The U.S. Defense Department failed for the seventh straight year to score a clean financial audit, highlighting the challenge of tracking the finances of a sprawling organization that has some $3.8 trillion in assets and $4 trillion in liabilities.
Auditors overseen by the Pentagon Inspector General once again declared the department’s finances were too messy to offer an opinion on whether its books were in order. But the Pentagon said it at least has a better grasp of the problem.
“Despite the disclaimer of opinion, which was expected, the department has turned a corner in its understanding of the depth and breadth of its challenges,” Comptroller Michael McCord said in a statement. “Momentum is on our side, and throughout the department there is strong commitment — and belief — in our ability to achieve an unmodified audit opinion” by fiscal 2028.
Tom Brenner/Bloomberg
McCord in meeting with reporters strongly objected to characterizing the latest audit as a failure, citing progress such as reducing a number of internal “material weaknesses,” for example.
The incoming Trump administration will likely continue efforts to produce a clean audit as the issue’s been a bipartisan congressional crusade for more than a decade.
Of the 28 reporting entities undergoing stand-alone financial statement audits, one received a new unmodified audit opinion and eight other agencies retained theirs. Only one received a “qualified” opinion, meaning there was enough information to conclude any misstatements in the financial statements were not pervasive.
Another 15 agencies received disclaimers and three had audit opinions that remained pending. Included in those three is the Marine Corps, which received a clean opinion for fiscal 2023.
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