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War, War, War See other War, War, War Articles Title: The Pentagon's doctored ledgers conceal epic waste LETTERKENNY ARMY DEPOT, Chambersburg, Pennsylvania (Reuters) - Linda Woodford spent the last 15 years of her career inserting phony numbers in the U.S. Department of Defense's accounts. Every month until she retired in 2011, she says, the day came when the Navy would start dumping numbers on the Cleveland, Ohio, office of the Defense Finance and Accounting Service, the Pentagon's main accounting agency. Using the data they received, Woodford and her fellow DFAS accountants there set about preparing monthly reports to square the Navy's books with the U.S. Treasury's - a balancing-the-checkbook maneuver required of all the military services and other Pentagon agencies. And every month, they encountered the same problem. Numbers were missing. Numbers were clearly wrong. Numbers came with no explanation of how the money had been spent or which congressional appropriation it came from. "A lot of times there were issues of numbers being inaccurate," Woodford says. "We didn't have the detail … for a lot of it." The data flooded in just two days before deadline. As the clock ticked down, Woodford says, staff were able to resolve a lot of the false entries through hurried calls and emails to Navy personnel, but many mystery numbers remained. For those, Woodford and her colleagues were told by superiors to take "unsubstantiated change actions" - in other words, enter false numbers, commonly called "plugs," to make the Navy's totals match the Treasury's. Jeff Yokel, who spent 17 years in senior positions in DFAS's Cleveland office before retiring in 2009, says supervisors were required to approve every "plug" - thousands a month. "If the amounts didn't balance, Treasury would hit it back to you," he says. After the monthly reports were sent to the Treasury, the accountants continued to seek accurate information to correct the entries. In some instances, they succeeded. In others, they didn't, and the unresolved numbers stood on the books. STANDARD PROCEDURE At the DFAS offices that handle accounting for the Army, Navy, Air Force and other defense agencies, fudging the accounts with false entries is standard operating procedure, Reuters has found. And plugging isn't confined to DFAS (pronounced DEE-fass). Former military service officials say record-keeping at the operational level throughout the services is rife with made-up numbers to cover lost or missing information. A review of multiple reports from oversight agencies in recent years shows that the Pentagon also has systematically ignored warnings about its accounting practices. "These types of adjustments, made without supporting documentation … can mask much larger problems in the original accounting data," the Government Accountability Office, the investigative arm of Congress, said in a December 2011 report. Plugs also are symptomatic of one very large problem: the Pentagon's chronic failure to keep track of its money - how much it has, how much it pays out and how much is wasted or stolen. This is the second installment in a series in which Reuters delves into the Defense Department's inability to account for itself. The first article examined how the Pentagon's record-keeping dysfunction results in widespread pay errors that inflict financial hardship on soldiers and sap morale. This account is based on interviews with scores of current and former Defense Department officials, as well as Reuters analyses of Pentagon logistics practices, bookkeeping methods, court cases and reports by federal agencies. As the use of plugs indicates, pay errors are only a small part of the sums that annually disappear into the vast bureaucracy that manages more than half of all annual government outlays approved by Congress. The Defense Department's 2012 budget totaled $565.8 billion, more than the annual defense budgets of the 10 next largest military spenders combined, including Russia and China. How much of that money is spent as intended is impossible to determine. In its investigation, Reuters has found that the Pentagon is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; thus it continues to spend money on new supplies it doesn't need and on storing others long out of date. It has amassed a backlog of more than half a trillion dollars in unaudited contracts with outside vendors; how much of that money paid for actual goods and services delivered isn't known. And it repeatedly falls prey to fraud and theft that can go undiscovered for years, often eventually detected by external law enforcement agencies. The consequences aren't only financial; bad bookkeeping can affect the nation's defense. In one example of many, the Army lost track of $5.8 billion of supplies between 2003 and 2011 as it shuffled equipment between reserve and regular units. Affected units "may experience equipment shortages that could hinder their ability to train soldiers and respond to emergencies," the Pentagon inspector general said in a September 2012 report. Because of its persistent inability to tally its accounts, the Pentagon is the only federal agency that has not complied with a law that requires annual audits of all government departments. That means that the $8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996, the first year it was supposed to be audited, has never been accounted for. That sum exceeds the value of China's economic output last year. Congress in 2009 passed a law requiring that the Defense Department be audit-ready by 2017. Then-Defense Secretary Leon Panetta in 2011 tightened the screws when ordered that the department make a key part of its books audit-ready in 2014. Reuters has found that the Pentagon probably won't meet its deadlines. (See related article [ID:nL2N0J00PX].) The main reason is rooted in the Pentagon's continuing reliance on a tangle of thousands of disparate, obsolete, largely incompatible accounting and business-management systems. Many of these systems were built in the 1970s and use outmoded computer languages such as COBOL on old mainframes. They use antiquated file systems that make it difficult or impossible to search for data. Much of their data is corrupted and erroneous. "It's like if every electrical socket in the Pentagon had a different shape and voltage," says a former defense official who until recently led efforts to modernize defense accounting. CONTRACT HITS Over the past 10 years, the Defense Department has signed contracts for the provision of more than $3 trillion in goods and services. How much of that money is wasted in overpayments to contractors, or was never spent and never remitted to the Treasury, is a mystery. That's because of a massive backlog of "closeouts" - audits meant to ensure that a contract was fulfilled and the money ended up in the right place. The Defense Contract Management Agency handles audits of fixed-price contracts, which are relatively problem-free. It's the Defense Contract Audit Agency that handles closeouts for department-wide contracts that pay the company or individual for expenses incurred. At the end of fiscal 2011, the agency's backlog totaled 24,722 contracts worth $573.3 billion, according to DCAA figures. Some of them date as far back as 1996. The individual military services close out their own contracts, and the backlogs have piled up there, too. The Army's backlog was 450,000 contracts, the GAO said in a December 2012 report. The Navy and Air Force did not have estimates of their backlogs. "This backlog represents hundreds of billions of dollars in unsettled costs," the GAO report said. Timely closeouts also reduce the government's financial risk by avoiding interest on late payments to contractors. To trim its backlog, the DCAA last year raised to $250 million from $15 million the threshold value at which a contract is automatically audited. DCAA says that by concentrating its auditors on the biggest contracts, it will recoup the largest sums of money, and that it will conduct selective audits of smaller contracts, based on perceived risk and other factors. Still, hundreds of thousands of contracts that would eventually have been audited now won't be. "Having billions of dollars of open, unaudited contracts stretching back to the 1990s is clearly unacceptable, and places taxpayer dollars at risk of misuse and mismanagement," Senator Thomas Carper, a Delaware Democrat and chairman of the Homeland Security and Governmental Affairs Committee, said in an email response to questions. "We must make sure that the Department of Defense is actively assessing risks and making sure that contractors who fall underneath the threshold remain accountable for their work." Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: X-15 (#0)
If a private company engaged in this kind of shoddy bookkeeping they would be liable to be sued for fraud.
"“Believe nothing merely because you have been told it. Do not believe what your teacher tells you merely out of respect for the teacher. But whatsoever, after due examination and analysis, you find to be kind, conducive to the good, the benefit, the welfare of all beings - that doctrine believe and cling to, and take it as your guide.” ~ Gautama Siddhartha — The Buddha Not really. Years ago, working for a major contractor, doing both fixed price and cost-plus contracts, it was routine for us to work overtime on Saturdays on fixed-price and it would be charged off as work on cost-plus. The resident DOD watch dog HAD to know about it, such an operation in millions could not be hidden.
Americans in general are to fucking stupid and too fucking lazy and too fucking feminized to be free people. I give up on any expectation that any resistance to the vampires in D.C. will ever amount to more than an indignant minority of "men" that would prefer death to kissing Obozo's ass. "Judah was the single tribe with which Israel could not live in peace over 2,000 years ago, and which has the baleful gift of stirring up the same kind of dissension today. Yet no one ever thought of charging the Ten Tribes of Israel with "anti-Semitism." ." The Dearborn Independent / Henry Ford
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