Politico: Massive Pentagon Agency Lost Track of Hundreds of Millions of Dollars

One of the Pentagon's largest agencies is unable to account for hundreds of millions of dollars in spending, the Ernst & Young accounting firm said in an internal audit, Politico reported on Monday.

Due to weak financial management, the Defense Logistics Agency (DLA) did not properly document more than $800 million in construction projects, just one of numerous examples where it fails to have a paper trail for millions of dollars in property and equipment, according to the Ernst & Young report.

The audit raises many questions about whether the Defense Department is capable of responsibly managing its $700 billion annual budget, especially as President Donald Trump is proposing a major increase in the military budget.

Despite a congressional mandate and pressure to do so, the department has never undergone a full audit.

This despite other examples of apparent massive waste in the Pentagon, such as a report of an audit in The Hill last May that the army failed to keep track of more than $1 billion worth of military equipment it transferred to the government of Iraq.

This latest audit, which covers the fiscal year that ended on September 30, 2016, looks at the DLA, which has 25,000 employees who process some 100,000 orders a day on behalf of the armed forces and a many other federal agencies, according to Politico.

Despite the worrisome report, the DLA insists that "The initial audit has provided us with a valuable independent view of our current financial operations. We are committed to resolving the material weaknesses and strengthening internal controls around DLA's operations."

Defense Department Comptroller David Norquist told the Washington Examiner last month that a full audit of the Pentagon could cost almost $1 billion this year.

The DLA also explained that it was not surprised by the report, saying the agency "is the first of its size and complexity in the Department of Defense to undergo an audit so we did not anticipate achieving a 'clean' audit opinion in the initial cycles.

"The key is to use auditor feedback to focus our remediation efforts and corrective action plans, and maximize the value from the audits."

• Audit: Army Failed to Monitor $1 Billion in Arms Transfers to Iraq
• US Army Fudged Its Accounts by Trillions of Dollars: Audit