Pentagon’s Quest for Clean Books Takes Hit

Just over a year ago, Pentagon Comptroller Robert Hale (since retired) told Government Executive that the Marine Corps’ receipt of a clean audit opinion for its fiscal 2012 financial statement “validates our strategy,” in the Defense Department’s bid to fully audit its books by 2017.

This Monday, that effort suffered a setback. Deputy Defense Department Inspector General for Auditing Daniel Blair announced in a letter to current Comptroller Mike McCord and others that his office had “withdrawn” the report that had given the Pentagon what Hale called “points on the board,” the December 2013 independent auditor’s report on the Corps’ 2012 budget activity.

The IG auditing staff, which is being backed in the Marine Corps’ case by Grant Thornton LLP, reported that “subsequently discovered facts identified during the fiscal 2014 audit cause us to question the completeness of the information on which we based our opinion.”

A DoD IG spokeswoman confirmed that the earlier audit is no longer available because, as the letter phrases it, it is "not to be relied upon."

The new discovery had to do with so-called “suspense accounts” kept by the Treasury Department, which auditors assumed were immaterial to the Marine Corps. But “because these suspense accounts contain transactions from all DoD components and neither the Defense Finance and Accounting Service nor the U.S. Treasury have the necessary information to accurately assign ownership of the commingled transactions,” the IG letter explained, “we are unable to quantify the number of USMC transactions that resided in the accounts and whether those transactions were material” to the fiscal 2012 Marine Corps financial statement audit. A revised audit is in preparation.

(Image via Brad Ingram/Shutterstock.com)