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If you thought the botched rollout of Obamacare, the government shutdown, or the sequester represented Washington dysfunction at its worst, wait until you hear about the taxpayer waste at the Defense Department.
Special Enterprise Reporter Scot Paltrow unearthed the “high cost of the Pentagon’s bad bookkeeping” in a Reuters investigation. It amounts to $8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996 that has never been accounted for. (The year 1996 was the first that the Pentagon should have been audited under a law requiring audits of all government departments. Oh, and by the way, the Pentagon is the only federal agency that has not complied with this law.)
We talk to Paltrow in the accompanying video about his findings.
Here are some some highlights he found among the billions of dollars of waste and dysfunctional accounting at the Pentagon:
The DOD has amassed a backlog of more than $500 billion in unaudited contracts with outside vendors. How much of that money paid for actual goods and services delivered isn’t known.
Over the past 10 years the DOD has signed contracts for provisions of more than $3 trillion in goods and services. How much of that money is wasted in overpayments to contractors, or was never spent and never remitted to the Treasury is a mystery.
The Pentagon uses a standard operating procedure to enter false numbers, or “plugs,” to cover lost or missing information in their accounting in order to submit a balanced budget to the Treasury. In 2012, the Pentagon reported $9.22 billion in these reconciling amounts. That was up from $7.41 billion the year before.
The accounting dysfunction leads the DOD to buy too much stuff. One example: the “vehicular control arm” to supply Humvees. In 2008, the DOD had 15,000 parts -- a 14-year supply (anything more than three years is considered excess supply). Yet from 2010 to 2012, it bought 7,437 more of these parts and at higher prices than they paid for the ones they already had.
The Defense Department’s 2012 budget was $565.8 billion. Paltrow points out that’s more than the annual defense budgets of the next 10 biggest military spenders combined. He tells us the Pentagon “almost certainly is” the biggest source of waste in the government based on his reporting.