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Pentagon fails audit for sixth year in a row

344 points by TurkishPoptart 3y ago

moose44 3y ago
> While there are still three outstanding audits not yet wrapped up, the DoD reported that the remaining 18 failed, including the Defense Advanced Research Projects Agency and National Security Agency. Here's my surprised face: - _ -
Mistletoe 3y ago
Can anyone explain to me why it is awful for a person to live in debt but it is okay for the federal government to do so? I've never understood this in the least, other than the "kick the can down the road, America superpower backed by military blah, blah, blah" very weak argument. History is full of the carnage of failed empires that had this same idea. https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN 32 trillion in debt seems insurmountable, has anything like this ever reversed course historically?
- kaesar14 3y ago
  I don't think it's 'awful' for a person to live in debt. The richest Americans have loads of debt. A significant part of the American Dream is to own a house which is essentially debt. Perhaps the argument is more about whether the US government is drowning in debt more akin to CC debt (bad debt) or mortgage debt (good debt) but in the abstract, leverage is a perfectly fine thing for a government to use in order to fund its development.
  - logicchains 3y ago
    The American dream is to "own" a house, not to own a mortgage.
    - anon291 3y ago
      You do not own a mortgage. You have sold a mortgage.
  - nxm 3y ago
    Debt is also how economies and a lot of companies grow
    - HideousKojima 3y ago
      They could also grow by saving and reinvesting surpluses/profits
      - intotheabyss 3y ago
        The entire point of debt is to bring future revenue to the present so that you don't have to wait for savings to trickle in every year.
        HideousKojima 3y ago
        At the cost of some portion of your future revenue
        airstrike 3y ago
        and if that future revenue is N times greater than you would otherwise get without debt, then it's still better to take on debt. Would you rather have 90% of $1M or 100% of $800k?
        HideousKojima 3y ago
        >if That single word is doing all of the heavy lifting for you. "If" the housing market will never crash, then it's a surefire safe investment! Better buy tons of houses to flip on credit. There's no guarantee that your debt/investment will succeed, which is why banks try (and often enough, fail) to price in risk with things like varying interest rates, collateral, etc.
        airstrike 3y ago
        the 90% accounts for the "if". my point is there an expected value for the future revenue amount, subject to your own assumptions about the probability of each outcome and your discount rate for the value of that money over time in scenarios where your expected value discounted to present value is greater than the alternative, you make the investment. it's really finance 101... it's just NPV
- digitalengineer 3y ago
  Small correction: it’s awful for a poor person to live in debt. If you are quite wealthy there are lots of ways to borrow money and it’s all good!
  - logicchains 3y ago
    >If you are quite wealthy there are lots of ways to borrow money and it’s all good! If you have a negative net worth (more debt than assets) you're generally not considered a wealthy person.
    - fbdab103 3y ago
      Perception is everything. For quite a while, Sam Bankman-Fried was billions in the hole, but could still secure more funds on demand.
    - thaumasiotes 3y ago
      > If you have a negative net worth (more debt than assets) you're generally not considered a wealthy person. That's only true if your debt and assets are both small. If you have $200 million in assets and $500 million in debt, you will be considered a wealthy person. You would only stop being wealthy if your stuff got taken away.
    - mikeyouse 3y ago
      There’s no meaningful sense in which the Federal Government could be considered to have a negative net worth.. they have a ‘stake’ in the collective value of the largest and most vibrant economy on earth. People’s conception of the Federal ‘balance sheet’ as limited to the dollars in bank accounts explains why they are continually surprised that $30+ trillion in debt is shrugged off by the market and every knowledgeable economist.
    - grotorea 3y ago
      How would you even calculate the asset value for a government? Normally you'd compare it to GDP which is something else.
    - 3y ago
- teaearlgraycold 3y ago
  So I don’t know if what the government is doing is the best long term decision. But the US’s national debt could be compared to a mortgage. And the government’s income is massive so they can be in trillions of debt without it exceeding what they can reasonably pay off (never paying it all off, but paying off individual loans). So by your analogy, is it actually bad for a normal person to be in debt? Normal people have mortgages.
  - askonomm 3y ago
    Has the number ever decreased? As in, have they actually paid things off? Without actual numbers, U.S feels increasingly like a high-school bully who borrows money and then threatens with violence when that money is wanted back.
    - l33t7332273 3y ago
      I don’t think US really threatens violence when people collect on the public debt. This is quite rare historically because it makes people weary to lend you money. Payments, including interest, are regularly made and of course individual debts are paid all the time.
    - buerkle 3y ago
      The only time the US was debt free was a few years during Andrew Jackson's presidency.
    - macintux 3y ago
      We were paying it off at the end of the 90s, some projections had the debt paid off in 10 years, but then Bush 2.0's tax cuts and 9/11 wrecked everything. (I could be off in some details, but I remember my despair when Greenspan gave Congress cover for supporting the tax cuts by testifying that it wasn't necessarily a good thing to be debt-free.)
    - metabagel 3y ago
      A better question is whether the percentage of debt to GDP has ever decreased, and it has. https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S
- uticus 3y ago
  asking about state-level debt gets into philosophical (and I would argue even religious) territory very quickly, but to answer your questions: 'why...it is okay for the federal government...' federal govt in US is following general patterns at business and individual scale, because democratic processes lead to a reflection of decisions at smaller elements of society at bigger ones. '...ever reversed course historically?' no reversals, but plenty of upheavals, such as war, conquering, etc.
- HideousKojima 3y ago
  Most explanations I've seen boil down to to "The US (or any other sovereign nation with control over their own currency) can print their way out of debt, it's literally impossible for the US to default." This ignores the devastating economic effects that printing such a huge amount of currency would cause (likely comparable to the effects of simply defaulting) and ignores the fact that sovereign nations with control over their own currency have chosen to default anyway (see Russia ~20 years ago for an example).
  - dragonwriter 3y ago
    > Most explanations I've seen boil down to to "The US (or any other sovereign nation with control over their own currency) can print their way out of debt, it's literally impossible for the US to default." Its impossible for the US to be forced to default. Its quite possible for the US to make a political choice to default, and it has come very close to doing so.
    - evancox100 3y ago
      Also, not only is it possible, but many countries have in fact chosen to default on debt denominated in their own currency, rather than subject their citizens to wild inflation and/or break norms around reserve bank independence. So, it could happen even if US is not forced to, I agree. For a starting point, see https://www.bankofcanada.ca/wp-content/uploads/2020/06/BoC-BoE-Sovereign-Default-Database-Local-Currency-Default-Frequency.pdf https://www.bankofcanada.ca/wp-content/uploads/2020/06/BoC-B...
      - dllthomas 3y ago
        Though for the US, it would be clearly unconstitutional.
  - scatters 3y ago
    The Russian rouble was not free floating prior to the crisis. They tried to defy the iron triangle and paid for it. This is not a problem for the USA, since other currencies are denominated in terms of the dollar. The reason it would be impossible for the US to default is that the US is not significantly in debt. Most of the federal debt is held domestically, meaning by the US. You can't be in debt to yourself.
- DrNosferatu 3y ago
  That’s the Fallacy of Composition - the economics of a government are not the economics of a grocery store or a household: https://amp.theguardian.com/business/2013/nov/21/post-crash-economics-austerity-common-fallacies https://amp.theguardian.com/business/2013/nov/21/post-crash-...
  - ahallock 3y ago
    But imagine if they were. Wars and other destructive behaviors would be a lot more difficult
  - uticus 3y ago
    Sorry, but 'Fallacy of Composition' is just a theory. (Disclaimer: I happen to disagree with it.) Ultimately the way these ideas about economic theory are approached is a lot more philosophical/religious-based (for the Atheists, please read that 'strong belief-based') and a lot less math based than some would be willing to admit. Honestly the math itself is usually statistical, which in turn is a lot more difficult to comprehend and analyze properly.
    - HFguy 3y ago
      I would put aside statistics and whether we completely understand how the economy works (we don't). Just ask...are there are very fundamental differences between the finances of an individual and the government? There are. For starters, the government can simply print money and pay off debts. They can also choose, by their actions, to inflate away nominal liabilities. So then it is reasonable to consider that "being in debt" may have different ramifications for the government than for an individual.
      - uticus 3y ago
        > may have different ramifications for the government than for an individual I can only agree ramifications look different when an inappropriately narrow timespan is in focus. Thinking through history, what nations have been able to ultimately avoid ramifications from significant debt – the same sort of scenario that would in proportion cause ‘ramifications’ for individuals or businesses? I can think of several historical instances where a nation having significant debt appeared to have no ‘ramifications’ early on but were unable to avoid the inevitable (and inenviable) outcomes. I mean, even an individual may get deeply – horribly - in debt yet avoid ramifications for a time. But the bills will come due. No doubt a government is not the same thing as a business or an individual. But to dismiss government debt as playing by different rules than debt elsewhere is foolish.
- deleted 3y ago
  [deleted]
- ahallock 3y ago
  You can leverage debt as an individual as well. We often shame people for bankruptcies when we shouldn't. Businesses fail all the time and go bankrupt -- running a household is similar and can fail.
  - HideousKojima 3y ago
    Barring difficult to foresee circumstances like an expensive medical procedure, a debilitating injury/illness, or a devastating lawsuit, most of the circumstances that lead to a household going bankrupt are directly attributable to mismanagement.
- dragonwriter 3y ago
  > Can anyone explain to me why it is awful for a person to live in debt but it is okay for the federal government to do so? Not sure its awful for a person, depending on the kind of debt, but people and the government are differently situated. For one, people (natural or corporate) who have a debt in something that isn't a token that they can issue at will have an externally enforced obligation to do whatever is necess5 to acquire those tokens and sacrifice whatever is necessary to deliver them to the creditor. Currency-issuing governments with debt in their own currency have an obligation to... ultimately, if nothing else works or is desirable, just poof up some currency. Also, for certain governments, there isn't a vastly more powerful external enforcer of whatever obligation they have, whereas with most people, there is, in the form of the local government.
- DougWebb 3y ago
  I'm hardly an expert, but I think "government debt" and "government investment" are accounted for the same way, but only the former is a problem. If the government sells bonds/T-bills (eg acquires debt) and uses that to improve the country in a way that benefits the citizens and encourages population and economic growth, then its worth doing. If the government uses the money only to pay interest on existing debt, or to give it away to make wealthy citizens more wealthy, or other unproductive uses, then it's not so good. The attacks directly on the national debt are a political strawman, meant to distract from the real issues about where revenue comes from and how it is spent. It's like the constant debt ceiling wailing; Congress sets a budget and legislation that requires spending more than the revenue available, then sets a debt ceiling that prevents the treasure from borrowing to cover the required by law spending, then bitches and moans and grandstands over how the debt ceiling creates a crisis. It's all for show.
  - TimedToasts 3y ago
    > The attacks directly on the national debt are a political strawman, meant to distract from the real issues about where revenue comes from and how it is spent. No, I assure you that those of us concerned about the national debt are actually concerned about it.
- nradov 3y ago
  It's not awful for a person to live in debt. Debt is a useful financial tool. Unlike a person, a government has an unlimited lifespan and debt can persist forever. This only becomes a concern when total debt exceeds some multiple of GDP. The exact limit will vary based on many factors including interest rates, economic growth rate, demographics, and tax compliance. Once that limit is breached it tends to cause a fiscal and political crisis within a few years. Either default or hyperinflation in the short term, followed by a long period of austerity.
  - dragonwriter 3y ago
    > This only becomes a concern when total debt exceeds some multiple of GDP. The exact limit will vary based on many factors including interest rates, economic growth rate, demographics, and tax compliance. Once that limit is breached it tends to cause a fiscal and political crisis within a few years. This is the kind of theory that, without a concrete model of how the limit varies (or even with one, if it involves much statsitical variability) is nonfalsifiable, either because the probability of a crisis in actual concrete conditions is unknown or the range of variability is too wide to make strong conclusions given the small-n problem with real-world conditions, but at the same time becomes very easy to rationalize almost any real-world conditions as fitting.
- intalentive 3y ago
  Depends on the productivity of the country and whether the debt can be exported (as reserve currency) or monetized (as inflation). The USA checks all these boxes for now. Highly productive and the costs can be passed on to others. Otherwise you are correct. Zimbabwe certainly has to live within its means.
- jmyeet 3y ago
  People like to use the household analogy when it comes to government spending and debt. Some cynically do it to justify cutting social programs. Some (and I include you here) are genuinely confused. First, literally nobody in government cares about the debt. Of the $32T debt in our entire history, $8T comes from the 4 years of the Trump presidency. Remember that when the next fiscal hawk starts chirping about the need to cut spending. Second, debt doesn’t matter when you can print money in the currency the debt is denominated in. We borrow US dollars. We print US dollars. So if we’rea household who has to pay out build you can’t ignore it fact that we have a money printer in the next room. There have been sovereign currency devaluations in the past too, famously by FDR who changed the gold standard. I would suggest looking up videos on Modern Monetary Theory.
- TacticalCoder 3y ago
  > 32 trillion in debt seems insurmountable, has anything like this ever reversed course historically? Never and it is insane that there are apologists for such a sad state of affairs. https://www.usdebtclock.org/ https://www.usdebtclock.org/ This is not going to end well. That's what happen when totally clueless, incompetent and senile people are pulling the levers, following the advices of visionaries like Paul "it will become clear that the Internet's impact on the economy has been no greater than the fax machine's" Krugman. > https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN What is insane on that graph is that it doubled in ten years and quadrupled in 15 years. Anyone who thinks this is reasonable is simply out of his mind.
  - uticus 3y ago
    The numbers are just outside comprehension. We can comprehend a dollar, or a hundred dollars, in the hand. We may be able to imagine (or have seen) a room full of a couple tens of thousands of dollars. But to extrapolate one, to 32 trillion of the same... If a 4 GHz processor core executes an instruction every clock cycle, it would still take two hours to iterate that instruction 32 trillion times. If you lined up 32 trillion inches, it would be over 505 million miles. If a dollar bill is 0.1 millimeters thick, and you stacked 32 trillion of the bills on top of each other, the stack would be almost 2 million miles high. Etc By the way, we went past $33 trillion in September, and reached $33.5 20 days later. Only a half trillion added in 20 days.
- _jal 3y ago
  To start with, individuals do not print their own currencies. People always jump in immediately to say you can't inflate your way out of debt/look at Argentina/etc., but that's missing the point, I'm not saying that. The point is a sovereign currency issuer has a fundamentally different relationship to money than mere people. They can certainly still get themselves in trouble through mismanagement, no doubt, but there are a lot of levers they have that are unavailable to normal folks. Like some other major differences: not too many people have massive standing armies or hundreds of millions of tax payers, or control over a substantial fraction of global financial flows. Again, not saying eleventy-trillion in debt is not a problem, or that all's well, or anything else like that. I am saying that comparing private finance to sovereign finance is a category error, and things will make much more sense to you if you understand why.
- smileysteve 3y ago
  > it is awful for a person to live in debt Is an interesting premise when data is > American households carry a total of $17.29 trillion in debt as of the third quarter of 2023, and the average household debt is $103,358 as of the second quarter of 2023.
- dragonwriter 3y ago
  > 32 trillion in debt seems insurmountable, has anything like this ever reversed course historically? If you look at output or income relative, instead of meaningless absolute nominal terms, yes, in fact, the current US debt to to GDP ratio and debt to revenue ratios are a drop from the recent peak—a result of exactly the kind of reversal of course you are asking about.
- Exoristos 3y ago
  Similar reason it's a bad idea for you to be in debt to Tony Soprano, but not necessarily for him to be in debt to you.
- crazygringo 3y ago
  Who said it's awful for a person to live in debt? If your salary increases 3% a year every year in real terms, and it's cheap to borrow, then it's absolutely mathematically optimal to carry a level of debt that you never pay off. In fact, you'd be a sucker if you didn't. The main difference between people and government is that people like to retire, while governments can live forever. People ideally need to stop carrying debt at some point in their lives because they need to save for retirement. Governments don't need to do that. It's kind of counterintuitive, but governments don't ever need to pay off all their debt. They just need to keep the overall debt level below a certain ratio to GDP. Debt can keep growing as GDP keeps growing.
nradov 3y ago
It's important to understand the history here. Failing the audit isn't necessarily due to some sort of fraud or abuse (although there likely are isolated instances). The problem is that for decades Congress never allocated funds to put proper financial controls in place so naturally the accounting systems are a disconnected jumbled mess. When they started annual audits everyone knew they would fail so that was no surprise. The point is to make gradual improvements every year until they can eventually pass.
- edgyquant 3y ago
  Yeah but with that in mind it’s a good thing that new outlets roll with this “failed audit” as it puts pressure to constantly be trying to do better and this slowly helps to rule out corruption or incompetence
- BiteCode_dev 3y ago
  Sure, let me use that excuse with the IRS and this how it works.
  - l33t7332273 3y ago
    IRS exists to give those organizations money, so they’re more of a client and you’re more of a product.
    - malux85 3y ago
      Product is a very diplomatic way of saying Lunch
    - warkdarrior 3y ago
      Not quite. The money is the product of the IRS, you and I are the raw materials from which the money is produced.
  - vkou 3y ago
    You're going to make the excuse that your company's accounting mess is because you founded it before the IRS existed? Good... Luck with that.
Iwan-Zotow 3y ago
Ha ha
kgwxd 3y ago
Duh. You can't just put "classified alien technology R&D" as a clear-text line item. Just trust them, it's all going towards national, even global, security.
- mike_hock 3y ago
  "What, do you think we spent 10 grand on a fire extinguisher?"
  - Kon-Peki 3y ago
    Large fire extinguishers are high-pressure cylinders that require high-precision valves. There are fewer than 10 manufacturers in the world that can do it - half of them are in the US and the DoD will spend what it takes to keep it that way. You wouldn't want to end up like the EU and not have a single manufacturer that can do it, or (since Brexit) not have any that are legally allowed to import them. It's a good thing they can be refurbished when used, and that the authorities look the other way when a shipment arrives from a 3rd party...
    - psunavy03 3y ago
      Now do the US shipbuilding industry . . .
- walterbell 3y ago
  Since 2018, there's a separate, non-public accounting ledger for national security items at 150 agencies. In theory, this should improve public ledgers. http://files.fasab.gov/pdffiles/handbook_sffas_56.pdf http://files.fasab.gov/pdffiles/handbook_sffas_56.pdf The objective of this Statement is to balance the need for financial reports to be publicly available with the need to prevent the disclosure of classified national security information or activities in publicly issued General Purpose Federal Financial Reports (GPFFRs). This Statement allows financial presentation and disclosure to accommodate user needs in a manner that does not impede national security.
warner25 3y ago
Just to provide a ground-level insider perspective: We've been doing things in the name of "audit readiness" for a decade, and I just... don't get it. It has translated to a lot of asinine things like 1. Making sure that everyone's marriage certificates and kids' birth certificates are on-file, to root out maybe the one person in 10,000 who is erroneously getting paid an extra $200 per month for certain entitlements. 2. Making sure that when we sign leave forms (i.e. requests for vacation time) we do so with a digital signature (even though they got printed out for processing and archival) using a certain image instead of a manual signature with a pen. 3. Going through an absurdly painful process to put on the books every physical piece of property we see (e.g. hand tools, step ladders, obsolete radio and telephone equipment) and then account for them on a monthly basis even if they've been useless and in storage since the 1970s. Meanwhile, I can see tens or hundreds of billions of dollars of seemingly wasted man-hours on various initiatives (including those listed above), unnecessary personnel moves / rotations, and questionable purchases of new uniforms, equipment, vehicles, software, etc.
- wolverine876 3y ago
  I'm not an insider, but those sound like generally hard-to-avoid issues of large organizations, public and private, profit-oriented and service-oriented. You can't manage that many people, millions in DoD, without rules, and rules can't be defined to apply well to the very wide variety of situations in reality - just like an algorithm, they'll be inflexible. These kind of gripes are, understandably, in every large organization. > 3. Going through an absurdly painful process to put on the books every physical piece of property we see (e.g. hand tools, step ladders, obsolete radio and telephone equipment) and then account for them on a monthly basis even if they've been useless and in storage since the 1970s. On the upside, that provides one of the benefits of an audit: Identifying wasted assets. I know the Army is focusing on reducing the amount of useless equipment it warehouses.
  - justrealist 3y ago
    Stuff is cheap... there's been immense value in having tons of old cheap assets to throw into Ukraine. And even if it isn't dirt-cheap, there's value in maintaining industrial military production capacity. Corporations got incredibly fragile supply chains by optimizing for JIT asset delivery, let's not repeat the mistake with national defense. I don't want the US to run out of vehicles, artillery shells, and spare uniforms 2 weeks into a real war.
mtrees_io 3y ago
da fence is a broad term
MrMetlHed 3y ago
Worked with a guy ten years ago that would obsessively read these reports from the Pentagon. Here's a couple of his stories about the matter: https://www.reuters.com/investigates/pentagon/ https://www.reuters.com/investigates/pentagon/ and https://www.reuters.com/investigates/special-report/usa-marines-audit https://www.reuters.com/investigates/special-report/usa-mari... (very old and I apologize for my horrific javascript at the time.) It sounds like nothing has changed. Relevant to this crowd, maybe: "Most of the Cobol code the Pentagon uses for payroll and accounting was written in the 1960s, according to 2006 congressional testimony by Zack Gaddy, director of DFAS from May 2004 to September 2008." "Wallace, the Army assistant deputy chief of staff, says the system has "seven million lines of Cobol code that hasn't been updated" in more than a dozen years, and significant parts of the code have been "corrupted." The older it gets, the harder it is to maintain. As DFAS itself said: "As time passes, the pool of Cobol expertise dwindles.""
- samus 3y ago
  If it ain't broke, don't fix it, they say. But if it is already broken in significant ways, there is little point in not replacing it.
- wslh 3y ago
  I would love to perform static security code analysis to that code.
  - tandr 3y ago
    Are there any SA tools, that would understand COBOL?
    - Jtsummers 3y ago
      https://www.sonarsource.com/knowledge/languages/cobol/ https://www.sonarsource.com/knowledge/languages/cobol/ Never used it (and hopefully never will), but yes.
  - xeromal 3y ago
    Not all the RAM on earth would be enough to process that shit
b8 3y ago
Which 18 departments failed besides the two mentioned in the article?
- solardev 3y ago
  Sorry, that'll have to be a separate audit of this audit.
blindriver 3y ago
Why would anyone care about an audit if there are no repercussions?
- eviks 3y ago
  Those boxes don't check themselves
- wolverine876 3y ago
  Why do you say there are no reprocussions? It's a signicant issue in Congress, which writes all of the Department of Defense's checks, oversees them, investigates them, confirms their leaders, and makes laws controlling everything they do.
  - Loughla 3y ago
    And what has failing audits led to in the past?
    - jsbisviewtiful 3y ago
      So far more money :P
    - wolverine876 3y ago
      To improving the auditability of the Pentagon, a new and ongoing project. https://news.ycombinator.com/item?id=38307749 https://news.ycombinator.com/item?id=38307749
    - edgyquant 3y ago
      They haven’t been doing them for very long at all and have had better results pretty much every year since they started.
  - mrchucklepants 3y ago
    It should be. But its not and, likely, never will be.
  - 3y ago
jmyeet 3y ago
At least the missile knows where it is.
- rattlesnakedave 3y ago
  au contraire, it knows where it isn't
jfoutz 3y ago
I know I'm incredibly naive, and there's no political will to actually make the system work. It seems like various sections and departments are passing audits. If you're within, say, 1% just allocate the funds. If you didn't pass the audit, fill out this form and then get the money. The form can be classified. I have no idea, but I'd imagine like payroll and taxes are pretty much perfect. Once you get a handle on who doesn't know where their money is going, you can help them figure it out, throughout the year, and be on track next year. It's huge, it's massive it's trillions of dollars, it's a completely incomprehensible system. But, like, some parts are comprehensible. Those parts are easy. The incomprehensible parts can be broken down and figured out. Is divide and conquer not a thing?
- TinyRick 3y ago
  There's no political will to actually make the system work because the system is working perfectly fine for those in charge.
- curiousllama 3y ago
  This is what they’re doing (“incremental progress” as they say). The issue is the scale of the system. With a big enough org, the ongoing deterioration occurs faster than you can actually root cause and fix the problems. You divide the orgs, they divide the pillars, they divide the groups, they divide the pods, they divide the teams… all the sudden, a 4 week root cause exercise takes a year and a half. By the time you implement the solution, you’re 3 years out of date. Whoops - administration flipped. They don’t care anymore. “What do you mean accounting - why are we behind China in AI?!”
- importantbrian 3y ago
  Divide and conquer actually does seem to be the strategy. Each department within the DoD does its own audit, and a few of those departments actually have passed. But most of them have failed with a few still ongoing. The bigger issue is the no political will part. If congress mandated that senior pentagon officials lose their jobs when they fail an audit they would get the process figured out really quickly. As is there's no urgency because there are no consequences for failure.
- 3y ago
wolverine876 3y ago
The US Department of Defense was not audited until six years ago, when it began a project to make their organization auditable. From the start, it was expected to take longer than six years: You are looking at a potential new job. A large company wants you to lead a project on their audits. Here is the situation: They are large and complex - on a different order of magnitude, possibly the largest, most complex organization in the world - with ~$4 trillion in assets (not market cap, but hard assets), and ~$900 billion annual budget, seven figures of employees, and operations spanning almost every activity, all over the world. Such an organization is naturally divided into an incredibly large and complex org chart that maybe nobody really comprehends. Among all the entities on that chart are an incredible array of financial and asset tracking systems, computerized and manual, from new back to possibly WWII. Your boss says that procurement is the most important thing to audit: An unusually large part of that $900 billion budget is the world's largest procurement budget and operation, with an endless list of vendors of every size and shape, from the world's largest companies - some whose core function is milking your organization without crossing legal redlines - to the tailor for West Point uniforms. And we were hoping you wouldn't ask, but we're afraid the budget and operation is decentralized across all/most of those entities in that org chart [edit: per commenter with actual knowledge, "the budget is somewhat centralized; it's just the execution that's decentralized".] We'll need you to stitch all that together so we can audit it. Who is providing executive support for this project? Well, very few in our organization, from the leadership down, really want it - they all see it as a distraction and source of trouble, possibly risk to their missions and careers. It was imposed on us. Also, the project will be the target of politics (including from a certain highly aggressive party in Congress), talking heads, and general public Internet attacks no matter what you do. Everyone sees you as a useful whipping post. Do you take the job?
- psunavy03 3y ago
  As someone with 20 years active and reserve time, the only thing I'd really tweak here is that the budget is somewhat centralized; it's just the execution that's decentralized. DOD is an Executive Branch department that operates on money programmed by Congress. Agencies choose, within limits of Title 10 US Code, how to spend that money, but the "pots" or "flavors" of money they have to spend are allocated in the Congressional budget.
thelastgallon 3y ago
Sounds like an ideal job for AI. AI, please read this COBOL code and rewrite it all in Rust. Understanding 85 COBOL Standard reserved words is orders of magnitude easier than understanding English. AI should bludgeon this task in no time. And Rust can be 180,000x faster[1], all the code will be efficient and run on a mac mini or raspberry pi. It sounds like the easiest way for AI startups to make a pitch and collect a big bounty from Pentagon. [1]https://news.ycombinator.com/item?id=37964161 https://news.ycombinator.com/item?id=37964161
- RugnirViking 3y ago
  I think you are hopelessly naive about the problems here. The physical , fingers-on-keys writing of the code represents 0.000001% of the effort. Simply translating the code to another language does nothing. What is needed is to understand every asset and role of multiple millions of employees. Take literally the biggest company in the world, multiply it by 40 or so in terms of assets, employees, supply chain complexity. There are so many edge cases. So, so many
- psunavy03 3y ago
  Do you even code?
btbuildem 3y ago
Pardon me if this is too simplistic, but wouldn't cutting back the budget begin to instil some fiscal responsibility into an organization? Conducting an audit seems like just another expenditure in a climate of obscene overabundance of resources that encourages spending more and more.
- px43 3y ago
  I'm pretty sure they would blame the cuts for their continued lack of action.
- wedn3sday 3y ago
  Any loss in revenue would immediately be blasted through the media as the destruction of jobs. Dont think of the pentagon as a fighting force, think of it as a make work (and thus make votes) organization.
- dralley 3y ago
  Doing so in the current world climate, with Russia actively neighboring countries and making threats against Europe, and China threatening their neighbors and actively preparing their military for a potential invasion of Taiwan, and with more shit kicking off in the Middle East, seems politically rather fraught.
dostick 3y ago
60% of 35 trillion is unaccounted for. With this kind of money they can build whole separate world under earth surface. Nothing they can't buy with that money.
- queuebert 3y ago
  That's 420 years of the NIH budget. They lost FOUR CENTURIES worth of groundbreaking medical research. We have really eff-ed up priorities. In other units that I'm known for, that's 550 Enrons.
  - earthscienceman 3y ago
    When you measure it like that... something really tingles and puts it into perspective. That also shows how much progress we make with how little money. To put it in units I know: I work on a team that operates ~the only climate research station in Greenland, the fastest melting piece of ice on earth. The total cost of our project is ~10e-7 of the money they lost. You could build, operate, and employ ~10,000,000 scientists at 1,050,000 climate research stations with that kind of money. Let's just say our forecasts and climate projections would be pretty spot on with that sort of funding.
juujian 3y ago
Looks like they can just get away with it, so what's the incentive to change that?
karaterobot 3y ago
> Auditing the Department’s $3.8 trillion in assets and $4.0 trillion in liabilities is a massive undertaking But... that's irrelevant. The audits didn't fail, the things being audited failed the audit.
mega_villain 3y ago
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juanani 3y ago
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rglover 3y ago
Is everybody ready to warmly embrace anarchism yet (or as a start, secession) or are we going to take a few more trips around the sun? /s
willis936 3y ago
I can't believe there's never been a Splinter Cell game that breaks into the Pentagon. I feel like I'd appreciate that gameplay.
MattGrommes 3y ago
I've been reading The Declassification Engine (https://app.thestorygraph.com/books/fb013174-5d21-4ddb-ba64-bdc09cbaa339 https://app.thestorygraph.com/books/fb013174-5d21-4ddb-ba64-...), a history of secrecy in the US, and it talks a lot about the culture of avoiding accountability in the military. They refuse to allow civilian oversight of any kind if they can avoid it and have since WWII. I doubt failing an audit is causing many people to lose sleep. It's a good book, if completely infuriating, and worth reading.

> While there are still three outstanding audits not yet wrapped up, the DoD reported that the remaining 18 failed, including the Defense Advanced Research Projects Agency and National Security Agency. Here's my surprised face: - _ -

Mistletoe 3y ago

Can anyone explain to me why it is awful for a person to live in debt but it is okay for the federal government to do so? I've never understood this in the least, other than the "kick the can down the road, America superpower backed by military blah, blah, blah" very weak argument. History is full of the carnage of failed empires that had this same idea. https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN 32 trillion in debt seems insurmountable, has anything like this ever reversed course historically?

kaesar14 3y ago
I don't think it's 'awful' for a person to live in debt. The richest Americans have loads of debt. A significant part of the American Dream is to own a house which is essentially debt. Perhaps the argument is more about whether the US government is drowning in debt more akin to CC debt (bad debt) or mortgage debt (good debt) but in the abstract, leverage is a perfectly fine thing for a government to use in order to fund its development.
- logicchains 3y ago
  The American dream is to "own" a house, not to own a mortgage.
  - anon291 3y ago
    You do not own a mortgage. You have sold a mortgage.
- nxm 3y ago
  Debt is also how economies and a lot of companies grow
  - HideousKojima 3y ago
    They could also grow by saving and reinvesting surpluses/profits
    - intotheabyss 3y ago
      The entire point of debt is to bring future revenue to the present so that you don't have to wait for savings to trickle in every year.
      - HideousKojima 3y ago
        At the cost of some portion of your future revenue
        airstrike 3y ago
        and if that future revenue is N times greater than you would otherwise get without debt, then it's still better to take on debt. Would you rather have 90% of $1M or 100% of $800k?
        HideousKojima 3y ago
        >if That single word is doing all of the heavy lifting for you. "If" the housing market will never crash, then it's a surefire safe investment! Better buy tons of houses to flip on credit. There's no guarantee that your debt/investment will succeed, which is why banks try (and often enough, fail) to price in risk with things like varying interest rates, collateral, etc.
        airstrike 3y ago
        the 90% accounts for the "if". my point is there an expected value for the future revenue amount, subject to your own assumptions about the probability of each outcome and your discount rate for the value of that money over time in scenarios where your expected value discounted to present value is greater than the alternative, you make the investment. it's really finance 101... it's just NPV
digitalengineer 3y ago
Small correction: it’s awful for a poor person to live in debt. If you are quite wealthy there are lots of ways to borrow money and it’s all good!
- logicchains 3y ago
  >If you are quite wealthy there are lots of ways to borrow money and it’s all good! If you have a negative net worth (more debt than assets) you're generally not considered a wealthy person.
  - fbdab103 3y ago
    Perception is everything. For quite a while, Sam Bankman-Fried was billions in the hole, but could still secure more funds on demand.
  - thaumasiotes 3y ago
    > If you have a negative net worth (more debt than assets) you're generally not considered a wealthy person. That's only true if your debt and assets are both small. If you have $200 million in assets and $500 million in debt, you will be considered a wealthy person. You would only stop being wealthy if your stuff got taken away.
  - mikeyouse 3y ago
    There’s no meaningful sense in which the Federal Government could be considered to have a negative net worth.. they have a ‘stake’ in the collective value of the largest and most vibrant economy on earth. People’s conception of the Federal ‘balance sheet’ as limited to the dollars in bank accounts explains why they are continually surprised that $30+ trillion in debt is shrugged off by the market and every knowledgeable economist.
  - grotorea 3y ago
    How would you even calculate the asset value for a government? Normally you'd compare it to GDP which is something else.
  - 3y ago
teaearlgraycold 3y ago
So I don’t know if what the government is doing is the best long term decision. But the US’s national debt could be compared to a mortgage. And the government’s income is massive so they can be in trillions of debt without it exceeding what they can reasonably pay off (never paying it all off, but paying off individual loans). So by your analogy, is it actually bad for a normal person to be in debt? Normal people have mortgages.
- askonomm 3y ago
  Has the number ever decreased? As in, have they actually paid things off? Without actual numbers, U.S feels increasingly like a high-school bully who borrows money and then threatens with violence when that money is wanted back.
  - l33t7332273 3y ago
    I don’t think US really threatens violence when people collect on the public debt. This is quite rare historically because it makes people weary to lend you money. Payments, including interest, are regularly made and of course individual debts are paid all the time.
  - buerkle 3y ago
    The only time the US was debt free was a few years during Andrew Jackson's presidency.
  - macintux 3y ago
    We were paying it off at the end of the 90s, some projections had the debt paid off in 10 years, but then Bush 2.0's tax cuts and 9/11 wrecked everything. (I could be off in some details, but I remember my despair when Greenspan gave Congress cover for supporting the tax cuts by testifying that it wasn't necessarily a good thing to be debt-free.)
  - metabagel 3y ago
    A better question is whether the percentage of debt to GDP has ever decreased, and it has. https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S
uticus 3y ago
asking about state-level debt gets into philosophical (and I would argue even religious) territory very quickly, but to answer your questions: 'why...it is okay for the federal government...' federal govt in US is following general patterns at business and individual scale, because democratic processes lead to a reflection of decisions at smaller elements of society at bigger ones. '...ever reversed course historically?' no reversals, but plenty of upheavals, such as war, conquering, etc.
HideousKojima 3y ago
Most explanations I've seen boil down to to "The US (or any other sovereign nation with control over their own currency) can print their way out of debt, it's literally impossible for the US to default." This ignores the devastating economic effects that printing such a huge amount of currency would cause (likely comparable to the effects of simply defaulting) and ignores the fact that sovereign nations with control over their own currency have chosen to default anyway (see Russia ~20 years ago for an example).
- dragonwriter 3y ago
  > Most explanations I've seen boil down to to "The US (or any other sovereign nation with control over their own currency) can print their way out of debt, it's literally impossible for the US to default." Its impossible for the US to be forced to default. Its quite possible for the US to make a political choice to default, and it has come very close to doing so.
  - evancox100 3y ago
    Also, not only is it possible, but many countries have in fact chosen to default on debt denominated in their own currency, rather than subject their citizens to wild inflation and/or break norms around reserve bank independence. So, it could happen even if US is not forced to, I agree. For a starting point, see https://www.bankofcanada.ca/wp-content/uploads/2020/06/BoC-BoE-Sovereign-Default-Database-Local-Currency-Default-Frequency.pdf https://www.bankofcanada.ca/wp-content/uploads/2020/06/BoC-B...
    - dllthomas 3y ago
      Though for the US, it would be clearly unconstitutional.
- scatters 3y ago
  The Russian rouble was not free floating prior to the crisis. They tried to defy the iron triangle and paid for it. This is not a problem for the USA, since other currencies are denominated in terms of the dollar. The reason it would be impossible for the US to default is that the US is not significantly in debt. Most of the federal debt is held domestically, meaning by the US. You can't be in debt to yourself.
DrNosferatu 3y ago
That’s the Fallacy of Composition - the economics of a government are not the economics of a grocery store or a household: https://amp.theguardian.com/business/2013/nov/21/post-crash-economics-austerity-common-fallacies https://amp.theguardian.com/business/2013/nov/21/post-crash-...
- ahallock 3y ago
  But imagine if they were. Wars and other destructive behaviors would be a lot more difficult
- uticus 3y ago
  Sorry, but 'Fallacy of Composition' is just a theory. (Disclaimer: I happen to disagree with it.) Ultimately the way these ideas about economic theory are approached is a lot more philosophical/religious-based (for the Atheists, please read that 'strong belief-based') and a lot less math based than some would be willing to admit. Honestly the math itself is usually statistical, which in turn is a lot more difficult to comprehend and analyze properly.
  - HFguy 3y ago
    I would put aside statistics and whether we completely understand how the economy works (we don't). Just ask...are there are very fundamental differences between the finances of an individual and the government? There are. For starters, the government can simply print money and pay off debts. They can also choose, by their actions, to inflate away nominal liabilities. So then it is reasonable to consider that "being in debt" may have different ramifications for the government than for an individual.
    - uticus 3y ago
      > may have different ramifications for the government than for an individual I can only agree ramifications look different when an inappropriately narrow timespan is in focus. Thinking through history, what nations have been able to ultimately avoid ramifications from significant debt – the same sort of scenario that would in proportion cause ‘ramifications’ for individuals or businesses? I can think of several historical instances where a nation having significant debt appeared to have no ‘ramifications’ early on but were unable to avoid the inevitable (and inenviable) outcomes. I mean, even an individual may get deeply – horribly - in debt yet avoid ramifications for a time. But the bills will come due. No doubt a government is not the same thing as a business or an individual. But to dismiss government debt as playing by different rules than debt elsewhere is foolish.
deleted 3y ago
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ahallock 3y ago
You can leverage debt as an individual as well. We often shame people for bankruptcies when we shouldn't. Businesses fail all the time and go bankrupt -- running a household is similar and can fail.
- HideousKojima 3y ago
  Barring difficult to foresee circumstances like an expensive medical procedure, a debilitating injury/illness, or a devastating lawsuit, most of the circumstances that lead to a household going bankrupt are directly attributable to mismanagement.
dragonwriter 3y ago
> Can anyone explain to me why it is awful for a person to live in debt but it is okay for the federal government to do so? Not sure its awful for a person, depending on the kind of debt, but people and the government are differently situated. For one, people (natural or corporate) who have a debt in something that isn't a token that they can issue at will have an externally enforced obligation to do whatever is necess5 to acquire those tokens and sacrifice whatever is necessary to deliver them to the creditor. Currency-issuing governments with debt in their own currency have an obligation to... ultimately, if nothing else works or is desirable, just poof up some currency. Also, for certain governments, there isn't a vastly more powerful external enforcer of whatever obligation they have, whereas with most people, there is, in the form of the local government.
DougWebb 3y ago
I'm hardly an expert, but I think "government debt" and "government investment" are accounted for the same way, but only the former is a problem. If the government sells bonds/T-bills (eg acquires debt) and uses that to improve the country in a way that benefits the citizens and encourages population and economic growth, then its worth doing. If the government uses the money only to pay interest on existing debt, or to give it away to make wealthy citizens more wealthy, or other unproductive uses, then it's not so good. The attacks directly on the national debt are a political strawman, meant to distract from the real issues about where revenue comes from and how it is spent. It's like the constant debt ceiling wailing; Congress sets a budget and legislation that requires spending more than the revenue available, then sets a debt ceiling that prevents the treasure from borrowing to cover the required by law spending, then bitches and moans and grandstands over how the debt ceiling creates a crisis. It's all for show.
- TimedToasts 3y ago
  > The attacks directly on the national debt are a political strawman, meant to distract from the real issues about where revenue comes from and how it is spent. No, I assure you that those of us concerned about the national debt are actually concerned about it.
nradov 3y ago
It's not awful for a person to live in debt. Debt is a useful financial tool. Unlike a person, a government has an unlimited lifespan and debt can persist forever. This only becomes a concern when total debt exceeds some multiple of GDP. The exact limit will vary based on many factors including interest rates, economic growth rate, demographics, and tax compliance. Once that limit is breached it tends to cause a fiscal and political crisis within a few years. Either default or hyperinflation in the short term, followed by a long period of austerity.
- dragonwriter 3y ago
  > This only becomes a concern when total debt exceeds some multiple of GDP. The exact limit will vary based on many factors including interest rates, economic growth rate, demographics, and tax compliance. Once that limit is breached it tends to cause a fiscal and political crisis within a few years. This is the kind of theory that, without a concrete model of how the limit varies (or even with one, if it involves much statsitical variability) is nonfalsifiable, either because the probability of a crisis in actual concrete conditions is unknown or the range of variability is too wide to make strong conclusions given the small-n problem with real-world conditions, but at the same time becomes very easy to rationalize almost any real-world conditions as fitting.
intalentive 3y ago
Depends on the productivity of the country and whether the debt can be exported (as reserve currency) or monetized (as inflation). The USA checks all these boxes for now. Highly productive and the costs can be passed on to others. Otherwise you are correct. Zimbabwe certainly has to live within its means.
jmyeet 3y ago
People like to use the household analogy when it comes to government spending and debt. Some cynically do it to justify cutting social programs. Some (and I include you here) are genuinely confused. First, literally nobody in government cares about the debt. Of the $32T debt in our entire history, $8T comes from the 4 years of the Trump presidency. Remember that when the next fiscal hawk starts chirping about the need to cut spending. Second, debt doesn’t matter when you can print money in the currency the debt is denominated in. We borrow US dollars. We print US dollars. So if we’rea household who has to pay out build you can’t ignore it fact that we have a money printer in the next room. There have been sovereign currency devaluations in the past too, famously by FDR who changed the gold standard. I would suggest looking up videos on Modern Monetary Theory.
TacticalCoder 3y ago
> 32 trillion in debt seems insurmountable, has anything like this ever reversed course historically? Never and it is insane that there are apologists for such a sad state of affairs. https://www.usdebtclock.org/ https://www.usdebtclock.org/ This is not going to end well. That's what happen when totally clueless, incompetent and senile people are pulling the levers, following the advices of visionaries like Paul "it will become clear that the Internet's impact on the economy has been no greater than the fax machine's" Krugman. > https://fred.stlouisfed.org/series/GFDEBTN https://fred.stlouisfed.org/series/GFDEBTN What is insane on that graph is that it doubled in ten years and quadrupled in 15 years. Anyone who thinks this is reasonable is simply out of his mind.
- uticus 3y ago
  The numbers are just outside comprehension. We can comprehend a dollar, or a hundred dollars, in the hand. We may be able to imagine (or have seen) a room full of a couple tens of thousands of dollars. But to extrapolate one, to 32 trillion of the same... If a 4 GHz processor core executes an instruction every clock cycle, it would still take two hours to iterate that instruction 32 trillion times. If you lined up 32 trillion inches, it would be over 505 million miles. If a dollar bill is 0.1 millimeters thick, and you stacked 32 trillion of the bills on top of each other, the stack would be almost 2 million miles high. Etc By the way, we went past $33 trillion in September, and reached $33.5 20 days later. Only a half trillion added in 20 days.
_jal 3y ago
To start with, individuals do not print their own currencies. People always jump in immediately to say you can't inflate your way out of debt/look at Argentina/etc., but that's missing the point, I'm not saying that. The point is a sovereign currency issuer has a fundamentally different relationship to money than mere people. They can certainly still get themselves in trouble through mismanagement, no doubt, but there are a lot of levers they have that are unavailable to normal folks. Like some other major differences: not too many people have massive standing armies or hundreds of millions of tax payers, or control over a substantial fraction of global financial flows. Again, not saying eleventy-trillion in debt is not a problem, or that all's well, or anything else like that. I am saying that comparing private finance to sovereign finance is a category error, and things will make much more sense to you if you understand why.
smileysteve 3y ago
> it is awful for a person to live in debt Is an interesting premise when data is > American households carry a total of $17.29 trillion in debt as of the third quarter of 2023, and the average household debt is $103,358 as of the second quarter of 2023.
dragonwriter 3y ago
> 32 trillion in debt seems insurmountable, has anything like this ever reversed course historically? If you look at output or income relative, instead of meaningless absolute nominal terms, yes, in fact, the current US debt to to GDP ratio and debt to revenue ratios are a drop from the recent peak—a result of exactly the kind of reversal of course you are asking about.
Exoristos 3y ago
Similar reason it's a bad idea for you to be in debt to Tony Soprano, but not necessarily for him to be in debt to you.
crazygringo 3y ago
Who said it's awful for a person to live in debt? If your salary increases 3% a year every year in real terms, and it's cheap to borrow, then it's absolutely mathematically optimal to carry a level of debt that you never pay off. In fact, you'd be a sucker if you didn't. The main difference between people and government is that people like to retire, while governments can live forever. People ideally need to stop carrying debt at some point in their lives because they need to save for retirement. Governments don't need to do that. It's kind of counterintuitive, but governments don't ever need to pay off all their debt. They just need to keep the overall debt level below a certain ratio to GDP. Debt can keep growing as GDP keeps growing.

nradov 3y ago

It's important to understand the history here. Failing the audit isn't necessarily due to some sort of fraud or abuse (although there likely are isolated instances). The problem is that for decades Congress never allocated funds to put proper financial controls in place so naturally the accounting systems are a disconnected jumbled mess. When they started annual audits everyone knew they would fail so that was no surprise. The point is to make gradual improvements every year until they can eventually pass.

edgyquant 3y ago
Yeah but with that in mind it’s a good thing that new outlets roll with this “failed audit” as it puts pressure to constantly be trying to do better and this slowly helps to rule out corruption or incompetence
BiteCode_dev 3y ago
Sure, let me use that excuse with the IRS and this how it works.
- l33t7332273 3y ago
  IRS exists to give those organizations money, so they’re more of a client and you’re more of a product.
  - malux85 3y ago
    Product is a very diplomatic way of saying Lunch
  - warkdarrior 3y ago
    Not quite. The money is the product of the IRS, you and I are the raw materials from which the money is produced.
- vkou 3y ago
  You're going to make the excuse that your company's accounting mess is because you founded it before the IRS existed? Good... Luck with that.

Iwan-Zotow 3y ago

Ha ha

kgwxd 3y ago

Duh. You can't just put "classified alien technology R&D" as a clear-text line item. Just trust them, it's all going towards national, even global, security.

mike_hock 3y ago
"What, do you think we spent 10 grand on a fire extinguisher?"
- Kon-Peki 3y ago
  Large fire extinguishers are high-pressure cylinders that require high-precision valves. There are fewer than 10 manufacturers in the world that can do it - half of them are in the US and the DoD will spend what it takes to keep it that way. You wouldn't want to end up like the EU and not have a single manufacturer that can do it, or (since Brexit) not have any that are legally allowed to import them. It's a good thing they can be refurbished when used, and that the authorities look the other way when a shipment arrives from a 3rd party...
  - psunavy03 3y ago
    Now do the US shipbuilding industry . . .
walterbell 3y ago
Since 2018, there's a separate, non-public accounting ledger for national security items at 150 agencies. In theory, this should improve public ledgers. http://files.fasab.gov/pdffiles/handbook_sffas_56.pdf http://files.fasab.gov/pdffiles/handbook_sffas_56.pdf The objective of this Statement is to balance the need for financial reports to be publicly available with the need to prevent the disclosure of classified national security information or activities in publicly issued General Purpose Federal Financial Reports (GPFFRs). This Statement allows financial presentation and disclosure to accommodate user needs in a manner that does not impede national security.

warner25 3y ago

Just to provide a ground-level insider perspective: We've been doing things in the name of "audit readiness" for a decade, and I just... don't get it. It has translated to a lot of asinine things like 1. Making sure that everyone's marriage certificates and kids' birth certificates are on-file, to root out maybe the one person in 10,000 who is erroneously getting paid an extra $200 per month for certain entitlements. 2. Making sure that when we sign leave forms (i.e. requests for vacation time) we do so with a digital signature (even though they got printed out for processing and archival) using a certain image instead of a manual signature with a pen. 3. Going through an absurdly painful process to put on the books every physical piece of property we see (e.g. hand tools, step ladders, obsolete radio and telephone equipment) and then account for them on a monthly basis even if they've been useless and in storage since the 1970s. Meanwhile, I can see tens or hundreds of billions of dollars of seemingly wasted man-hours on various initiatives (including those listed above), unnecessary personnel moves / rotations, and questionable purchases of new uniforms, equipment, vehicles, software, etc.

wolverine876 3y ago
I'm not an insider, but those sound like generally hard-to-avoid issues of large organizations, public and private, profit-oriented and service-oriented. You can't manage that many people, millions in DoD, without rules, and rules can't be defined to apply well to the very wide variety of situations in reality - just like an algorithm, they'll be inflexible. These kind of gripes are, understandably, in every large organization. > 3. Going through an absurdly painful process to put on the books every physical piece of property we see (e.g. hand tools, step ladders, obsolete radio and telephone equipment) and then account for them on a monthly basis even if they've been useless and in storage since the 1970s. On the upside, that provides one of the benefits of an audit: Identifying wasted assets. I know the Army is focusing on reducing the amount of useless equipment it warehouses.
- justrealist 3y ago
  Stuff is cheap... there's been immense value in having tons of old cheap assets to throw into Ukraine. And even if it isn't dirt-cheap, there's value in maintaining industrial military production capacity. Corporations got incredibly fragile supply chains by optimizing for JIT asset delivery, let's not repeat the mistake with national defense. I don't want the US to run out of vehicles, artillery shells, and spare uniforms 2 weeks into a real war.

mtrees_io 3y ago

da fence is a broad term

MrMetlHed 3y ago

Worked with a guy ten years ago that would obsessively read these reports from the Pentagon. Here's a couple of his stories about the matter: https://www.reuters.com/investigates/pentagon/ https://www.reuters.com/investigates/pentagon/ and https://www.reuters.com/investigates/special-report/usa-marines-audit https://www.reuters.com/investigates/special-report/usa-mari... (very old and I apologize for my horrific javascript at the time.) It sounds like nothing has changed. Relevant to this crowd, maybe: "Most of the Cobol code the Pentagon uses for payroll and accounting was written in the 1960s, according to 2006 congressional testimony by Zack Gaddy, director of DFAS from May 2004 to September 2008." "Wallace, the Army assistant deputy chief of staff, says the system has "seven million lines of Cobol code that hasn't been updated" in more than a dozen years, and significant parts of the code have been "corrupted." The older it gets, the harder it is to maintain. As DFAS itself said: "As time passes, the pool of Cobol expertise dwindles.""

samus 3y ago
If it ain't broke, don't fix it, they say. But if it is already broken in significant ways, there is little point in not replacing it.
wslh 3y ago
I would love to perform static security code analysis to that code.
- tandr 3y ago
  Are there any SA tools, that would understand COBOL?
  - Jtsummers 3y ago
    https://www.sonarsource.com/knowledge/languages/cobol/ https://www.sonarsource.com/knowledge/languages/cobol/ Never used it (and hopefully never will), but yes.
- xeromal 3y ago
  Not all the RAM on earth would be enough to process that shit

b8 3y ago

Which 18 departments failed besides the two mentioned in the article?

solardev 3y ago
Sorry, that'll have to be a separate audit of this audit.

blindriver 3y ago

Why would anyone care about an audit if there are no repercussions?

eviks 3y ago
Those boxes don't check themselves
wolverine876 3y ago
Why do you say there are no reprocussions? It's a signicant issue in Congress, which writes all of the Department of Defense's checks, oversees them, investigates them, confirms their leaders, and makes laws controlling everything they do.
- Loughla 3y ago
  And what has failing audits led to in the past?
  - jsbisviewtiful 3y ago
    So far more money :P
  - wolverine876 3y ago
    To improving the auditability of the Pentagon, a new and ongoing project. https://news.ycombinator.com/item?id=38307749 https://news.ycombinator.com/item?id=38307749
  - edgyquant 3y ago
    They haven’t been doing them for very long at all and have had better results pretty much every year since they started.
- mrchucklepants 3y ago
  It should be. But its not and, likely, never will be.
- 3y ago

jmyeet 3y ago

At least the missile knows where it is.

rattlesnakedave 3y ago
au contraire, it knows where it isn't

jfoutz 3y ago

I know I'm incredibly naive, and there's no political will to actually make the system work. It seems like various sections and departments are passing audits. If you're within, say, 1% just allocate the funds. If you didn't pass the audit, fill out this form and then get the money. The form can be classified. I have no idea, but I'd imagine like payroll and taxes are pretty much perfect. Once you get a handle on who doesn't know where their money is going, you can help them figure it out, throughout the year, and be on track next year. It's huge, it's massive it's trillions of dollars, it's a completely incomprehensible system. But, like, some parts are comprehensible. Those parts are easy. The incomprehensible parts can be broken down and figured out. Is divide and conquer not a thing?

TinyRick 3y ago
There's no political will to actually make the system work because the system is working perfectly fine for those in charge.
curiousllama 3y ago
This is what they’re doing (“incremental progress” as they say). The issue is the scale of the system. With a big enough org, the ongoing deterioration occurs faster than you can actually root cause and fix the problems. You divide the orgs, they divide the pillars, they divide the groups, they divide the pods, they divide the teams… all the sudden, a 4 week root cause exercise takes a year and a half. By the time you implement the solution, you’re 3 years out of date. Whoops - administration flipped. They don’t care anymore. “What do you mean accounting - why are we behind China in AI?!”
importantbrian 3y ago
Divide and conquer actually does seem to be the strategy. Each department within the DoD does its own audit, and a few of those departments actually have passed. But most of them have failed with a few still ongoing. The bigger issue is the no political will part. If congress mandated that senior pentagon officials lose their jobs when they fail an audit they would get the process figured out really quickly. As is there's no urgency because there are no consequences for failure.
3y ago

wolverine876 3y ago

The US Department of Defense was not audited until six years ago, when it began a project to make their organization auditable. From the start, it was expected to take longer than six years: You are looking at a potential new job. A large company wants you to lead a project on their audits. Here is the situation: They are large and complex - on a different order of magnitude, possibly the largest, most complex organization in the world - with ~$4 trillion in assets (not market cap, but hard assets), and ~$900 billion annual budget, seven figures of employees, and operations spanning almost every activity, all over the world. Such an organization is naturally divided into an incredibly large and complex org chart that maybe nobody really comprehends. Among all the entities on that chart are an incredible array of financial and asset tracking systems, computerized and manual, from new back to possibly WWII. Your boss says that procurement is the most important thing to audit: An unusually large part of that $900 billion budget is the world's largest procurement budget and operation, with an endless list of vendors of every size and shape, from the world's largest companies - some whose core function is milking your organization without crossing legal redlines - to the tailor for West Point uniforms. And we were hoping you wouldn't ask, but we're afraid the budget and operation is decentralized across all/most of those entities in that org chart [edit: per commenter with actual knowledge, "the budget is somewhat centralized; it's just the execution that's decentralized".] We'll need you to stitch all that together so we can audit it. Who is providing executive support for this project? Well, very few in our organization, from the leadership down, really want it - they all see it as a distraction and source of trouble, possibly risk to their missions and careers. It was imposed on us. Also, the project will be the target of politics (including from a certain highly aggressive party in Congress), talking heads, and general public Internet attacks no matter what you do. Everyone sees you as a useful whipping post. Do you take the job?

psunavy03 3y ago
As someone with 20 years active and reserve time, the only thing I'd really tweak here is that the budget is somewhat centralized; it's just the execution that's decentralized. DOD is an Executive Branch department that operates on money programmed by Congress. Agencies choose, within limits of Title 10 US Code, how to spend that money, but the "pots" or "flavors" of money they have to spend are allocated in the Congressional budget.

thelastgallon 3y ago

Sounds like an ideal job for AI. AI, please read this COBOL code and rewrite it all in Rust. Understanding 85 COBOL Standard reserved words is orders of magnitude easier than understanding English. AI should bludgeon this task in no time. And Rust can be 180,000x faster[1], all the code will be efficient and run on a mac mini or raspberry pi. It sounds like the easiest way for AI startups to make a pitch and collect a big bounty from Pentagon. [1]https://news.ycombinator.com/item?id=37964161 https://news.ycombinator.com/item?id=37964161

RugnirViking 3y ago
I think you are hopelessly naive about the problems here. The physical , fingers-on-keys writing of the code represents 0.000001% of the effort. Simply translating the code to another language does nothing. What is needed is to understand every asset and role of multiple millions of employees. Take literally the biggest company in the world, multiply it by 40 or so in terms of assets, employees, supply chain complexity. There are so many edge cases. So, so many
psunavy03 3y ago
Do you even code?

btbuildem 3y ago

Pardon me if this is too simplistic, but wouldn't cutting back the budget begin to instil some fiscal responsibility into an organization? Conducting an audit seems like just another expenditure in a climate of obscene overabundance of resources that encourages spending more and more.

px43 3y ago
I'm pretty sure they would blame the cuts for their continued lack of action.
wedn3sday 3y ago
Any loss in revenue would immediately be blasted through the media as the destruction of jobs. Dont think of the pentagon as a fighting force, think of it as a make work (and thus make votes) organization.
dralley 3y ago
Doing so in the current world climate, with Russia actively neighboring countries and making threats against Europe, and China threatening their neighbors and actively preparing their military for a potential invasion of Taiwan, and with more shit kicking off in the Middle East, seems politically rather fraught.

dostick 3y ago

60% of 35 trillion is unaccounted for. With this kind of money they can build whole separate world under earth surface. Nothing they can't buy with that money.

queuebert 3y ago
That's 420 years of the NIH budget. They lost FOUR CENTURIES worth of groundbreaking medical research. We have really eff-ed up priorities. In other units that I'm known for, that's 550 Enrons.
- earthscienceman 3y ago
  When you measure it like that... something really tingles and puts it into perspective. That also shows how much progress we make with how little money. To put it in units I know: I work on a team that operates ~the only climate research station in Greenland, the fastest melting piece of ice on earth. The total cost of our project is ~10e-7 of the money they lost. You could build, operate, and employ ~10,000,000 scientists at 1,050,000 climate research stations with that kind of money. Let's just say our forecasts and climate projections would be pretty spot on with that sort of funding.

juujian 3y ago

Looks like they can just get away with it, so what's the incentive to change that?

karaterobot 3y ago

> Auditing the Department’s $3.8 trillion in assets and $4.0 trillion in liabilities is a massive undertaking But... that's irrelevant. The audits didn't fail, the things being audited failed the audit.

mega_villain 3y ago

[dead]

juanani 3y ago

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rglover 3y ago

Is everybody ready to warmly embrace anarchism yet (or as a start, secession) or are we going to take a few more trips around the sun? /s

willis936 3y ago

I can't believe there's never been a Splinter Cell game that breaks into the Pentagon. I feel like I'd appreciate that gameplay.

MattGrommes 3y ago

I've been reading The Declassification Engine (https://app.thestorygraph.com/books/fb013174-5d21-4ddb-ba64-bdc09cbaa339 https://app.thestorygraph.com/books/fb013174-5d21-4ddb-ba64-...), a history of secrecy in the US, and it talks a lot about the culture of avoiding accountability in the military. They refuse to allow civilian oversight of any kind if they can avoid it and have since WWII. I doubt failing an audit is causing many people to lose sleep. It's a good book, if completely infuriating, and worth reading.