The Sanders-Grassley Audit the Pentagon Act was introduced yesterday. The legislation would require the Department of Defense (DOD) to finally pass a full, independent audit in fiscal year 2024. If enacted, the bill would require any DOD component that fails to complete a clean audit opinion to return 1 percent of its budget to the Treasury for deficit reduction.

The bill is sponsored by Sens. Bernie Sanders (I-VT) and Chuck Grassley (R-IA), along with Sens. Edward J. Markey (D-MA),  Ron Wyden (D-OR), Mike Lee (R-UT), Elizabeth Warren (D-MA), Mike Braun (R-IN), Jeff Merkley (D-OR), Rand Paul (R-KY), and Tammy Baldwin (D-WI).

TCS supports efforts to hold the DOD accountable by requiring each component to pass an independent audit in fiscal year 2024. This legislation will help ensure transparency, fiscal responsibility, and effective oversight of taxpayer dollars.

The last annual audit of the Pentagon revealed that most elements of the DOD failed to achieve a “clean opinion.” Only seven military agencies received a clean opinion; none of the military services did. The audit report identified several material weaknesses, with the Joint Strike Fighter Program being particularly noteworthy.

Simply passing an audit should not be the sole indicator of oversight, but rather ensuring appropriate spending. Last month’s report from the Government Accountability Office highlighted the DOD’s failure to combat fraud department-wide and the inadequacy of its accounting systems. It found that DOD faces significant challenges in accurately tracking and disclosing its physical assets and expenditures.

Despite investing billions of dollars annually for over three decades to modernize its business and financial systems, the DOD continues to struggle. GAO’s High Risk List has included DOD’s business systems modernization and financial management initiatives since 1995. Without proper guidance, the DOD runs the risk of allocating funds towards the development and upkeep of systems that fail to support auditable financial statements.

The lack of an independent audit for the Pentagon is deeply concerning, considering it was mandated by Congress several decades ago. The DOD’s financial practices and use of taxpayer funds, which account for over half of discretionary spending and two-thirds of federal contracting activity, need rigorous scrutiny.

The fact that the DOD has failed to pass an audit and cannot account for over half of its assets, totaling more than $3.1 trillion, is deeply troubling. Instances of fraud, waste, and financial mismanagement have been documented, including the loss of billions of dollars in wartime contracting and reconstruction projects. This raises serious concerns about the DOD’s ability to effectively manage taxpayer funds.