GAO: Pentagon’s Finances Are a Mess

Chuck Hagel
Chuck Hagel / AP

The Pentagon has roughly $7.2 billion in excess equipment, gave out more than $1 billion in improper payments, and wasted billions on a system for the Air Force to account for its inventory, according to the Government Accountability Office (GAO).

According to a GAO report released Tuesday, the Department of Defense (DOD) faces "serious and continuing deficiencies," including the inability to account for their total assets.

"Long-standing weaknesses in the Department of Defense’s (DOD) financial management adversely affect the economy, efficiency, and effectiveness of its operations," the report said.

Highlights from the report included:

  • Data from the end of fiscal year 2009 showed that of the about $94.5 billion in on-hand inventory, 9.4 percent, or about $8.8 billion, was excess. DOD’s most recent fiscal year-end data from September 2013, showed that of the about $98.9 billion in on-hand inventory, 7.3 percent was considered excess.
  • Data from the end of fiscal year 2009 through 2013 showed that the department had reduced its percentage of on-order excess inventory from $13.6 billion to about $10.2 billion, from 9.5 to 7.9 percent, with $812 million considered as excess.
  • In December 2012, DOD canceled the Air Force’s Expeditionary Combat Support System after having spent more than a billion dollars and missing multiple milestones, including failure to achieve deployment within 5 years of obligating funds. The system was to provide the Air Force with a single, integrated logistics system that was to control and account for about $36 billion of inventory. We issued several reports on this system and found that among other things, the program was not fully following best practices for developing reliable schedules and cost estimates.

In addition, the GAO found that DOD has paid over $1 billion in improper payments for years.  The government watchdog said it fears that the total is much higher, since the agency "does not know the extent of its improper payments because of flaws in its estimating methodology."

Published under: Defense