The Pentagon Doesn’t Know What it Spent 8.5 Trillion Dollars on

June 11, 2015 5:15 am 4 comments Views:

When government is completely dysfunctional and seems not to serve the people’s interests, we have to wonder where our tax dollars are going. Thanks to a Reuters investigation by Scot Paltrow, we have an answer—or, rather, a non-answer. Apparently, the Pentagon has made use of $8.5 trillion of our tax money handed over by Congress since 1996—but don’t ask what was done with the money. The Department of Defense doesn’t have a clue.

Audits of all federal agencies were mandated by law beginning in 1996, but the Pentagon is unique in neverhaving complied. In almost 20 years, the Pentagon has never accounted for trillions it spent, in part because “plugging”—fudging the numbers—is standard operating procedure.

According to the investigation, employees of the Defense Finance and Accounting Service, the Pentagon’s primary accounting agency, were routinely told by superiors to take “unsubstantiated change actions.” These plugs—which amounted to falsifying the books—were used to bring the military’s figures in line with the Treasury’s when discrepancies couldn’t be traced and accounted for. According to DFAS employee, Linda Woodford,“A lot of times there were issues of numbers being inaccurate. We didn’t have the detail . . . for a lot of it.” This so-called plugging isn’t unique to DFAS—when it comes to resolving lost or missing information, it’s just business as usual in every branch of the service.

When it was announced that the military’s budget would be cut by $52 billion in 2014, Secretary of Defense Chuck Hagel had a fit, telling a defense conference: “[The cuts are] too deep, too steep, and too abrupt. This is an irresponsible way to govern and it forces the department into a very bad set of choices.” This is quite befuddling to the rest of us, as the $581 billionbudget that year was more than the total of the next 10 biggest spenders combined—including Russia, China, and even Saudi Arabia (whose military budget made up 10.7% of their total GDP).  In fact, the US budget was a fullone-third of the entire amount spent on defense worldwide. If the DoD is this concerned about losing money to budget cuts, perhaps it should consider tackling its own systemic irresponsibility and discern what, precisely, $8.5 trillion in taxpayer funds has already paid for.

Many of the problems occurred in simple bookkeeping errors rather than actual financial losses. This was the case of one Columbus, Ohio DFAS office whose duplicate entries across multiple ledgers led to errors in financial reports for the Air Force in 2009, totaling $1.59 trillion—trillion—including $538 billion for plugs, which amounts to roughly 8 times what was allotted for the entire Air Force budget that year.

But the errors and manipulated numbers, though obviously problems in their own right, simply compound the issue for a Defense Department that seemingly has no control over its excessive spending habits.

The Defense Logistics Agency is responsible for supplying just about everything imaginable for the DoD. As Paltrow puts it, “everything from airplane parts to zippers for uniforms.” Speaking in a meeting with aviation industry executives in 2013, DLA director and Navy Vice Admiral Mark Harnitchek explained, “We have about $14 billion in inventory for lots of reasons, and probably half of that is excess to what we need.” But it keeps buying more—often adding to inventory of which there is already a surplus.

In one example, the DLA had stockpiled 15,000 Humvee front suspensions as of 2008, which is the equivalent of a 14 year supply. Yet somehow between 2010-2012, defying both logic and prudence entirely, the agency purchased 7,437 more of those same parts—at significantly higher cost than those already gathering dust on warehouse shelves—at a time when demand had been cut in half.

As of September 2012, the DLA and military had already ordered $733 million in duplicates of existing supernumerary supplies, which was a 21% increase from the $609 million it spent on the same asinine duplication the previous year. All this stuff makes a comprehensive inventory impossible, and a worker in the DLA’s largest warehouse explained there is no system for verifying  that items are stored correctly or even to track or estimate how much is lost to employee theft.

These examples only touch on the enormity of the Pentagon’s mystical record-keeping, poor decision-making, and insanely wasteful spending problems. Taken in another context, they represent an acute criticism of priorities.

As of 2013, there were 45.3 million people, including 14.7 million children, living in poverty in the US—14.5% of the population, which is the largest number in the 52 years such statistics have been kept. But instead of focusing sharp criticism on the causes for such an outrageous number, politicians target “wasteful” spending by food stamp recipients by passing into law prohibitions for purchasing items like steak. But if members of Congress find a steak wasteful, what about 22,437 superfluous Humvee front ends?

Hey, government: you’re doing it wrong.

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  • gchakko

    Congragulations Reuters for this enlightening shock!

    I have been a great admirer of U.S. open free democracy. As much as in past many decades, when it came to U.S. dealings with the external world, esp. foreign policy in practice, particularly with non-Western cultures, the U.S. behaviour was very often anti-democratic, supporting dictators and dictatorships. This report from America’s internal four walls gets me cold face. Have systemic indiscipline and inefficiency
    become America’s norms? Nothing could be more outlandish than world’s most powerful and richest democracy, not knowing where $8.5 trillion were spent since 1996!

    “World-endeared” Uncle Sam cannot truly account for $425 billion annual defence spending for a 20 yr. time – (1996-2016). Gee! Only last year the U.S. Senate approved (64:36 votes) a 2-yr total defence spending of $1.012 trill. for 2014-15 and $1.014 trill. for 2015-16) with a Pentagon annual base budget $530 bill. approx. This is already more than the cumulative sum on defence spending by the rest of the world, at least of the leading military powers – EU, Russia, India, China, Japan and Latino nations. How could any democratic parliament approve of such spending and now the reported unaccountability to top it all, when over 14.6 percent of its population (over 45 millions) reel under poverty? Predominantly Christian America, where is your Good Samaritan conscience?!

    If this is the prime example world’s most free open democracy and world’s largest economy sets, what inspiration and leadership quality it is for the United States to deliver democracy sermons to rest of the Globe? America is seemingly the world’s most hypocritical democracy ever. Any other democratic nation in the world can justifiably ask America to shut up now, if the U.S. were to preach fiscal discipline and point to corruption outside U.S. borders. Not that mistake or sin of one justifies or
    exonerates sin of the accused, but the blind U.S. arrogance and “couldn’t care
    less” belligerence in evangelism has hit the roof soundly for some time now. Is it not high time for the U.S. to clean up its backyard garbage before ever wanting to regain lost world leadership?

    George Chakko, former U.N. correspondent, now retiree in Vienna, Austria
    Vienna, 12/06/2015 15:14 hrs

  • James Honeyball

    What about all the underground cities for nuclear war survival by the unknown elite corps?? HAARP experiments, weapon handouts to their Islam buddies,
    funding of illegal immigration etc…??

    • KSW

      Please refrain from calling Terrorist “Islamic” And “Islam Buddies”

  • QV3

    Didn’t Donald Rumsfeld admit to $2.3 trillion missing on Sept. 10, 2001?
    One day before 9/11?