Pentagon Stumbles Again as Seventh Audit Fails to Account for $824 Billion Budget

Clear Facts

• The Pentagon has failed its seventh consecutive audit, unable to fully account for its $824 billion budget.
• Of the 28 Department of Defense reporting entities audited, only 9 received an unmodified opinion, while 15 received disclaimers.
• The Department of Defense aims to achieve a clean audit by 2028, with officials confident in their progress.

In a concerning development, the Pentagon has once again failed to pass its annual audit, marking the seventh consecutive year of such an outcome. The Department of Defense (DoD) was unable to provide sufficient information to account for its substantial $824 billion budget. This led to a disclaimer of opinion from the auditors, indicating a lack of adequate data to form a reliable assessment of the financial accounts.

Among the 28 reporting entities within the DoD that underwent standalone audits, only nine received an unmodified opinion, suggesting a clean bill of financial health. In contrast, 15 entities received disclaimers, and three opinions are still pending. Despite these setbacks, Pentagon officials remain optimistic about the future.

Michael McCord, the Under Secretary of Defense (Comptroller) and Chief Financial Officer, expressed confidence in the department’s progress. He stated that the agency “has turned a corner in its understanding of the depth and breadth of its challenges,” emphasizing a strong commitment across the department to achieve an unmodified audit opinion by 2028.

McCord further elaborated on the audit results during a briefing, suggesting that the outcome was not entirely negative. “So if someone had a report card that is half good and half not good, I don’t know that you call the student or the report card a failure,” he remarked.

The objective of securing an unmodified audit opinion is mandated by the National Defense Authorization Act, underscoring the importance of financial accountability within the DoD. Independent public accountants, along with the DoD Office of Inspector General, rigorously examined the financial statements as part of the audit process.

Despite the challenges, McCord remains hopeful about the path forward. “Significant work remains and challenges lie ahead, but our annual audit continues to be a catalyst for Department-wide financial management reform,” he stated. This reform aims to enhance financial integrity, transparency, and support for warfighters, ultimately leading to better financial management across the department.

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