of the equipment and supplies our troops use.”

The Department of Defense is estimated to have over $2.4 trillion worth of assets.