Two U.S. senators want to attach a financial penalty to the Pentagon’s long-running failure to pass an audit.
Sens. Bernie Sanders, I-Vt., and Chuck Grassley, R-Iowa, reintroduced legislation that would withhold 2% of the budget from any Department of Defense component that fails to earn a clean audit opinion. The money would be redirected to the Treasury for deficit reduction.
The bill arrives eight days after the U.S. House passed a $1.15 trillion defense authorization for fiscal 2027. The Pentagon has never passed a financial audit in the more than three decades since Congress first required one.
The Audit the Pentagon Act would apply to any Defense Department element that fails to earn an unqualified opinion, the technical term for a clean audit, on its financial statements.
The 2% reduction would be spread proportionally across that element’s programs, with the withheld funds going to deficit reduction.
The bill has 10 cosponsors spanning the ideological spectrum, from Republicans Mike Lee of Utah and Rand Paul of Kentucky to Democrats Elizabeth Warren of Massachusetts and Cory Booker of New Jersey.
In December, the Defense Department’s inspector general issued its eighth consecutive disclaimer of opinion, meaning auditors could not gather enough evidence to determine whether the department’s financial statements were accurate. It was the same result as the prior seven years. The audit covered $4.7 trillion in assets and identified 26 material weaknesses, serious internal control deficiencies, in the department’s financial reporting.
The inspector general’s report pointed to a deeper problem than any single year’s result. Of the 2,485 findings issued that year, 929 had no scheduled date for when the department would fix them, and 622 had been reissued seven times since the audits began in 2018. Congress has set a statutory deadline of Dec. 31, 2028, for the Pentagon to achieve a clean opinion.
The department has made some progress. The inspector general found 13.9% fewer material weaknesses and 17.7% fewer audit findings than the year before, and both the Military Retirement Fund and the Marine Corps earned clean opinions. But of the 2,485 findings issued, 1,911 were carried over from prior years.
Pentagon officials have argued the audit failures to reflect the difficulty of valuing decades-old equipment rather than wasteful spending. Acting Comptroller Jules Hurst has said the department must account for the present-day value of assets such as a nuclear missile bought in the 1970s, including every repair and modification made over 50 years.
“Year after year, the Pentagon fails an audit, and year after year, Congress hands it another blank check,” Sanders said in a statement.
Grassley framed the bill, refiled Wednesday, as holding the department “to the same audit standards as other agencies, or it faces a financial penalty.”
Sanders and Grassley have introduced versions of the bill before without passage, and this one has been referred to committee. Whether it advances or not, the Pentagon faces its congressional deadline for a clean audit in a little over two years.
