Lawmakers want answers from the Pentagon after it failed 7 audits

The Pentagon has failed seven audits, and now a group of U.S. House members are asking Defense Secretary Pete Hegseth for answers. The bipartisan group of lawmakers wants to know how close the Department of Defense is to getting its budget to a point where it can pass at least one audit.

Members of the House Oversight Committee sent a letter to Hegseth on Monday, June 16, asking for an accounting. Adding to the poignancy of the request is the fact that DOD is expected to fail its audit next year.

Rep. Pete Sessions, R-Texas, and Rep. Kweisi Mfume, D-Md., want Hegseth to deliver a briefing to Congress by the end of June on the DOD’s efforts to pass an audit.

The letter

“DOD spending comprises nearly half of the federal government’s discretionary spending, and its physical assets make up more than 70% of the government’s physical assets,” the lawmakers wrote. “The failure to fully account for these assets and spending results in gaps in DOD’s operational readiness and the financial strength of the entire federal government.”

For example, in 2022, the DOD failed to properly account for 61% of its $3.5 trillion in assets. The number increased in 2023, with the Pentagon improperly documenting 63% of its $3.8 trillion in assets, according to the DOD inspector general. While military contractors are in possession of many of these assets, the extent to which they possess them is unknown to the DOD. That’s because the DOD doesn’t have access to contractor records like spare parts for the F-35, which relies on contractors to document the “cost, total quantity and locations of [F-35] spare parts in global spare pools,” according to Responsible Statecraft.

The Pentagon is required to produce complete and reliable data in order to prevent fraud, waste and abuse. However, it is the only federal agency subject to the law “that has never obtained an unmodified or ‘clean’ audit opinion on its financial statements, primarily due to serious financial management and system weaknesses,” Asif Khan, a director of financial management assurance at the Government Accountability Office, told the subcommittee in April.

Progress report

The subcommittee wants a progress report to ensure that the DOD is on track to obtain a “clean audit opinion” by 2028.

“As stated in previous hearing, if DOD is to achieve a clean audit opinion by December 2028, significant progress must be made by fiscal year 2026,” Mfume and Sessions wrote. “Based on testimony before the Subcommittee, there is still a lot of work ahead of the Department.” 

The request comes as President Donald Trump has proposed a $1.01 trillion budget for the DOD in fiscal year 2026, a 13% increase from the year prior.

Report on the federal government

At the beginning of this year, the GAO, which serves as the research hub of Congress, stated that the federal government must work toward solving “serious deficiencies” in its management of money and get its “unsustainable” long-term spending habits under control.

The GAO’s report acknowledges three areas of concern, including major “financial management problems” at the Pentagon; the federal government’s failure to keep track of collaborative work and interactions between different levels of government as well as balances; and “weaknesses in the federal government’s process for preparing the consolidated financial statements.” 
Since 2001, Congress has run a deficit each year. In the past half-century, the federal government has only concluded a fiscal year with a budget surplus four times, the last one occurring in 2001.