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DOD’s Supply Agency Shows Need for Spending Reform

Posted by Concerned Veterans for America on


Last week, an outside accounting firm determined the Department of Defense (DOD) is once again unable to complete an audit. President Trump has pledged to strengthen America’s military, but this failure to produce an audit continues to undermine the president’s efforts to shore up our national defense.

The DOD is the only federal agency not to undergo an audit, even though it has been required by law since 1990. The supply agency for the DOD, the Defense Logistics Agency (DLA), has been tasked with producing the first DOD audit. According to Politico’s Bryan Bender, experts predict the DLA is a case study for determining if the DOD is capable of producing an audit.

The outside accounting firm reviewing the DLA’s financial records–Ernst & Young–warned that the agency lacks “complete and accurate supporting documentation” and it was unable to reconcile differences “between the sub-ledger and the general ledger.” With a $44 billion budget, which would make it a Fortune 50 company if it were private, the inability by the DLA to even maintain competent financial records is unacceptable.

A lack of financial accountability has led to some egregious misuses of its funds. A 2015 Politico report found an alarming statistic when examining the DLA:

“Half of what the DLA has purchased may never be used. Wal-Mart, by comparison, turns over its entire worldwide inventory eight times a year.”

In that same report, the agency’s deputy director of finance claimed the DLA was “ready for an audit” and “no one is as far along as we are.” Over two years later the DLA is in the very same position–with no clear path towards producing an audit. Making matters worse, if the DLA was the farthest along in the DOD, the prospects of the entire DOD producing an audit anytime in the near future are slim to none.

Something must be done to eliminate wasteful spending and ensure taxpayer dollars are spent in the most efficient manner possible. Our fiscal and national security are inextricably linked–perpetual wasteful spending jeopardizes our national security.

CVA has pushed for Congress to pass the bipartisan Audit the Pentagon Act of 2015 to incentivize the Pentagon to produce its first audit. In its FY 2018 NDAA recommendations, CVA explained the legislation strikes the right balance of rewarding the Pentagon if it produces an audit on time and would place stricter accounting restrictions if they fail to complete an audit–and doesn’t arbitrarily slash its budget if it fails to produce an audit.

It is clear the DLA and DOD have not been able to produce an audit on their own. There is broad consensus that eliminating waste and increasing efficiency within the Pentagon leads to an improvement in our national security. Congress needs to act and consider passing this legislation that will reform defense spending and prioritize strengthening our national defense.

The post DOD’s Supply Agency Shows Need for Spending Reform appeared first on Concerned Veterans for America.

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