A new bill introduced in the Senate would create “new incentives and enforcement mechanisms to force the Pentagon the pass an audit,” according to Sen. Tom Coburn (R-OK), the bill’s principal sponsor. The “Audit the Pentagon Act” (S.3487) will, according to Coburn, “help the pentagon to help itself.”
Coburn, along with co-sponsors Sen. Kelly Ayotte (R-NH), Sen. Chuck Grassley (R-IA), Sen. Rand Paul (R-KY), Sen. Ron Johnson (R-WI), Sen. John Cornyn (R-TX), Sen. Scott Brown (R-MA), and Sen. Claire McCaskill (D-MO) have all been critical of what they see as DoD’s inability to achieve a clean audit.
Secretary of Defense Leon Panetta has directed the department to achieve full audit readiness by 2017. Testifying before Sen. McCaskill’s Senate Armed Services Subcommittee on Readiness and Management Support in April Robert Hale, DoD’s Comptroller and Chief Financial Officer, said DoD is on the right track to improve financial operations. Under Secretary Panetta’s leadership, Hale told the Subcommittee, “auditability is now a goal that every commander, every manager, and every functional specialist must understand and embrace.”
Nevertheless, the bill’s sponsors believe that DoD needs additional enforcement mechanisms and incentives to achieve its auditability goals.
The bill would create new incentives to encourage DoD and the Military Departments to achieve its auditability goals. If a Military Department achieves an audit with an unqualified opinion after FY2013, the thresholds for reprogramming actions not requiring prior approval would automatically increase by: $60 million for a procurement program; $30 million for a R&D program; $45 million for an O&M budget activity; and $30 million for a Military Personnel budget activity.
If a Military Department achieved an audit with an unqualified opinion the bill would relieve it of having to submit semi-annual report on the status of the implementation by the Department of Defense of the Financial Improvement and Audit Readiness Plan and the annual report on the reliability of the Department of Defense financial statements