GAO Finds DOD Finances Too Disorganized to Audit

A GAO report released on Feb. 9 found that the Department of Defense budgetary schedules are so disorganized that they cannot be audited. “DOD remains one of the few entities that cannot demonstrate its ability to accurately account for and reliably report its spending and assets,” the report states. The problem is not a new one. In 2010, Congress required DOD to make its financial statements ready for audit by Sept. 30, 2017. To gauge its progress toward that goal, DOD hired three independent public accountants to conduct audits of the Army, Navy, and Air Force budgetary schedules for fiscal year 2015. Instead of completing their audits, the accountants issued disclaimers of opinion because all three services were “unable to provide sufficient supporting evidence to enable the auditor to express an opinion.” The accountants identified “material weaknesses” in the services’ financial control systems, including incomplete transaction reports, lack of supporting documentation for transactions, ineffective systems for gathering transaction data, and poor oversight of service providers. In the case of the Air Force, the report recommends changes to policies and procedures, but admits that these may be difficult to complete in time to comply with the audit request of the Congress.