Marine Corps’ Missing $800 Million Shines Light on Faulty Pentagon Accounting System
The Marine Corps can’t account for $800 million in transactions after proclaiming last year that its books were balanced, something the Marines and other branches of the military have struggled to accomplish.
The Defense Department is facing a deadline of 2017 to show Congress that all of its books are up to date and accurate. The Pentagon was originally supposed to have its accounting squared away by 1997, but the deadline has been pushed back several times, according to the Center for Public Integrity (CPI).
In addition, the Marine Corps paid accounting firm Grant Thornton $32 million from 2010 until 2014 to audit its accounting report, which was certified last year by the firm and backed up by the Pentagon’s inspector general. Then, it was revealed the Corps couldn’t account for $800 million, according to the independent Government Accountability Office (GAO).
Defense’s deputy inspector general, Daniel Blair, was reported to have urged his colleagues “to do what it takes” to ensure its results matched Grant Thornton’s.
“These actions appear to show how undue influence and bias trumped objectivity and independence,” Sen. Chuck Grassley (R-Iowa) said. He said emails sent between one of Grant Thornton’s partners and Daniel Blair “suggest a professional relationship that was far too cozy,” according to CPI.
Defense officials have allocated more than $15 billion in software upgrades to modernize the department’s bookkeeping. It remains to be seen if this investment will pay off.
The GAO report said such shortcomings in the Marine Corps’ accounting are typical, Julia Harte wrote at the Center for Public Integrity. Harte added the “same undocumented transactions and unreliable methods of financial record-keeping plague the Defense Department’s entire accounting apparatus.”
“Defense dishes out over $500 billion a year yet still can’t tell the people where all the money is going,” Grassley said. Senator Tom Carper (D-Delaware), likewise complained that lawmakers can’t figure out how to cut Pentagon spending “if we don’t know how much, and where, we’re spending that money in the first place.”
“This is more than just a disagreement among accountants; it raises questions about the Department’s basic financial practices,” he added.
To Learn More:
Pentagon Remains Stubbornly Unable to Account for its Billions (by Julia Harte, Center for Public Integrity)
Broken Audit Promises (by Chris Zubak-Skeesemail and Julia Harte, Center for Public Integrity)
Withdrawal of DoD Inspector General Report (Letter from Inspector General, Department of Defense) (pdf)
Fraudulent Bookkeeping at the Pentagon said to be Business as Usual (by Noel Brinkerhoff and Danny Biederman, AllGov)
Pentagon Spends Billions on Cost-Overruns Just Trying to Track Its Spending (by Noel Brinkerhoff, AllGov)
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