UPDATE: A week after this article was originally written and posted on this site, Bridget Serchak, chief of public affairs at the Pentagon’s Office of General Inspector, sent us the following supposed explanation of the enormous unaccountable and unauditable 2015 expenditure budget of the US Army, as reported on below. Her explanation of why that budget is somehow stated as being nearly double the entire FY 2015 budget of $3.8 trillion is as follows:
“For clarification, these numbers reflect changes made in Fiscal Year 2015…
These adjustments do not adjust the budget amount for the Army. The dollar
amounts are possible because adjustments are made to the Army General Fund
financial statement data throughout the compilation process for various reasons
such as correcting errors, reclassifying amounts, and reconciling balances
between systems. The general ledger data that posts to a financial
statement line can be adjusted for more than the actual reported value of
the line. For example, there was a net unsupported adjustment of $99.8
billion made to the $0.2 billion balance reported for Accounts Receivable”
We will let this obtuse “explanation” stand. Clearly, even if Congress — or someone in Congress — wanted to police the country’s military and see what it is actually doing with the hundreds of billions of taxpayer dollars it receives and spends each year, they would find it totally impossible to do so, with this kind of “accounting” going on. I took a semester of managerial accounting at Columbia University’s Graduate School of Business during a journalism fellowship program once, and I cannot begin to understand what they’re saying here. No doubt that’s the object.
What if the inspector general of the Department of Health and Human Services were to report that $6.5 billion in spending by that federal agency was unaccounted for and untraceable? You can imagine the headlines, right? What if it was $65 billion? The headlines would be as big as for the first moon landing or for troops landing on Omaha Beach in World War II.
But how about a report by the Pentagon’s Office of Inspector General saying that the US Army had $6.5 trillion in unaccountable expenditures for which there is simply no paper trail? That is 6,500 billion dollars! Have you heard about that? Probably not. That damning report was issued back on July 26 — two whole weeks ago — but as of today it has not even been reported anywhere in the corporate media.
It’s not that it’s secret information, or hard to come by. The report is available online at the Department of Defense’s OIG website. And as it states:
The Office of the Assistant Secretary of the Army (Financial Management & Comptroller) (OASA[FM&C]) and the Defense Finance and Accounting Service Indianapolis (DFAS Indianapolis) did not adequately support $2.8 trillion in third quarter journal voucher (JV) adjustments and $6.5 trillion in yearend JV adjustments1 made to AGF data during FY 2015 financial statement compilation.2 The unsupported JV adjustments occurred because OASA(FM&C) and DFAS Indianapolis did not prioritize correcting the system deficiencies that caused errors resulting in JV adjustments, and did not provide sufficient guidance for supporting system‑generated adjustments.
In addition, DFAS Indianapolis did not document or support why the Defense Departmental Reporting System‑Budgetary (DDRS-B), a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015. This occurred because DFAS Indianapolis did not have detailed documentation describing the DDRS-B import process or have accurate or complete system reports.
As a result, the data used to prepare the FY 2015 AGF third quarter and yearend financial statements were unreliable and lacked an adequate audit trail. Furthermore, DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.
This dense bureaucrateze doesn’t mean that $6.5 trillion has been stolen, or that this is money in addition to the $600 billion that the Pentagon spent in fiscal 2015. It means that for years — and $6.5 trillion represents at about 15 years’ worth of US military spending — the Department of Defense (sic) has not been tracking or recording or auditing all of the taxpayer money allocated by Congress — what it was spent on, how well it was spent, or where the money actually ended up. There are enough opportunities here for corruption, bribery, secret funding of “black ops” and illegal activities, and or course for simple waste to march a very large army, navy and air force through. And by the way, things aren’t any better at the Navy, Air Force and Marines.
Incredibly, no mainstream reporter or editor in the US has seen this as a story worth reporting to the American public.
Just to give a sense of the scale of this outrage, consider that total federal discretionary spending in FY 2015 was just over $1.1 trillion. That includes everything from education ($70 billion), housing and community development ($63 billion), Medicare and health ($66 billion), veterans’ benefits ($65 billion), energy ($39 billion), transportation ($26 billion) and international affairs ($41 billion), and of course that $600 billion for the military.
All the other agencies that are responsible for those other outlays, like the Dept. of Education, the Dept. of Veterans Affairs, the Dept. of Housing and Urban Development, etc., have been required by Congress since 1996 to file reports on annual audits of their budgets. The Pentagon was subject to that same act of Congress too, but for 20 years and running it has failed to do so. It has simply stonewalled, and so far has gotten away with it.
Nobody in Congress seems to care about this contempt of Congress. Neither of the two mainstream political candidates for president, Republican Donald Trump nor Democrat Hillary Clinton, seems to care either. Neither one has mentioned this epic scandal.
According to the OIG’s report, this problem actually goes back a generation, to 1991, five years before Congress even passed the law requiring all federal agencies to operate using federal accounting standards and to conduct annual audits, when the Government Accountability Office found “unsupported aadjustments” were being made to the military’s financial statements during an audit of FY 1991 Army financial statements. Fully 17 years later, the Army, in its FY 2008 statement of Assurance on Internal Controls, said that the “weakness” found in 1991 “would be corrected by the end of FY 2011,” an outrageous decade later. But the OIG report goes on to say:
However, the FY 2015 Statement of Assurance on Internal Controls indicated this material weakness remained uncorrected and may not be corrected until third quarter 2017.
Such a lackadaisical attitude on the part of the Pentagon, Congress and the media towards such a massive accounting failure involving trillions of dollars is simply mind-boggling, and yet there is nobody in Congress jumping up and down in the well of the House or or at Armed Services Committee hearings demanding answers and heads. No president or presidential candidate is denouncing this atrocity.
Aside from the political question of how much the US should actually be spending on the military — and clearly, spending almost as much as the rest of the world combined on war and war preparedness is not justifiable — how can anyone, of any political persuasion, accept the idea of spending such staggering sums of money without insisting on any accountability?
Consider that politicians of both major political parties are demanding accountability for every penny spent on welfare, including demanding that recipients of welfare prove that they are trying to find work. Ditto for people receiving unemployment compensation. Consider the amount of money and time spent on testing students in public schools in a vain effort to make teachers accountable for student “performance.” And yet the military doesn’t have to account for any of its trillions of dollars of spending on manpower and weapons — even though Congress fully a generation ago passed a law requiring such accountability.
Phone and email requests to the DOD press office for the Office of Inspector General asking for comment went unanswered.
Mandy Smithberger, director of the Straus Military Reform Project at the Project on Government Oversight (POGO), says, “Accounting at the Department of Defense is a disaster, but nobody is screaming about it because you have a lot of people in Congress who believe in more military spending, so they don’t really challenge military spending.” She adds, “You won’t see anything change unless Congress cuts the Pentagon budget in order to get results, and they’re not going to do that.”
She might have added that the reporters and editors and publishers of the corporate media also support military spending, so the media are not reporting on this scandal either, meaning that the public remains in the dark and unconcerned about it. Sure, the media will report on a $600 air force toilet seat and the public will be appropriately outraged, but there is no word about an untracable $6.5 trillion in Army spending and no public outrage…except perhaps among those who read alternative publications like this one.
Enough! I don’t want to hear another complaint about government spending on welfare, education, environment, health care subsidies, immigrant benefits or whatever, until the Pentagon has to report on, account for and audit every dollar that it is spending on war.
No more free ride for the military.