- - Tuesday, March 7, 2017

Financial mismanagement is rampant at the Pentagon. And the Trump administration wants to give them tens of billions dollars more.

A staggering report by the Defense Department’s Inspector General last summer found the Army made $2.8 trillion worth of wrongful adjustments to accounting entries in one quarter alone in 2015, and $6.5 trillion for the year. The Army lacked receipts and invoices to support those numbers or simply made them up.

The Army – the institution in which Americans have the most confidence, according to a Gallup poll – received taxpayer dollars and cavalierly made up numbers to account for where those dollars went!  

To continue to deserve our confidence, the army will need to get its accounting straight. Politically and fiscally it would be foolhardy to increase the military’s budget when it so obviously can’t manage the money it currently has.

The army’s bookkeeping problems are not new.  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.”  

Unreliable accounting. Pervasive, material “misstatements.” These are words that don’t inspire confidence.

According to Jack Armstrong, a former Defense Inspector General official in charge of auditing the Army General Fund, the practice of cooking the army’s books was so widely accepted that some employees of the Defense Finance and Accounting Services (DFAS), which handles Defense Department accounting, referred to the task of preparing the Army’s year-end statements as “the grand plug.” “Plug” is accounting jargon for inserting made-up numbers.

Waste at the Pentagon is nothing new, but it may have soared to new heights.  Multiple financial scandals have emerged from U.S. involvement in Afghanistan, with ProPublica estimating the cost of wasteful and misguided expenditures to be $17 billion.

While imaginative bookkeeping takes place at the Department Of Defense, and wild spending goes on far away from home in Afghanistan…who’s simply minding the store?

Just last week, two defense contractors in southern California pleaded guilty to conspiracy to commit wire fraud and file false claims. Their companies, Veteran Logistics Inc., Industrial Xchange Inc. and Boston Laser Technology Inc. had been selling supplies to the Department of Defense, Department of the Navy and other federal agencies for years. The companies had sold the military $45 million worth of mostly incorrect and overpriced products.

Why would it take years to discover that contractors were selling one thing and delivering something else? Why? Probably because the tap is open with a flow of OPM (other people’s money) and no one is minding the store.

Back during the Reagan administration, military overspending gave us memorable stories of excess, such as $600 toilet seats. We thought corrections had since been made to prevent the most egregious mismanagement, but apparently we were wrong.  Today overspending continues.  There have been reports of the army spending $8,000 on a gear worth $500.

Because the Pentagon can’t pass an audit, we can’t know for sure just how much it overspends for what, and how much excess, unnecessary or inappropriate equipment and supplies it is buying.

What we do know, though, is that until the Pentagon can pass an audit and provide an honest accounting of the money it gets and spends, it would be very wrong to trust them with more.

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