The House Subcommittees on National Security, the Border, and Foreign Affairs; and Government Operations and the Federal Workforce held a joint hearing regarding pervasive financial mismanagement at the Pentagon. The hearing was titled, “Beyond the Budget: Addressing Financial Accountability in the Department of Defense.”
Members of Congress discussed with officials from the Department of Defense (DOD) and the U.S Government Accountability Office (GAO) the causes of the ongoing financial problems and called for fiscal accountability. They also asked for information on why current system controls designed to safeguard taxpayer funds are failing, and what actions the Pentagon is implementing to rein in rampant waste, fraud, and abuse.
Key Takeaways from the Committee:
Widespread waste, fraud, and abuse of U.S. taxpayer dollars is taking place within the DOD as recently evidenced by their fifth consecutive failed audit. The DOD Comptroller General found that the department couldn’t account for 61 percent of assets in addition to admitting sending an extra $6.2 billion in funding to Ukraine.
- Brett Mansfield— Deputy Inspector General for Audits at the Department of Defense Office of the Inspector General (OIG)—broke down the alarming findings from the most recent DOD financial audit: “During the most recent audit, the DOD OIG identified 28 material witnesses at the DOD agency wide level. Of those 28 material witnesses, we consider 16 to be scope limiting, meaning that they prevent auditors from performing the necessary procedures and steps to draw a conclusion on the financial statements and the supporting information…these examples individually and collectively erode the confidence of the American public regarding the DOD’s ability to manage taxpayer’s dollars.”
Over 300 legacy control systems currently in place within the DOD are failing in their mission and personnel who operate these systems are struggling to run them properly. These critical flaws work in tandem to make accurate reporting of financials more difficult and lead to further waste of U.S. taxpayer dollars.
- John Tenaglia—Principal Director of Defense Pricing and Contracting within DOD—admitted that systems within the DOD are outdated: “The standard procurement system needs to be retired, it is a legacy system.”
- Asif Khan—Director of Financial Management and Assurance at the U.S. GAO—testified that his investigations have shockingly been unable to find “any system within DOD that works as intended.”
The inability of DOD to pass a clean audit and have properly functioning control systems in place erodes public trust. DOD must institute effective controls to steward taxpayer funding effectively and efficiently to ensure our national security forces are ready and able to defend U.S. interests.
- Asif Khan explained the critical need for DOD to efficiently utilize funds: “The Department of Defense’s role in national security is paramount. The spacecraft represents the DOD and the spacecraft’s fuel signifies the Department’s resources such as personal, taxpayer dollars, and equipment. Every bit of fuel is vital for the mission success and every dollar dropped should be used optimally.”
Click the play arrow below to watch a replay of the hearing.