Audit the Pentagon Act of 2015 -- Answering the Question: How is the Taxpayer Dollar Spent?

By Angela Canterbury, Laicie Heeley and Aman Shareef

This month, Representative Barbara Lee (D-Calif.) introduced the bipartisan Audit the Pentagon Act of 2015, (H.R. 942) co-sponsored by Mike Burgess (R-Texas) and five others. It aims to do exactly what it says: audit the Pentagon. Why, you ask? Because unlike every other federal agency required by law to undergo an audit, the Department of Defense (DoD) has never done so.

The Government Accountability Office (GAO) has placed various parts of the DoD’s financial management on its “High-Risk” list since 1990. According to the GAO, the issue is so bad that the department does not know how many people are on its payroll, and doctoring the ledgers is a standard practice. If you didn’t know any better, you would think this is a corrupt institution in a different hemisphere . . .

Rep. Lee’s bill would require the DoD to obtain an independent audit opinion by March 2016 lest the department’s discretionary budget be reduced by 0.5%. The reduction, however, would not apply to any accounts that fund personnel or their healthcare. Additionally, the president would be able to waive any reductions required by the bill if the account is deemed necessary for national security, or if the account provides equipment or supplies to any American troops that are in combat.

Despite the exceptions, if the Pentagon fails to obtain an independent audit opinion by early next year, the consequences would be immediate.

A different bipartisan bill ( S. 327) by the same name is also pending in the Senate, sponsored by Sen. Joe Manchin (D-W.Va.), co-sponsored by Rand Paul (R-Ky.), Ted Cruz (R-Texas), and four others. The most notable difference in this bill is that it calls for escalating, rather than immediate consequences for the DoD’s failure to provide an audit.
If the Pentagon fails to pass an audit by 2016, it would have to make changes to the required qualifications for the DoD Comptrollers. The new Comptrollers would have to have served as the chief financial officer for a state or federal agency that has received an independent unqualified audit during their time.

If the Pentagon fails to obtain an audit by 2017, then the Defense Finance and Accounting Service (DFAS), which writes the checks for the various DoD offices, would be moved to the Department of the Treasury. The DoD is the only department where check-writing authority is held within the department. But shouldn’t all Americans be concerned about this right now? Maybe we should start by stripping this absurd autonomy that seems more befitting of a military-controlled state.

The Pentagon would also lose its enhanced transfer authority in 2017. “Transfer authority” allows the movement of funds from one appropriation to another, but only if Congress gives them permission first. Presumably, this means that any outstanding transfer authorities given in previous legislation would be revoked.

Failure to obtain an audit by 2018 would result in the loss of reprogramming authority, which is an inherent authority to move funds around within an appropriation. At the end of the day, though, losing transfer/reprogramming authority amounts to little, since the lack of auditable accounts gives the department ultimate flexibility in moving funds around as they please.

The Pentagon has been required to submit an independent audit of its books every year for the past 20 years.  Without such an audit of the Pentagon’s finances, there is no way to know how taxpayer dollars are being spent. Given the budgetary constraints the federal government faces today, the Pentagon ought to pass an independent audit before taxpayers fork over another dime.

Nukes of Hazard
The Center for Arms Control and Non-Proliferation is a Washington,
D.C.-based non-profit, non-partisan research organization dedicated to
enhancing international peace and security in the 21st century.

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