The Pentagon’s office of inspector general warned this week the Department of Defense may “not achieve audit readiness” by the end of September 2017—a violation of a law passed in 2009.
The OIG called on military leaders to remedy “deficiencies in accounting entries, compliance with laws and regulations, and audit trails,” and said that Pentagon brass themselves have acknowledged not adhering to widely-accepted accounting standards.
“The basic financial statements may also have undetected misstatements that were both material and pervasive,” the IG also said.
“Unless DOD takes action to address the 13 material weaknesses identified in this report, DOD’s ability to be audit-ready by FY 2017 is at risk,” the report concluded.
When it passed the annual defense policy bill in 2009, Congress ordered the Pentagon to be able to be independently audited, and set the 2017 deadline. The move came after the Defense Department for years failed to meet an audit-capability test, despite the passage of a 1990 law stating that federal agencies must be able to annually submit themselves to outside financial examinations.
The Pentagon OIG itself played host in recent months to a minor accounting scandal. Reuters in May reported that a deputy inspector general last year knowingly approved of an independent examiner’s flimsily crafted analysis, which declared the Marine Corps fully audited, for part of 2012. In June, Inspector General Jon Rymer announced that the deputy in question, Daniel Blair, would be demoted to deputy chief of staff.
Read the OIG report here.
