{"id":28898,"date":"2019-11-20T18:54:20","date_gmt":"2019-11-20T18:54:20","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2019\/11\/20\/pentagon-audits-secret-to-success-is-failure\/"},"modified":"2026-08-07T23:27:22","modified_gmt":"2026-08-07T23:27:22","slug":"pentagon-audits-secret-to-success-is-failure","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/congress\/2019\/11\/20\/pentagon-audits-secret-to-success-is-failure\/","title":{"rendered":"Pentagon audit\u2019s secret to success is failure"},"content":{"rendered":"\n

WASHINGTON \u2015 How did the Defense Department succeed in completing its first two full financial-statement audits in the large and complex organization\u2019s history? It embraced failure<\/a>.<\/p>\n\n\n\n

In testimony to the Senate Subcommittee on Readiness and Management Support on Wednesday, the official who spearheaded the first two annual audits, Deputy Defense Secretary David Norquist, said Pentagon leaders in prior years wanted to avoid the hefty expense of an audit until the department felt it was prepared to pass.<\/p>\n\n\n\n

That was \u201ca major mistake,\u201d said Norquist, who was the the chief financial officer at the Department of Homeland Security when that agency performed its audit. Instead Norquist planned to use the audit to identify deficiencies and then fix them. DoD just announced<\/a> it completed the second audit last week.<\/p>\n\n\n\n

\u201cThe challenge on the audit was an emphasis to get ready for it, and there\u2019s where I brought a fundamentally different view than those who came before me,\u201d Norquist said in an exchange with Sen. Dan Sullivan, R-Alaska. At DHS, \u201cthe auditors were already there. I found the auditors and their feedback to be the central piece to get to that clean opinion.\u201d<\/p>\n\n\n\n

This year\u2019s audit saw 1,400 auditors conduct 600 site visits, and the department made progress. It closed 23 percent of the 2,300 issues found in the 2018 audit<\/a>.<\/p>\n\n\n\n

That\u2019s not to say the picture\u2019s entirely rosy. There were 1,300 new issues, including $280 million in items Naval Air Station Jacksonville didn\u2019t properly track, and the Defense Logistics Agency found $200 million worth of its inventory.<\/p>\n\n\n\n

\u201cWhat the Navy started discovering was warehouses and storage facilities with items that had never been loaded into their inventory system, so you you\u2019d open it up and fund spare parts that were not where someone trying to order them can get to them,\u201d Norquist said. \u201cEven at the bases they already visited, they found $167 million in useable supplies, that met unmet demands, things on backorder.\u201d<\/p>\n\n\n\t