The Pentagon has once again stumbled in its 7th consecutive audit, asserting it cannot adequately track its staggering $824 billion budget while also noting some strides have been made.
On Friday (November 15), the Department of Defense (DOD) unveiled the outcomes of its wide-ranging fiscal year 2024 financial audit, marking the seventh such evaluation since 2018. The Pentagon indicated that its 2024 audit reflects advancements toward its 2028 objectives despite falling short in its 7th audit and lacking a complete account of its $824 billion budget.
Per the report, the Defense Department’s Inspector General issued a blanket “disclaimer of opinion” on DOD financial statements, indicating that it has not supplied sufficient data for auditors to render a precise judgment. Mike McCord, Under Secretary of Defense (Comptroller) and Chief Financial Officer, clarified that this signifies the department has not accomplished a clean audit.
The Pentagon aims to secure an “unmodified audit opinion,” or a spotless report asserting the accuracy of the financial statements. A “qualified opinion” indicates that while there are gaps and issues, the finances are generally trustworthy. Nonetheless, despite the string of audits failing, McCord, who anticipated the “disclaimer of opinion,” noted that the Pentagon has consistently exhibited substantial improvement every year during department-wide audits.
McCord expressed, “I believe the department has turned a corner in grasping its obstacles and, more crucially, in addressing them. We’re building momentum, and there’s a robust dedication—along with confidence in our capacity—to achieve an unmodified audit opinion.”
In the context of the DOD audit for fiscal year 2024, there were 28 distinct reporting entities, of which only 9 earned “unmodified audit opinions,” while 15 received “disclaimers.” McCord mentioned that 3 additional entities are still pending, but it’s anticipated that two will also secure “unmodified audit opinions,” just as they did last year. Once finalized, this will result in 11 clean audits, one more than fiscal year 2023… a step forward.
This year, for the initial time, the Defense Threat Reduction Agency attained an “unmodified audit opinion.” He further noted that this marks only the second year that the Defense Threat Reduction Agency has been subjected to a stand-alone audit. Furthermore, as part of this year’s comprehensive department audit, one entity earned a “qualified opinion,” while 15 others received “disclaimers.”
The Hill reports that the Pentagon has never successfully completed an audit since the agency became legally bound to conduct them in 2018. The Defense Department appears to face its most significant hurdle in auditing with fully accounting for the numerous systems it employs.
Despite these auditing difficulties, failing its 7th audit and unable to properly account for its $824 billion budget, the Pentagon remains fully devoted to achieving a clean audit by fiscal year 2028, as stipulated by the 2024 National Defense Authorization Act.