WASHINGTON — The Defense Department is starting the first agencywide financial audit in its history, Pentagon officials announced today.
Defense Department Comptroller David L. Norquist and chief Pentagon spokesperson Dana W. White spoke during the Pentagon news conference, in which they also addressed the possibility of a government shutdown when the continuing resolution that has been keeping the government running expires tomorrow.
Norquist said he received the DoD Office of Inspector General’s notification that the financial statement audit begins this month.
The audit is massive. It will examine every aspect of the department from personnel to real property to weapons to supplies to bases. About 1,200 auditors will fan out across the department to conduct it, Pentagon officials said.
“It is important that the Congress and the American people have confidence in DoD’s management of every taxpayer dollar,” Norquist said.
Audits are necessary to ensure the accuracy of financial information. They also account for property. Officials estimate the department has around $2.4 trillion in assets. “With consistent feedback from auditors, we can focus on improving the processes of our day-to-day work,” the comptroller said. “Annual audits also ensure visibility over the quantity and quality of the equipment and supplies our troops use.”
The DoD Office of the Inspector General hired independent public accounting firms to conduct audits of individual components – the Army, Navy, Air Force, agencies, activities and more – as well as a departmentwide consolidated audit to summarize all results and conclusions.
“Beginning in 2018, our audits will occur annually, with reports issued Nov. 15,” Norquist said.
Norquist also addressed the looming government shutdown. Military personnel will continue to report for duty to ensure the safety of the United States and its citizens, he said. Military and civilian personnel conducting operations around the world will also report, he added.
“Any time we get close to the end of a CR, we automatically go through and update our contingency plans,” Norquist said. “And so we’ve had to do that several times this year.”
If a shutdown occurs, military personnel will report to work as normal, but the department cannot pay them until the shutdown ends. Civilian employees – and the department has roughly 700,000 – will be notified before the shutdown what to do. Employees performing an excepted activity – such as law enforcement – will report to work, he said.
“I cannot emphasize too much how destructive a shutdown is,” Norquist said. “We’ve talked before about the importance of maintenance on weapons systems and others, but if it’s not an excepted activity, there’ll be work stoppage on many of those maintenance functions.”
Congress is considering passing a two-week extension of the continuing resolution, which would give the legislators until Dec. 22 to pass a budget. The Defense Department has operated under a continuing resolution for 1,081 days over the past nine years, White noted.
Continuing Resolutions Affect Readiness
“And so we are optimistic that the Congress will pass a robust and predictable, fully funded [fiscal year 2018] budget,” she said. “Nothing has had a greater impact on combat readiness than CRs, … and at a time where security threats are high, we really do need the predictability in the budget — certainty that we don’t have with CRs.”
Continuing resolutions are supposed to be short-term bridges for financing. A long-term CR is disruptive, Norquist said. “Every time … you add to it, it creates more challenges,” he added.
One problem with a CR is there can be no new starts, the comptroller told reporters. “In the administration’s budget, we requested additional money for munitions, and so we would like to increase the production of some of those munitions,” he said.
“What the CR says is, ‘Stop, wait, don’t award that contract yet,’ which delays when you begin to increase the quantity and the production,” he explained, adding that none of this can be fixed until there is a proper budget.