Senators urge Pentagon to end systematic faking of its accounts

WASHINGTON Fri Jun 13, 2014 3:54pm EDT

Aerial view of the United States military headquarters, the Pentagon, September 28, 2008. REUTERS/Jason Reed

Aerial view of the United States military headquarters, the Pentagon, September 28, 2008.

Credit: Reuters/Jason Reed

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WASHINGTON (Reuters) - Four senators have called on the Defense Department to end a practice that involves deliberately inserting false numbers into the Pentagon's accounting ledgers and financial reports.

The senators sent a letter to Defense Department Comptroller Robert Hale urging the Pentagon to stop an accounting practice widely known as "plugging." The letter, dated June 12, 2014, said that plugs are fictitious dollar amounts inserted into financial ledgers to make it appear that the Pentagon’s books balance.

The letter (1.usa.gov/1kwEY2X) was sent by Charles Grassley, Tom Coburn, Thomas Carper and Ron Johnson. The four senators have been pressing for a solution to severe accounting problems at the Pentagon, whose spending accounts for the largest chunk by far of the annual federal budget approved by Congress. Grassley is the senior Republican on the Senate Judiciary Committee; the others hold top positions on the Homeland Security and Governmental Affairs Committee.

The senators said that plugs, called "reconciling amounts" by the Pentagon, totaled $9.6 billion in 2013 - an 80% increase since 2008. The letter asked Hale and Pentagon Inspector General Jon Rymer to provide the senators with a plan to end the practice, including a specific timetable.

The legislators criticized the Office of the Inspector General - the internal Pentagon unit charged with policing the agency - for using more than $200 million worth of plugs to balance its own accounts. "In order to play a leadership role in financial management reform, the DoD OIG should start by ending the use of plugging in its own financial statements," they wrote.

The Pentagon's practice of faking its budget numbers was the subject of a Reuters investigation last year on accounting malpractice at the Defense Department. The Senate letter to Hale and Rymer cited the findings of the Reuters series. (here#article/part2)

"The department will respond to the letter in an appropriate manner," a Pentagon spokesman said.

Michael Thiem, spokesman for the inspector general, said: "At the office of the inspector general, we are committed to accurate and transparent financial reporting." He said the office would continue "aggressive oversight" of the Defense Department to improve accounting systems.

(Edited by Michael Williams)

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Comments (20)
natewf wrote:
Thanks for the report last year, Reuters. A story so scandalous, it seems maybe something will actually be done about it.

Jun 13, 2014 6:51pm EDT  --  Report as abuse
2Borknot2B wrote:
You mean there are other Senators that want the government to stop ripping off the US tax payers? Good to know. See if you can get Graham and McCain to go along with that one, doubtful. L.

Jun 13, 2014 7:23pm EDT  --  Report as abuse
Cleveland2012 wrote:
After spending over two decades in the Army I can report that the whole carnival is past due for an overhaul. It is not just the budget that is fake. I remember Special Forces weapons sergeants who did not know how to properly clear the M2 machine gun. I know guys who got killed because the unit had no idea what it was doing. That is a problem. And the leadership? They were happily going up the ladder. They are ones who are fake, and they need to held accountable. One of the Masters of Ceremonies at the Pentagon needs to be punished for this budget buffoonery, and let that be a start.

Jun 13, 2014 8:46pm EDT  --  Report as abuse
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