A group of bipartisan senators continued the decades long tradition of calling for a clean financial audit from the Department of Defense. In a letter to the Pentagon’s Chief Financial Officer, Michael McCord, the senators called attention to the thousands of outstanding recommendations from internal auditors and the limited progress that the department has made on implementing them. They also urged the DoD to adopt modern accounting systems to support effective internal controls and clean audits in the future.
Penned by U.S. Senators Chuck Grassley (R-Iowa), Bernie Sanders (I-Vt.), Ron Wyden (D-Ore.), Mike Braun (R-Ind.), Elizabeth Warren (D-Mass.), Rand Paul (R-Ky.), and Joni Erst (R-Iowa), the letter emphasized the potential savings that are left untapped due to a lack of a clean audit. The internal audit conducted in fiscal year 2020 by the DoJ’s Office of Inspector General identified process improvements that could save up to $700 million, as well as 3,500 outstanding notices of findings and recommendations (NFRs).
“As you know, the DoD has the largest budget of any executive branch agency, and unfortunately is the only agency that has not managed to obtain a clean audit opinion. The DoD only recently began conducting full financial audits, despite the fact that it has been required by law since 1990,” the senators wrote.
The DoD has spent billions of dollars on upgrading its financial and accounting technology over the last decade, but remains dependent upon 250 financial management systems that are currently unable to produce reliable data. The senators worry that these shortfalls undermine taxpayers’ confidence that their money is being spent prudently, and expose the DoD to waste, fraud, and abuse.
As internal audit functions turn to new technologies and cloud-based data storage, it remains to be seen whether such changes will become more common among government agencies and offices. The public sector has typically lagged behind on implementing advanced audit technologies. 