Defense Unleashes 1,200 Auditors for First Ever Financial Review

The Defense Department is finally beginning an audit of its finances, following years of calls for greater transparency and failed attempts to make its accounts fully reviewable.

Defense Comptroller David Norquist made the announcement Thursday, saying the department’s inspector general would begin the audit in December. Starting in 2018, Norquist said, the IG will issue reports on the Pentagon’s finances annually. The first audit will be released in November of next year.

Congress has pushed for Defense to make itself audit-ready for decades, but the Pentagon has repeatedly missed deadlines for investigators to fully dive into the minutiae of its $600 billion in annual spending. For the last several years, department officials and lawmakers of all ideological backgrounds have targeted 2017 as the year to finally get Defense ready for its financial review. The Pentagon was statutorily required to be audit-ready by September, and Norquist pledged in his May confirmation hearing to release a full financial review in 2018 whether the department was ready or not.

The department will deploy 1,200 auditors to examine every corner of its finances. The IG has hired independent public accounting firms to help it analyze each military service and to produce an overarching, department-wide report.

"It is important that the Congress and the American people have confidence in DOD's management of every taxpayer dollar," Norquist said. "With consistent feedback from auditors, we can focus on improving the processes of our day-to-day work.”

He added the annual audits also would ensure the military receives adequate supplies and equipment.

“It demonstrates our commitment to fiscal responsibility and maximizing the value of every taxpayer dollar that is entrusted to us,” said Dana White, a Pentagon spokeswoman, on Thursday.  

The Government Accountability Office first put the Pentagon’s lack of audit-readiness on its “high-risk list” in 1995. Disparate systems among the department’s various branches and components, coupled with a dramatic increase in the use of contracts in recent years, have inhibited the efforts to boost oversight. Obama administration officials acknowledged their failure to make Defense audit-ready hindered officials' ability to track the smallest of expenses and created a public confidence issue.

“The taxpayer will never be convinced if we can’t do what every public company does” and achieve full auditability, then-Defense Comptroller Robert Hale told Government Executive in 2014.

Rep. Mike Conway, R-Texas, who chairs the House Armed Services Committee’s panel on oversight and investigations, commended department leadership.

“Today’s announcement is a major turning point for Department of Defense auditability,” Conway said. “The commitment to perform a full, annual audit of the DoD will provide the taxpayers the accountability they deserve, as well as present opportunities for increased efficiency within the department.”

Correction: The Defense Department initially stated, incorrectly, that 2,400 auditors would be deployed for the financial review. The story and headline have been updated with the correct number of 1,200.