We know from too many years of GAO and DOD Inspector General (IG) reports that the financial management of the Pentagon is in shambles. A new report from Business Leaders for Sensible Priorities (written by a senior manager with decades of experience at GAO and the EPA Inspector General) helps Americans understand the dimensions of the problem and suggests a route out of the morass, which others seem unable, or unwilling, to recommend. A summary of the report and a link to it are below.
May 15, 2006
No One is Accountable in the Pentagon
The Defense Department has failed to comply with the Chief Financial Officers Act since its enactment in 1990. This means that the Pentagon has only very imperfect information about what it owns, what it has and has not paid out to contractors, how much money is being spent, and why. Today, no reliable and verifiable system exists for knowing what new equipment the troops in Iraq and Afghanistan need, who needs them, and when – or if - the supplies will be delivered.
Sadly, that is just the tip of the iceberg. We know from several decades of reports from the Government Accountability Office (GAO) and the Pentagon’s own Inspector General (the DOD IG) that it is not that the DOD flunks audits; rather, the books are so chaotic that they cannot be audited in the first place. Literally, it would be an improvement for the Pentagon to be able to fail an audit.
A business group, Business Leaders for Sensible Priorities (BLSP), has commissioned a new study of the financial condition of the Pentagon. The report finds that no business could survive if it was managed like the Pentagon, and, certainly, the managers in responsibility would be fired. And, yet, the Pentagon receives instead larger and larger budgets and its basic management is never brought into serious question.
Despite their highly informative reports, even the vaunted GAO and DOD IG bear some of the responsibility. Neither has specified the steps needed to comply with basic accounting practices and the law.
It is time for Congress to require some accountability from the un-audit-able Pentagon. The Defense Department’s CFO, the Comptroller, should be given any and all authority she requests to bring DOD into compliance with generally accepted accounting practices, and if that end is not promptly achieved, the president should replace the Comptroller.
This new report was written by Kwai C. Chan, who has recently retired from a decades long government career at the Inspector General of the Environmental Protection Agency and as an Issue Area Director of the National Security and International Affairs Division of GAO.
The new BLSP report is available by going directly to the link
Winslow T. Wheeler
Director
Straus Military Reform Project
Center for Defense Information
202 797-5271 in DC
301 840-1362 in MD
winslowwheeler@comcast.net