U.S. Department of Defense Avoids Accountability Audit
By Alex Gauthier | 01/21/2013 | Issues, War and Foreign Policy | 5 Comments
credit: dod.gov
As the third largest department within the federal government in terms of annual cost, the Department of Defense constitutes 21 percent of the United States’ reported net cost for fiscal year 2012. The Government Accountability Office, a non-partisan investigative congressional agency, released findings Friday of massive un-auditable spending.
The office found a marked inability to appropriately appraise both DOD and other government agencies like the Department of Homeland Security:
“Material weaknesses resulted in ineffective internal control over financial reporting for fiscal year 2012.”
The ‘material weakness’ the GAO cites as a cause for its inability to function properly concerns a current lack of internal controls, whereby the misreporting or absence of financial statements is not effectively detected or corrected in a timely manner. The report contends:
“[T]hree major impediments continued to prevent us from rendering an opinion on the federal government’s accrual-based consolidated financial statements over this period: (1) serious financial management problems at DOD that have prevented its financial statements from being auditable, (2) the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal government’s ineffective process for preparing the consolidated financial statements.”
The aforementioned ‘serious financial management problems’ are to be addressed through what is known as the Financial Improvement and Audit Readiness or FAIR plan. The plan requires that the DOD “prepare department-wide auditable statements by 2017.”
The Department of Homeland Security has avoided unqualified audit opinions from the Congressional Accountability Office as well; reportedly due to the DHS’s “inability to provide sufficient evidence to support certain components of property, plant, and equipment and heritage and stewardship assets presented in the financial statements.”
An unqualified audit opinion is also known as a complete audit, whereas a qualified audit is released when the agency disagrees with the information given to it as the audit may be inaccurate or incomplete. Unreliable data, as recognized by the GAO, has resulted in numerous detrimental oversight consequences.
Four of these consequences are outlined by the report:
- hamper[s] the federal government’s ability to reliably report a significant portion of its assets, liabilities, costs, and other related information
- affect[s] the federal government’s ability to reliably measure the full cost as well as the financial and nonfinancial performance of certain programs and activities
- impair[s] the federal government’s ability to adequately safeguard significant assets and properly record various transactions
- hinder[s] the federal government from having reliable financial information to operate in an efficient and effective manner
As DOD spending continues to increase, the Government Accountability Office seems to have little recourse to ensure that an accurate audit of the department’s financial statements be found before the next Olympic games.
The Department of Defense’s budget has increased by hundreds of billions of dollars over the past decade, with few transparency mechanisms in place. With little power to ensure that unqualified audit requirements are met, the GAO is forced to rely on whatever information it is given by the DOD. The question that remains is whether or not a substantive audit will materialize in this decade.
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5 Comments
Jenny Jo
01.21.2013
How about some new guidelines for all these federal agencies who’s only oversight is hand picked members by the administration, who don’t answer to the people?
#1, Mandated to turn in quarterly reports on supplies, funds, inventories, everything.
#2 Mandated to turn in quarterly budgets.
#3 Mandated to turn in all surveillance of every building the agency operates in to be combed through to ensure no foul play or theft, etc.
If any one of these are broken or late, that agency is defunded until it can prove it’s legitimacy in records. Sick and tired of fascist beaurocrats doing as they please with our tax dollars, and then hiding everything they are doing so we never know how much, or what is going on. People in this country are being duped. Want to expand some government? Expand into monitoring and reporting yourself to the public… YOUR EMPLOYERS!
Alex Gauthier
01.21.2013
@alexg
though this may be the ideal way to ensure transparency, is it the most realistic approach? what are the steps average americans can take to improve oversight of agencies like the DOD?
Jenny Jo
01.22.2013
The most realistic approach is to take any and all steps required to fix the administration and beaurocratic corruption, before its too late. I don’t see anyone holding back laws and regulations on other sectors of society for “realism”. Where was the person standing up for realism when the government repealed the 4th amendement by issuing indefinite detention? The Patriot Act? Full body pat downs and nude image scanners on public transportation? Guantanamo is still open.. How can anyone talk of being realistic while we “preach” to the world about humanitarianism, democracy and peace, yet run a war machine, a gulag torture facility, we have no Habeus Corpus any longer, we want to censor the internet with no oversight, administrations are run by unelected appointees, were sending 20,000+ drones in the next few years to spy on our own citizens, were being forced to buy private corporations products by the government, being disarmed, and there is plenty more….
Where is the realism now? The most realistic option is to fix it NOW, or we may not have another chance. The most realistic option is for the people to make their voices known that we want oversight and we want to hold accountable politicians who stray from what they have said they are doing in their campaign, and do whatever it takes to fix our government, even if that means cleaning house and packing every street in the country with bodies and signs. Of course, all of this has to be coupled with legislation to reduce political funding by lobbyists and the elite, as well as term limits and the ability to hold federal emplpoyees liable for damages they cause through negligence or abuse. There are only two options. Halt the fall and try to reverse it, or continue down. We can sit around all day and talk about how its not “realistic” to cut off funding to a federal agency, but I guarentee you, if federal employees stopped getting paid, when they stop doing their job, (like the rest of the country), we might get some shit done for once.
Noel Egnatios
01.22.2013
@noelegnatios
So one of the most expensive and largest departments of the federal government, and one that many Americans have concerns about, has made itself “un-auditable” – either intentionally or just through sheer lack of organization and ineptitude. In doing so, they’ve hampered the ability of our current administration to understand how to efficiently make spending cuts to the defense budget moving forward. It’s not clear to me how this can possibly be acceptable to the administration, but maybe they lack the practical ability to force Defense to get in line. One could surmise it is the military is trying to assert control over government.
Jenny Jo
01.23.2013
Pure irony that everything you mentioned applies to the Federal Reserve for the last 5+ years, as well as the administration itself and about 10+ other departments.. When was the last time a budget was passed? Nice one… As if the military is corrupt and the beaurocracy isn’t.