Army audit drive exposes flaws as Pentagon nears 2028 goal

WASHINGTON, July 22 (Reuters) – As the Defense Department continues its first clean audit, new systems at the Pentagon have revealed a range of errors, from too many zeros to too few numbers and even the letter ‘O’ written instead.

After years of work, the Pentagon is on track to pass its first financial audit in 2028, the U.S. Army’s top financial official told Reuters. It’s a breakthrough for an agency that manages nearly $1 trillion a year but has never been able to fully account for its spending.

Since 2018, the Pentagon has undergone annual audits that evaluate how it tracks weapons, property and personnel across its global operations. The audit was mandated by congress in a bill passed in 1990, but departmentwide audits began in 2018 after delays and postponements.

Repeated failures exposed gaps in the department’s financial systems, making it difficult to track government funds from the time they were allocated to the time they were spent.

After failing its eighth straight audit in December, acting Pentagon chief financial officer Jules Hurst said at the time that he was “committed to resolving critical issues and obtaining an unmodified audit opinion by 2028.”

The task was daunting. For example, the Army, which along with the Navy and Air Force makes up the bulk of the U.S. military, operated more than 1,300 separate business systems in 2019; this figure has since been reduced to approximately 200. New technology that displays all Army spending at once came online in June, paving the way for many breakthroughs.

“We’re on the right track and we’re confident we’ll be part of the overall opinion for the department in ’28,” said Marc Andersen, the military’s comptroller, referring to a consolidated Pentagonwide audit in 2028.

TOO MANY TRUCKS

Natasha Anderson, the Army’s financial operations and accounting manager, said pulling data from many systems into a single system called the ‘Army Financial Frontline’ brought to light problems that masked the Army’s reported inventory of equipment and property.

In one case, a mismatch between the Army’s property tracking system, Global Combat Support System-Army, and its maintenance tracking system, Logistics Modernization Program, led to fraudulent records, he said. Personnel manually entering the serial numbers of vehicles being maintained would sometimes type the letter “O” instead of the number zero, causing the maintenance system to record what appeared to be a completely new piece of equipment rather than an existing piece of equipment.

As a result, it turned out that the Army had more trucks and other vehicles than it actually had, and this error is now being corrected Army-wide.

A second example involved the Army’s property records, which were necessary to budget for the maintenance of facilities, including the maintenance and repair of barracks, hospitals, and other facilities.

After combining property data, officials were able to double-check items like square footage and utility lines, Anderson said. This shift allowed the Army to catch numerous errors resulting from data entry errors with extra zeros that were missed because no one was cross-checking the data.

Correcting such errors is important, he said, because outdated property data can directly skew how much money a base will ultimately receive for repairs or new construction.

‘ONE GLASS’

The new digital dashboard, Army Fiscal Frontline, which Andersen describes as “a single pane of glass,” gives officials a previously unavailable real-time, transaction-level view of the service’s finances.

The Army says this allows everyone from a contingent of troops in the field to Pentagon leaders to see the same basic numbers, rather than individually tailored or conflicting versions.

Consolidation of data also allows officials to see the inventory of books that have been previously used, Anderson said.

Looking forward, Anderson said the more ambitious goal is to use machine learning to flag recurring data errors, such as the O-Zero error, before they corrupt financial records, rather than catching them after the fact.

(Reporting by Mike Stone in Washington; Editing by Chris Sanders and Deepa Babington)