Defense Department loses track of 61 percent of its assets

FPI / November 27, 2022

The Pentagon has acknowledged that it can only manage to fully account for 39 percent of its $3.5 trillion in assets.

“We failed to get an ‘A,’ ” Mike McCord, the Pentagon’s comptroller and chief financial officer, told reporters in announcing the results of the Pentagon’s fifth-ever financial audit.

Only seven out of the Pentagon’s 27 military agencies received a passing grade.

The audit also looks at equipment such as ships and tanks, and other high-dollar weapons systems such as the military's flagship fifth-generation fighter, the F-35 Lightning II.

"The DoD continues to operate with little to no oversight of its spending practices," The Cradle online magazine noted in a Nov. 23 report.

Not only did the audit put a spotlight on the U.S. Department of Defense's lack of internal financial control, but its poor budget estimations and rampant overspending were also highlighted, critics say.

One of the top examples is the F-35 program, which has gone over its original budget by $165 billion.

The Pentagon is slated to buy more than 2,400 F-35s for the Air Force, Marines, and Navy. The estimated lifetime cost for procuring and operating these planes – $1.7 trillion – would make it the Pentagon’s most expensive weapons project ever.

A 2021 Pentagon assessment of the F-35 found 800 unresolved defects in the plane.

The Navy is underestimating costs of new shipbuilding by $120 billion, the audit found.

McCord said the quest for a clean audit of DoD assets comes down to putting confidence in the Pentagon and military. Being able to prove on paper how the U.S. resources poured into defense are actually being used would be a badge of responsibility for the department. That result is, at least for this year, out of reach.

"I think many people feel that it does improve taxpayers' or veterans' or service members' confidence if they would see that or if they see more clean opinions than we have now," McCord said.

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