The next time you hear some deficit/debt hawk economist whine and complain about how Social Security and Medicare are too expensive and ruining the economy (for which there is absolutely no evidence at all) and the only solution is to push old and sick people out on an ice flow to die if they can’t make it on a diet of cat food (rather than sensible policies like eliminating the Social Security Cap or Single Payer) you might gently remind them that our bloated, inefficient, and ineffective Military is the single largest portion of our budget.
How bad is it? This bad-
U.S. Army fudged its accounts by trillions of dollars, auditor finds
By Scot J. Paltrow, Reuters
Fri Aug 19, 2016 11:08am EDT
The United States Army’s finances are so jumbled it had to make trillions of dollars of improper accounting adjustments to create an illusion that its books are balanced.
The Defense Department’s Inspector General, in a June report, said the Army made $2.8 trillion in wrongful adjustments to accounting entries in one quarter alone in 2015, and $6.5 trillion for the year. Yet the Army lacked receipts and invoices to support those numbers or simply made them up.
As a result, the Army’s financial statements for 2015 were “materially misstated,” the report concluded. The “forced” adjustments rendered the statements useless because “DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.”
The report affirms a 2013 Reuters series revealing how the Defense Department falsified accounting on a large scale as it scrambled to close its books. As a result, there has been no way to know how the Defense Department – far and away the biggest chunk of Congress’ annual budget – spends the public’s money.
“Where is the money going? Nobody knows,” said Franklin Spinney, a retired military analyst for the Pentagon and critic of Defense Department planning.
The significance of the accounting problem goes beyond mere concern for balancing books, Spinney said. Both presidential candidates have called for increasing defense spending amid current global tension.
An accurate accounting could reveal deeper problems in how the Defense Department spends its money. Its 2016 budget is $573 billion, more than half of the annual budget appropriated by Congress.
Some employees of the Defense Finance and Accounting Services (DFAS), which handles a wide range of Defense Department accounting services, referred sardonically to preparation of the Army’s year-end statements as “the grand plug,” Armstrong said. “Plug” is accounting jargon for inserting made-up numbers.
At first glance adjustments totaling trillions may seem impossible. The amounts dwarf the Defense Department’s entire budget. Making changes to one account also require making changes to multiple levels of sub-accounts, however. That created a domino effect where, essentially, falsifications kept falling down the line. In many instances this daisy-chain was repeated multiple times for the same accounting item.
Every other government Department must pass an annual audit. DoD is Congressionally mandated to comply by the beginning of October 2017, a deadline many think is impossible to achieve.