Bill would give DoD incentives to audit its books on time

Friday - 8/3/2012, 5:36am EDT

By Taeja Smith
Special to Federal News Radio

Sens. Tom Coburn (R-Okla.) and Joe Manchin (D-W.Va.), along with several other colleagues in the Senate, are advocating the Department of Defense create a financial audit itemizing its spending habits.

The proposal, called Audit the Pentagon Act, would give DoD new incentives and enforcement mechanisms to help it pass an audit, according to an Aug. 2 news release.

"By failing to pass an audit, the Pentagon has undermined our national security. This bill ends the culture of 'don't ask, don't tell' budgeting within the Pentagon that says, 'don't ask us how we're spending money because we can't tell you,'" Coburn said. "When the Pentagon can't tell Congress, or itself, how it is spending money, good programs face cuts along with wasteful programs, which is the situation in which we find ourselves today under sequestration."

Sen. Tom Coburn (R-Okla.)

The lawmakers also added DoD "has never fully complied with several laws on financial management." The Government Accountability Office continues to find that DoD has never received a clean audit, and the weakness in the military's financial management has been "pervasive and longstanding."

This act would give DoD two authorities:

  • To reprogram funds without congressional approval, though notification still would be required.

  • To get rid of obsolete reports and reporting requirements and tell Congress which ones they want to end.

With sequestration hovering over DoD, it is important that limited resources are issued in the best way "to shed light on the DoD budget, without jeopardizing our national security secrets," Manchin said.

"It's not just a matter of accountability, it's a matter of national security that the Pentagon be able to account for the hundreds of billions of taxpayer dollars it receives every year," Sen. Claire McCaskill (D-Mo.) said.

The bill also would develop new accountability and enforcement mechanisms:

  • Any new major weapon system will not progress beyond research and development until the Pentagon audits its books.

  • A chief management officer will be created to fix any finances and IT problems.

  • Defense Finance and Accounting Service would be transferred to the Treasury Department.

The 2011 Defense Authorization bill requires DoD to be audit-ready by 2017.

"A clear picture of how dollars are spent enables you to prioritize critical missions and eliminate waste," Sen. Ron Johnson (R-Wis.) said.

The GAO told Congress in a 2010 report that DoD's financial management has not been reformed despite its attempts.

"We have made steady progress toward reaching overall audit-readiness by the 2017 deadline set by Congress, as well as toward our internal commitment to be audit-ready with the first of four principal general fund financial statements by the end of 2014," said Lt. Col. Elizabeth Robbins, a DoD spokeswoman, in an email statement.

Taeja Smith is an intern with Federal News Radio.

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