Pentagon audit failures

[Figment]

This story seems to be flying way under the radar: DOD cannot account for 61% of its assets.

W T A F

I apologize for linking to The Hill, but there isn't much other coverage on this.

Where are the budget-hawks pounding the podium on this vaporous $2trillion?

[LeeG]

but it’s for DEFENSE!

[Durnik]

what Lee said.. the MI(C)C wants the DoD to Spend! Spend! Spend! Accountability is troublesome.

[LeeG]

no doubt there is enormous waste involved. enormous.

but, then again, there is this, copied from the bbc link birlinn just posted:



when the **** hits the fan, it's not altogether and utterly bad that the u.s. has spent a ridiculous amount on defense. the question is, how much less wasted and misspent money could a human driven system produce while attaining the defense capabilities currently represented by the u.s. military and defense industry?

I see two problematic issues. One is finite resources going to the self licking ice cream cone that is diverted from investment in people who pay for that chit. The other being the distortion or bias in our world view from such a heavy investment that makes adventures like remaking the world in our image attractive.
Our ability to waste money isn’t protecting anyone, “allies” or ourselves.

[Jimmy W]

We have legislators insisting that the military buy weapons that it doesn't even want and a military that can't or won't do the accounting to keep up with what it does spend. Yet even now in Georgia when he isn't going on about trans athletes or werewolves we have a candidate that thinks we should increase military spending. We already spend over twice as much as China and Russia combined. Just how much more do we need to spend?

[Jimmy W]

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

President Dwight D. Eisenhower, January 17, 1961

[Canoeyawl]

Check out Oshkosh defense/ dod contracts

[sandtown]

I see two problematic issues. One is finite resources going to the self licking ice cream cone that is diverted from investment in people who pay for that chit. The other being the distortion or bias in our world view from such a heavy investment that makes adventures like remaking the world in our image attractive.
Our ability to waste money isn’t protecting anyone, “allies” or ourselves.

And consider the fact that a very large percentage of the US's best minds are working for the Military Industrial Complex.

And much of the work they do is classified and thus has few civilian spill-overs.

That is a huge opportunity cost for the US society.

And folks wonder why the US is not nearly as competitive as it might be.

[LeeG]

our waste, no, but what about the money spent effectively?

are the weapons being shared with ukraine protecting them from conquest or not?

the bloat of our defense budget is an easy target when the very existence of a large budget means that a player like putin does not represent an existential threat to ourselves, or more likely, our allies in closer geographic proximity.

re. Ukraine there’s a logistical tail to maintaining those weapons so it’s not just the howitzers or HIMARS themselves that matter because stuff does need repairs when out in the field.

re. money being spent effectively you mean there’s a larger goal for these weapons other than the contract to build them? That’s the can of worms I’m talking about.

[Too Little Time]

This story seems to be flying way under the radar: DOD cannot account for 61% of its assets.

W T A F

I apologize for linking to The Hill, but there isn't much other coverage on this.

Where are the budget-hawks pounding the podium on this vaporous $2trillion?

I would be concerned if many of these items were not accounted for

What they found were several new weaknesses in how DOD accounted for its assets, which include nearly 2.9 million military personnel; equipment and weapons including 19,700 aircraft and more than 290 ships;

But a lot of stuff does not matter.

[Figment]

A lot of stuff does not matter. yeah, ok, but 61%???
Any entity which cannot account for the majority of its assets is simply not taking it seriously.

Now, one can legitimately argue that the USDOD is not in the business of taking its assets seriously, it's in the business of national security, and that's cool...

...except that we have personnel in that operation living in substandard housing because :shrug: limited resources, y'know? :shrug:
The limits on those resources are difficult to accept when the resources are so poorly monitored.

[Garret]

Years back I had a conversation with the brother-in-law of a friend who, at the time, was a colonel working @ the pentagon. Turns out he was the #3 or 4 guy in purchasing. So - being my ever bashful self, I asked about the 10K toilet seats.

He laughed (we had a few beers in us) & said (not his exact phrasing): POs (Purchase Orders) go out for often several hundred different items. There might be 500 toilet seats, 40 jet engines, 2000 screwdrivers, etc. etc. on the PO. When stuff is received, it's charged against the PO. The person receiving it can put whatever they want in for cost, so they might say they paid 10 cents each for the screwdrivers or 1K each for the jet engines, etc. When the last items start coming in, they have to start jacking the cost because when the whole PO is received, the total charged against it has to equal the total on the PO. So - the toilet seats might have to be costed at 10K to use up the remaining amount on the PO.

Having worked on a # of accounting systems & being familiar with POs, my jaw dropped & I asked "You mean the items aren't individually costed?" "Nope - one lump sum". I asked how they could possibly keep track of anything that way & his reply was to the effect of "That's just one tiny little issue with our procurement. If it were even close to the worst I'd be a happy camper".

Also - most DoD stuff is purchased though companies who do nothing but purchase stuff for them. My brother's company (20 years ago) sold the Air Force 15 wind turbines - except they didn't sell them to the Air Force, they sold them to a company (Stewart & Stephenson I believe) that then resold them to the Air Force. This is because of the record keeping required - for example one form has 13 carbonless copies that have to be filed in separate locations for something like 10 years and there are dozens of different forms. S&S (IIRC) more than doubled the price to "cover their costs".

Another POV on gov't: the IRS approves accounting systems. They won't accept P&Ls (Profit & Loss Statements) & other documents from some systems & require a full audit if they find out you use them. Well, the IRS, in its many divisions, uses a bunch of different accounting systems (that don't talk to each other, but that's a different story) & when I last heard - about 10 years ago - roughly half of the systems they were using were in the "not approved" list.

So - none of this surprises me. Forgetting who it was so I don't rile people, one of my senators helped expose financial shenanigans at Freddy Mac & Freddy Mae. When asked if he would be doing the same thing at the DoD, his reply was that he was told he didn't have a high enough security level, and no, he wasn't going to get it.

[Jim Bow]

Eisenhower’s first draft said, “congressional, industrial, military complex”. Aides convinced him to edit.

[Too Little Time]

A lot of stuff does not matter. yeah, ok, but 61%???
Any entity which cannot account for the majority of its assets is simply not taking it seriously.

My wife keeps an inventory of office equipment for tax reasons. When she asks me where stuff on the inventory is, I shrug my shoulders. Keeping track of stuff is not economically worthwhile.

I think the military is in the same situation. It is simply not worthwhile and perhaps impossible to do an inventory. I expect a lot of items had been disposed of in the past and those who knew what happened are no longer available to be consulted.

[Garret]

My wife keeps an inventory of office equipment for tax reasons. When she asks me where stuff on the inventory is, I shrug my shoulders. Keeping track of stuff is not economically worthwhile.

I think the military is in the same situation. It is simply not worthwhile and perhaps impossible to do an inventory. I expect a lot of items had been disposed of in the past and those who knew what happened are no longer available to be consulted.

You've got to be kidding. How'd you feel about having stock in a company that couldn't account for over half its inventory? Why should the gov't get a pass on our money?

[Too Little Time]

You've got to be kidding. How'd you feel about having stock in a company that couldn't account for over half its inventory? Why should the gov't get a pass on our money?

I think in a business where the goal is to break things and blow up things, it is likely that a lot of stuff may not be removed from the books.

[Canoeyawl]

Keeping track of stuff is not economically worthwhile.

except money, we keep pretty close track of that right?

[Paul Pless]

DOD cannot account for 61% of its assets.

feature not a bug

[Paul Pless]

fart

[L.W. Baxter]

fair enough

[sandtown]

. It is simply not worthwhile and perhaps impossible to do an inventory. I expect a lot of items had been disposed of in the past . . .

You mean like all that military hardware that was sent to Ukraine and will or has wound up in the hands of extreme ethnic nationalists in both Europe and the US ??

Training too.

As usual, I give good source !! https://www.theguardian.com/world/20...f-jurgen-stock

[Chip-skiff]

It's right-wing welfare.

Why feed poor children when you can keep a bunch of suburbanites fat and happy?

[Nicholas Carey]

This story seems to be flying way under the radar: DOD cannot account for 61% of its assets.

W T A F

I apologize for linking to The Hill, but there isn't much other coverage on this.

Where are the budget-hawks pounding the podium on this vaporous $2trillion?

How much of that 61% are assets that disappeared into the void was Afghanistan and Iraq?

[sandtown]

How much of that 61% are assets that disappeared into the void was Afghanistan and Iraq?

You left out Ukr.

https://responsiblestatecraft.org/20...-gaps-experts/

[sandtown]

The War Lovers' new toy . . .

$750 million a pop !!

https://www.commondreams.org/news/20...nuclear-bomber

[Garret]

I think in a business where the goal is to break things and blow up things, it is likely that a lot of stuff may not be removed from the books.

Huh? I get you might not keep track of the blown up stuff, but the tools used to do it? You think a mining or quarry company could last long this way? They blow stuff up too. I don't get how anyone can be so blase about trillions of tax dollars unaccounted for.

[skuthorp]

Maybe it should be the Military-Industrial-Congressional Kleptocracy Complex? MICKC?

[Gerarddm]

Nutsburgers. Sounds like we need a new version of the Truman Commission.

[The Ranger]

In one of my first inventories as a young District Forester I was trying to figure out what a snathe was on the inventory and where I could find it. I looked it up in a paper dictionary and found out it was a handle for a scythe. I did find 3 snathes but they were unusable as there were no blades for scycthes.

[Nicholas Carey]

I think in a business where the goal is to break things and blow up things, it is likely that a lot of stuff may not be removed from the books.

My grandfather was in the Latvian National Guard when WW2 started. When they decided it was time to get the hell out of Dodge, seeing as how he was almost certainly on the kill list (educated and in the Latvian military),he checked out a horse and wagon from inventory.

Which they used to make their escape. They made the last refugee ship out of Riga, bound for Poland. The horse and cart were left on the dock. My mom said that watching the horse standing there in harness to the wagon as the ship pulled away from quay was the saddest thing.

Sometime in the early 1970s, my grandfather got a letter from the Red Army. It was a bill for the unreturned equipment issued to my grandfather, being one horse and one wagon, in the early 1940s.

Some bureaucrat had finally tracked them down, probably via the Red Cross Displaced Persons registry.

Armies keep track of their gear.

[Figment]

Nutsburgers. Sounds like we need a new version of the Truman Commission.

Absolutely.

The "blown up stuff" argument holds zero water for me. That seems like the easiest write-off on earth. Stuff went missing in a combat zone? it was blown-up, get it off the books.

61% unaccountability goes way beyond lost or destroyed assets lingering on paper, it indicates a serious systemic problem.

[Garret]

Absolutely.

The "blown up stuff" argument holds zero water for me. That seems like the easiest write-off on earth. Stuff went missing in a combat zone? it was blown-up, get it off the books.

61% unaccountability goes way beyond lost or destroyed assets lingering on paper, it indicates a serious systemic problem.

See post # 12...

[Boatbum]

This story seems to be flying way under the radar: DOD cannot account for 61% of its assets.

W T A F

I apologize for linking to The Hill, but there isn't much other coverage on this.

Where are the budget-hawks pounding the podium on this vaporous $2trillion?

I don't know whether you did this deliberately, or out of not understanding. The Hill article has a link to the US military audit from which it created its report. Here is a nice summary from that report:

Screenshot 2022-12-05 095333.jpg

I'm sure others know more about this than me but there are four types of auditor opinions:

Four Different Types of Auditor Opinions

Auditors have the option of choosing among four different types of auditor opinion reports. An auditor opinion report is a letter that auditors attach to the statutory audit report that reflects their opinion of the audit. The four types of auditor opinions are:

1. Unqualified opinion-clean report
2. Qualified opinion-qualified report
3. Disclaimer of opinion-disclaimer report
4. Adverse opinion-adverse audit report

https://www.diligent.com/insights/au...l%20statements.

Though a disclaimer report (the 61% referenced in the hill article) is negative, it is not the same as an adverse report in which the auditor finds a large number of misstatements. Though 61% of the categories had disclaimers, that is not the same as 61% of the military assets. I'm pretty sure they know where most of their aircraft carriers, jets and tanks are.

I'm not so much defending them and putting a little balance to it. The Hill article is not creating a fair representation of the actual audit. Like all government departments they should have airtight accounting on all of their spending. I still remember the infamous $600 toilet seat!

[Figment]

I appreciate the balance, but my concern remains. The disclaimer vs adverse distinction is of little comfort when it applies to such a large proportion of the total.
I don't doubt that keep reasonable track of the big-ticket weaponry, but that's just the tip of the spear.

Let's consider for a moment the level of congressional outrage which would follow a similar audit of HUD or ATF or CDC or really any other government entity. This one is way too quiet.

[Too Little Time]

My grandfather was in the Latvian National Guard when WW2 started. When they decided it was time to get the hell out of Dodge, seeing as how he was almost certainly on the kill list (educated and in the Latvian military),he checked out a horse and wagon from inventory.

Which they used to make their escape. They made the last refugee ship out of Riga, bound for Poland. The horse and cart were left on the dock. My mom said that watching the horse standing there in harness to the wagon as the ship pulled away from quay was the saddest thing.

Sometime in the early 1970s, my grandfather got a letter from the Red Army. It was a bill for the unreturned equipment issued to my grandfather, being one horse and one wagon, in the early 1940s.

Some bureaucrat had finally tracked them down, probably via the Red Cross Displaced Persons registry.

Armies keep track of their gear.

You might notice how post #33 changed the facts. From saying that 61% of assets were unaccounted for to 61% of the accounts were in too poor of condition to know much about them.

The military has had to keep records sufficient for an independent audit only since 2017. Consider this comment about that audit.

https://www.defense.gov/News/News-St...istory-really/

By far, the most discrepancies involved IT security, he said. For example, not revoking certificates of personnel who have departed or using systems that could be hacked.

Auditors did not find any evidence of fraud, nor did they report any problems for civilian or military pay. And, all of the services were able to account for the existence and completeness of all major military equipment.

https://www.npr.org/2021/05/19/99796...to-change-that has comments on the matter.

One really needs to read the entire audit report to understand the actual issues.