{"id":29742,"date":"2018-01-10T20:22:28","date_gmt":"2018-01-10T20:22:28","guid":{"rendered":"https:\/\/one.sightlinemg.com\/c4isrnet\/uncategorized\/2018\/01\/10\/pentagon-is-prepared-to-spend-over-900-million-in-first-audit\/"},"modified":"2026-08-07T23:43:59","modified_gmt":"2026-08-07T23:43:59","slug":"pentagon-is-prepared-to-spend-over-900-million-in-first-audit","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/c4isrnet\/it-networks\/defense-budget\/2018\/01\/10\/pentagon-is-prepared-to-spend-over-900-million-in-first-audit\/","title":{"rendered":"Pentagon is prepared to spend over $900 million in first audit"},"content":{"rendered":"\n

WASHINGTON \u2014 The Pentagon is preparing to spend more than $900 million in fiscal 2018 to identify and fix problems as part of its first-ever financial audit.<\/p>\n\n\n\n

David Norquist, the Pentagon\u2019s comptroller, said Wednesday that the first steps of the long-awaited Pentagon audit are already underway.<\/p>\n\n\n\n

The audit itself will cost $367 million in FY18 \u2014 covering fees for the independent public accounting firms ($181 million) and infrastructure to support the audits ($186 million). That will help fund the roughly 1,200 auditors who will support the 24 individual audits that make up the overall effort.<\/p>\n\n\n\n

In addition, Norquist estimated the Defense Department will spend about $551 million to fix problems identified by the auditors, bringing the total to an estimated $918 million. While that\u2019s not cheap, Norquist spent part of his hearing at the House Armed Services Committee defending the upfront cost as necessary to create the baseline for future reforms.<\/p>\n\n\n\n

\u201cAccurate data helps drive more accurate decision-making,\u201d Norquist said.<\/p>\n\n\n\n

And those costs could come down easily if the Pentagon decides it can live with the issues identified by the services \u2014 although neither Norquist nor the committee members seemed keen on that option.<\/p>\n\n\n\n

HASC Chairman Mac Thornberry, R-Texas, told reporters after the hearing that while he was not aware of the costs of the audit until recently, it will be money well-spent.<\/p>\n\n\n\n

\u201cIf you have things that need to be fixed, they need to be fixed,\u201d the chairman said. \u201cParticularly at the beginning it will be expensive, but I am firmly of the view that it will pay off for the taxpayers and for the war fighters over time.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The audit has been a focus for Norquist since being confirmed over the summer. At the Defense News Conference in September, the comptroller said he was \u201centhusiastic<\/a>\u201d about the possibilities the audit offered the Pentagon. And in December, he wrote in an op-ed<\/a> that the audit will lead to \u201ca steady improvement in the accuracy and reliability of our business data,\u201d which will build on itself year after year.<\/p>\n\n\n\n

It has also received a bipartisan focus on Capitol Hill, which was on full display during Wednesday\u2019s hearing. In his opening comments, Thornberry emphasized that this was the first HASC hearing of 2018, showing the importance of the audit to members. Ranking member Rep. Adam Smith, D-Wash., also shared positive words for the audit and its attempts to fixed a \u201cscrewed up\u201d system.<\/p>\n\n\n\n

When designing the audit, Norquist purposefully laid out a design for 24 individual audits that will flow up to the inspector general\u2019s office, partly to ensure independence from review teams.<\/p>\n\n\n\n

Under his guidance, no firm can audit an agency if their company does consulting work with them. In other words, if your firm does business with the Army, you can\u2019t audit the Army. Finding a firm to do the Pentagon-wide audit without those conflicts of interest would have been almost impossible; finding several firms to break that work up, however, was entirely doable.<\/p>\n\n\n\n

In addition, using just one firm to do an audit would lead to what Norquist called a \u201cmonopoly\u201d that would, down the road, cost the Pentagon.<\/p>\n\n\n\t