Government Bookkeeping: The Pentagon Cannot Account For $21 Trillion

Leave it to the government to break the very rules they themselves have put into place.  The Pentagon is supposed to keep an accounting record of monetary transactions, yet they can’t account for $21 trillion of spent money.

For the fiscal year of 2015 alone, the Army failed to provide adequate support for $6.5 trillion in journal voucher adjustments, according to Forbes.  That’s not exactly in line with the rules they laid out for themselves:

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” ~ Article I, Section 9, Clause 7, The US Constitution

On July 26, 2016, the Office of the Inspector General (OIG) issued a report “Army General Fund Adjustments Not Adequately Documented or Supported.”  According to the GAO’s Comptroller General, “Journal vouchers are summary-level accounting adjustments made when balances between systems cannot be reconciled. Often these journal vouchers are unsupported, meaning they lack supporting documentation to justify the adjustment or are not tied to specific accounting transactions. For an auditor, journal vouchers are a red flag for transactions not being captured, reported, or summarized correctly.”

Mark Skidmore, a professor of economics at Michigan State University began looking into the OIG report and the trillions in unaccounted for money spent by the Pentagon. Not long after Skidmore began inquiring about OIG-reported unsubstantiated adjustments, the OIG’s webpage, which documented, albeit in a highly incomplete manner, these unsupported “accounting adjustments,”  was mysteriously taken down. Fortunately, Mark copied the July 2016 report and all other relevant OIG-reports in advance and reposted them here. Mark has repeatedly tried to contact Lorin Venable, Assistant Inspector General at the Office of the Inspector General.  He has emailed, phoned, and used LinkedIn to ask Venable about OIG’s disclosure of unsubstantiated adjustments, but she has not responded.

Given that the entire Army budget in the fiscal year 2015 was $120 billion, unsupported adjustments were 54 times the level of spending authorized by Congress. And people are constantly wondering why they are forced to pay such a high tax rate and live paycheck to paycheck while the military industrial complex continues to grow.

Forbes broke down the OIG report. It indicates that just 170 transactions accounted for $2.1 trillion in year-end unsupported adjustments.  No information is given about these 170 transactions.  In addition, many thousands of transactions with unsubstantiated adjustments were, according to the report, removed by the Army.

Skidmore and Catherine Austin Fitts, former Assistant Secretary of Housing and Urban Development,  conducted a search of government websites and found similar reports dating back to 1998.  While the documents are incomplete, original government sources indicate $21 trillion in unsupported adjustments have been reported for the Department of Defense and the Department of Housing and Urban Development for the years 1998-2015.