{"id":17607,"date":"2018-11-20T18:29:04","date_gmt":"2018-11-20T18:29:04","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2018\/11\/20\/so-were-celebrating-the-pentagons-failed-audit\/"},"modified":"2026-08-07T21:37:41","modified_gmt":"2026-08-07T21:37:41","slug":"so-were-celebrating-the-pentagons-failed-audit","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/opinion\/2018\/11\/20\/so-were-celebrating-the-pentagons-failed-audit\/","title":{"rendered":"So we\u2019re celebrating the Pentagon\u2019s failed audit?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The Department of Defense completed its first-ever audit. It failed, but officials <a href=\"https:\/\/www.defensenews.com\/pentagon\/2018\/11\/15\/the-pentagon-failed-its-audit-but-officials-arent-surprised\/\" target=_blank>don\u2019t seem terribly bothered<\/a> by that. Because, you know, they figured they would; and the real success here is that it was done at all. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe never thought we were going to pass an audit, right? Everyone was betting against us, that we wouldn\u2019t even do the audit.\u201d That\u2019s what Deputy Secretary of Defense Patrick Shanahan told reporters.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Really?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I suppose the fact that an audit was completed at all is worthy of celebration \u2014 or perhaps a subdued \u201cnice job\u201d \u2014 when you consider it was nearly two decades in the making. Remember that the Pentagon remained the sole holdout to complying with a 1990 law passed by Congress requiring audits for all government agencies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But arguments from several administrations as to why it could not be done were difficult to swallow: The building is too large and has too many systems that don\u2019t link up to give any kind of helpful result that would be worth the cost.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Isn\u2019t it precisely those kind of circumstances that make an audit necessary? And if a department or entity of any sort is just too large to be appropriately monitored \u2014 to be scrutinized in such a way to ensure that funds are properly spent and systems appropriately managed \u2014 then might that entity by definition be, in fact, too large? <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">No, I\u2019m not arguing for a breakup of the Pentagon. But I am questioning a rationale that ultimately involves throwing one\u2019s hands up and saying: \u201cNot possible.\u201d <\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/pentagon\/2018\/11\/16\/heres-what-the-pentagons-first-ever-audit-found\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/4378735.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Here\u2019s what the Pentagon\u2019s first-ever audit found<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">1,150 auditors worked over the last year digging through the department, but what did they find?<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">Consider that federal securities laws require publicly held companies file financial reports with the Securities and Exchange Commission that are \u201caccurate, truthful, and complete and prepared according to a set of accounting standards,\u201d according to the SEC. Many of these financial statements, including those in the company\u2019s annual report and those provided to shareholders, must be examined by an independent auditor. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">I know it\u2019s not apples to apples. Companies are in the business of selling, while the Pentagon is in the business of buying. And even when you look at a company like Apple, which reported revenue of $265.6 billion in 2018, its highest ever, the dollars entering pale in comparison to the dollars going out from the military \u2014 which touts a top-line budget of roughly $700 billion, with calls for more. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the Pentagon answers to taxpayers and Congress as much as companies answer to shareholders. The Pentagon is expected to keep data and systems secure, same as companies. The Pentagon is expected to track assets, same as companies. Furthermore, while a company that fails in any one of these areas could at best see its stock price plummet or at worst go out of business, the Pentagon will (must) continue spending taxpayer dollars and functioning much as it always has. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In fact, the cynic in me thinks the delay was less about the challenge of the undertaking and more about the potential fallout \u2014 cuts to budgets or increased oversight. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And now, here we are. The Pentagon completed an audit, which is good, but it failed. Which, one would think, is not. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As tweeted by Cisco\u2019s Alan Balutis, who served as the Commerce Department\u2019s head of management and budget and its first chief information officer: \u201cNo surprise. But it also taints all of government. How could one give a clean opinion to the Federal government overall when 50+ percent of its spend can\u2019t be properly accounted for?\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Indeed, inventory management challenges persisted, in that systems in one place would say an item is usable or missing when the truth on the ground is different. And arguably the most significant issue was that IT security measures were not being taken.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As the acting inspector general pointed out, the value of the audit is that it provides the department with a to-do list, so to speak, in terms of identified deficiencies that need to be fixed. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Fair. And perhaps one more reason why it\u2019s ridiculous it took so long.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The good news: With plans for next year\u2019s audit underway, we\u2019ll get to see if any of this changes. I, for one, will be watching closely.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Pentagon completed an audit, which is good, but it failed. Which, one would think, is not.<\/p>\n","protected":false},"author":7,"featured_media":35639,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":17,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[160,36,17,19],"tags":[],"coauthors":[2572],"class_list":["post-17607","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news-roundup","category-newsletters","category-opinion","category-pentagon"],"acf":{"subheadline":"","legacy_arc_id":"47ZRF6OOGNBATDR2EZFNRZALBY","arc_canonical_url":"\/opinion\/2018\/11\/20\/so-were-celebrating-the-pentagons-failed-audit\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>So we\u2019re celebrating the Pentagon\u2019s failed audit? - Defense News<\/title>\n<meta name=\"description\" content=\"The Pentagon completed an audit, which is good, but it failed. 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Which, one would think, is not.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/one.sightlinemg.com\/defensenews\/opinion\/2018\/11\/20\/so-were-celebrating-the-pentagons-failed-audit\/\" \/>\n<meta property=\"og:site_name\" content=\"Defense News\" \/>\n<meta property=\"article:published_time\" content=\"2018-11-20T18:29:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-08-07T21:37:41+00:00\" \/>\n<meta name=\"author\" content=\"Jill Aitoro\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jill Aitoro\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\n\t    \"@context\": \"https:\\\/\\\/schema.org\",\n\t    \"@graph\": [\n\t        {\n\t            \"@type\": \"Article\",\n\t            \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/#article\",\n\t            \"isPartOf\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/\"\n\t            },\n\t            \"author\": {\n\t                \"name\": \"migration\",\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/#\\\/schema\\\/person\\\/cc76c831bb37a926738c8391fca7a3b1\"\n\t            },\n\t            \"headline\": \"So we\u2019re celebrating the Pentagon\u2019s failed audit?\",\n\t            \"datePublished\": \"2018-11-20T18:29:04+00:00\",\n\t            \"dateModified\": \"2026-08-07T21:37:41+00:00\",\n\t            \"mainEntityOfPage\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/\"\n\t            },\n\t            \"wordCount\": 708,\n\t            \"commentCount\": 0,\n\t            \"publisher\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/#organization\"\n\t            },\n\t            \"image\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/#primaryimage\"\n\t            },\n\t            \"thumbnailUrl\": \"https:\\\/\\\/one.sightlinemg.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/Pentagon-Building-GettyImages-104684801.jpg.jpg\",\n\t            \"articleSection\": [\n\t                \"Daily News Roundup\",\n\t                \"Newsletters\",\n\t                \"Opinion\",\n\t                \"Pentagon\"\n\t            ],\n\t            \"inLanguage\": \"en-US\",\n\t            \"potentialAction\": [\n\t                {\n\t                    \"@type\": \"CommentAction\",\n\t                    \"name\": \"Comment\",\n\t                    \"target\": [\n\t                        \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/#respond\"\n\t                    ]\n\t                }\n\t            ]\n\t        },\n\t        {\n\t            \"@type\": \"WebPage\",\n\t            \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/\",\n\t            \"url\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/\",\n\t            \"name\": \"So we\u2019re celebrating the Pentagon\u2019s failed audit? - Defense News\",\n\t            \"isPartOf\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/#website\"\n\t            },\n\t            \"primaryImageOfPage\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/#primaryimage\"\n\t            },\n\t            \"image\": {\n\t                \"@id\": \"https:\\\/\\\/one.sightlinemg.com\\\/defensenews\\\/opinion\\\/2018\\\/11\\\/20\\\/so-were-celebrating-the-pentagons-failed-audit\\\/#primaryimage\"\n\t            },\n\t            \"thumbnailUrl\": \"https:\\\/\\\/one.sightlinemg.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/Pentagon-Building-GettyImages-104684801.jpg.jpg\",\n\t            \"datePublished\": \"2018-11-20T18:29:04+00:00\",\n\t            \"dateModified\": \"2026-08-07T21:37:41+00:00\",\n\t            \"description\": \"The Pentagon completed an audit, which is good, but it failed. 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Which, one would think, is 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