The Pentagon has failed another audit but with an expected $770
billion budgeted for the Defense Department in fiscal year 2022,
keeping track of all this money is no simple matter.
It took the Department of Homeland Security a decade to
pass its audit. And it's a fraction of the size of the
Defense Department
Old systems for tracking funds, a slow bureaucracy and the sheer
size of the US Defense apparatus have kept audits from passing
since they began in late 2017.
We need to impose some kind of a penalty.
Personally, I would like to spend as little in the military
as possible while achieving the important national security
goals that the country has and the people expect from the
country.
After four straight failures, why does the Department of
Defense struggle to pass an audit?
The Department of Defense is responsible for defending U.S.
interests around the world. Since 1988, the budget has grown
from over 634 billion to over 724 billion in 2020. But the
defense budget as a percentage of the total gross domestic
product has actually dropped in the same period from 5.7% to
3.5%.
Like any organization in America, any large organization
anyway, the single biggest expense on the balance sheet is
people and it's no different for the Defense Department,
the size of the budget is constantly a subject of debate.
But for lawmakers to make informed decisions, they need
good data,
the financial system that you have in DOD right now are set up
to control taxpayers dollars to guarantee that there is not
going to be unauthorized use of it. So every use every dollar
and cent is accounted for, you can see that by the violations
being extremely low.
It is one of the largest organizations on planet Earth,
right three quarters of a trillion dollars, direct
payroll, 3 million people. Congress has plenty of data on
the department, but they don't have as useful data. And they
don't have visualized, you know, content that's helpful to them
to do their oversight job.
They're responsible for the security of the United States if
in fact, their audit systems are outdated. If in fact, they can't
do an audit and give us a picture of what they're
spending. I kind of worry about what they're doing on the really
important stuff as it relates to terrorism, as it relates to our
national security issues over there at the Pentagon.
One of the main problems with the Department of Defense's
accounting stems from the older methods still use today to track
and organize funds.
You know, there is a myth out there that just because the
department can't pass the audit, it doesn't know where it's
spending its money, and it does. But what it doesn't do well is
tracking at an enterprise level.
One example of items found in the recent audit was that the
Navy found a warehouse for $126 million in aircraft parts that
was not accounted for. According to the Government Accountability
Office. It's items like this one that makes some critics ask if
the Pentagon's overall budget could be more focused and
efficient.
What you have right now is a Pentagon that is everything for
everyone. The DoD is trying to heal cancer and heal Planet
Earth at the same time. And it's always tacking on more missions,
it's the matter of efficiency is what are you making it efficient
for
the umbrella of services under the Department of Defense such
as the Army, the Navy, the Air Force, and the Marines along
with other agencies and offices creates layers of financial
bureaucracy and differing methods of achieving similar
goals.
Individually, some of the services are better than others.
So the Marine Corps has got to clean audit. So you know, I
think we will continue to see that kind of progress and
Congress should expect that. But secondly, even just going
through the whole process of reorienting the culture and the
department to to have a clean sheet audit has contributed to,
you know, its own set of benefits. So for example, the
army used to laboriously input property and asset transfer
documents into a system essentially by hand. By bringing
in more people into the audit process, the army was able to
automate that and say, 60,000 man hours a year. That's great,
small but great, you know, important steps that I want to
continue to see.
Some members of Congress have tried to institute a penalty for
a failed Pentagon audit
maybe they just don't want to do it, because they're misspending
tax dollars, and that's why I introduced the audit the
Pentagon act of 2021.
The audit the Pentagon act lays out a punitive system where a
failed audit can result in a budget drop and repeated
failures increases this sort of penalty. The bill was introduced
by Democratic Representative Barbara Lee and is co sponsored
in the house by Republican Representative Michael Burgess.
It is also sponsored in the Senate by Senator Bernie
Sanders, but even with bipartisan support, it has not
managed to get much traction in Congress. The Pentagon is also
where discretionary resources Live, which is how some
priorities can be funded without going through Congress directly,
such as when President Trump redirected funds from the DOD to
border wall construction.
Both parties are to blame on that, since DoD is where the
bulk of the discretionary resources live, it goes to that
that old joke like why do people rob the bank? Because that's
where the money is. So if you want to find your pet project,
you go to DOD, because that's where the money is,
after the withdrawal from Afghanistan, some question why
defense spending wasn't slated to drop.
So the defense firm has two budgets, they have sort of the
standing professional force, and what it costs to train, equip
and feed them essentially. And then there is this conflict and
contingency money. And that's usually on the credit card.
Right. So you debt finance, so to speak. And it's off the books
separate from the standing defense budget, which you you
know, maintain for sort of global stability to turn it
against China's or operations and anywhere. Yes, spending
should go down. The challenge is explaining to the American
people that it goes down on something that was debt financed
anyway, and so the base defense budget doesn't really fall much.
Another issue is incorrect payments or payments that should
not have been made for traveling expenses, which constituted 11
point 4 billion in misallocated funds. Part of the blame for
this is the antiquated travel payment systems. And another
factor is the sheer number of people processing requests.
The Department of Defense's budget has trended up as a
percentage of GDP since 2018. And with competition with China
in Russia heating up it likely isn't going to trend down
anytime soon.
The Pentagon understands that members of Congress are fearful
of doing anything because they believe that they would appear
as being soft on national security when in fact, it's just
the opposite. We want resources to support our troops to provide
the better quality of life for them.
Despite all of the problems the auditor has shown progress, the
Department of Defense has stated that business reform efforts
have resulted in 37 billion in savings from 2017 through 2021,
please,
the department will get that clean sheet. It's just going to
be probably another half decade or so. So better use of member
time is to focus on that enterprise level oversight to
push the department into the 21st century, right. Commercial
technologies and data analytics and other kinds of AI and other
software tools that can help the department better explain what
it does not just track what it does.
There needs to be a good understanding between Congress
and DOD on what is oversight water, it is the information
that you need. What are the proper financial data that you
require? Does it doesn't need to be a snapshot? Or can it be
alive information for quarter that and those things can be
talked and negotiated between the two organizations. That's
why there are quarterly O and M reports for instance that
Congress received, could those be replaced with, I don't know,
a nexus to the system that question staffers can view the
system but not modify for instance. But those are the type
of conversations that need to take place to assure that DOD
financial systems are responsive to congressional in
congressional needs into the transparency required to operate
in a democratic society.