What’s Hiding In The Pentagon’s Wallet? Spoiler: It’s Not Receipts!

By Alan Hume | Sunday, 08 December 2024 12:00 PM
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Image Credit : AETN Editorial Team

In a startling revelation, the Department of Defense (DoD) has once again failed to pass its financial audit, marking the seventh consecutive year of such failure.

This raises serious questions about the department's financial transparency, particularly given its staggering budget of $824 billion. The inability to account for such a vast sum of money is not only a violation of federal law but also a stark admission of the military's lack of understanding of its own expenditure.

As reported by Gateway Pundit, the DoD's audit failure is not a conventional one. Independent accountants have issued a "disclaimer of opinion" on the department's financial records, indicating that the records are so convoluted and incomplete that their accuracy cannot be determined. The DoD comprises 28 subcomponents, including four military branches and departments such as the Defense Threat Reduction Agency. Of these, 15 received disclaimers, a slight improvement from last year's 19, although three audits are still underway.

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A disclaimer is issued when accountants identify numerous "material weaknesses" in financial statements, which are severe enough to potentially distort the reported figures. The presence of even a single material weakness can derail an audit. Alarmingly, the DoD had 28 such weaknesses this year, mirroring last year's figure. Since its first audit in 2018, the DoD has identified 20 material weaknesses, some of which have been rectified, but new ones have also emerged.

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The DoD's audit failures are not only a matter of concern but also a violation of a federal law from the early 1990s that prohibits federal agencies from failing audits. Despite this, the DoD did not conduct an audit until 2018 and remains the only agency yet to pass one. Although legislators frequently threaten to cut the Pentagon's budget, such as through the Audit the Pentagon Act of 2023, these bills seldom make headway. The DoD aims to pass an audit by 2028.

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The Pentagon's financial woes can be partially attributed to its burgeoning bureaucracy. Each year, the Pentagon seeks increasing funds for "operations & maintenance" for its daily business. In 2025, the military requested $338 billion for this purpose, a significant increase from the inflation-adjusted $175 billion in 2000. Active forces account for only $182 billion, or 21% of the Pentagon's budget request for the coming year.

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Despite the disclaimer of opinion, Pentagon Comptroller Michael McCord remains optimistic. "Despite the disclaimer of opinion, which was expected, the Department has turned a corner in its understanding of the depth and breadth of its challenges," he said. "Momentum is on our side, and throughout the Department there is strong commitment — and belief in our ability — to achieve an unmodified audit opinion."

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The ongoing financial mismanagement at the DoD raises critical questions about the efficiency and accountability of the world's most expensive military. It is essential that the cost of maintaining such a force be attributed to its might, not to poor bookkeeping. The forensic auditors at OpenTheBooks.com, who brought this issue to light, continue to monitor the situation closely.

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