Pentagon fails fifth audit while facilitating Ukraine arms shipments

The Pentagon racked up its fifth comprehensive audit failure as the vast bureaucracy lumbers toward a passing grade, but the exercise's utility is paying off as the US ships weapons to Ukraine, the department's chief financial officer said on Tuesday.

While the failure this year was a foregone conclusion for those watching the progress of the complex comprehensive audit, "I would prefer to see more progress, of course, but we are peeling off the layers," Mike McCord, the Pentagon's CFO, told reporters.

But one bright spot has been that shipping nearly US$18 billion (about RM81.7 billion) in weapons to Ukraine has been a "teachable moment," McCord said.

The US has "not been in a position where we've gotten only a few days of some critical ammunition left," McCord said, "but we are now supporting a partner who is" and the audit is helping to locate weapons and get accurate figures to Pentagon leadership ahead of assistance promises for Ukraine.

The legally required audit has helped sharpen the Pentagon's systems and controls and has regularly helped the Department of Defence find misplaced inventory, which saves money.

"We failed to get an 'A'," McCord said as he released the results of the audit of more than US$3.5 trillion in assets and US$3.7 trillion in liabilities.

About 1,600 auditors tested the systems and record-keeping processes on weapons systems, military personnel and property around the world with 220 site visits and 750 virtual visits.

The audit process led to 27 standalone audits that comprised the overall exercise.

Nine units were expected to receive clean opinions from the auditors, the same as last year, McCord said.

The US Department of Homeland Security took a decade to pass a comprehensive audit, and Pentagon officials have said the DoD could take just as long, making 2027 the possible date for its first clean audit.

This year's audit fees were up nearly 5% from last year to US$218 million. McCord said inflation has impacted costs at the Pentagon in several areas.