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http://sputniknews.com/military/20160809/1044071774/pentagon-audit-trillions.html
US Taxes Well Spent: Pentagon Can’t Account for $6.5 Trillion
00:24 09.08.2016(updated 07:09 09.08.2016)
While US lawmakers are applying pressure on the Pentagon to be more transparent about how it spends money, a new report shows that the Defense Department’s substandard bookkeeping practices make that virtually impossible.
Despite a 1996 law requiring all federal agencies to conduct regular spending audits, the Pentagon has so far failed to conduct a single one. While US lawmakers have pressed the DoD to comply by September of 2017, a new inspector general’s report indicates that meeting this deadline is highly unlikely.
In common language, the Pentagon has no idea how it spent nearly $7 trillion.
This is largely due to the fact that the DoD fails to provide the "journal vouchers" for its transactions, intended to provide serial numbers and dates, for bookkeeping purposes.
But the report also found that many of the Pentagon’s records were missing without explanation.
"DFAS Indianapolis did not document or support why the Defense Departmental Reporting System-Budgetary, a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015," the report reads.
While nothing suggests foul play, a lack of proper accounting makes it impossible to determine how much money the Pentagon spends, and on what.
"While there is nothing in the IG’s report specifying that the money has been stolen, the mere fact that the Pentagon can’t account for how it spent the money reveals a potentially far greater problem than simple theft alone," Jay Syrmopoulos writes for the Free Thought Project.
The report warns that the issuance of journal vouchers must be enforced immediately.
These problems are nothing new, however. A Reuters investigation from 2013 determined that "for two decades, the US military has been unable to submit to an audit, flouting federal law and concealing waste and fraud totaling billions of dollars."
Getting the DoD to turn around its lax accounting in one year seems as unlikely as getting the United States government to spend less on its military, and more on education and healthcare.
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http://fortune.com/2016/08/19/us-army-accounting-misstated/
Report: U.S. Army Fudged Trillions of Dollars in Accounting
The United States Army’s finances are so jumbled it had to make trillions of dollars of improper accounting adjustments to create an illusion that its books are balanced.
The Defense Department’s Inspector General, in a June report, said the Army made $2.8 trillion in wrongful adjustments to accounting entries in one quarter alone in 2015, and $6.5 trillion for the year. Yet the Army lacked receipts and invoices to support those numbers or simply made them up.
As a result, the Army’s financial statements for 2015 were “materially misstated,” the report concluded. The “forced” adjustments rendered the statements useless because “DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.”
Disclosure of the Army’s manipulation of numbers is the latest example of the severe accounting problems plaguing the Defense Department for decades.
The report affirms a 2013 Reuters series revealing how the Defense Department falsified accounting on a large scale as it scrambled to close its books. As a result, there has been no way to know how the Defense Department – far and away the biggest chunk of Congress’ annual budget – spends the public’s money.
The new report focused on the Army’s General Fund, the bigger of its two main accounts, with assets of $282.6 billion in 2015. The Army lost or didn’t keep required data, and much of the data it had was inaccurate, the IG said.
The significance of the accounting problem goes beyond mere concern for balancing books, Spinney said. Both presidential candidates have called for increasing defense spending amid current global tension.
An accurate accounting could reveal deeper problems in how the Defense Department spends its money. Its 2016 budget is $573 billion, more than half of the annual budget appropriated by Congress.
The Army account’s errors will likely carry consequences for the entire Defense Department.
Congress set a September 30, 2017 deadline for the department to be prepared to undergo an audit. The Army accounting problems raise doubts about whether it can meet the deadline – a black mark for Defense, as every other federal agency undergoes an audit annually.
For years, the Inspector General – the Defense Department’s official auditor – has inserted a disclaimer on all military annual reports. The accounting is so unreliable that “the basic financial statements may have undetected misstatements that are both material and pervasive.”
In an e-mailed statement, a spokesman said the Army “remains committed to asserting audit readiness” by the deadline and is taking steps to root out the problems.
The spokesman downplayed the significance of the improper changes, which he said net out to $62.4 billion. “Though there is a high number of adjustments, we believe the financial statement information is more accurate than implied in this report,” he said.
“Where is the money going? Nobody knows,” said Franklin Spinney, a retired military analyst for the Pentagon and critic of Defense Department planning.
US Taxes Well Spent: Pentagon Can’t Account for $6.5 Trillion
00:24 09.08.2016(updated 07:09 09.08.2016)
While US lawmakers are applying pressure on the Pentagon to be more transparent about how it spends money, a new report shows that the Defense Department’s substandard bookkeeping practices make that virtually impossible.
Despite a 1996 law requiring all federal agencies to conduct regular spending audits, the Pentagon has so far failed to conduct a single one. While US lawmakers have pressed the DoD to comply by September of 2017, a new inspector general’s report indicates that meeting this deadline is highly unlikely.
"Army and Defense Finance and Accounting Service Indianapolis personnel did not adequately support $2.8 trillion in third quarter adjustments and $6.5 trillion in year-end adjustments made to Army General Fund (AGF) data during FY 2015 financial statement compilation," the report reads.
In common language, the Pentagon has no idea how it spent nearly $7 trillion.
This is largely due to the fact that the DoD fails to provide the "journal vouchers" for its transactions, intended to provide serial numbers and dates, for bookkeeping purposes.
But the report also found that many of the Pentagon’s records were missing without explanation.
"DFAS Indianapolis did not document or support why the Defense Departmental Reporting System-Budgetary, a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015," the report reads.
While nothing suggests foul play, a lack of proper accounting makes it impossible to determine how much money the Pentagon spends, and on what.
"While there is nothing in the IG’s report specifying that the money has been stolen, the mere fact that the Pentagon can’t account for how it spent the money reveals a potentially far greater problem than simple theft alone," Jay Syrmopoulos writes for the Free Thought Project.
The report warns that the issuance of journal vouchers must be enforced immediately.
"Until the Army and DFAS Indianapolis correct these control deficiencies, there is considerable risk that AGF financial statements will be materially misstated and the Army will not achieve audit readiness by the congressionally mandated deadline of September 30, 2017," it says.
These problems are nothing new, however. A Reuters investigation from 2013 determined that "for two decades, the US military has been unable to submit to an audit, flouting federal law and concealing waste and fraud totaling billions of dollars."
Getting the DoD to turn around its lax accounting in one year seems as unlikely as getting the United States government to spend less on its military, and more on education and healthcare.
-------------------------------------------------------------------------------------------------------------------------------------
http://fortune.com/2016/08/19/us-army-accounting-misstated/
Report: U.S. Army Fudged Trillions of Dollars in Accounting
The United States Army’s finances are so jumbled it had to make trillions of dollars of improper accounting adjustments to create an illusion that its books are balanced.
The Defense Department’s Inspector General, in a June report, said the Army made $2.8 trillion in wrongful adjustments to accounting entries in one quarter alone in 2015, and $6.5 trillion for the year. Yet the Army lacked receipts and invoices to support those numbers or simply made them up.
As a result, the Army’s financial statements for 2015 were “materially misstated,” the report concluded. The “forced” adjustments rendered the statements useless because “DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.”
Disclosure of the Army’s manipulation of numbers is the latest example of the severe accounting problems plaguing the Defense Department for decades.
The report affirms a 2013 Reuters series revealing how the Defense Department falsified accounting on a large scale as it scrambled to close its books. As a result, there has been no way to know how the Defense Department – far and away the biggest chunk of Congress’ annual budget – spends the public’s money.
The new report focused on the Army’s General Fund, the bigger of its two main accounts, with assets of $282.6 billion in 2015. The Army lost or didn’t keep required data, and much of the data it had was inaccurate, the IG said.
The significance of the accounting problem goes beyond mere concern for balancing books, Spinney said. Both presidential candidates have called for increasing defense spending amid current global tension.
An accurate accounting could reveal deeper problems in how the Defense Department spends its money. Its 2016 budget is $573 billion, more than half of the annual budget appropriated by Congress.
The Army account’s errors will likely carry consequences for the entire Defense Department.
Congress set a September 30, 2017 deadline for the department to be prepared to undergo an audit. The Army accounting problems raise doubts about whether it can meet the deadline – a black mark for Defense, as every other federal agency undergoes an audit annually.
For years, the Inspector General – the Defense Department’s official auditor – has inserted a disclaimer on all military annual reports. The accounting is so unreliable that “the basic financial statements may have undetected misstatements that are both material and pervasive.”
In an e-mailed statement, a spokesman said the Army “remains committed to asserting audit readiness” by the deadline and is taking steps to root out the problems.
The spokesman downplayed the significance of the improper changes, which he said net out to $62.4 billion. “Though there is a high number of adjustments, we believe the financial statement information is more accurate than implied in this report,” he said.
“Where is the money going? Nobody knows,” said Franklin Spinney, a retired military analyst for the Pentagon and critic of Defense Department planning.
Really? Who? 
