U.S. Army Audit Shows Trillions In Budget Discrepancies

A Department of Defense (DOD) audit of the United States Army budget showed that the military organization made trillions of dollars in accounting alterations last year.

While it is not clear how these massive errors arose, a report from the DOD inspector general indicated that $6.5 trillion in wrongful adjustments were made during the year 2015. In one quarter alone, the erring calculations totaled $2.8 trillion. The report referred to these changes as “forced.”

“DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.”

The U.S. Army reportedly lacked adequate evidence to clear up the confusion. Reuters suggested it was either because they did not have any such documentation of the transactions, or, alternatively, could have “simply made them up.”

At least partially, the lack of receipts may be due to the fact that the U.S. Army’s budget team lost 16,000 financial data files this year due to bad programming and employee negligence.

On the other hand, the audit did produce some proof that amounts that did not match up were sometimes edited to make them fit. In one case, noted the report, differing prices for missiles and ammunition were amended superficially in the budget, while the problem that produced the issue remained unresolved.

The U.S. Army is, however, incredulous toward the gravity of these claims. Puzzlingly, the stated disparities account for more that 20 times the agency’s total budget. A representative told Reuters that accounting is off by closer to $62.4 billion, a fraction of what the audit alleges.

“Though there is a high number of adjustments, we believe the financial statement information is more accurate than implied in this report.”

It appears the inspector general who performed the audit would beg to differ. He’s come into the habit of writing a message on the covers of his DOD budget reports: “the basic financial statements may have undetected misstatements that are both material and pervasive.”

Statements from officials formerly close to the U.S. Army audit reflect that disclaimer. Jack Armstrong, who audited the Army General Fund until 2010, said the the same practices were taking place when he left. In fact, he says the Defense Finance and Accounting Services (DFAS) jokingly refers to the year-end rush to make the budget and financial reports meet “the grand plug.”

“They don’t know what the heck the balances should be.”

At the end of last year, Pentagon comptroller Mike McCord offered several explanations for the DOD’s struggle to balance budgets, reported The Fiscal Times. First of all, he noted that the budget was larger than the GDP of many first-world countries, and also that because of myriad assets and systems the organization possessed, it was nearly impossible to arrive at a clean audit.

In addition to these justifications, McCord also openly stated that it was not necessarily the mission of organizations like the U.S. Army to meet its budget. There was a purpose of defense, he suggested, that went beyond audits.

“It’s not the department’s primary mission, right? The primary mission is to defend the nation, fight and win wars. So the trick has been to get our culture to see this as a mission that needs to get done, even though it will never be the top mission of the department.”

Larger than the defense budget of the next seven biggest spenders combined, the U.S. allocates $596 billion to its strong arm annually, reported the Peter G. Peterson Foundation. Almost three-quarters of this spending goes to the U.S. Army and Navy budgets, with the latter taking the biggest share at more than 40 percent.

Many other public officials have expressed outrage over the inability of the U.S. Army and its peers to present a trustworthy budget. Last year, public outrage ensued when it was reported that $43 million was spent on a gas station in Afghanistan that was earmarked for $500,000. During his unsuccessful presidential candidacy, Bernie Sanders repeatedly called for an audit of the DOD.

The U.S. Army budget controversy may raise concerns about a deadline that the DOD must meet on September 30, 2017. On that date, Congress has ordered that the whole department be ready to undergo a full audit.

[Photo by John Moore/Getty Images]