Audit the Pentagon: POGO Applauds New Bipartisan Initiative

August 6, 2012

Although the Pentagon budget has ballooned by billions in the past decade, it can’t even produce a basic financial statement. But last week, Sen. Tom Coburn (R-Okla.) and a bipartisan band of senators introduced a bill to fix this outrage and increase accountability at the Pentagon.

The “Audit the Pentagon Act” (S. 3487) would create critical new enforcement mechanisms coupled with new incentives for the Pentagon to meet its audit schedule (full audit readiness is targeted for all Department of Defense financial statements by 2017). The Project On Government Oversight applauds this crucial step towards more accountability and oversight.

Explaining why this bill matters, Sen. Coburn said, “By failing to pass an audit, the Pentagon has undermined our national security. This bill ends the culture of ‘don’t ask, don’t tell’ budgeting within the Pentagon that says, ‘don’t ask us how we’re spending money because we can’t tell you.’”

Other cosponsors of the bill include Sens. Kelly Ayotte (R-N.H.), Scott Brown (R-Mass.), John Cornyn (R-Texas), Chuck Grassley (R-Iowa), Ron Johnson (R-Wis.), Joe Manchin (D-W.V.), Claire McCaskill (D-Mo.), and Rand Paul (R-Ky.).

Unlike nearly all other government agencies, DoD has never produced an unqualified consolidated financial statement. It is ridiculous that an agency that was just authorized over $600 billion for FY 2013 cannot obtain a clean opinion on its financial statements. So, why does DoD need new incentives to clean up their financial statements? Because so far, no one has held them accountable.

But Sen. Coburn and the other senators are ready to stop asking and start demanding more accountability—with consequences if the Pentagon doesn’t comply. Under the Audit the Pentagon Act, major weapon systems would not be able to proceed past the R&D phase until the Department can successfully get an unqualified opinion on its books. POGO approves of this “stick” to ensure compliance. But there are also carrots: the bill also would grant the Pentagon more power to reprogram its funds without congressional approval if it meets its audit schedule, a pretty big incentive, with debatable advantages and disadvantages.

It’s great to see some members of Congress setting aside partisan politics and ignoring the Pentagon contractor industry lobbyists in order to bring a dose of good government to the Pentagon.

Topics: National Security

Related Content: Budget, Defense, Deficit, Waste

Authors: Angela Canterbury, Suzanne Dershowitz

Submitted by Christopher Hanks at: January 16, 2013

For more discussion of Senator Coburn's bill, see the commentary on the American Society of Military Comptrollers website at: http://www.asmconline.org/2012/08/senators-introduce-new-legislation-to-force-a-clean-dod-audit/#comments Senator Coburn's bill,in modified form, has now been incorporated into law -- see Section 1005, page 273 of H.R 4310, the National Defense Authorization Act for FY 2013. The key point is that as a result of this new law, Senator Coburn has now made it possible (even though he probably didn't intend to) for DOD leaders to FORMALLY request permission from the Congress to focus SOLELY on the Statement of Budgetary Resources and abandon, once and for all the Department's quixotic and never-ending pursuit of private-sector-style balance sheets and income statements as if the DOD were a business.

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