Last year, the DOD failed its fifth audit and was unable to account for over half of its assets, which are in excess of $3.1 trillion, or roughly 78 percent of the entire federal government.
Washington (June 21, 2023) – As the recent debt ceiling deal increased military spending to $886 billion for fiscal year 2024, Senator Edward J. Markey (D-Mass) joined Senators Bernie Sanders (I-Vt.) and Chuck Grassley (R-Iowa), along with his colleagues Senators Ron Wyden (D-Ore.), Mike Lee (R-Utah), Elizabeth Warren (D-Mass.), Mike Braun (R-Ind.), Jeff Merkley (D-Ore.), Rand Paul (R-Ky.), and Tammy Baldwin (D-Wis.), today introduced legislation that would require the Department of Defense (DOD) to finally pass a full, independent audit in fiscal year 2024. If enacted, the Audit the Pentagon Act of 2023 would require any DOD component that fails to complete a clean audit opinion to return 1 percent of its budget to the Treasury for deficit reduction.
“Defense contractors are lining their pockets with taxpayer money while the Pentagon fails time and time again to pass an independent audit. It’s a broken system,” said Markey. “We need to compel the Department of Defense to take fraud and mismanagement seriously – and we need Congress to stop inflating our nation’s near-trillion-dollar defense budget. Putting the wants of contractors over the needs of our communities isn’t going to make our country any safer.”
“The Pentagon and the military industrial complex have been plagued by a massive amount of waste, fraud, and financial mismanagement for decades. That is absolutely unacceptable,” said Sanders. “If we are serious about spending taxpayer dollars wisely and effectively, we have got to end the absurdity of the Pentagon being the only agency in the federal government that has never passed an independent audit.”
“From buying $14,000 toilet seats to losing track of warehouses full of spare parts, the Department of Defense has been plagued by wasteful spending for decades. Every dollar the Pentagon squanders is a dollar not used to support service members, bolster national security or strengthen military readiness,” Grassley said. “The Department of Defense should have to meet the same annual auditing standards as every other agency.”
“Taxpayers can’t keep writing blank checks – they deserve long-overdue transparency from the Pentagon about wasteful defense spending,” Wyden said. “If the Department of Defense cannot conduct a clean audit, as required by law, Congress should impose tough financial consequences to hold the Pentagon accountable for mismanaging taxpayer money.”
“Providing for our national defense does not mean sacrificing fiscal responsibility. The Pentagon should not be permitted to access an ever-increasing sum of money every year without meeting the same financial accounting standards as every other federal department,” Lee said. “The Audit the Pentagon Act brings the Department of Defense into parity with the accounting measures Congress expects from all other agencies and ensures responsible stewardship of taxpayer funds.”
“Last year during an audit, the Pentagon could only account for 39% of its $3.5 trillion in assets. Our national debt is a dire national security threat, and every dollar that is misplaced or overpaid at the Pentagon is a dollar not properly supporting our men and women in uniform and protecting our country. Defense is the most important thing we do in the federal government, and that means our Department of Defense should be held to at least the same standard of financial accounting as the rest of the federal government,” Braun said.
“Accountability and transparency are the bedrock of responsible democracy. No institution is above scrutiny, especially the Department of Defense which has the largest budget of any federal agency and is charged with carrying out the greatest constitutional responsibility. We need to ensure that our defense spending is accurate, accountable, and in the best interest of American Taxpayers,” said Dr. Paul.
Not only does the U.S. spend more on the military than the next ten countries combined, but every year the DOD obligates more money than all other U.S. civilian agencies put together. The DOD accounts for more than half of the federal government’s discretionary spending and about two-thirds of all federal contracting activity. Despite this, the Defense Department remains the only federal agency in the country that has failed to ever pass an independent audit – a requirement under federal law for all government agencies since the early 1990s. For the last decade, all but the DOD have been able to meet that requirement.
Last year, the DOD failed its fifth audit and was unable to account for over half of its assets, which are in excess of $3.1 trillion, or roughly 78 percent of the entire federal government.
Every year, auditors find billions of dollars in the Pentagon’s proverbial couch cushions. In 2022, the Navy audit found $4.4 billion in previously untracked inventory, while the Air Force identified $5.2 billion worth of variances in its general ledger. CBS recently reported that defense contractors were routinely overcharging the Pentagon – and the American taxpayer – by nearly 40-50 percent, and sometimes as high as 4,451 percent. The Commission on Wartime Contracting in Iraq and Afghanistan concluded that $31-60 billion had been lost to fraud and waste; and a recent Ernst & Young audit of the Defense Logistics Agency found that it could not properly account for some $800 million in construction projects.
The Pentagon has not shown proper urgency to address these problems. In 2021, the Government Accountability Office (GAO) reported that the DOD had not implemented a comprehensive approach to combat department-wide fraud. Earlier this year, the GAO reported that DOD accounting systems cannot generate reliable and complete information and are unable to even capture and post transactions to the correct accounts, in violation of statutory requirements.
The Audit the Pentagon Act of 2023 is endorsed by a number of organizations, including American Friends Service Committee, Center for International Policy, Coalition on Human Needs, Common Defense, Demand Progress Action, Friends Committee on National Legislation, Just Foreign Policy, National Priorities Project at the Institute for Policy Studies, National Taxpayers Union, Project On Government Oversight, Public Citizen, Quincy Institute, R Street, Taxpayers for Common Sense, and Win Without War.
