Kirsters Baish| It hasn’t even been two weeks since the Department of Defense made the announcement that they would finally be subjecting themselves to their first audit in history. Now, a report has come out which explains very well why the Pentagon needs a detailed analysis of where they have been spending trillions of dollars. Taxpayers’ dollars are disappearing… or at least it seems that way. $21 trillion can’t be accounted for by two government agencies, one of which is the Department of Defense.
Together, the Department of Defense and Housing and Urban Development have “misplaced” $21 trillion in taxpayer money, and it only took 17 years to “lose” this gargantuan amount of cash. Between 1998, the year legislation passed the mandate of annual audits of every government agency and 2015, the money somehow disappeared.
Professor of Economics at Michigan State University, Mark Skidmore, specializes in public finance. He authored the study which he thought up after hearing former Assistant Secretary of Housing and Urban Development Catherine Austin Fitts make a remark about a report from the Office of the Inspector General. This report revealed that at least $6.5 trillion of taxpayer money was unaccounted for (AKA spent by the Department of Defense.)
Skidmore was taken aback.
He spoke about what usually happens when funds cannot be accounted for during an interview in December, saying “Sometimes you have an adjustment just because you don’t have adequate transactions, so an auditor would just recede. Usually it’s just a small portion of authorized spending, maybe one percent at most. So for the Army one percent would be $1.2 billion of transactions that you just can’t account for.”
The “misplaced” money didn’t total billions. Skidmore confirmed that the large sum of money was much higher. He published in his OIG report, “Army General Fund Adjustments Not Adequately Documented or Supported,” on July 26, 2016. Then, on December 8, which was just a day after the Pentagon’s audit announcement, Skidmore and Boston University Economics Professor Laurence Kotlikoff wrote a column together for Forbes. The column explained their research.
“The report indicates that for fiscal year 2015, the Army failed to provide adequate support for $6.5 trillion in journal voucher adjustments. 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.’”
“Given that the entire Army budget in fiscal year 2015 was $120 billion, unsupported adjustments were 54 times the level of spending authorized by Congress. The July 2016 report indicates that unsupported adjustments are the result of the Defense Department’s ‘failure to correct system deficiencies.’ The result, according to the report, is that data used to prepare the year-end financial statements were unreliable and lacked an adequate audit trail. The report 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. There is no explanation concerning why they were removed nor their magnitude. The July 2016 report states, ‘In addition, DFAS (Defense Finance and Accounting Service) Indianapolis personnel did not document or support why DDRS (The Defense Department Reporting System) removed at least 16,513 of 1.3 million feeder file records during the Third Quarter.’”
The column reaffirmed that the figures led Skidmore to join Fitts to collaborate with graduate students in order to examine thousands of additional Inspector General reports from 1998 to 2015.
Skidmore stated, “This is incomplete, but we have found $21 trillion in adjustments over that period. The biggest chunk is for the Army. We were able to find 13 of the 17 years and we found about $11.5 trillion just for the Army.”
Original numbers were alarming, but Skidmore wouldn’t propound on the nature of the unaccounted for funds.
Skidmore was interviewed by USAWatchdog, during which he explained, “[A]fter Mark 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. 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 Ms. Venable about OIG’s disclosure of unsubstantiated adjustments, but she has not responded.”
Where did the $21 trillion go? The Department of Defense and Housing and Urban Development have some serious explaining to do to the American people. We pay taxes to improve our country, so when money of that amount goes missing, someone owes us an explanation.