Pentagon fails annual audit for 7th year in a row
The Pentagon faced another setback on Friday as it failed its seventh consecutive audit, unable to fully account for its massive $824 billion budget. The Department of Defense received a disclaimer of opinion from auditors, indicating that there was insufficient information to form an accurate assessment of the accounts.
Out of the DoD’s 28 reporting entities that underwent standalone audits, 9 received an unmodified audit opinion, 1 received a qualified opinion, 15 received disclaimers, and 3 opinions are still pending. Despite this, officials at the Pentagon expressed confidence in the agency’s progress in understanding its budgetary challenges moving forward.
Under Secretary of Defense Michael McCord, who also serves as the Chief Financial Officer, stated that the Department “has turned a corner in its understanding of the depth and breadth of its challenges.” The goal is to achieve a clean audit by 2028, as mandated by the National Defense Authorization Act.
McCord emphasized that while there is still much work to be done, the agency is committed to earning an unmodified audit opinion. He highlighted that the audits serve as a catalyst for financial management reform within the Department, leading to greater financial integrity, transparency, and better support for warfighters.
Independent public accountants and the DoD Office of Inspector General conducted a thorough examination of the financial statements for the audit. Despite the challenges, McCord remains optimistic about the path to achieving a clean audit and believes that the momentum is on their side.
The Pentagon’s failure to achieve clean audits for the seventh consecutive year underscores the ongoing challenges in managing its budget effectively. However, with a clear roadmap in place and a commitment to financial reform, the Department of Defense is working towards improving its financial management practices for the benefit of its stakeholders and the nation’s security.
