Increasing Accountability at the U.S. Department of Defense

Oversight Subcommittee Chaired by Platts Continues its Oversight of Financial Management Issues at Federal Agencies

WASHINGTON, D.C. – Funded with $680 billion in taxpayer dollars in Fiscal Year 2011, the U.S. Department of Defense (DOD) is one of the largest and most complex organizations in the world, charged with protecting our nation and supporting more than three million active duty, guard, reserve and civilian personnel.  Yet, DOD has never been able to produce an auditable financial statement. On Friday, September 23, 2011, the Subcommittee on Government Organization, Efficiency and Financial Management, chaired by U.S. Congressman Todd Platts (PA-19) will review DOD’s efforts to strengthen its financial management practices and internal controls.

 “Our national debt currently exceeds $14 trillion and we are borrowing more than 40 cents of every dollar we spend,” said Congressman Platts. “America cannot continue on this unsustainable fiscal path, and all government agencies, including the Department of Defense, must be held more accountable for their use of taxpayer funds.”

The efforts by DOD to protect and defend our Nation and its citizens are unparalleled in their success, said Platts.  As such, improvements to DOD’s financial management systems are critically important to protecting taxpayer dollars, and to ensuring that we maximize our nation’s financial resources for meeting the needs of our war fighters in harm’s way who defend our freedoms with great courage and dedication. 

Since 1995, the Government Accountability Office (GAO) has designated financial management at DOD a high-risk area due to pervasive and systemic deficiencies in its financial management.  According to GAO, these deficiencies continue to impair DOD’s ability to: assess the resources needed for its operations; track and control costs; ensure basic accountability; anticipate future costs and reduce the risk of fraud, waste and abuse. 

The DOD has established a “Financial Improvement and Audit Readiness (FIAR) Plan” to improve its financial management practices and has established a goal of meeting audit readiness by 2017.  Yet, GAO and even officials within DOD itself question whether the department is on track to meet that deadline.  The lack of reliable financial statements has multiple consequences, including the inability to determine the amount of improper payments made by DOD.  In 2009, GAO found that DOD did not perform risk assessments for more than $320 billion of its payments, while DOD’s Inspector General has reported significant overpayments in DOD programs.

This hearing continues the Subcommittee’s oversight of Executive Branch financial management and accountability issues throughout the 112th Congress.  Recent hearings have included examining improper payments made by the federal government, which are currently estimated to be $125 billion annually, financial management at the U.S Department of Homeland Security and reviewing Internal Revenue Service policies regarding tax identity theft.