U.S. News

Pentagon discovers $81 million of U.S. Navy gear during audit

WASHINGTON (Reuters) - The Pentagon found $81 million of military equipment at a U.S. Navy facility that had not been inventoried, a top Pentagon official said on Wednesday as he described the Department of Defense second straight failed audit.

The Pentagon says that it has made progress toward fixing accounting discrepancies, but that it will take years to eventually pass a full audit, Deputy Secretary of Defense David Norquist told a U.S. Senate panel.

One Navy base, the fleet logistics center in Jacksonville Florida, “identified $81 million worth of active material not tracked in the inventory system.” They also eliminated “unneeded equipment” freeing up 4.6 acres (1.9 hectares) of space he said.

A 1990 federal law mandated that U.S. government agencies be audited. Individual Pentagon programs have undergone audits, but the Pentagon had not faced a comprehensive audit until last year here.

Defense officials and outside experts have said it may be years before the Defense Department is able to fix its accounting gaps and errors and pass an audit.

Norquist said that the Pentagon will not pass their audit until all of the 24 audited entities get a clean audit, but “within five or so years, I would expect you’d see a majority of them with a clean (audit) opinion.”

Through a series of site visits here and samples, 1,400 auditors tested the systems and record-keeping processes on weapons systems, military personnel and property at some 600 sites around the world, completing 24 standalone audits, as well as the overall audit.

Norquist told the Senate Armed Services Committee, “to do this work, the auditors went through billions of transactions, pulled samples, and then tested them for accuracy and completeness.”

Reporting by Mike Stone in Washington, D.C.; Editing by Marguerita Choy