Pentagon Fails Audit For 8th Consecutive Year

Authored by Ryan Morgan via The Epoch Times,

The Pentagon has failed to pass a full financial audit for the eighth year in a row.

Congress initially mandated annual independent audits across the Department of Defense in 2018. In that time, the department has failed to pass a single full audit.

The Department of Defense—also known as the Department of War—lists $4.65 trillion in assets and $4.72 trillion in liabilities through fiscal year 2025, which ended on Sept. 30. The Pentagon cannot account for its full balance sheet.

An audit report, finalized on Dec. 18 by the Department of Defense Office of Inspector General, identified 26 material weaknesses and two significant deficiencies in the Pentagon’s financial reporting practices for the year.

Auditors rendered adverse opinions in 10 of 28 subaudits contained within the overall Pentagon audit for the year. Adverse opinions are issued when audits find financial reporting to be inaccurate.

The audit also listed further disclaimers of opinion, meaning auditors could not be certain one way or another whether the balance sheets of certain funds or programs were accurately recorded.

Auditors applied the disclaimers of opinion to the Department of the Army General Fund, the Department of the Army Working Capital Fund, the U.S. Navy General Fund, the Department of the Air Force General Fund, the Department of the Air Force Working Capital Fund, the U.S. Transportation Command Transportation Working Capital Fund, the Defense Intelligence Agency, the National Geospatial-Intelligence Agency, the Defense Health Program General Fund, the Defense Information Systems Agency General Fund, and the Defense Logistics Agency Working Capital Fund.

The audit report said the disclaimers of opinion cover programs and funds that comprise a combined 43 percent of the U.S. military’s total assets and at least 64 percent of the military’s total budgetary resources.

Auditors found material misstatements within the Joint Strike Fighter program, which oversees the F-35 Lightning II stealth fighter used by the various U.S. military branches and numerous partner nations.

The report found the program did not properly account for its global pool of spare parts.

The audit also found misstatements in the various programs the U.S. military uses to build up the military strength of various global allies and partners. Auditors determined there were $18.9 billion worth of material misstatements across partnership programs.

Despite eight attempts and eight failures, the Pentagon still has a way to go before it passes a full audit. The Pentagon is currently set on a goal to pass its first audit in 2028.

“We have reviewed the audit report and acknowledge the findings and results. The Department of War is committed to resolving its critical issues and achieving an unmodified audit opinion by 2028,” Jules Hurst, who is performing the duties of the Pentagon comptroller, said in a Dec. 18 statement attached to the audit report.

Despite the setbacks, the Secretary of War Pete Hegseth said the latest report showed continuing improvements across the Pentagon’s accounting efforts.

“This year’s audit revealed remediations in key areas, reflecting significant progress in financial management,” Hegseth said in a statement attached to the audit report.