Pentagon fails sixth audit in a row

The Pentagon has failed its annual audit for the sixth year in a row, according to the Defense Department’s chief financial officer. 

Out of 29 individual sub-audits of the department, only seven passed this year, the same as the year prior, Comptroller Mike McCord told reporters Wednesday. 

One other received a “qualified” rating — a step down from passing — while three are ongoing and 18 were given failing grades, with no fraud found, he said. 

All sub-audits are required to pass for the overall audit to be approved.  

McCord said that while “things are showing progress,” overall “it’s not enough.” 

Secretary of Defense Lloyd Austin “feels we need to be doing better at this and moving faster,” but a successful audit is still years away, he added.  

Federal law since the early 1990s requires mandatory audits for all government agencies. The Pentagon didn’t begin auditing itself until 2018 and has only had incremental improvement yearly.  

This time around, 1,600 auditors combed through DOD’s $3.8 trillion in assets and $4 trillion in liabilities, conducting some 700 site visits. They found that half of DOD’s assets can’t be accounted for.  

The auditing process is difficult for the Pentagon due to the sheer size and scope of the department. The Department of Defense makes up for more than half of the U.S. discretionary spending and its assets range vastly, covering personnel, supplies, bases and weapons. 

McCord last year admitted that each audit “is getting a little harder” due to “much of the lower hanging fruit having been picked,” meaning simpler issues have already been fixed. 

Lawmakers have taken note of the trend of failed audits, and earlier this year a bipartisan group of senators introduced legislation to ensure DOD passes a clean audit next year. The bill follows repeated concerns from Congress about fraud, waste and abuse in the Pentagon.   

Asked Thursday whether the failed audit sends a bad message to U.S. adversaries and allies alike, Pentagon deputy press secretary Sabrina Singh said the effort is “a continuing and ongoing process.” 

“While it wasn’t the results that we wanted, we certainly are learning each time an audit passes,” she told reporters.