(RightWing.org) – The United States Department of Defense (DOD) is one of the world’s largest organizations. It currently has roughly $3.8 trillion in assets and $4 trillion in liabilities, necessitating clean annual audits. Nevertheless, the Pentagon recently failed its annual asset audit — again!
On November 15, Defense Department officials released the Pentagon’s department-wide financial statement audit results for fiscal year 2023. Conducted by independent, non-government experts, the 318-page report discussed the DOD’s organizational structure, provided a performance overview, and detailed legal compliance. The annual report also contained the independent auditor’s report, a biennial review of fees, and a summary of the financial statement audit and management assurances.
The annual report details 29 “standalone audits” of military components and services and a “consolidated audit,” an overall rating based on those standalone reviews. One DOD component received a “qualified opinion,” and seven ended up with an “unmodified audit opinion.” In short, that means auditors “found these organizations [were] in compliance.”
That finding also means the remaining 21 Pentagon components, except for the US Marine Corps, failed the audit. That service branch was given an extension until March 1 to provide the necessary data to complete the audit. Additionally, auditors could not provide an overall assessment since the annual review remains incomplete.
Undersecretary of Defense (Comptroller) and Chief Financial Officer Michael J. McCord held a press conference to discuss the results of the department-wide asset review. He told reporters that auditors issued “favorable opinions” covering 50% of the Pentagon’s assets. “This doesn’t mean… the other 50% is unaccounted for,” he quickly added.
McCord explained that the Pentagon was working to “accelerate the retirement of older systems” used to maintain “tight control of its assets.” According to him, once they update those systems, the DOD should be able to comply with current auditing standards.
However, McCord also conceded that the Pentagon had only closed 490 of the 3,008 notices of finding recommendations (NFRs) from the 2022 asset audit. Additionally, this year’s audit included 2,509 new NFRs. Of those, 2,144 were recurring or reissued, while the remaining 365 were new.
This is the sixth asset audit conducted by outside auditors. Sadly, it’s also the sixth one the Pentagon effectively failed.
Copyright 2023, RightWing.org