Monday, June 26, 2023

Washington, D.C. – U.S. Senators Ron Wyden, Jeff Merkley and Senate colleagues announced today they introduced bipartisan legislation that would require the Department of Defense to pass a full, independent audit in fiscal year 2024.

Last year, the Department of Defense failed its fifth audit and was unable to account for over half of its assets, which are in excess of $3.1 trillion, or roughly 78 percent of the entire federal government.

“Taxpayers can’t keep writing blank checks – transparency from the Pentagon is long-overdue to curb wasteful defense spending,” Wyden said. “If the Department of Defense cannot conduct a clean audit, as required by law, Congress should impose tough financial consequences to hold the Pentagon accountable for mismanaging taxpayer money.”

“We can’t effectively rein in wasteful defense spending without a full and complete audit of the Pentagon,” Merkley said. “There’s bipartisan agreement, so let’s get it done to responsibly direct taxpayers dollars to programs that keep our nation safe while investing more in health care, housing, education, and living-wage jobs that give families and workers the opportunity to thrive.” 

The Department of Defense accounts for more than half of the federal government’s discretionary spending and about two-thirds of all federal contracting activity. Despite this, the Defense Department remains the only federal agency that has failed to ever pass an independent audit – a requirement under federal law for all government agencies since the early 1990s.

A recent news report found that defense contractors were routinely overcharging the Pentagon – and the American taxpayer – by nearly 40-50 percent, and sometimes as high as 4,451 percent.

The Pentagon has not shown proper urgency to address these problems. In 2021, the Government Accountability Office reported that the Defense Department had not implemented a comprehensive approach to combat department-wide fraud. Earlier this year, the Government Accountability Office reported that Defense Department accounting systems cannot generate reliable and complete information and are unable to even capture and post transactions to the correct accounts, in violation of statutory requirements.

The Audit the Pentagon Act of 2023 would require any Department of Defense component that fails to complete a clean audit opinion to return 1 percent of its budget to the Treasury for deficit reduction.

Alongside Wyden and Merkley, the legislation was introduced by U.S. Senators Bernie Sanders, I-Vt., Chuck Grassley, R-Iowa, Mike Lee, R-Utah, Elizabeth Warren, D-Mass., Mike Braun, R-Ind., Rand Paul, R-Ky., Ed Markey, D-Mass., and Tammy Baldwin, D-Wis.

The Audit the Pentagon Act of 2023 is endorsed by the American Friends Service Committee, Center for International Policy, Coalition on Human Needs, Common Defense, Demand Progress Action, Friends Committee on National Legislation, Just Foreign Policy, National Priorities Project at the Institute for Policy Studies, National Taxpayers Union, Project On Government Oversight, Public Citizen, Quincy Institute, R Street, Taxpayers for Common Sense, and Win Without War.

A fact sheet is here.

The bill text is here.

A web version of this release is here.