U.S. News

Pentagon gets failing grade in its second audit

WASHINGTON (Reuters) - The Pentagon has failed a comprehensive audit for a second year, though an official said it has made progress toward fixing accounting discrepancies that could still take years to resolve.

Last year, Acting Secretary of Defense Patrick Shanahan said the Pentagon had failed here its first-ever comprehensive audit, receiving an opinion of "disclaimer," a technical term used by auditors for findings that do not meet accounting standards.

“As expected, we will receive an overall disclaimer again this year,” Deputy Under Secretary of Defense Comptroller Elaine McCusker told reporters on Thursday ahead of the release of the audit result late on Friday.

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.

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.

McCusker said “the audit did what we needed and wanted it to do. It tested the fixes we made, did more in-depth reviews and provided us with more findings. We are making progress.”

Through a series of site visits 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.

One unit, the Defense Commissary Agency, improved its audit results to receive a passing grade for the first time, McCusker said.

The Pentagon said it was able to close more than 550 of the issues raised by auditors in the 2018 audit, or 23 percent of the findings.

The Department of Defense has 3 million employees in 160 countries at more than 4,500 sites on 30 million acres of land, McCusker said.

Reporting by Mike Stone; Editing by Greg Mitchell and Dan Grebler