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The Pentagon fails its fifth audit in a row

144 points by rsj_hn 4y ago

torstenvl 4y ago
I find articles like this very frustrating in their internal contradictions and failure to report anything of substance. Is it the Pentagon that failed, the DoD, or the military? It sounds like it's the DoD, except for 7 components, but we're never told which components passed and which failed, so there's no possibility of intelligent discussion of the nature of the problem or possible fixes.
- mc32 4y ago
  But still; how can an organization fail an audit five times in a row and there not be repercussions and large investigations to ensure its possibility of repeating are vanishingly small going forward?
  - favflam 4y ago
    1.5 million people are employed directly by the Pentagon (fact check me plz). Trillions??? in capital assets (planes, boats, ??). 750 installations globally plus deeply integrated relationships with multiple allies (military and fiscal). Allies train in the US and visa versa. I can understand the monumental undertaking it would be to audit the Pentagon.
    - favflam 4y ago
      Oh yes, I forgot the audit also has to prevent leakage of national secrets.
    - eastbound 4y ago
      Any waterfall attribution of budgets can be made with an little more than an Excel spreadsheet ;) but, to keep secrets, maybe they have to invent a special decentralized protocol. I’m sure someone is getting the same budget from several entities, and perhaps owns an island to spend it all.
  - tdeck 4y ago
    After the second or third time failing with no consequences, the people involved must realize that there are no consequences for failing a fourth and fifth time.
    - asvitkine 4y ago
      I understand that cutting funding may be unpalatable, but couldn't they instead incentivize passing the audit by offering bonuses to middle-managenent for departments that pass?
  - toast0 4y ago
    Retrofiting proper accounting controls into an existing (extremely) large organization that was built without them is difficult work. That the audits are run consistently each year now is a big step. In past years, it's sounded like a lot of progress was being made, but this year's press releases are not as bubbly about progress, although it seems the wheels of progress are still turning. AFAIK, there's been no allegations of fraud or wrongdoing in these failed audits, just that there are insufficient controls to validate the numbers. You could tie future funding to passing audits in order to have repercussions, but there's a question of if you'd rather have an unfunded military or an unaudited military.
  - MattGaiser 4y ago
    Depends on the goal of the audit. The purpose of the audit may indeed be just that.
- woodruffw 4y ago
  "The Pentagon" is the standard metonym for the DoD, similar to "The White House" for POTUS. So it's about the DoD as a whole. Here's the actual DoD press release[1], and the DoD comptroller's website[2]. [1]: https://www.defense.gov/News/Releases/Release/Article/3219649/dod-completes-department-wide-financial-statement-audit-essential-catalyst-for/ https://www.defense.gov/News/Releases/Release/Article/321964... [2]: https://comptroller.defense.gov/odcfo/afr/ https://comptroller.defense.gov/odcfo/afr/
- mlindner 4y ago
  The group that wrote this is not exactly a reputable source in the first place: https://en.wikipedia.org/wiki/Quincy_Institute_for_Responsible_Statecraft#Criticism https://en.wikipedia.org/wiki/Quincy_Institute_for_Responsib...
  - rsj_hn 4y ago
    The existence of a "criticism" section on wikipedia does not mean a journal isn't reputable. But if you want to censor your own information sources that way, go ahead. The Quincy Institute -- which publishes Responsible Statecraft -- is a realist foreign policy think tank, designed to oppose neo-con foreign policy and advocate for a rationalist approach rather than an ideological approach. They opposed many of the foreign wars the U.S. has recently waged. Here is their mission statement: "The Quincy Institute promotes ideas that move U.S. foreign policy away from endless war and toward vigorous diplomacy in the pursuit of international peace." That, of course, is enough to make a lot of the redditors very angry, but it's certainly a reputable outlet. You can read more here, which has their mission statement, list of board members, and major funders: https://quincyinst.org/about/ https://quincyinst.org/about/ Funders include The Carnegie Corporation of New York, The Open Society Foundation, The Ploughshares fund, Ford Foundation, Streisand Foundation, Rockefeller Brothers Foundation. Examine their full list of donors here: https://quincyinst.wpengine.com/our-financial-supporters/ https://quincyinst.wpengine.com/our-financial-supporters/ There is also a podcast you can listen to, called "in search of monsters". If you are a foreign policy wonk, you will get the reference. https://quincyinst.org/category/podcast/ https://quincyinst.org/category/podcast/ I would also argue that wikipedia is not an unbiased source on anything that touches politics or foreign policy, and it would be quite foolish to trust it as a reputable information source on those topics.
    - mlindner 4y ago
      Firstly, it's not a journal. It's a think tank. There is nothing "rational" from a US point of view in opposing the supporting Ukraine in this war. It has basically infinite upsides with no downsides. They obviously have funding routes that come from the Russian government. Also it seems hacker news isn't following their own policies as a different comment of mine got flagged simply for noting the background of this think tank.
woodruffw 4y ago
When you remember that the DoD is really just a $800B jobs program for segments of the population that would otherwise blush at accepting welfare (including many of the fine commenters on this website), it becomes easier to understand why it's culturally incapable of passing a financial audit.
- jrockway 4y ago
  Do you get the impression that a large number of HN readers work for the federal government or defense contractors? I certainly don't.
  - woodruffw 4y ago
    Plenty work for companies that contract with the DoD, even if they are non "defense contractors" in the historical/industry scope sense. Google and Amazon, for example, do brisk business with the DoD. And, to be clear: I don't have any particular problem with that, at least any more so than anything about the general business of defense! I'd just prefer we be a little more honest about the financial structure.
  - tsimionescu 4y ago
    I would bet the majority (or maybe even the vast majority) of HN readers work for companies that do some business with the DoD. The amount of money the DoD invests in virtually every US industry can't be underestimated.
- jm4 4y ago
  This is quite possibly dumbest thing I have ever seen written on this site. You are grossly underestimating the DOD, its purpose and its necessity at a time when it is more important than it has been in decades. Obviously, there is waste, failed projects, and pockets of dysfunction. That happens in all large organizations. Despite all its flaws, the DOD is putting on a clinic on superior training, logistics, discipline, technology and power projection. I shudder to think what the world would look like right now and in several years without the DOD. Europe would be getting steamrolled if not for the DOD and NATO and it wouldn’t end there.
hobbitstan 4y ago
$2.1 trillion dollars unaccounted for. This is clearly by design. American taxpayers have a serious problem with the government. That's nothing new.
- MuffinFlavored 4y ago
  Do we think this "narrative" (not sure what else to call it, if we supposedly have facts to prove how broken it is) will change in our life time? Get better? Get worse? Stay the same? Why does it matter who we vote for if the whole system is a sham?
  - tartoran 4y ago
    Because we could vote out the the whole sham if we united one day. But the powers are always dividing us while giving us the illusion of choice which is their fabricated narrative. An independent could technically win and wipe out the whole system in a poof.
    - HDThoreaun 4y ago
      Wiping out the pentagon is not realistically possible. You can vote in whoever you want, they won’t be able to dismantle the DOD beauracracy
    - tsimionescu 4y ago
      While any such system can be changed or dismantled by popular will, it certainly can't happen by voting. Look at how slavery was dismantled - it took decades of organizing to create any wide-spread negative sentiment against it to even begin to make it possible to have candidates who would oppose it. Who do you imagine could suddenly unite the whole country behind them as presodent strongly enough that they would actually be able to dismantle something like the defense budget? Do you even know how much of the economy is currently financed by that, and would have to go through a painful re-org if that money would stop, or even if the way it was being received changes?
      - 4y ago
sp332 4y ago
I mean we knew it was going to fail the audit. The reason it has failed five in a row is because it has only ever had five. It's a work in progress. The point now is to make sure they actually make progress instead of slow-walking or depending on our apathy to stop caring after the first few times.
- hackernewds 4y ago
  It's actually beneficial for them to keep failing so a president isn't set that there is a chance that it could not feel because the Pentagon is in such a situation that the public cannot just boycott or dismantle it
  - sampo 4y ago
    > president precedent
    - EGreg 4y ago
      A manchurian precedent
- readams 4y ago
  It wasn't that long ago that I was hearing about how audits were impossible at the Pentagon and they would just give up whenever it was attempted. This sounds like progress.
- delusional 4y ago
  You're just echoing the article: > The news came as no surprise to Pentagon watchers. After all, the U.S. military has the distinction of being the only U.S. government agency to have never passed a comprehensive audit. Although your argument that it's supposed to force them to make progress doesn't seem correct: > But what did raise some eyebrows was the fact that DoD made almost no progress in this year’s bookkeeping: Of the 27 areas investigated, only seven earned a clean bill of financial health, which McCord described as “basically the same picture as last year.”
tartoran 4y ago
What happened last time when they failed? Oh, nothing? Then why not fail again when it could be lucrative.
bufferoverflow 4y ago
Without prison sentences for higher level people responsible, this is a pointless exercise. Start throwing them into prison, and they will rat each other out.
- Rebelgecko 4y ago
  For what?
  - bufferoverflow 4y ago
    For stealing billions of dollars.
mlindner 4y ago
[flagged]
- Mordisquitos 4y ago
  Comparing your description to the content of the Wikipedia article I cannot help but feel that you're giving a biased summary, particularly by using the loaded term "far right" which is nowhere suggested in the article, and by bringing up the claims of anti-Semitism which appear to have been mostly based on their criticism of the USA's uncritical support for the state of Israel [0]. While some in the far right may sympathise with this foundation's non-interventionist approach, I don't think it's accurate to describe them as far right through guilt by association. [0] https://m.jpost.com/american-politics/new-us-think-tank-accused-of-antisemitism-615750 https://m.jpost.com/american-politics/new-us-think-tank-accu...
  - mlindner 4y ago
    > Comparing your description to the content of the Wikipedia article I cannot help but feel that you're giving a biased summary I directly linked to the section of the wiki article that says almost exactly what I said. Here's direct quotes for you: > Cirincione said he "fundamentally" disagrees with Quincy experts who "completely ignore the dangers and the horrors of Russia’s invasion and occupation and focus almost exclusively on criticism of the United States, NATO, and Ukraine". > describing it as an "isolationist, blame America First money pit for so-called scholars who've written that American foreign policy could be fixed if only it were rid of the malign influence of Jewish money." > According to an April 2021 article in Tablet, two Quincy Institute fellows have cast doubt on whether the Chinese government's persecution of the Uyghur population amounts to a genocide.
- remarkEon 4y ago
  > Initial funding for the group, launched in November 2019, included half a million dollars each from George Soros' Open Society Foundations and Charles Koch's Koch Foundation. How is this “far right”? And are we really doing the “you’re an anti-Semite” act if you don’t agree with 100% of what AIPAC says?
boston_clone 4y ago
A better article was linked some paragraphs in - https://www.defenseone.com/defense-systems/2022/11/pentagon-failed-its-audit-again-says-bots-could-change/379827/ https://www.defenseone.com/defense-systems/2022/11/pentagon-... Much better review of the internal complexities of DoD and the audit itself. And if you’re really into this stuff, the actual report can be found here - https://comptroller.defense.gov/Portals/45/Documents/afr/fy2022/DoD_FY22_Agency_Financial_Report.pdf https://comptroller.defense.gov/Portals/45/Documents/afr/fy2...
- Rebelgecko 4y ago
  It would be interesting to see a breakdown of the sorts of issues that caused the 21 segments to fail their audits. I was hoping to see sexy scandals like missing gold from Fort Knox that was used to bribe overseas warlords, or maybe billions of dollars that were spent on secret stealth weapons. But from skimming through, all I see is boring stuff: revised actuarial tables to more accurately determine pension liabilities? Yawn! The realization that official balance sheets had underestimated the costs of cleaning up the DOD's various environmental disasters. Guh
- cm2187 4y ago
  I like the idea of the pentagon adopting corporate financial systems. At the end of the day, the soldier will connect from the battlefield with his rugged laptop and itemise every single bullet shot in fucking SAP. Likewise the F35 pilot will do his diversity training from his cockpit since the thing is supposed to fly itself. If every army does the same, we will bring peace to the world by means of overwhelming bureaucracy.
culi 4y ago
Anybody remember the $10,000 toilet seat lids[0]? It's practically an open secret that a huge chunk of the military budget is just giveaways to the "defense" industry. California's biggest export isn't "tech". It's airplanes. The backbone of the world's 4th largest economy is the military. It's why Microsoft and other tech giants are all slowly transitioning to be government contractors. Elon Musk has never run a profitable company in his life yet is the richest man on Earth. He knows that where the real money is to be made is convincing government officials to fund fantasy projects like underground tunnels and get heavy funding. Tesla is only around because of heavy subsidization and straight up scamming the government (anybody remember the time they pretended to have battery swapping figured out just to take advantage of a California bill but still have not swapped a single battery? It's been 4 years!!) </rant> [0] https://www.washingtonpost.com/business/capitalbusiness/the-air-forces-10000-toilet-cover/2018/07/14/c33d325a-85df-11e8-8f6c-46cb43e3f306_story.html https://www.washingtonpost.com/business/capitalbusiness/the-...
smitty1e 4y ago
You can't have the SecDef talking about "climate change" as a national security threat and expect any sobriety in the accounting department.
- implements 4y ago
  Political instability / war / mass migrations, and associated interruption to food and energy supplies - how are these not national security threats?
- deleted 4y ago
  [deleted]
- krisoft 4y ago
  How is climate change not a national security threat?
  - smitty1e 4y ago
    Unsure when climate was constant.
    - TheCoelacanth 4y ago
      Likewise, there has never been a time when the US has not faced any threats to its security.
      - smitty1e 4y ago
        Oh, absolutely. For example, actual rivals triggering a waste of resources on climate change, DEI, and the rest of the contemporary follies.
    - krisoft 4y ago
      Ok. And how does that make it not a national security threat?
      - 4y ago
cm2187 4y ago
I am a bit confused. The intro seems to suggest there is a problem with book keeping, i.e. accounting for assets and expenses. That's kind of a problem. But then most of the article is about programmes being over budget. When dealing with a large project, whether it is a new plane, a big infrastructure, anything large and unique, you should take any budget with a big pinch of salt, there is no way anyone can predict precisely how a complex project, that involves a lot of research, millions of moving pieces, is going to cost from the outset. A ship programme being 10% over budget doesn't seem particularly problematic to me. F35 is a different story.
- mirekrusin 4y ago
  They should hire Elon, he would trim the fat in no time.
- galaxyLogic 4y ago
  It is as if the same people who can't do proper accounting now confuse the difference between accounting and budgeting. Issue with books is not budget overruns but that money is unaccounted for. Money has somehow vanished. Where did it go? Why can't they figure out such a simple thing? Use double-entry book-keeping. Money that comes from somewhere must go somewhere. This suggests they/somebody don't want to record in books where the money went. Smells like corruption and criminality. Who got the money?
- rsj_hn 4y ago
  > When dealing with a large project, whether it is a new plane, a big infrastructure, anything large and unique, you should take any budget with a big pinch of salt, there is no way anyone can predict precisely how a complex project, that involves a lot of research, millions of moving pieces, is going to cost from the outset. You are talking about uncertainty -- e.g. risk. But that should lead you to overestimate as often as you underestimate so that you're average is on target but there is wide variation in individual results. If there is a systemic bias causing you to underestimate costs consistently, then you cannot blame uncertainty for that.
pirate787 4y ago
The collapse of the Russian military mobilization, in some measure from corruption, should make financial accountability at the US DoD more urgent. Of course , much of the US corruption is legal (political donations, uncompetitive contracts, buy-US rules, revolving door for govt->private sector staff) and we need functioning audits to get our arms around it.
galaxyLogic 4y ago
Here is the explanation why: https://www.thenation.com/article/archive/pentagon-audit-budget-fraud/ https://www.thenation.com/article/archive/pentagon-audit-bud... . "... When the DoD submits its annual budget requests to Congress, it sends along the prior year’s financial reports, which contain fabricated numbers. The fabricated numbers disguise the fact that the DoD does not always spend all of the money Congress allocates in a given year. However, instead of returning such unspent funds to the US Treasury, as the law requires, the Pentagon sometimes launders and shifts such moneys ..."
jmpman 4y ago
My senior year in college, I interned at a government contractor. I joined a project which was already 15 months behind schedule, and was expected to take another 12 months to complete. Everyone on the project seemed fine with these slips. I asked why the government didn’t cancel the project and award it to another company - “they could, but it would take just as long to complete as we have left, so they won’t save anything.” I was disgusted by this attitude and swore I wouldn’t work for that company upon graduation. Jump forward to the career fair at college, and I spoke with a recruiter from another large defense contractor. Told him that same story, and asked if I’d find a similar attitude at his company. He quickly pulled me aside and told me that I should never repeat that story. I took that as a “yes”, and I enjoy repeating that story as loudly and as often as possible. I decided to never work for a government contractor. Not because I disagreed with the work, but because I realized that working in a company with such an attitude was going to change me. I was worried that in 15 years, if there was a layoff, I’d have a hard time finding a new job, and if I did, I wouldn’t be a world class engineer. I see a system where excellence isn’t rewarded, and instead, gaming the system, is the most profitable. I’ve thought quite a bit about this problem, and one thing which might improve it, is a bidding system, where historical project “on time, under budget” is a weighted factor in contact awards. Maybe that’s how it works today?
- justsomehnguy 4y ago
  > working in a company with such an attitude was going to change me As a person who witnessed and interacted with many people from such companies - your gut was right. > I see a system where excellence isn’t rewarded, and instead, gaming the system, is the most profitable Well, it is like that in any structure with enough bureaucratic levels. > I’ve thought quite a bit about this problem, and one thing which might improve it, is a bidding system, where historical project “on time, under budget” is a weighted factor in contact awards. Maybe that’s how it works today? Nope. That's would make papers to be signed on the date, but the actual work would just continue - because the work wasn't completed on the date. Been there, saw that, didn't got even a lousy t-shirt. The main problem here is what "under budget" is a moot point in the first place - if the project demands N money, then doing it under less than N money means one of: 1. the budget was calculated incorrectly in the first place. Maybe there was some kickbacks included in it? 2. the budget was calculated correctly, but the implementor did cheap out on something to have a bigger revenue of the project. Maybe cheap ass chinesium parts instead of mandated approved parts, maybe outsourcing/outstaffing to people who takes less than a market value. So both the time and budget isn't ... valuable metrics for gauging actual performance, especially if something changes on the way - imagine bidding and winning some project what relied on a cheap Huawei gear before the current situation? You could think what relying on completing the projects objectives/targets would be a meaningful metric... see about signed papers up there. And the most wonderful thing of that is what even if you do everything on time, on budget, with A+ quality - nobody would say "Yeah, that's good, here is your money", everyone would try to find a anything, however minuscule thing it would be, what would allow them not to pay you money, all of it or at least a part of it. It's like people are paying from their own pockets for these projects.
naveen99 4y ago
Well atleast inflation is a catchall accounting mechanism. Also you can buy into some defense stocks. probably the real reason governments don’t want central cryptocurrency, because they love to embezzle themselves.
JoeAltmaier 4y ago
Oh the busted processes and contrary incentives abound, with everybody at a defense industry having all the anecdotes you'd care to listen to. Here's one: an Engineer friend worked on a classified project. It apparently had a rocket thruster. He designed the chassis to withstand the thrust. Then they wanted 10% more thrust. He'd overdesigned by 15% so signed off on it. Then they wanted 10% more thrust. No can do! Have to revisit the bracing etc, use different materials, different processes to machine it. Boss visits, says "You can't obstruct this project! It has to go through without delay. So just sign off." He didn't. Recalled materials from railroad siding where they were stored pending machining. Changed drawings and processes. Signed it all now that it was correct and safe. He never got another promotion or raise. Had to quit and work elsewhere.

144 points by rsj_hn 4y ago

I find articles like this very frustrating in their internal contradictions and failure to report anything of substance. Is it the Pentagon that failed, the DoD, or the military? It sounds like it's the DoD, except for 7 components, but we're never told which components passed and which failed, so there's no possibility of intelligent discussion of the nature of the problem or possible fixes.

mc32 4y ago
But still; how can an organization fail an audit five times in a row and there not be repercussions and large investigations to ensure its possibility of repeating are vanishingly small going forward?
- favflam 4y ago
  1.5 million people are employed directly by the Pentagon (fact check me plz). Trillions??? in capital assets (planes, boats, ??). 750 installations globally plus deeply integrated relationships with multiple allies (military and fiscal). Allies train in the US and visa versa. I can understand the monumental undertaking it would be to audit the Pentagon.
  - favflam 4y ago
    Oh yes, I forgot the audit also has to prevent leakage of national secrets.
  - eastbound 4y ago
    Any waterfall attribution of budgets can be made with an little more than an Excel spreadsheet ;) but, to keep secrets, maybe they have to invent a special decentralized protocol. I’m sure someone is getting the same budget from several entities, and perhaps owns an island to spend it all.
- tdeck 4y ago
  After the second or third time failing with no consequences, the people involved must realize that there are no consequences for failing a fourth and fifth time.
  - asvitkine 4y ago
    I understand that cutting funding may be unpalatable, but couldn't they instead incentivize passing the audit by offering bonuses to middle-managenent for departments that pass?
- toast0 4y ago
  Retrofiting proper accounting controls into an existing (extremely) large organization that was built without them is difficult work. That the audits are run consistently each year now is a big step. In past years, it's sounded like a lot of progress was being made, but this year's press releases are not as bubbly about progress, although it seems the wheels of progress are still turning. AFAIK, there's been no allegations of fraud or wrongdoing in these failed audits, just that there are insufficient controls to validate the numbers. You could tie future funding to passing audits in order to have repercussions, but there's a question of if you'd rather have an unfunded military or an unaudited military.
- MattGaiser 4y ago
  Depends on the goal of the audit. The purpose of the audit may indeed be just that.
woodruffw 4y ago
"The Pentagon" is the standard metonym for the DoD, similar to "The White House" for POTUS. So it's about the DoD as a whole. Here's the actual DoD press release[1], and the DoD comptroller's website[2]. [1]: https://www.defense.gov/News/Releases/Release/Article/3219649/dod-completes-department-wide-financial-statement-audit-essential-catalyst-for/ https://www.defense.gov/News/Releases/Release/Article/321964... [2]: https://comptroller.defense.gov/odcfo/afr/ https://comptroller.defense.gov/odcfo/afr/
mlindner 4y ago
The group that wrote this is not exactly a reputable source in the first place: https://en.wikipedia.org/wiki/Quincy_Institute_for_Responsible_Statecraft#Criticism https://en.wikipedia.org/wiki/Quincy_Institute_for_Responsib...
- rsj_hn 4y ago
  The existence of a "criticism" section on wikipedia does not mean a journal isn't reputable. But if you want to censor your own information sources that way, go ahead. The Quincy Institute -- which publishes Responsible Statecraft -- is a realist foreign policy think tank, designed to oppose neo-con foreign policy and advocate for a rationalist approach rather than an ideological approach. They opposed many of the foreign wars the U.S. has recently waged. Here is their mission statement: "The Quincy Institute promotes ideas that move U.S. foreign policy away from endless war and toward vigorous diplomacy in the pursuit of international peace." That, of course, is enough to make a lot of the redditors very angry, but it's certainly a reputable outlet. You can read more here, which has their mission statement, list of board members, and major funders: https://quincyinst.org/about/ https://quincyinst.org/about/ Funders include The Carnegie Corporation of New York, The Open Society Foundation, The Ploughshares fund, Ford Foundation, Streisand Foundation, Rockefeller Brothers Foundation. Examine their full list of donors here: https://quincyinst.wpengine.com/our-financial-supporters/ https://quincyinst.wpengine.com/our-financial-supporters/ There is also a podcast you can listen to, called "in search of monsters". If you are a foreign policy wonk, you will get the reference. https://quincyinst.org/category/podcast/ https://quincyinst.org/category/podcast/ I would also argue that wikipedia is not an unbiased source on anything that touches politics or foreign policy, and it would be quite foolish to trust it as a reputable information source on those topics.
  - mlindner 4y ago
    Firstly, it's not a journal. It's a think tank. There is nothing "rational" from a US point of view in opposing the supporting Ukraine in this war. It has basically infinite upsides with no downsides. They obviously have funding routes that come from the Russian government. Also it seems hacker news isn't following their own policies as a different comment of mine got flagged simply for noting the background of this think tank.

woodruffw 4y ago

When you remember that the DoD is really just a $800B jobs program for segments of the population that would otherwise blush at accepting welfare (including many of the fine commenters on this website), it becomes easier to understand why it's culturally incapable of passing a financial audit.

jrockway 4y ago
Do you get the impression that a large number of HN readers work for the federal government or defense contractors? I certainly don't.
- woodruffw 4y ago
  Plenty work for companies that contract with the DoD, even if they are non "defense contractors" in the historical/industry scope sense. Google and Amazon, for example, do brisk business with the DoD. And, to be clear: I don't have any particular problem with that, at least any more so than anything about the general business of defense! I'd just prefer we be a little more honest about the financial structure.
- tsimionescu 4y ago
  I would bet the majority (or maybe even the vast majority) of HN readers work for companies that do some business with the DoD. The amount of money the DoD invests in virtually every US industry can't be underestimated.
jm4 4y ago
This is quite possibly dumbest thing I have ever seen written on this site. You are grossly underestimating the DOD, its purpose and its necessity at a time when it is more important than it has been in decades. Obviously, there is waste, failed projects, and pockets of dysfunction. That happens in all large organizations. Despite all its flaws, the DOD is putting on a clinic on superior training, logistics, discipline, technology and power projection. I shudder to think what the world would look like right now and in several years without the DOD. Europe would be getting steamrolled if not for the DOD and NATO and it wouldn’t end there.

hobbitstan 4y ago

$2.1 trillion dollars unaccounted for. This is clearly by design. American taxpayers have a serious problem with the government. That's nothing new.

MuffinFlavored 4y ago
Do we think this "narrative" (not sure what else to call it, if we supposedly have facts to prove how broken it is) will change in our life time? Get better? Get worse? Stay the same? Why does it matter who we vote for if the whole system is a sham?
- tartoran 4y ago
  Because we could vote out the the whole sham if we united one day. But the powers are always dividing us while giving us the illusion of choice which is their fabricated narrative. An independent could technically win and wipe out the whole system in a poof.
  - HDThoreaun 4y ago
    Wiping out the pentagon is not realistically possible. You can vote in whoever you want, they won’t be able to dismantle the DOD beauracracy
  - tsimionescu 4y ago
    While any such system can be changed or dismantled by popular will, it certainly can't happen by voting. Look at how slavery was dismantled - it took decades of organizing to create any wide-spread negative sentiment against it to even begin to make it possible to have candidates who would oppose it. Who do you imagine could suddenly unite the whole country behind them as presodent strongly enough that they would actually be able to dismantle something like the defense budget? Do you even know how much of the economy is currently financed by that, and would have to go through a painful re-org if that money would stop, or even if the way it was being received changes?
    - 4y ago

sp332 4y ago

I mean we knew it was going to fail the audit. The reason it has failed five in a row is because it has only ever had five. It's a work in progress. The point now is to make sure they actually make progress instead of slow-walking or depending on our apathy to stop caring after the first few times.

hackernewds 4y ago
It's actually beneficial for them to keep failing so a president isn't set that there is a chance that it could not feel because the Pentagon is in such a situation that the public cannot just boycott or dismantle it
- sampo 4y ago
  > president precedent
  - EGreg 4y ago
    A manchurian precedent
readams 4y ago
It wasn't that long ago that I was hearing about how audits were impossible at the Pentagon and they would just give up whenever it was attempted. This sounds like progress.
delusional 4y ago
You're just echoing the article: > The news came as no surprise to Pentagon watchers. After all, the U.S. military has the distinction of being the only U.S. government agency to have never passed a comprehensive audit. Although your argument that it's supposed to force them to make progress doesn't seem correct: > But what did raise some eyebrows was the fact that DoD made almost no progress in this year’s bookkeeping: Of the 27 areas investigated, only seven earned a clean bill of financial health, which McCord described as “basically the same picture as last year.”

tartoran 4y ago

What happened last time when they failed? Oh, nothing? Then why not fail again when it could be lucrative.

bufferoverflow 4y ago

Without prison sentences for higher level people responsible, this is a pointless exercise. Start throwing them into prison, and they will rat each other out.

Rebelgecko 4y ago
For what?
- bufferoverflow 4y ago
  For stealing billions of dollars.

mlindner 4y ago

[flagged]

Mordisquitos 4y ago
Comparing your description to the content of the Wikipedia article I cannot help but feel that you're giving a biased summary, particularly by using the loaded term "far right" which is nowhere suggested in the article, and by bringing up the claims of anti-Semitism which appear to have been mostly based on their criticism of the USA's uncritical support for the state of Israel [0]. While some in the far right may sympathise with this foundation's non-interventionist approach, I don't think it's accurate to describe them as far right through guilt by association. [0] https://m.jpost.com/american-politics/new-us-think-tank-accused-of-antisemitism-615750 https://m.jpost.com/american-politics/new-us-think-tank-accu...
- mlindner 4y ago
  > Comparing your description to the content of the Wikipedia article I cannot help but feel that you're giving a biased summary I directly linked to the section of the wiki article that says almost exactly what I said. Here's direct quotes for you: > Cirincione said he "fundamentally" disagrees with Quincy experts who "completely ignore the dangers and the horrors of Russia’s invasion and occupation and focus almost exclusively on criticism of the United States, NATO, and Ukraine". > describing it as an "isolationist, blame America First money pit for so-called scholars who've written that American foreign policy could be fixed if only it were rid of the malign influence of Jewish money." > According to an April 2021 article in Tablet, two Quincy Institute fellows have cast doubt on whether the Chinese government's persecution of the Uyghur population amounts to a genocide.
remarkEon 4y ago
> Initial funding for the group, launched in November 2019, included half a million dollars each from George Soros' Open Society Foundations and Charles Koch's Koch Foundation. How is this “far right”? And are we really doing the “you’re an anti-Semite” act if you don’t agree with 100% of what AIPAC says?

boston_clone 4y ago

A better article was linked some paragraphs in - https://www.defenseone.com/defense-systems/2022/11/pentagon-failed-its-audit-again-says-bots-could-change/379827/ https://www.defenseone.com/defense-systems/2022/11/pentagon-... Much better review of the internal complexities of DoD and the audit itself. And if you’re really into this stuff, the actual report can be found here - https://comptroller.defense.gov/Portals/45/Documents/afr/fy2022/DoD_FY22_Agency_Financial_Report.pdf https://comptroller.defense.gov/Portals/45/Documents/afr/fy2...

Rebelgecko 4y ago
It would be interesting to see a breakdown of the sorts of issues that caused the 21 segments to fail their audits. I was hoping to see sexy scandals like missing gold from Fort Knox that was used to bribe overseas warlords, or maybe billions of dollars that were spent on secret stealth weapons. But from skimming through, all I see is boring stuff: revised actuarial tables to more accurately determine pension liabilities? Yawn! The realization that official balance sheets had underestimated the costs of cleaning up the DOD's various environmental disasters. Guh
cm2187 4y ago
I like the idea of the pentagon adopting corporate financial systems. At the end of the day, the soldier will connect from the battlefield with his rugged laptop and itemise every single bullet shot in fucking SAP. Likewise the F35 pilot will do his diversity training from his cockpit since the thing is supposed to fly itself. If every army does the same, we will bring peace to the world by means of overwhelming bureaucracy.

culi 4y ago

Anybody remember the $10,000 toilet seat lids[0]? It's practically an open secret that a huge chunk of the military budget is just giveaways to the "defense" industry. California's biggest export isn't "tech". It's airplanes. The backbone of the world's 4th largest economy is the military. It's why Microsoft and other tech giants are all slowly transitioning to be government contractors. Elon Musk has never run a profitable company in his life yet is the richest man on Earth. He knows that where the real money is to be made is convincing government officials to fund fantasy projects like underground tunnels and get heavy funding. Tesla is only around because of heavy subsidization and straight up scamming the government (anybody remember the time they pretended to have battery swapping figured out just to take advantage of a California bill but still have not swapped a single battery? It's been 4 years!!) </rant> [0] https://www.washingtonpost.com/business/capitalbusiness/the-air-forces-10000-toilet-cover/2018/07/14/c33d325a-85df-11e8-8f6c-46cb43e3f306_story.html https://www.washingtonpost.com/business/capitalbusiness/the-...

smitty1e 4y ago

You can't have the SecDef talking about "climate change" as a national security threat and expect any sobriety in the accounting department.

implements 4y ago
Political instability / war / mass migrations, and associated interruption to food and energy supplies - how are these not national security threats?
deleted 4y ago
[deleted]
krisoft 4y ago
How is climate change not a national security threat?
- smitty1e 4y ago
  Unsure when climate was constant.
  - TheCoelacanth 4y ago
    Likewise, there has never been a time when the US has not faced any threats to its security.
    - smitty1e 4y ago
      Oh, absolutely. For example, actual rivals triggering a waste of resources on climate change, DEI, and the rest of the contemporary follies.
  - krisoft 4y ago
    Ok. And how does that make it not a national security threat?
    - 4y ago

cm2187 4y ago

I am a bit confused. The intro seems to suggest there is a problem with book keeping, i.e. accounting for assets and expenses. That's kind of a problem. But then most of the article is about programmes being over budget. When dealing with a large project, whether it is a new plane, a big infrastructure, anything large and unique, you should take any budget with a big pinch of salt, there is no way anyone can predict precisely how a complex project, that involves a lot of research, millions of moving pieces, is going to cost from the outset. A ship programme being 10% over budget doesn't seem particularly problematic to me. F35 is a different story.

mirekrusin 4y ago
They should hire Elon, he would trim the fat in no time.
galaxyLogic 4y ago
It is as if the same people who can't do proper accounting now confuse the difference between accounting and budgeting. Issue with books is not budget overruns but that money is unaccounted for. Money has somehow vanished. Where did it go? Why can't they figure out such a simple thing? Use double-entry book-keeping. Money that comes from somewhere must go somewhere. This suggests they/somebody don't want to record in books where the money went. Smells like corruption and criminality. Who got the money?
rsj_hn 4y ago
> When dealing with a large project, whether it is a new plane, a big infrastructure, anything large and unique, you should take any budget with a big pinch of salt, there is no way anyone can predict precisely how a complex project, that involves a lot of research, millions of moving pieces, is going to cost from the outset. You are talking about uncertainty -- e.g. risk. But that should lead you to overestimate as often as you underestimate so that you're average is on target but there is wide variation in individual results. If there is a systemic bias causing you to underestimate costs consistently, then you cannot blame uncertainty for that.

pirate787 4y ago

The collapse of the Russian military mobilization, in some measure from corruption, should make financial accountability at the US DoD more urgent. Of course , much of the US corruption is legal (political donations, uncompetitive contracts, buy-US rules, revolving door for govt->private sector staff) and we need functioning audits to get our arms around it.

galaxyLogic 4y ago

Here is the explanation why: https://www.thenation.com/article/archive/pentagon-audit-budget-fraud/ https://www.thenation.com/article/archive/pentagon-audit-bud... . "... When the DoD submits its annual budget requests to Congress, it sends along the prior year’s financial reports, which contain fabricated numbers. The fabricated numbers disguise the fact that the DoD does not always spend all of the money Congress allocates in a given year. However, instead of returning such unspent funds to the US Treasury, as the law requires, the Pentagon sometimes launders and shifts such moneys ..."

jmpman 4y ago

My senior year in college, I interned at a government contractor. I joined a project which was already 15 months behind schedule, and was expected to take another 12 months to complete. Everyone on the project seemed fine with these slips. I asked why the government didn’t cancel the project and award it to another company - “they could, but it would take just as long to complete as we have left, so they won’t save anything.” I was disgusted by this attitude and swore I wouldn’t work for that company upon graduation. Jump forward to the career fair at college, and I spoke with a recruiter from another large defense contractor. Told him that same story, and asked if I’d find a similar attitude at his company. He quickly pulled me aside and told me that I should never repeat that story. I took that as a “yes”, and I enjoy repeating that story as loudly and as often as possible. I decided to never work for a government contractor. Not because I disagreed with the work, but because I realized that working in a company with such an attitude was going to change me. I was worried that in 15 years, if there was a layoff, I’d have a hard time finding a new job, and if I did, I wouldn’t be a world class engineer. I see a system where excellence isn’t rewarded, and instead, gaming the system, is the most profitable. I’ve thought quite a bit about this problem, and one thing which might improve it, is a bidding system, where historical project “on time, under budget” is a weighted factor in contact awards. Maybe that’s how it works today?

justsomehnguy 4y ago
> working in a company with such an attitude was going to change me As a person who witnessed and interacted with many people from such companies - your gut was right. > I see a system where excellence isn’t rewarded, and instead, gaming the system, is the most profitable Well, it is like that in any structure with enough bureaucratic levels. > I’ve thought quite a bit about this problem, and one thing which might improve it, is a bidding system, where historical project “on time, under budget” is a weighted factor in contact awards. Maybe that’s how it works today? Nope. That's would make papers to be signed on the date, but the actual work would just continue - because the work wasn't completed on the date. Been there, saw that, didn't got even a lousy t-shirt. The main problem here is what "under budget" is a moot point in the first place - if the project demands N money, then doing it under less than N money means one of: 1. the budget was calculated incorrectly in the first place. Maybe there was some kickbacks included in it? 2. the budget was calculated correctly, but the implementor did cheap out on something to have a bigger revenue of the project. Maybe cheap ass chinesium parts instead of mandated approved parts, maybe outsourcing/outstaffing to people who takes less than a market value. So both the time and budget isn't ... valuable metrics for gauging actual performance, especially if something changes on the way - imagine bidding and winning some project what relied on a cheap Huawei gear before the current situation? You could think what relying on completing the projects objectives/targets would be a meaningful metric... see about signed papers up there. And the most wonderful thing of that is what even if you do everything on time, on budget, with A+ quality - nobody would say "Yeah, that's good, here is your money", everyone would try to find a anything, however minuscule thing it would be, what would allow them not to pay you money, all of it or at least a part of it. It's like people are paying from their own pockets for these projects.

naveen99 4y ago

Well atleast inflation is a catchall accounting mechanism. Also you can buy into some defense stocks. probably the real reason governments don’t want central cryptocurrency, because they love to embezzle themselves.

JoeAltmaier 4y ago

Oh the busted processes and contrary incentives abound, with everybody at a defense industry having all the anecdotes you'd care to listen to. Here's one: an Engineer friend worked on a classified project. It apparently had a rocket thruster. He designed the chassis to withstand the thrust. Then they wanted 10% more thrust. He'd overdesigned by 15% so signed off on it. Then they wanted 10% more thrust. No can do! Have to revisit the bracing etc, use different materials, different processes to machine it. Boss visits, says "You can't obstruct this project! It has to go through without delay. So just sign off." He didn't. Recalled materials from railroad siding where they were stored pending machining. Changed drawings and processes. Signed it all now that it was correct and safe. He never got another promotion or raise. Had to quit and work elsewhere.