A relatively obscure audit report from the Office of Inspector General of the United States Department of Defense suddenly is getting a lot of attention for what it apparently reveals: The Pentagon can’t account for $6.5 trillion.
At ArmstrongEconomics, the blog reported, “Once again, the office of inspector general has come up with a huge hole in the Department of Defense with a missing $6.5 trillion.”
The day before 9/11, Defense Secretary Donald Rumsfeld admitted $2.3 trillion was missing from the Defense Department budget, noted the blog.
That figure has now grown to $6.5 trillion and counting.
To get a handle on its magnitude, a pile of $100 bills in that amount would be enough to make every man, woman and child in the states of Colorado, Wyoming and South Dakota an instant millionaire.
The report, “Army General Fund Adjustments Not Adequately Documented or Supported,” started out with the goal of finding out whether the changes in the Army General Fund data during Fiscal Year 2015 to financial statements were “adequately documented and supported.”
The report concluded “the office of the assistant secretary of the army (Financial Management & Comptroller) (OASA[FM&C]) and the Defense Finance and Accounting Service Indianapolis (DFAS Indianapolis) did not adequately support $2.8 trillion in third quarter journal voucher (JV) adjustments and $6.5 trillion in yearend JV adjustments occurred because OASA(FM&C) and DFAS Indianapolis did not prioritize correcting the system deficiencies that caused errors resulting in JV adjustments, and did not provide sufficient guidance for supporting system-generated adjustments.”
Further, there was no indication of why 16,513 of 1.3 million records were removed from the budget system during the third quarter of FY 2015, the report said.
“As a result, the data used to prepare the FY 2015 AGF third quarter and yearend financial statements were unreliable and lacked an adequate audit trail,” the report said. “Furthermore, DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.
“Until the Army and DFAS Indianapolis correct these control deficiencies, there is considerable risk that AGF financial statements will be materially misstated and the Army will not achieve audit readiness by the congressionally mandated deadline of Sept. 30, 2017.”
How to fix it?
The auditors said the “adjustments” in the system need to be monitored and verified, and the “system deficiencies” that triggered errors should be addressed.
The Armstrong Economics site commented: “Let[‘s] faced the truth. Government is incapable of managing even a bubblegum machine. They are completely hopeless. This money is lining the pockets of unknown people and it is funding unknown military operations.
“When will enough ever be enough? While the press micro-manages every word Trump utters, not a single one will [ever] investigate the massive government waste. Under the Obama administration, the total government spending on budget increased from $2.9 trillion to $3.9 trillion or about 32 percent while the off-budget increased 66 percent. This does not include the Quantitative Easing buying in debt by the Federal Reserve.”
The inspector general’s report said the military admitted there were problems.
“The deputy assistant secretary of the Army (Financial Operations), responding for the assistant secretary of the Army (Financial Management & Comptroller), and the director, DFAS Indianapolis, agreed with the recommendations,” the IG said.
While the military office promised to review system change requests, identify errors that result in unsupported adjustments and more, it still has failed to “provide an understanding of the reasons for system-generated JV adjustments,” the IG said.
It also has not addressed “the prioritization of system change requests for correcting system deficiencies resulting in JV adjustments.”
“Therefore, we request that the assistant secretary of the Army (Financial Management & Comptroller) and the director, DFAS Indianapolis, provide additional comments to this report by August 25, 2016,” the inspectors wrote.
One of the legacies of the Obama administration undoubtedly will be the doubling of the national debt during his eight years in office.
Currently at $19.4 trillion, the debt is projected to hit $20 trillion by Inauguration Day, up from $10.6 trillion when Obama entered the White House on Jan. 20, 2009.
Put in perspective, it means Obama will have added to the debt as much as all previous 43 presidents have done cumulatively.
Sputnik News pointed out a 1996 law requires all federal agencies to audit regularly.
“The Pentagon has so far failed to conduct a single one,” the report said. “In common language, the Pentagon has no idea how it spent nearly $7 trillion.”
And Jay Syrmopoulos wrote at the Free Thought Project, “While there is nothing in the IG’s report specifying that the money has been stolen, the mere fact that the Pentagon can’t account for how it spent the money reveals a potentially far greater problem than simple theft alone.”
Writer Dave Lindorff at Opednews cited the report’s “dense bureaucrateze” and said “it means that for years – and $6.5 trillion represents … about 15 years’ worth of U.S. military spending – the Department of Defense (sic) has not been tracking or recording nor auditing all of the taxpayer money allocated by Congress – what it was spent on, how well it was spent, or where the money actually ended up.
“There are enough opportunities here for corruption, bribery, secret funding of ‘black ops’ and illegal activities, and [of] course for simple waste to march a very large army, navy and air force through.”
He pointed out the total federal discretionary spending in FY 2015 was just over $1.1 trillion.