In any enterprise or institution, there are bound to be errors in financial bookkeeping that can result in the loss of money that in most cases is small and inconsequential. But a chronic pattern of accounting missteps among various branches of the U.S. military, revealed in a recent investigative report, is astonishing in its scope and constitutes a serious threat to public confidence in the fiscal competence of the Pentagon.
The report estimated the military wastes billions of dollars a year as a result of its institutional inability to properly account for expenditures and use of equipment. More disturbing is the fact that the estimate may be conservative, and the amount of annual “spillage” could be much greater.
A report by the international news agency Reuters details the ongoing inability of various agencies of the military establishment to balance their books in a way that confirms how money was spent. As a result, the Pentagon cannot account for more than $8 trillion in taxpayer money it has received since 1996. Furthermore, military leaders acknowledge the problem exists while admitting to the failure of efforts to fix it.
This is simply not acceptable. Not at a time when the federal budget deficit is so high, and so much of it the result of military spending.
The amount of potential waste is so great that perspective is hard to come by. A Reuters report points out that the Pentagon has more than $500 billion in outstanding contracts that have not been properly audited to determine if and how the money was spent. That amount of untracked money is larger than the combined total defense budgets of the world’s next 10 largest militaries, including Russia and China.
The problem is attributed to the vast and uncoordinated network of offices and installations that report to the Pentagon, and the fact that the military as a whole is not subject to the kind of accounting and auditing practices required of most businesses. The number of these subdivisions of the Pentagon that operate without standardized bookkeeping is estimated to be between 2,000 and 5,000.
And it’s not as if the Pentagon is unaware of the problem. In a speech two years ago, then-Secretary of Defense Robert Gates described the military’s business operations as “an amalgam of fiefdoms without centralized mechanisms to allocate resources, track expenditures, and measure results My staff and I learned that it was nearly impossible to get accurate information and answers to such questions as, ‘How much money did you spend’ and ‘How many people do you have?’”
Those of course are vital questions to which clear answers are necessary. But they are answers the nation may never get, given the entrenched nature of the Pentagon’s state of fiscal entropy.
Making sure such answers are available in the future will require much more stringent congressional oversight and the introduction of an unequivocal commitment to operational self-discipline within the military itself. It may take years to reach that objective, but there are few higher policy priorities than bringing the nation’s military behemoth to a state of proper accountability.
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