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Pentagon fails audit for sixth year in a row

breakingdefense.com

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Re: Pentagon fails audit for sixth year in a row

#61

Post by mikeyouse »

logicchains wrote: post #17
digitalengineer wrote: post #7

Earlier quoted context omitted.

Small correction: it’s awful for a poor person to live in debt. If you are quite wealthy there are lots of ways to borrow money and it’s all good!

>If you are quite wealthy there are lots of ways to borrow money and it’s all good! If you have a negative net worth (more debt than assets) you're generally not considered a wealthy person.

There’s no meaningful sense in which the Federal Government could be considered to have a negative net worth.. they have a ‘stake’ in the collective value of the largest and most vibrant economy on earth. People’s conception of the Federal ‘balance sheet’ as limited to the dollars in bank accounts explains why they are continually surprised that $30+ trillion in debt is shrugged off by the market and every knowledgeable economist.

Re: Pentagon fails audit for sixth year in a row

#62

Post by mrchucklepants »

wolverine876 wrote: post #47
blindriver wrote: post #34

Why would anyone care about an audit if there are no repercussions?

Why do you say there are no reprocussions? It's a signicant issue in Congress, which writes all of the Department of Defense's checks, oversees them, investigates them, confirms their leaders, and makes laws controlling everything they do.

It should be. But its not and, likely, never will be.

Re: Pentagon fails audit for sixth year in a row

#64

Post by wolverine876 »

warner25 wrote: post #27

Just to provide a ground-level insider perspective: We've been doing things in the name of "audit readiness" for a decade, and I just... don't get it. It has translated to a lot of asinine things like 1. Making sure that everyone's marriage certificates and kids' birth certificates are on-file, to root out maybe the one person in 10,000 who is erroneously getting paid an extra $200 per month for certain entitlements.…

I'm not an insider, but those sound like generally hard-to-avoid issues of large organizations, public and private, profit-oriented and service-oriented. You can't manage that many people, millions in DoD, without rules, and rules can't be defined to apply well to the very wide variety of situations in reality - just like an algorithm, they'll be inflexible. These kind of gripes are, understandably, in every large organization.

> 3. Going through an absurdly painful process to put on the books every physical piece of property we see (e.g. hand tools, step ladders, obsolete radio and telephone equipment) and then account for them on a monthly basis even if they've been useless and in storage since the 1970s.

On the upside, that provides one of the benefits of an audit: Identifying wasted assets. I know the Army is focusing on reducing the amount of useless equipment it warehouses.

Re: Pentagon fails audit for sixth year in a row

#65

Post by nradov »

Mistletoe wrote: post #3

Can anyone explain to me why it is awful for a person to live in debt but it is okay for the federal government to do so? I've never understood this in the least, other than the "kick the can down the road, America superpower backed by military blah, blah, blah" very weak argument. History is full of the carnage of failed empires that had this same idea. https://fred.stlouisfed.org/series/GFDEBTN 32 trillion in debt…

It's not awful for a person to live in debt. Debt is a useful financial tool.

Unlike a person, a government has an unlimited lifespan and debt can persist forever. This only becomes a concern when total debt exceeds some multiple of GDP. The exact limit will vary based on many factors including interest rates, economic growth rate, demographics, and tax compliance. Once that limit is breached it tends to cause a fiscal and political crisis within a few years. Either default or hyperinflation in the short term, followed by a long period of austerity.

Re: Pentagon fails audit for sixth year in a row

#66

Post by tandr »

wslh wrote: post #41
MrMetlHed wrote: post #38

Worked with a guy ten years ago that would obsessively read these reports from the Pentagon. Here's a couple of his stories about the matter: https://www.reuters.com/investigates/pentagon/ and https://www.reuters.com/investigates/special-report/usa-mari... (very old and I apologize for my horrific javascript at the time.) It sounds like nothing has changed. Relevant to this crowd, maybe: "Most of the Cobol code the P…

I would love to perform static security code analysis to that code.

Are there any SA tools, that would understand COBOL?

Re: Pentagon fails audit for sixth year in a row

#67

Post by wolverine876 »

marricks wrote: post #37
nradov wrote: post #4

It's important to understand the history here. Failing the audit isn't necessarily due to some sort of fraud or abuse (although there likely are isolated instances). The problem is that for decades Congress never allocated funds to put proper financial controls in place so naturally the accounting systems are a disconnected jumbled mess. When they started annual audits everyone knew they would fail so that was no sur…

Eisenhower warned this would be a thing and here we are, it's a thing. The best we will ever get is the illusion of spending being under control. It's wild, but whenever a big change occurs there's always smart folks who knew what was going to happen and exactly called it out. Usually as a "ok guys be careful cause X could happen" and X inevitably does.

When did Eisenhower warn about failed audits, or something like them?

Re: Pentagon fails audit for sixth year in a row

#68

Post by intalentive »

Mistletoe wrote: post #3

Can anyone explain to me why it is awful for a person to live in debt but it is okay for the federal government to do so? I've never understood this in the least, other than the "kick the can down the road, America superpower backed by military blah, blah, blah" very weak argument. History is full of the carnage of failed empires that had this same idea. https://fred.stlouisfed.org/series/GFDEBTN 32 trillion in debt…

Depends on the productivity of the country and whether the debt can be exported (as reserve currency) or monetized (as inflation). The USA checks all these boxes for now. Highly productive and the costs can be passed on to others.

Otherwise you are correct. Zimbabwe certainly has to live within its means.

Re: Pentagon fails audit for sixth year in a row

#70

Post by intalentive »

wolverine876 wrote: post #67
marricks wrote: post #37

Earlier quoted context omitted.

Eisenhower warned this would be a thing and here we are, it's a thing. The best we will ever get is the illusion of spending being under control. It's wild, but whenever a big change occurs there's always smart folks who knew what was going to happen and exactly called it out. Usually as a "ok guys be careful cause X could happen" and X inevitably does.

When did Eisenhower warn about failed audits, or something like them?

His farewell address warned of unaccountable military bureaucracy.
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