WHY DO WE NEED THIS?
The examples of waste are endless. Let’s take a peek under the Pentagon's hood. In 2015, the Defense Business Board — a group that provides the Secretary of Defense and Deputy Secretary of Defense along with other senior leaders within the Department of Defense with independent advice on business management issues — found that the Department of Defense (DoD) could save $125 billion over five years...an assertion that inherently implies there is $125 billion being wasted at the DoD.
The internal report said that this could be achieved not through civil servant or military personnel layoffs, but by focusing on streamlining bureaucracy, offering early retirements, reducing the number of high-priced contractors, and embracing information technology.
According to the Government Accountability Office (GAO), “In 2014, Congress authorized the creation of the Iraq Train and Equip Fund (ITEF) to provide equipment and other assistance to Iraq’s security forces, including the Kurdistan Regional Government forces, to counter the expansion of the Islamic State of Iraq and Syria…As of December 2016, DoD had disbursed about $2 billion of the $2.3 billion Congress appropriated for ITEF in fiscal years 2015 and 2016 to purchase, for example, personal protective equipment, weapons, and vehicles for these forces.”
However, the Pentagon has no idea where many of these shipments ultimately landed: “DoD cannot fully account for ITEF-funded equipment transfers because of missing or incomplete transfer documentation. Without timely and accurate transit information, DoD cannot ensure that the equipment has reached its intended destination, nor can program managers conduct effective oversight of ITEF-funded equipment.”
But wait! Of course, there’s more. A special report from Reuters says that “pay errors in the military are widespread.”
“Reuters found multiple examples of pay mistakes affecting active-duty personnel and discharged soldiers. Some are erroneously shortchanged on pay. Others are mistakenly overpaid and then see their earnings drastically cut as the Defense Finance Accounting Service (DFAS) recoups the money...Precise totals on the extent and cost of these mistakes are impossible to come by, and for the very reason the errors plague the military in the first place: The Defense Department’s jury-rigged network of mostly incompatible computer systems for payroll and accounting, many of them decades old, long obsolete, and unable to communicate with each other.
The DFAS accounting system still uses a half-century-old computer language that is largely unable to communicate with the equally outmoded personnel management systems employed by each of the military services.
The department’s authorized 2013 budget, after sequester, totaled $565.8 billion — by far the largest chunk of the annual federal budget approved by Congress. Yet the Pentagon is literally unable to account for itself. As proof, consider that a law in effect since 1992 requires annual audits of all federal agencies — and the Pentagon alone has never complied. It annually reports to Congress that its books are in such disarray that an audit is impossible.
In its investigation, Reuters found that the Pentagon is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; thus, it continues to spend money on new supplies it doesn’t need and on storing others long out of date. It has amassed a backlog of more than half a trillion dollars in unaudited contracts with outside vendors; how much of that money paid for actual goods and services delivered isn’t known. And it repeatedly falls prey to fraud and theft that can go undiscovered for years, often eventually detected by external law enforcement agencies.
In its annual report of department-wide finances for 2012, the Pentagon reported $9.22 billion in ‘reconciling amounts’ to make its own numbers match the Treasury’s, up from $7.41 billion a year earlier. It said that $585.6 million of the 2012 figure was attributable to missing records. The remaining $8 billion-plus represented what Pentagon officials say are legitimate discrepancies. However, a source with knowledge of the Pentagon’s accounting processes said that because the report and others like it aren’t audited, they may conceal large amounts of additional plugs and other accounting problems.”
This Reuters investigation was in 2013, so one would hope that there had been at least small improvements over the years. Nope. The Department of Defense’s financial management practices have been on the GAO’s High-Risk List since 1995. Yes, you did the math correctly. That’s 27 YEARS.
The GAO’s latest report notes the following:
“DOD’s financial management continues to face long-standing issues — including its ineffective processes, systems, and controls; incomplete corrective action plans; and the need for more effective monitoring and reporting.
Although DOD’s spending makes up about half of the federal government’s discretionary spending, and its physical assets represent more than 70 percent of the federal government’s physical assets, it remains the only major agency that has never been able to accurately account for and report on its spending or physical assets. DOD’s financial management issues extend beyond financial reporting as long-standing control deficiencies adversely affect the economy, efficiency, and effectiveness of its operations.”
This last example may be the most infuriating yet. On March 27, 2020, Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (a.k.a. the CARES Act), unleashing the largest flood of federal money into the American economy in U.S. history.