Pentagon Fails First Departmentwide Audit

In 1990, Congress passed the Chief Financial Officers Act and initially gave the Pentagon until 1997 to be ready for a clean financial audit, later pushing the target date out to 2017. Instead of meeting those deadlines, the Defense Department finally underwent its first ever full, department-wide financial statement audit for fiscal year 2018, covering about 2.7 trillion dollars in assets and 2.6 trillion in liabilities. Auditors issued a disclaimer of opinion and reported major weaknesses in inventory records, IT systems, and internal controls, and Pentagon officials openly acknowledged that they had failed the audit. The department has repeated the audit every year since but still has not earned a clean, department-wide opinion, even though some components, such as the Marine Corps, have started getting unmodified opinions, and Congress now expects a full clean audit by the end of 2028.

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