Pentagon fails audit yet again, could pass around 2027, comptroller says

The Pentagon building is seen in Arlington, Virginia, U.S. October 9, 2020. REUTERS/Carlos Barria

WASHINGTON (Reuters) – The Pentagon failed its comprehensive audit in fiscal 2020, the third year it has failed since the first audit was conducted in 2018, reflecting system and accounting problems across its vast bureaucracy that could persist until 2027, the department’s comptroller said on Monday.

“The process of getting to a clean opinion for federal agencies, it can take a long time,” said Thomas Harker, who is also undersecretary of defense and chief financial officer, told reporters in releasing the results on Monday.

After the first audit of the Pentagon’s nearly $3 trillion worth of assets in fiscal 2018, then-Acting Secretary of Defense Patrick Shanahan said here the department received an opinion of “disclaimer,” a term used by auditors for findings that do not meet accounting standards.

Harker said the Department of Homeland Security took a decade to pass a comprehensive audit, and the Pentagon could take just as long, making the possible date for its first clean audit somewhere around 2027.

Coronavirus-related travel restrictions hampered the auditing process this year as auditors had to resort to video feeds or photographs to execute due diligence, Harker said.

Around 1,400 auditors tested the systems and record-keeping processes on weapons systems, military personnel and property around the world in 100 site visits, 530 virtual visits and samples. The process resulted in 24 standalone audits, comprising the overall audit.

Seven of the units were expected to receive clean opinions from the auditors, Harker said. The Pentagon said it was “hopeful” the Defense Information Systems Agency’s working capital fund would receive a passing grade for the first time when its audit was completed in December.

Fees for the audit were $203 million this year.

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