On February 6, 2014, Defense and media personnel gathered in the Pentagon’s Hall of Heroes, not to award a medal – which is the hall’s normal use – but to celebrate a bookkeeping milestone. The Marine Corps had done something that no other military branch had done: passed an audit.
The labyrinthine Defense budgets have proven immune to normal accounting procedures. The Department of Defense (DoD) is the only government agency that has failed to comply with a 1992 law that all departments get their records in order. No one is even going to try to audit the Pentagon itself until 2017. The Marines had been the only service to pass an audit.
Unfortunately, the number of military services that have passed an audit have once again returned to zero. On March 23, 2015, the DoD’s Office of the Inspector General revoked their earlier glowing recommendation of the Marines’ record keeping. There are allegations of sloppy paperwork, missing records, and independent auditors who may not be so independent.
According to news articles, folks high up in the Inspector General office ignored their team’s report on the inadequacy of the Marine’s accounts. Furthermore, a civilian auditing team that was supposed to bring in an outside point-of-view may have been compromised.
This is not a small matter. As the Reuters’ news service noted:
“Chronic pay errors damp troop morale. Incompatible logistics and personnel systems complicate deployments. And the lack of reliable accounts conceals huge sums lost to waste, fraud and mismanagement.”
Reuters’ did an investigative piece about the failed audit (evidently a few investigative reporters still exist). To read it, click here.
We asked for an opinion from Rob Culver, AMREL’s Director of Business Development, DoD Programs. In addition to his career in Special Forces, he spent a number of years in procurement. As someone who has been an end-user, a vendor as well as an acquisition officer, he has a unique perspective.
According to Mr. Culver:
“Part of the problem is the fact that DOD is not a team. There are more than 30 different bureaucratic entities involved in procurement and financial management. Don’t forget the sixteen Assistant Secretaries of Defense, four Deputy Secretaries of Defense, five Undersecretaries, Joints Chiefs of Staff with their ten subordinate directorates and on and on.
“Most of the above is duplicated by the individual military services (USA, USN, USAF, USMC). This doesn’t include the fifteen+ independent agencies under OSD as well as the nine Unified Combatant Command. Of course, there are the ever present meddling fingers or Congress and the Whitehouse.
“No one, absolutely no one in any of these individual fiefdoms, is ever rewarded for cooperating outside their own little DoD entity. Employees are rewarded for protecting their bosses’ turf.
“I don’t have an answer. I’m just pointing out the inherent dysfunction of DoD’s highly politicized, bureaucratic labyrinth. Soldiers don’t run DoD; civilian politicians and political appointees do. DoD is criticized for not being able to pass an audit, but I suspect the last thing Congress wants is for DoD to completely and unabashedly open its financial kimono.”
Whatever you think of Donald Rumsfeld, Mr. Culver feels he hit the nail on the head with this speech, given early in his term as Secretary of Defense:
“… The topic today is an adversary that poses a threat, a serious threat, to the security of the United States of America. This adversary is one of the world’s last bastions of central planning. It governs by dictating five-year plans. From a single capital, it attempts to impose its demands across time zones, continents, oceans, and beyond. With brutal consistency, it stifles free thought and crushes new ideas. It disrupts the defense of the United States and places the lives of men and women in uniform at risk.
“Perhaps this adversary sounds like the former Soviet Union, but that enemy is gone: our foes are more subtle and implacable today. You may think I’m describing one of the last decrepit dictators of the world. But their day, too, is almost past, and they cannot match the strength and size of this adversary.
“The adversary’s closer to home. It’s the Pentagon bureaucracy. Not the people, but the processes. Not the civilians, but the systems. Not the men and women in uniform, but the uniformity of thought and action that we too often impose on them.”
