The Office of the Inspector General recently released a shocking report about the United States military’s finances. The Pentagon’s record-keeping system is so poor that it cannot provide adequate documentation for $6.5 trillion of spending.
These missing records are not unusual for the United States military. The Pentagon is the only U.S. agency which consistently fails to supply all the documents necessary for an audit. The Department of Defense has actually never been audited, even though defense comprises 20 percent of the federal budget.
Congress recently demanded that the Pentagon be ready for an audit by September of 2017. The purpose of the recent Inspector General’s report was to determine whether the Pentagon could meet this deadline.
The Inspector General requested records from the Defense Finance and Accounting Service (DFAS), which handles the Pentagon’s finances. The records turned out to be woefully inaccurate. The IG report concludes that meeting Congress’s deadline will probably be impossible, since there is no documentation for how the Pentagon spent $6.5 in 2015.
The IG report offers no evidence to suggest the Pentagon lost the money or spent it improperly. Rather, the report concludes the Pentagon has done a poor job of keeping documents called journal vouchers. Journal vouchers record the date and the amount of a transaction, as well as who authorized it.
Officials sometimes adjust journal vouchers at the end of the year. Adjustments may be necessary because of errors or problems recording earlier. However, DFAS made $6.5 trillion worth of adjustments at the end of the 2015 fiscal year, and they cannot provide adequate justification for making them.
The Inspector General also found that the Pentagon removed over 16,000 financial documents from their files, and there is no explanation for their removal.
It is unclear what will happen if the Pentagon can never produce any documentation for how it spent this money. The IG report makes recommendations on how DFAS can improve record keeping, but no recommendations about what do to about the missing money.
This video explains some of the possible reasons why the Pentagon has not been audited, included size of the organization, outdated computer systems, and political corruption:
Featured image from RT video.