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Inspector General Report: Pentagon Misreporting Trillions Of Dollars

The Department of Defense continues its (largely successful) quest to be the biggest financial black hole in world history.

A recent report by the Inspector General [PDF] found that the Office of the Assistant Secretary of the Army (OASA) and the Defense Finance and Accounting Service Indianapolis (DFAS Indianapolis) made unsupported journal voucher (JV) “adjustments” totaling up to $6.5 trillion by year end. Adjusting entries in accounting are made at the end of an accounting period to show income and expenditures.

“The unsupported JV adjustments occurred because OASA and DFAS Indianapolis did not prioritize correcting the system deficiencies that caused errors resulting in JV adjustments, and did not provide sufficient guidance for supporting system‑generated adjustments,” the report states.

The IG report also claims records were removed. “DFAS Indianapolis did not document or support why the Defense Departmental Reporting System‑Budgetary (DDRS-B), a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015,” the Inspector General writes. “This occurred because DFAS Indianapolis did not have detailed documentation describing the DDRS-B import process or have accurate or complete system reports.”

Given that improper adjustments were made and records were removed, the report found that “the data used to prepare the FY 2015 AGF third quarter and year-end financial statements were unreliable and lacked an adequate audit trail. Furthermore, DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.”

In other words, the Pentagon has been caught, once again, not keeping track of where the money is going and remains unable to go through an audit—a problem that has been persistent for decades, even after a law passed in 1996 that required all federal agencies to conduct annual audits.

DoD has so consistently disregarded this law that the media rarely notes the transgression. Or is there another reason this IG report went mostly ignored? An excellent analysis by David Lindorff at FAIR shows a pattern of mainstream media unwillingness to challenge Pentagon financial impropriety.

The Pentagon, with an annual budget well over $600 billion, contracts with companies that do major advertising business with the mainstream corporate press. Perhaps that dampens the enthusiasm for investigative reporting.

In any case, much of what the Pentagon does remains hidden despite its incredible tax on federal resources. DoD’s immense spending and operations hide behind a wall of classification so expansive that the Department of Defense recently denied a Freedom of Information Act request by claiming it could neither confirm or deny the existence of publicly known forward operating bases.

While the details remain obscured by shoddy accounting, you can bet some people are getting very rich off the broken system.

Still from "Toughest Prisons in America - Lewisburg Federal Documentary." Source: https://www.youtube.com/watch?v=45ipVwX7frk
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Dan Wright

Dan Wright

Daniel Wright is a longtime blogger and currently writes for Shadowproof. He lives in New Jersey, by choice.