The Pentagon failed its seventh audit in a row, failing to account for its more than $824 billion budget in 2024, the Department of Defense Office of Inspector General (DOD IOG) announced on Friday.
The DOD OIG said auditors “could not obtain sufficient, appropriate audit evidence to support an opinion.”
The audit, performed by independent public accounting firms, looked at 27 different DOD components.
In a statement, the Pentagon Inspector General Robert Storch said there has been little progress since 2005 — almost 20 years ago.
“Although the DoD made some progress in improving financial management during the FY 2024 financial statement audits, many of its identified weaknesses have not improved since 2005,” he said, adding:
A continued commitment to addressing root causes and implementing corrective actions is necessary to move toward achieving an unmodified opinion. The DoD must continue to address the Secretary of Defense Audit Priorities. Aggressively retiring noncompliant systems and modernizing the DoD’s financial management systems would materially support those efforts. However, achieving a clean audit opinion does not rest solely in the hands of financial management professionals, but encompasses the entirety of processes and systems that track the accountability and use of DoD assets.
According to the audit, DOD OIG auditors found: 28 material weaknesses, two significant deficiencies, and six instances of noncompliance with laws, regulations, contracts, and grant agreements.
Material weaknesses were defiined as “so significant that they could prevent management from promptly detecting and correcting a material misstatement in the financial statements,” while significant deficiencies were defined as “less severe than material weaknesses but are important enough to formally communicate to management.”
The Pentagon Comptroller and Chief Financial Officer Michael McCord addressed the audit in an off-camera briefing with reporters on Friday afternoon, calling it “not a surprise.”
“I know that on the surface it doesn’t sound like we’re making progress. However, that is not the case. I believe the department has turned a corner in its understanding of the challenges and more importantly in addressing those challenges,” he argued.
He added, “Momentum is on our side and throughout the department. There is a strong commitment and belief in our ability to achieve an unmodified opinion on behalf of the department’s senior management. I assess that DOD continues to make progress toward the Congressional mandate for achieving an unmodified audit opinion in FY ’28.”
McCord argued that not passing an audit was different from not knowing what assets the department has and that the DOD has been able to send equipment to Ukraine without problems.
“We have seen in a real-world example, most notably, Ukraine over the last two years. We’ve provided a lot of supplies to them of various types, the Army particularly, but everybody has contributed things. And what we have not seen is people saying, ‘Well, my records show I have a thousand of these and I want to give ten of them to Ukraine,’ and then finding that we don’t have a thousand or we can’t find a thousand or we don’t know what shape the thousand are in.”
He added, “We have some pretty good real-world experience here in that case where knowing what you have, being able to get your hands on it, get it to someone quickly because they’re fighting for their lives with it. We have not had that problem.”
McCord said it would be “unfair” to say the Pentagon failed the audit.
“I do not say we failed. As I said, we have about half clean opinions,” he said.
“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 and but — I think we’re making progress as I said,” he argued.
Sen. Rick Scott (R-FL), an ally of President-elect Donald Trump, said in a post on X:
The Department of Defense has once again failed to account for its MASSIVE taxpayer-funded budget of over $820 billion. If we want to be the most lethal and powerful fighting force on Earth, we not only need to fund defense but do so smartly. That is impossible when the DoD cannot tell anyone how it spends its nearly $1 TRILLION budget funded by American taxpayers. The U.S. federal government is now more than $36 TRILLION in debt – that’s $9 TRILLION more than when President Biden took office thanks to his addiction to reckless spending. It’s time for a reckoning, and I am confident that when President Trump takes office, the Senate confirms @PeteHegseth as Secretary of Defense, and the new @DOGE gets working, we will finally have accountability to the American taxpayer, and a lethal, not woke, military that terrifies our enemies and is respected by our allies. After years of the American people footing the bill for the mistakes and failures of the Biden-Harris administration, our government needs the wakeup call and that is what President Trump will soon deliver.
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