The Pentagon has failed its fifth consecutive audit, with the department’s comptroller telling reporters it’s “not the progress I would have hoped for” as it works toward reaching an eventual full clean opinion.
Mike McCord, the Pentagon’s comptroller and chief financial officer, noted that of the 27 individual audits conducted about 40 percent received clean opinions, one individual audit yielded a modified opinion and the remaining received disclaimers.
‘This is basically the same picture of last year,” McCord said, according to a transcript of a briefing with reporters ahead of Wednesday’s audit results. “I would say each year the auditors’ findings and recommendations to us increase in complexity and in terms of degree of difficulty, with much of the lower hanging fruit having been picked. So as we move forward, we have to continue to focus on leadership and collaboration across DoD to solve these more difficult challenges, because we all have this role to play in support of the strategy and the support of our DoD strategic management plan. The deputy secretary has made clear that we are going to, if anything, try harder on the audit if we need to.”
The Pentagon conducted its first in 2017 and has yet to pass its effort to assess its trillions of dollars in assets, with DoD officials in 2020 pointing to 2027 as a potential target date to reach a department-wide clean financial opinion (Defense Daily, Nov. 17 2020).
This year’s audit resulted in finding three new DoD-wide material weaknesses, according to the department, “and the consolidation of six material weaknesses into three for no net change in the number of material weaknesses.”
“We stayed basically steady there, the IG found 28 of these across the department. They had basically a plus three and a minus three netting out to the same number overall of material weaknesses across DoD. So again, you know, not the progress I would have hoped for, we had hoped to get one or two of those knocked off in the win column,” McCord said.
The Pentagon noted that, while the department did not receive a complete opinion, “significant progress was achieved,” to include the Army and Navy implementing further corrective actions for access control and the Marine Corps decommissioned three legacy systems to streamline its general ledger system.
“Achieving our audit goals will require the continued investment of resources and focus of senior comptroller leadership in partnership with acquisition and sustainment and the chief information officer. While there is much work remaining, and some of our most complex problems still lay before us, the audit has been a catalyst for business reform across the department, resulting in greater financial integrity, increased transparency, and ultimately, a better-supported warfighter,” the department wrote.