Pentagon's Failed Audit Shows How Chaotic US Bureaucracy Has Become

The US Department of Defense (DoD) has once again failed to pass its annual financial audit, making it the sixth consecutive year it has failed to account for its expenditures.

After combing through the Pentagon’s $3.8 trillion in assets and another $4 trillion in liabilities, scores of auditors found that half of the DoD’s assets can’t be accounted for.

"This is a testimony to how unruly and chaotic a bureaucratic department gets when it does nothing over the decades but grow and grow," Matthew Crosston said.

He recalled that the Pentagon audit actually consists of 29 individual sub-audits, conducted by over 1,600 auditors across more than 700 site visits and assessing trillions in both assets and liabilities.

To get a "clean" audit, Crosston went on, "every single one of these sub-audits must pass on its own merits." According to him, the Pentagon "had evolved to Leviathan size without subsequently maintaining a sensible and logical business and financial system."

The expert added that although the DoD sought to improve those systems, "the size of the reform needed is beyond the scope and capability of the department."

"What’s more, given its unique status within the United States government as something of a ‘sacred cow’ that can never be harshly critiqued or rebuked, it is fairly understandable why systems reform has been so slow and incomplete," Crosston stressed.

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He noted that all this is not about the allocation scheme at the Pentagon being too complicated, but about "the grandiose size of the enterprise overall (with all of the connective tentacles to other organizations as well that depend on the Pentagon for existence) and the gargantuan expansiveness of its assets and liabilities."

"Developing a scheme that can keep things perfectly in order and easily tracked has, so far, proven to be beyond the capacity of both the US government and most external organizations that have intermittently been brought in to attempt to ‘fix’ the problem," the expert said.

When asked whether it is possible to make the system more transparent, he suggested that such a scenario would "unlikely" see the light of the day.

According to him, while the huge size and expansiveness of the US defense industry overall "makes it hard to achieve true transparency across all actions, there will always be a significant portion of DoD assets and initiatives that cannot and will not be available for transparent evaluation and assessment."

Nonetheless, this problems seems to be common not just in the US. Crosston singled out “very few countries” that he said have "a perfectly transparent system covering their national security industrial complexes."

"The Pentagon has attempted to separate its national security content from its formal business/financial reporting, in an effort to achieve greater transparency and efficiency. But those attempts have only improved the system to a middling degree so far," he concluded.

Pentagon's Failed Audit: DoD Needs Reform 'Beyond Its Scope and Capability'