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TMCNet:  IN NEED OF A FEW GOOD ACCOUNTANTS [Virginian - Pilot]

[December 04, 2013]

IN NEED OF A FEW GOOD ACCOUNTANTS [Virginian - Pilot]

(Virginian - Pilot Via Acquire Media NewsEdge) AS MEMBERS of Congress work to prevent a second year of automatic budget cuts, which would take another $55 billion from the Department of Defense, a Reuters investigation into Pentagon records and practices shows that since 1996, the Defense Department has been unable to account for $8.5 trillion in spending.


The investigation, released last month, reveals a mammoth, error- plagued bureaucracy that has cheated soldiers out of pay, fudged its books to cover up discrepancies, ordered more supplies when years' worth of inventory sat in storage and failed to keep track of whether departments actually received the goods and services they paid for.

These infuriating findings make it difficult to argue for greater discretion in Pentagon spending. They make it impossible to justify any budget increase without corresponding accountability requirements and penalties. And they defy claims that defense spending cannot be trimmed without affecting readiness.

By law the Pentagon, the only federal agency that has not submitted to annual audits, is supposed to be ready for full audits by 2017 and subject to partial audits by next year. But that law, like the one that required annual audits of every department by 1996, goes unheeded.

"Year after year," Reuters reporter Scot J. Paltrow wrote, "top defense officials would appear before the House and Senate armed services committees to be scolded for missing their deadlines, and then they would set new ones. The next year, and the next, the scene was re-enacted. Congress and the White House stood back as more than half a trillion taxpayer dollars a year went unaudited." According to Reuters' series, "Unaccountable: The high cost of the Pentagon's bad bookkeeping," the Pentagon "is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; it continues to spend on new supplies it doesn't need and on storing others long out of date. It has amassed a backlog of more than half a trillion dollars in unaudited contracts with outside vendors; how much of that money paid for actual goods and services delivered isn't known. And it repeatedly falls prey to fraud and theft that can go undiscovered for years. ...

"In one example of many, the Army lost track of $5.8 billion in supplies between 2003 and 2011 as it shuffled equipment between reserve and regular units." In another, a single Defense Finance and Accounting Service office in Columbus "made at least $1.59 trillion in errors... in financial reports for the Air Force in 2009, according to a December 2011 Pentagon inspector general report." It's hard to know where to start with such waste and incompetence. How do we measure the cost of war when we can't even keep track of equipment? How can Pentagon leaders gauge military readiness when the department's records are works of fiction? This is the agency responsible for 47 percent of Hampton Roads' economy. Our military-rich area depends on the billions in defense contracts. But as taxpayers, we should have some measure of confidence that we're getting what we pay for.

The deadline for Congress' budget committee conference to agree on a spending plan that cancels sequestration is nine days away. Regardless of whether Republicans and Democrats strike a deal, lawmakers should be able to find common ground in assessing penalties on agencies that fail to account for spending.

The Pentagon's reckless approach to financial accounting must end.

(c) 2013 ProQuest Information and Learning Company; All Rights Reserved.

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