Senate Committee Examines DOD Financial Management

Urges Department of Defense to Take Additional Steps to Meet Audit Deadlines

WASHINGTON- Today, Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-Del.) and Ranking Member Tom Coburn (R-Okla.) urged a panel of Department of Defense (DOD) witnesses to take additional steps to improve the Department’s financial management, financial management systems and increase efforts to meet its deadlines conducting audits.

At the Committee’s hearing on DOD financial management practices, independent oversight officials from the Government Accountability Office (GAO) and the DOD Inspector General testified that, although the Department has made progress toward audit-readiness, there is still significant room for improvement and that the goal of being ‘audit ready’ by 2017 (as required by law) is in jeopardy. DOD is the last federal department unable to conduct a financial audit.

“Today’s hearing is part of this committee’s ongoing effort to review and enhance financial management at the Department of Defense,” said Chairman Carper. “Given our nation’s ongoing fiscal problems, it is simply unacceptable that our largest agency, which spends $2 billion every day, cannot conduct an audit. I often like to say that you can’t manage what you can’t measure; nowhere is that statement more true than at the Department of Defense. After all, we can’t effectively identify areas to reduce spending if we don’t know how much, and where, we’re spending that money in the first place. By holding the Department’s feet to the fire and continuing our Committee’s oversight, we can help keep the Department on the path towards conducting an audit for the first time in its history. It’s not an easy task but a critical one. I intend to continue working with the Department and my colleagues here in Congress to ensure that this happens in a timely manner.”

“In his prepared testimony, the Department of Defense Inspector General said the DOD’s ‘incremental approach to audit readiness does not fully meet the statutory requirements’ of the law.  I am optimistic DOD is making progress, but DOD is lowering their audit goals and, as a result, is continuing to fail at their obligation and responsibility to report to Congress and the American people where the hundreds of billions of dollars of taxpayer money goes.  Regardless of what DOD says, it doesn’t know how the money is spent – if it did it could pass an audit today.   Their track record of delay and ambiguity in this area highlights the need for leadership in Congress on this issue.  We must hold DOD accountable for the deadlines that have been set,” Dr. Coburn said.

At the hearing, DOD witnesses, including the Comptrollers from the Air Force, Navy and Army, and the Comptroller of the Department as a whole, discussed what their offices are doing to achieve audit-readiness by 2017. Overall, the witnesses underscored the progress the Department and their respective branch has made and expressed optimism that the Department would meet its deadlines.  

For more information on today’s hearing, Improving Financial Management at the Department of Defense, including a full video recording, please click here. To get a copy of the GAO report, “DOD Financial Management: Effect of Continuing Weaknesses on Management and Operations and Status of Key Challenges,” please click here.