The U.S. Department of Defense (DoD) has failed its seventh consecutive financial audit.
Despite commanding an $824 billion 2024 budget — funded entirely by hardworking American taxpayers — the Pentagon remains unable to account for vast sums of money.
The Pentagon began its first-ever agency-wide financial audit in 2017. This marked the beginning of a process that had been sought, promised, and delayed for years.
Since undertaking this initial audit, the Pentagon has consistently failed to pass its subsequent audits, the first of which failed in 2018.
Out of the 28 entities audited this year, only 9 received clean opinions, while 15 received disclaimers — meaning they were so disorganized that auditors couldn’t even determine the accuracy of their records.
One received a qualified opinion, meaning the financial statements were mostly accurate but contained certain issues or exceptions that were not fully compliant with standards.
According to the DoD:
“Teams of independent public accountants and the DoD Office of Inspector General closely examined the financial statements of the Department and its reporting entities. Of the 28 reporting entities undergoing standalone financial statement audits, 9 received an unmodified audit opinion, 1 received a qualified opinion, 15 received disclaimers, and 3 opinions remain pending.
The Defense Threat Reduction Agency (DTRA) achieved an unmodified audit opinion in only its second year under standalone audit. The fiscal year (FY) 2023 U.S. Marine Corps’ unmodified opinion and the FY 2024 DTRA unmodified opinion are the first new financial statement opinions since FY 2020.
The Department is firmly committed and is taking actions to achieve an unmodified audit opinion on its financial statements by December 31, 2028, as mandated by the National Defense Authorization Act for Fiscal Year 2024.”
Pentagon Comptroller Michael McCord downplayed the audit failure, claiming progress and rejecting the term “failure” altogether.
“Despite the disclaimer of opinion, which was expected, the Department has turned a corner in its understanding of the depth and breadth of its challenges,” said Michael McCord, Under Secretary of Defense (Comptroller) and Chief Financial Officer.
“Momentum is on our side, and throughout the Department there is strong commitment—and belief in our ability—to achieve an unmodified audit opinion,” he added.
Comptroller Michael McCord emphasized the department’s commitment to achieving a clean audit within the next four years, The Hill reported.
“I do not say we failed, as I said, we have about half clean opinions. We have half that are not clean opinions,” he said at a press briefing Friday.
“So if someone had a report card that is half good and half not good, I don’t know that you call the student or the report card a failure. We have a lot of work to do, but I think we’re making progress.”
“Is 2028 achievable? I believe so,” he said. “But we do have to keep getting faster and keep getting better.”
