In a July 21, 2017 memo, the secretary of defense, James Mattis, made promising comments about his ambitions to end wasteful spending at the Pentagon. He wrote that he expected “leaders at all levels in the department to exercise the utmost degree of stewardship over every penny” spent and that “only by instilling budget discipline, by establishing a culture of cost awareness, and by holding ourselves accountable, can we earn the trust and confidence of the Congress and the American people that we are the best possible stewards of taxpayer dollars.”
I’ve spent more than three decades reviewing egregious spending at the Defense Department. The sentiments expressed in the memo were encouraging, so much so that I sent Secretary Mattis a letter of support. Since then, however, it seems the department has done very little to change its ways.
Over the past few months alone, the Defense Department has had to explain why it’s been paying $14,000 for individual 3-D printed toilet seat lids and purchasing cups for $1,280 each. These are just the latest examples on a long list of unacceptable purchases made by the department, including $436 for hammers in the 1980s, and $117 soap dish covers and $999 pliers in the 1990s.
These wasteful expenditures reflect major underlying financial problems at the department, whose 2019 budget is more than $700 billion. If it had its financial house in order, overpriced parts and contracts might have been detected before ever being approved. Effective internal controls to catch and deter fraud, waste, abuse and theft serve as a firewall that would help prevent misuses of taxpayer dollars.
In 1990, Congress passed the Chief Financial Officers Act, which requires every federal agency to prepare a financial statement that is subject to audit by either the inspector general or an independent accounting firm. The auditors review the statements and render an opinion: clean, incomplete or failure. The goal is to hold government accountable by identifying and fixing financial problems. Since then, nearly all federal agencies have been able to produce a clean audit annually except for the Defense Department, because of its broken accounting systems.
The Pentagon is made up of many branches and agencies with multiple accounting systems. There are hundreds of different accounting systems with hundreds of different processes. This convoluted infrastructure is the perfect environment for waste, fraud and abuse. For example, with so many different systems in place it is easy — whether by design or accident — for supporting documentation like receipts and contract guidelines to vanish.
Without the ability to account for every dollar spent, there is no way for the Defense Department to produce a clean audit. There’s also no way of knowing exactly how much or on what money is being spent. Taxpayers pay billions of dollars annually to fund Pentagon programs that are supposed to increase battle readiness, support military personnel and protect national security. Every wasted dollar weakens America’s military might and takes resources away from our men and women in uniform and their families.
Last month, the Pentagon released the results of its recent full financial audit, produced at a cost of more than $400 million. They were disappointing but not surprising. Without an accounting system that can provide usable data, an audit is a waste of taxpayer money. What was surprising was the reaction from Pentagon officials. A deputy defense secretary told reporters, “We never thought we were going to pass an audit.”
The tone of the comment speaks volumes about a lasting cavalier attitude at the Pentagon regarding reckless spending of taxpayer dollars. It would be smart of the department to fix its accounting systems before spending hundreds of millions of dollars on any future audit that will render the same predictable results.
Americans routinely balance their checkbooks, scrutinize their credit card statements and review their banking phone apps to manage their household budgets. There’s no reason the Defense Department can’t effectively do the same thing.
Some in Congress have tried to pressure the department to get its financial house in order. In 2015, I worked with a Democratic colleague, Joe Manchin of West Virginia, to try to pass the Audit the Pentagon Act, which would have provided incentives to the Defense Department to produce a clean audit. But the measure was not brought up for a vote. I also co-sponsored an amendment to the 2018 National Defense Authorization Act, the Pentagon’s main spending bill, that would have required the Pentagon to report how much it spends preparing for audits and to verify data within its accounting systems. Again, the legislation went nowhere.
Ultimately Pentagon leaders must hold every department under them — including the Army, Navy, Air Force and Marine Corps — accountable for their financial failings. They need to heed the words of Secretary Mattis and live up to his promise that they’ll be good stewards of taxpayer dollars.
Charles Grassley is a Republican senator from Iowa and chairman of the Judiciary Committee.
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