The Pentagon is under mounting pressure to explain where the $824 billion went after failing its seventh consecutive audit.
The audits resulted in a disclaimer of opinion, which means that auditors needed to be given more information to form an accurate opinion of the accounts. The goal is to earn a qualified opinion or a clean audit, indicating correct financial statements.
This comes after the Department of Defense claimed it had "turned a corner" to receive a clean audit by 2028– mandated by the 2024 National Defense Authorization Act.
According to the Pentagon, the DoD received 28 reporting entities that contained standalone audits. Nine received an unmodified audit opinion, one had a qualified opinion, 15 received disclaimers, and three are still pending.
“Momentum is on our side, and throughout the Department, there is a strong commitment—and belief in our ability—to achieve an unmodified audit opinion,” Secretary of Defense Comptroller and Chief Financial Officer Michael McCord said.
The Pentagon has failed to pass every audit since the agency became legally obligated to carry them out in 2018.
McCord dismissed criticism that says the Pentagon failed its audits.
“I do not say we failed; as I said, we have about half clean opinions. We have half that are not clean opinions,” McCord said. “So if someone had a report card that is half good and half not good, I don’t know that you call the student or the report card a failure. We have a lot of work to do, but I think we’re making progress.”
“Significant work remains and challenges lie ahead, but our annual audit continues to be a catalyst for Department-wide financial management reform, resulting in greater financial integrity, transparency, and better-supported warfighters," he continued.
The 2024 audit cost the Defense Department $178 million and involved at least 1,700 auditors.
