Defense

Grassley: Missing Millions Indicate Pentagon Audit ‘Doomed To Failure’

An audit of one of the Pentagon’s largest agencies found $800 million unaccounted for, and that bodes ill for the success of a full audit of the Department of Defense, according to one senator.

“I think the odds of a successful DOD audit down the road are zero,” Iowa Republican Sen. Grassley told Politico, which first reported on the audit. “The feeder systems can’t provide data. They are doomed to failure before they ever get started.”

The Pentagon brought in consultancy Ernst & Young to conduct an audit of the Defense Logistic Agency (DLA), one of the Pentagon’s most prolific spenders. The independent auditors found that DLA didn’t properly document more than $800 million in construction projects, but that was only part of the agency’s problems. It also found $40 million spent on computers and tech was “inappropriately recorded.”

Iowa Sen. Joni Ernst, a Republican who has also called for a clean audit in the past, said she is “deeply concerned” about the report about DLA. “Because DLA is the DOD’s combat logistics support agency and manages the global supply chain for all branches of the military, it is especially important that they maintain a record of all their transactions,” Ernst told The Daily Caller News Foundation.

The audit declared that DLA had no reliable way to manage the finances of an agency that spends $40 billion a year. The report looked at the fiscal year ending Sept. 2016, and agency officials say that the results were not surprising.

When Ernst & Young first announced that they could not complete the audit on time, the DLA said it was a result of first-time audit issues.

“It simply means that Ernst & Young was unable to completely perform its work and the agency has difficulty providing certain information in a timely manner,” DLA Vice Director Ted Case told employees in October. “Disclaimers of opinion are common for agencies undergoing a first-year audit,” he said. He also noted that the Department of Homeland Security took 10 years to receive a clean audit.

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“The initial audit has provided us with a valuable independent view of our current financial operations,” Army Lt. Gen. Darrell Williams, director of the DLA, wrote in response to the audit. “We are committed to resolving the material weaknesses and strengthening internal controls around DLA’s operations.”

The Pentagon insisted in 2017 that it is ready for an audit, which is required by the Chief Financial Officers Act of 1990. Agencies were supposed to complete the audit by 1993, and the DOD is the only agency that still hasn’t completed it.

This post has been updated to include comment from Sen. Joni Ernst. 

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