The critics of the military’s spending habits seem to have a point; indeed, 6.5 trillion points. This is an example of governmental ethics failing. According to Fiscal Times (July 31, 2016) in an article entitled: “Pentagon’s Sloppy Bookkeeping Means $6.5 Trillion Can’t Pass an Audit,” author Eric Pianin writes:
“The Defense Finance and Accounting Service, the behemoth Indianapolis-based agency that provides finance and accounting services for the Pentagon’s civilian and military members, could not provide adequate documentation for $6.5 trillion worth of year-end adjustments to Army general fund transactions and data.”
Before we go on, I will let us all reflect for a second and take in a collective breath. It is essential to point out that this is an annual number. This is why members of Congress have demanded that by September 30, 2017 the Pentagon must achieve what is termed “audit readiness.”
Can they do it? I would be the last person to believe that they can. The Defense Finance and Accounting Service (DFAS) is said to pay for all military personnel, military contractors and vendors. They pay everyone and anyone who sells everything from bullets to bathroom sinks with our tax money. Accounting accurately for expenditures would be governmental ethics at its best, but it doesn’t seem that “at it’s best” is possible.
Surprisingly, the article tells us that there is nothing to “suggest that anyone has misplaced or absconded with large sums of money.” That is the really good news. The bad news is that the Pentagon has no idea who is authorizing transactions. It could be a four-star general or your mother-in-law. How to you measure governmental ethics when you can’t account for expenditure approvals?
For an agency of its vast size, DFAS cannot provide the invoice tracking necessary to perform an audit. The Inspector General’s (IG) office, the agency charged with reviewing military expenditures using generally accepted government auditing standards, cannot make heads or tails of how the Pentagon spent those trillions of dollars.
Where’s the paperwork?
To compound the problem even further, are the many thousands of pieces of paperwork backing and tracking transactions that should be in the files but have “gone missing.” How does this reflect a positive example of governmental ethics? As an example, according to the IG, for the third quarter of 2015 alone, there are more than 16,000 missing invoices and related documents. There is no audit trail.
These massive abuses come on the heels of accounting fraud discovered in Navy audits in 2013, where phony numbers were inserted in financial reports in order to justify the Navy’s books with Treasury Department numbers. Phony numbers equal governmental ethics gone horribly bad.
The conclusion to all of the misstatements and missing paperwork is that DFAS will probably not be able to be ready for an audit on September 30, 2017. We question if they will ever be ready for an audit, in this or in any other lifetime, unless there are ethical expectations in addition to financial expectations.
How about ethics at the Pentagon?
Unless Americas expect good ethics at the Pentagon, as they would expect from any other government agency, these kinds of abuses are bound to be perpetuated. I would even endorse civilian ethical oversight. Now, I am not suggesting ethical screens in terms of the military’s mission, I am endorsing an ethical filter to ask why, for example, in one fiscal quarter alone 16,000 important documents and invoices went missing. It would also be worth exploring how it is possible to misplace trillions of dollars of taxpayer money when hundreds of very vital non-military programs are going under-funded.
I would go a step further, and publish such information of ethical fiscal failures on a continuing basis (at least quarterly), so that Congress and taxpayers alike would react to the rather cavalier way in which the Pentagon is displaying incompetency in regard to the management of its funding. Within organizations such as DFAS, I would back a series of ethical trainings to make certain ethical considerations are always top of mind.
Again, I am not proposing interfering with mission, but certainly to ask for an accounting of how much is being spent and having the ability to track the massive number of invoices to justify expenditures. It is not too much for Americans to expect that our government makes an attempt to be ethical.
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