The military services are on track toward being ready for full audits by their goal of 2017, officials told a House panel on Thursday, though they acknowledged there is a lot of internal work still to accomplish in that time. Congress mandated in 2010 that DoD be ready for a full audit within seven years, and since then DoD and service officials have tried to adapt and improve their patchworks of systems to be able to provide complete accounts of their books.
Parts of the Defense Department already have been audited, or are being audited now, service officials said, and each branch of the military is trying to learn from the others about the best ways to improve its internal workings. Despite the vast scope of the Pentagon bureaucracy, it has the numbers it needs to show government or third-party auditors, officials say, but the problem is they're not kept and organized in a convenient way. Navy Department comptroller Gladys Commons gave an example:
"Our business processes were not designed from end to end," she said. "It was not necessarily coordinated with the financial system, so what we need to do is look at our end-to-end process. What the auditors do is they’ll say, I see from your financial records that you are paying an employee. What I would now like to look at is supporting data, supporting that entry in the accounting system. The supporting data is in fact is a personnel action, so when you go back, you’re going to personnel people, saying, give me that supporting documentation ... but our processes have not been optimized in that way. But that's where we’re going, making sure linkages between various business owners [are] there."
Commons and other top service financial officials said the initial experiments and smaller-scale assessments they've done give them confidence that the military has a good grasp on what it spends, though they admitted it's not at the level of accounting stringency Congress has imposed.
Congressional defense advocates have used the Pentagon's inability to endure an audit as an argument against cutting its budget, on the theory that if DoD officials can't say exactly where their money goes now, how do they even know whether they need more or less? But even though Secretary Panetta has said he'd like the department to be ready for an audit sooner than 2017 -- though without more specifics -- Thursday's witnesses and lawmakers kept using that date as their central goal.