(Revised June 2, 2014)
As patriots of many perspectives, we endorse the following principles while agreeing to disagree on many details:
Current law is strong, clear and fair.
No new law is needed to require a Pentagon audit. The Chief Financial Officers Act of 1990 and related laws apply government-wide to all federal agencies. The law’s audit deadlines were 20 years ago. The U.S. Constitution requires all agencies of the Federal Government, including DOD, to publish “a regular statement and account of the receipts and expenditures of all public money” (Section 9 of article 1).
Final notice: Impose the law on taxpayers and Pentagon alike.
By law, every American taxpayer must be able to pass an audit on the money they pay into the government. By law, the Pentagon must pass audits on how it spends taxpayer money. Tens of thousands of taxpayers and businesses face IRS audits each year. Meanwhile, leaders in Washington, DC have for two decades tolerated the idea that defense dollars need not be counted properly until some constantly receding year in the future. It’s time to end business as usual in Washington, DC and serve final notice to the Pentagon.
Require spending penalties for failure to pass an audit.
There should be immediate financial consequences for any part of the Pentagon cannot pass the routine annual financial audit required by the Chief Financial Officers Act of 1990. The Secretary of Defense should have some flexibility in imposing such spending penalties.
Judge each part of the Pentagon on its own merits.
Consequences should be imposed on each military service and defense agency separately, based on each component’s audit record. Some are making good progress while others lag.
Reform DOD contract audits.
To pass an IRS audit, taxpayers must document their transactions. By the same principle, agency-wide financial audits must be based on real audits of DOD contracts and transactions. Too many contracts are never audited. Too many audits are pro forma. Too many transactions have no solid justification or documentation. Top-down agency financial audits will only be real when bottom-up contract audits are real.
Use better accounting to get better management.
Audit-ready accounting systems are an essential tool for better management. By knowing what it owns, DOD can avoid unnecessary purchases. By knowing who authorized transactions, DOD can prevent waste and abuse. Similarly, by improving transparency of transactions and audit reports, DOD improves accountability and changes organizational culture.
Agree on principles. Disagree on details.
Endorsers of these AuditthePentagon.org Principles agree to disagree on details such as: the size of the DOD budget or any additional cuts; how much to spend on specific defense or domestic programs; which if any wars the US should wage; where any savings should go; whether or how to reduce the federal budget deficit; how to fix the economy; etc.
FINE PRINT PRINCIPLES
Goal is national security
The purpose of restricting the budget pending an audit is neither to please accountants nor punish the Pentagon. The goal is to strengthen American national security by ensuring: (1) Military plans are accountable to financial reality; (2) Waste and fraud don’t bleed DOD’s strength; (3) Efficiency in defense preserves U.S. economic might; (4) Citizens and taxpayers of the democracy bear their burden of taxes with confidence that they get the defense they pay for.
Wars are no excuse
DOD’s accounting problem predated the current wars. The solution cannot wait for the last U.S. soldier to leave Afghanistan.
Reforming DOD accounting helps the troops.
Cleaning up DOD accounting will reduce military pay errors, which are widespread and difficult to correct. It will also help ensure that DOD can devote money to protect individual service members in harm’s way and care for them after.
Both Republicans and Democrats are responsible
Politicians and partisans should debate this issue with some humility. For decades, all Presidents — and both Republicans and Democrats in Congress — have too often tolerated business as usual in DOD accounting.
Details of some programs must be secret
For classified defense programs, accounting details will remain secret. Ensure accountability using proven practices, including auditors with security clearances. DOD should avoid excessive, unneeded secrecy about spending because accountability and transparency help persuade taxpayers to pay their share and bear their burden.
Set priorities and remove excuses for delay
An independent commission found that some DOD asset valuation tasks were unnecessarily complex or inherently arbitrary. Simplify these, without compromising essential controls or generally accepted government auditing standards. Focus the audit on controlling and accounting for recent and future activity and assets, rather than trying to reconstruct ancient history in a way that invites further delay.
This website contains information, arguments and links to appeal to various perspectives. Endorsers agree only on these Coalition Principles and agree to disagree on many details. No endorser agrees with everything on this site.