by Julia Gledhill at Responsible Statecraft
DOD regularly buys parts and equipment it doesn’t need because it can’t keep track of the parts and equipment it already owns
The Pentagon failed its sixth audit in a row last month.
And “failed” is putting it generously. The department actually received a “disclaimer of opinion.” According to the Government Accountability Office, that means “auditors were unable to obtain sufficient, appropriate evidence to provide a basis for an audit opinion.” So the outcome is more like an “incomplete” than an abject failure.
But semantics aside, one major reason the Pentagon keeps failing audits is because it can’t keep track of its property. Last year, the Pentagon couldn’t properly account for a whopping 61% of its $3.5 trillion in assets. That figure increased this year, with the department insufficiently documenting 63% of its now $3.8 trillion in assets. Military contractors possess many of these assets, but to an extent unbeknownst to the Pentagon.
The GAO has flagged this issue for the department since at least 1981. Yet the latest audit states that the Pentagon’s target to correct insufficient accounting department-wide is fiscal year 2031. In the meantime, contractors are producing weapon systems and spare parts that they may already possess — an incredible waste of taxpayer dollars.
The F-35 program is a great example. The Pentagon technically owns the global pool of spare parts for all variations of the F-35, but the program’s contractors — mainly Lockheed Martin and Pratt & Whitney — manage those parts. According to the GAO, the Pentagon relies on contractors to record the “cost, total quantity, and locations of [F-35] spare parts in the global spares pool.” The department has estimated that the value of F-35 parts in the possession of contractors is over $220 billion, but the GAO reports that this is “likely significantly understated.”…
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