- Poor record keeping caused trillions to be counted multiple times.
- The Defense Department has failed two out of two audits.
The Defense Department has a serious accounting problem. Last year alone, the agency made $35 trillion in accounting adjustments due to bookkeeping errors.
Reporting assets of $2.7 trillion and liabilities of $2.6 trillion, accounting adjustments of $35 trillion represent an extreme degree of erroneous record keeping at the Pentagon. The discrepancy is mostly due to “a lot of double, triple, and quadruple counting of the same money as it got moved between accounts,” said Todd Harrison, a Pentagon budget expert with the Center for Strategic and International Studies, according to reporting by Bloomberg.
The $35 trillion in adjustments in 2019 follow adjustments of $30.7 trillion in 2018 and $29 trillion in 2017.
The Pentagon had its first ever audit in 2018, which it failed. Last year a second audit was conducted, which the agency also failed.
Defense spending makes up over half of the U.S. federal government’s discretionary spending. Watchdogs are concerned that such an opaque set of record keeping systems for such a large budget could result in abuses.