Pentagon Audit: “There Will Be Unpleasant Surprises”
For the first time in its history, the Department of Defense is now undergoing a financial audit.
The audit, announced last December, is itself a major undertaking that is expected to cost $367 million and to involve some 1200 auditors. The results are to be reported in November 2018.
“Until this year, DoD was the only large federal agency not under full financial statement audit,” Pentagon chief financial officer David L. Norquist told the Senate Budget Committee in March. Considering the size of the Pentagon, the project is “likely to be the largest audit ever undertaken,” he said.
The purpose of such an audit is to validate the agency’s financial statements, to detect error or fraud, to facilitate oversight, and to identify problem areas. Expectations regarding the outcome are moderate.
“DOD is not generally expected to receive an unqualified opinion [i.e. an opinion that affirms the accuracy of DoD financial statements] on its first-ever, agency-wide audit in FY2018,” the Congressional Research Service said in a new report last week. See Defense Primer: Understanding the Process for Auditing the Department of Defense, CRS In Focus, June 26, 2018.
In fact, “It took the Department of Homeland Security, a relatively new and much smaller enterprise, about ten years to get to its first clean opinion,” Mr. Norquist noted at the March Senate hearing.
In the case of the DoD audit, “I anticipate the audit process will uncover many places where our controls or processes are broken. There will be unpleasant surprises. Some of these problems may also prove frustratingly difficult to fix.”
“But the alternative is to operate in ignorance of the challenge and miss the opportunity to reform. Fixing these vulnerabilities is essential to avoid costly or destructive problems in the future,” Mr. Norquist said.
At a time when universities are already facing intense pressure to re-envision their role in the S&T ecosystem, we encourage NSF to ensure that the ambitious research acceleration remains compatible with their expertise.
FAS CEO Daniel Correa recently spoke with Adam Marblestone and Sam Rodriques, former FAS fellows who developed the idea for FROs and advocated for their use in a 2020 policy memo.
In a year when management issues like human capital, IT modernization, and improper payments have received greater attention from the public, examining this PMA tells us a lot about where the Administration’s policy is going to be focused through its last three years.
Congress must enact a Digital Public Infrastructure Act, a recognition that the government’s most fundamental responsibility in the digital era is to provide a solid, trustworthy foundation upon which people, businesses, and communities can build.