Senators say Pentagon must pass audit or return millions of dollars

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Military services and Pentagon offices that can’t complete a full, clean audit of their budgets should return millions of dollars to American taxpayers, a bipartisan group of senators said Wednesday as they introduced legislation that could transform Defense Department finances.

Unlike virtually every other arm of the federal government, the Defense Department has yet to produce a clean audit of its books, fueling critics’ argument that the Pentagon is unable to keep track of how it spends its annual budget of about $700 billion.

The Defense Department has conducted three internal audits in recent years, and while military officials say they’ve made substantial progress, the Pentagon has failed all three.

A group of prominent senators says that must change. The Audit the Pentagon Act of 2021, introduced Wednesday in Congress, would require each office in the Pentagon — including military services such as the Army and the Air Force — to pass a full independent audit.

If they don’t, the lawmakers said, the office, agency or service would have to return 1% of its budget to the Treasury Department. Depending on which office fails the audit, such a financial penalty could reach into the millions of dollars.

“The Pentagon and the military-industrial complex have been plagued by a massive amount of waste, fraud and financial mismanagement for decades. That is absolutely unacceptable,” said Sen. Bernard Sanders, Vermont independent and co-sponsor of the bill. “If we are serious about spending taxpayer dollars wisely and effectively, we have got to end the absurdity of the Pentagon being the only agency in the federal government that has not passed an independent audit.”

Democratic Sen. Ron Wyden of Oregon and Republicans Sens. Mike Lee of Utah and Charles E. Grassley of Iowa are co-sponsoring the legislation.

“We’ve seen example after example of excessive and inefficient spending by the Pentagon, and every dollar squandered is a dollar not being used to support our men and women in uniform,” Mr. Grassley said in a statement. “After 30 years to get ready, this bill pushes the Defense Department to finally achieve a clean annual audit — a requirement that every other federal agency is held to.”

The Pentagon completed its most recent audit in November. Of the two dozen individual services and offices audited, seven received clean opinions. The Army Corps of Civil Engineers, the Defense Finance and Accounting Service, and the Defense Commissary Agency were among those that passed their audits.

Despite the fact that the Pentagon failed the audit as a whole, officials said the review process is worthwhile and is driving improvements inside the Defense Department.

“As we continue reforming the department for greater affordability, the audit delivers returns that significantly outweigh its cost by improving business operations and enhancing the lethality of our warfighters,” former Deputy Defense Secretary David Norquist said in November when the audit was released.

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