Our military is capable of amazing things, virtually unsurpassed in the world. However, according to a new government study, the Department of Defense continues to struggle with nuts and bolts administrative tasks, and they have proved incapable of building a system that keeps track of how they spend our tax dollars.

As one of the largest organizations in the world, the challenges are daunting. Last year, the Department of Defense reported that its operations involved more than $1.1 trillion worth of assets, more than $1.5 trillion in liabilities, approximately $3.3 million in personnel, and disbursements of $416 billion. This includes all the major military services, numerous large defense agencies, and all the operational commands. To monitor all this, the DOD relies on 2,274 business systems to keep organized and will spend more than $19 billion to operate, maintain and modernize the systems.

Despite aeons of development and billions of dollars invested, thousands of the accounting, personnel and logistics systems at the Pentagon have longstanding financial and inventory management problems that prevent the agency from producing reliable audits. For example, more than 200 inventory-control systems at the Defense Department still are not integrated, offering little or no visibility of the Pentagon's $1.1 trillion in assets, according to a recent General Accounting Office (GAO) report.

These problems have left the department vulnerable to billions of dollars of waste, fraud and abuse in a time of record budget deficits and a growing need for increased fiscal restraint. Here are some examples of their blunders:

The Defense Department's IT mismanagement has adversely affected U.S. military units and service members, including those fighting in Iraq and Afghanistan. The lack of IT management at the Pentagon resulted in supply shortages, backlogs of material that sat in Iraq but never made it to the troops in need, and a $1.2 billion discrepancy between the amount of material shipped and the amount reported received by military units.

The supply chain's lack of visibility may also have allowed sensitive military equipment to be sold on the open market at huge losses. Auditors discovered that the Pentagon had sold new chemical and biological protective garments on the internet for $3 each. At the same time, the agency was buying the garments elsewhere for more than $200 apiece. Now the Pentagon admits that the garments should have been restricted to military use only.

As reported in the Wastebasket earlier this year, some DOD contractors have been abusing the federal tax system without any repercussions, and DOD is not collecting as much of the money owed to Uncle Sam as it could.

Our favorite is that DOD spent more than $34 million last year to fix $49 billion worth of previously recorded payments that needed to be fixed in the DOD contract payment database.

There were also challenges associated with paying our troops. Of the 481 Army National Guard soldiers from six Special Forces and Military Police units reviewed by the GAO, 450 had at least one pay problem associated with their mobilization. DOD's inability to provide accurate salary payments to soldiers risking their lives for this country verges on criminal.

The Pentagon's mismanagement of its IT infrastructure has also led to billions of taxpayer dollars being wasted on systems that have since been cancelled due to poor performance and rising costs. For example, Pentagon officials terminated two systems-modernization projects at the Defense Financing and Accounting Service (DFAS) after seven years of development work and a combined investment of more than $179 million.

Revamping DOD business systems is a major military need in the upcoming years. With the proliferation of military projects, it is necessary for the Pentagon to provide Congress with accurate and timely information on the military priority decision-making process.