Pentagon Auditor Can't Account For $800 Million In Spending
Content adapted from this Zerohedge.com article : Source
by Tyler Durden
The Pentagon's Defense Logistics Agency (DLA) has reportedly "lost track" of hundreds of millions of dollars it spent, said Ernst & Young, the accounting firm conducting the first-ever Pentagon audit, according to Politico.
E&Y discovered that DLA "failed to properly document more than $800 million in construction projects," said Politico, which also reported this is just one of the many instances where millions of dollars went missing as the accountability system inside the Pentagon is broken. Worse, according to Politico, the first-ever audit, covering the fiscal year that ended Sept. 30, 2016, signals complete incompetence about how the Pentagon handles its $700 billion annual budget.
While these comments from Ernst & Young are mindnumbing, **the Trump administration is set to ask Congress for $716 billion for defense spending for fiscal 2019, a 7% increase over the 2018 Budget. **Budget analysts have sounded warnings this would be a significant surge in spending for the Pentagon at a time when the organization can barely keep track of its current expenditures.
"If you can't follow the money, you aren't going to be able to do an audit," Sen. Chuck Grassley, an Iowa Republican and senior member of the Budget and Finance committees, who has suggested to past administrations that hemorrhaging of wasteful spending at the Pentagon must stop.
Army Lt. Gen. Darrell Williams, the agency's director, wrote in response to Ernst & Young's bombshell findings that the audit has "provided us with a valuable independent view of our current financial operations." "
We are committed to resolving the material weaknesses and strengthening internal controls around DLA's operations," he said, according to Politico.
The DLA is a $40 billion-a-year logistics agency within the Pentagon with some 25,000 employees and processes about 100,000 orders a day, said Politico.
Ernst & Young's auditors found significant accounting errors in DLA's process of tracking expenditures. There are minimal accounting records of where the money is going said the report. This does not bode well for accountability at the Pentagon, which has combined assets of $2.2 trillion.The Politico describes one section of the audit where Ernst & Young's auditors found misstatements for some $465 million in construction projects. Another section described that there was very little documentation for another $384 million worth of spending.
In one part of the audit, completed in mid-December, Ernst & Young found that misstatements in the agency's books totaled at least $465 million for construction projects it financed for the Army Corps of Engineers and other agencies. For construction projects designated as still "in progress," meanwhile, it didn't have sufficient documentation — or any documentation at all — for another $384 million worth of spending. The agency also couldn't produce supporting evidence for many items that are documented in some form — including records for $100 million worth of assets in the computer systems that conduct the agency's day-to-day business. "The documentation, such as the evidence demonstrating that the asset was tested and accepted, is not retained or available," it said.
The auditor also said that around $100 million worth of assets in computer systems had very little documentation.
The report, which covers the fiscal year that ended Sept. 30, 2016, also found that $46 million in computer assets were "inappropriately recorded" as belonging to the Defense Logistics Agency. It also warned that the agency cannot reconcile balances from its general ledger with the Treasury Department.
"The initial audit has provided us with a valuable independent view of our current financial operations," Army Lt. Gen. Darrell Williams, the agency's director, wrote in response to Ernst & Young's findings. "We are committed to resolving the material weaknesses and strengthening internal controls around DLA's operations."
In a statement to Politico, the DLA said it is the "first of its size and complexity in the Department of Defense to undergo an audit so we did not anticipate achieving a 'clean' audit opinion in the initial cycles."
"The key is to use auditor feedback to focus our remediation efforts and corrective action plans, and maximize the value from the audits. That's what we're doing now," the statement said.
Back in January, the team of 1,200 auditors found some $830 million in "missing" helicopters as the audit kicked off into 2018.
And in a preview of what is to come, Norquist told the House Armed Services Committee that an initial Army audit found 39 UH-60 Black Hawk helicopter ($830,700,000) were not adequately recorded in the property system. "The Air Force identified 478 structures and buildings at 12 installations that were not in its real property system," he added. In other words these helicopters were simply "missing" on the books.
As the army of auditors penetrates deep inside the Pentagon's financial records, we wonder what the 1,200 will find next as they descend further down the rabbit hole of decades of failed proxy wars, regime changes and dictator slush funds?
Large bureacratic institutions are often incompetent? What's new?
$800 M, that's chump change compared to the $2.3 Trillion Rumsfeld admitted losing track of before 911.
EXACTLY.
I'm surprised that more on ZH aren't zeroing in on this to better understand this. I think most are just glossing over it. It's ridiculous (and a little suspicious) that ZH hasn't covered it.
You simply CANNOT comprehend what is really going on in DC and what all these issues with inability to reconcile balance sheets or the depths, breadth and control of the DS without truly understanding the money. YOU ALWAYS FOLLOW THE MONEY.
I just posted this on another thread... people need to understand these funneling mechanisms.But it's far more than just the $21T that Skidmore was able to track.
It's more than the $20T national debt.
In final 18 mos. of Bush administration, US lost $12T on its net worth, 20% of accumulated wealth over two centuries was gone in 18 mos. No one in .gov, Wall Street held responsible.
After financial collapse in 2008 - $26T in bailouts not including TARP or FDIC financing of US institutions ($100k for every person), all done by Fed Reserve w/out any act in Congress authorizing it.But it's far more than just the $21T that Skidmore was able to track.It's more than the $20T national debt.
In final 18 mos. of Bush administration, US lost $12T on its net worth, 20% of accumulated wealth over two centuries was gone in 18 mos. No one in .gov, Wall Street held responsible.
After financial collapse in 2008 - $26T in bailouts not including TARP or FDIC financing of US institutions ($100k for every person), all done by Fed Reserve w/out any act in Congress authorizing it.
We're getting robbed blind and who knows what they are using the lost money for, pretty sad state of affairs when the government is stealing from the people.
How are they held responsible? Is there any way for the people to take action? If anyone else was doing this it would be jail time, but it's the government who appears to be immune, but maybe that's because they make themselves immune through crap laws.
We should be paying the strict minimum taxes necessary to stay out of prison and literally be doing 90% of our transactions off-the-record in anonymity, just as the DOJ has shown us to do.
As above so below. If the rules do not apply to the sovereigns, they certainly do not apply to the subjects. As far as I can tell, the US government is already and has been for quite some time a criminal entity with no legitimacy to rule...
Let them and their big guns go around murdering and looting the planet... Fine.
But let them raise the prices of their goods and tax their own corporate kronies to do so...
I believe any corporation with under 50 employees with revenue under 10 million dollars a year should not be taxed. And if it is being taxed, it should cook its books. As much as humanly possible and still getting away with it.
Only a corporation with 50 or more employees or 10 or more so million dollars of revenue should be taxed with a flat rate of 20% or so... Take all the megacorps in America and that's more than enough to finance even the most absurd Pentagon projects... And it only means the price of a McFish Sandwich will go up by a dollar or two...
That way, if they want to start illegal wars and go around committing genocide in the Middle East, South America, Africa, and South-East Asia, they will need to ask the market to support them...
That would be a do-able social contract... For now, it's absolute madness.
Screw these bastards... Be warned everybody, they're coming for everything that we have...
They have a mentality of "us" versus "them"... AKA even educated liberal white people have been taken for target... If you're part of the 99%, consider yourself neofeudal serf-scum
The system is broken, jump ship and start creating alternatives.
That's what blockchain is here for, to shift the power, everyone who looks into the government knows it's a bit crooked, but how do we join together to create good change? Blockchain is the closest thing I've seen to being able to do it, we need to be the change we want to see, because we can put forth all the suggestions we want and never see any results. We'll just keep getting screwed over because for some reason we need to spend as much money as possible to build weapons and bail out the banks who stole from us and finance vacations for politicians
PS followed because it looks like we have some things in common
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The individuals who verifiably were all money, trade, and valuable metals are presently likewise giving their records a chance to be opened by anybody with the methods (calculations) to do as such.
So no, crypto isn't a major center finger to the banksters; it is the Vaseline and the beverages that persuaded an expansive segment of private people to surrender their opportunity and control of their riches.
You have posted 897 times in a month . Why is your reputation so low at 5 ?
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First thanks for sharing your post with us @zer0hedge I appreciate that.
Second LOL they're eyeing the $3 trillion in social security. They plan on abolishing social security to pay for the tax cut and defense build up.
We hear the same story over and over, the government must pay the dividend on the $3 trillion of which social security uses to pay out claims on the money we put in. They say the amount of money the government must pay to social security is because it's an entitlement which must be cut. So it's slated for the mixed up world of lies and confiscation, we'll be told it has to be done for this and that reason.
The MSM will parrot the mantra, and everyone will sing the same tune and nothing we say will stop the greatest robbery in US history.
People worked all their lives with a promise, if you put money in, then you will get it out when you're old. What a lie. Funny how the Jews like Greenspan, Stockman and Rivlin have pumped abolishing social security, Stockman made it his life work, over and over he pumps the same message, kill social security. And he never says we will get our money back.
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After financial collapse in 2008 - $26T in bailouts not including TARP or FDIC financing of US institutions ($100k for every person), all done by Fed Reserve w/out any act in Congress authorizing it.
Trillions extended by the Federal Reserve in the form of corporate welfare - they took US dollar, they control the currency and have control over money supply and for first time in history they played favorites and lent out money at 0.01% interest to these special banks.
Bloomberg reported that there are Trillions in off-balance sheets transactions that FR has entered into since Sept (’08?)
Inspector General for Board of Federal Reserve Governors representative testified in hearing that they have direct oversight over board programs and operations and also look at board-delegated functions at reserve banks as well as the board’s oversight and supervision at the reserve banks. But they do not have jurisdiction to directly audit reserve bank activities. In other words, if the NY Fed Member or other member reserve banks made $23T in free transactions—gave it away, she had no jurisdiction to understand, look at or know about it.
Deep will increase the amount of casual losses
Great concept.. Thanks for sharing this
$800 million is nothing , in reality it should be $21 trillion. Former Secretary of Defense Donald Rumsfeld revealed that the Pentagon lost over $2.3 trillion on September 10 . After that 9/11 took over this news , just like a cover up .Fed and their member banks are transacting government money outside the law.That's why there is such a strong push to change or tear up the US Constitution. This is why there is such a push for gun control.Put those that money laundered the $800 million in jail. Unpunished white collar crimes. The funds are probably sitting in a bank vault in a Britain offshore account or anonymous corporate account.