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The Pentagon remains the only government agency that has yet to pass an audit. For years the department avoided starting the process, claiming its various systems made an audit effectively impossible to perform — much to the aggravation of Congress . But in 2017, the DoD began the process , which is broken down into 24 individual audits of various departmental offices. The audit cost $203 million in fees, with about $1 billion in remediation costs to fix identified problems. The effort covers roughly $2.7 trillion in department assets, including roughly 26.5 million acres of land. For the third straight year, auditors found no evidence of fraud, and have closed 16.3 percent of the issues identified in the previous year’s efforts. While none of the military services have cleared an audit, Harker believes the Marine Corps made a “ton” of progress, saying the service made a serious push for a clean audit this year but fell short, in part due to delays caused by the COVID-19 pandemic. But the effort will benefit them as the Corps tries against next year, he said. “That enabled them to clear a material weakness, and also increased the accuracy of a lot of their property, plant and equipment balances, and their inventory and operating materials and supplies,” Harker said. “They cleaned up military payroll, so that when the auditors tested military payroll and with our own internal testing, they got 100 percent accuracy, which is the first time any of our services have done that.” Among other positive changes identified by the Inspector General’s office: • “The Army was able to provide supporting documentation for differences in cash, as reported between the Army and the Department of the Treasury, which allowed the auditors to test Fund Balance with Treasury for the first time since the audits began in FY 2018.” • “The Air Force made progress in reconciling military equipment transactions to the financial statements, which enabled the auditors to expand testing and analysis over the balance.” • “The Marine Corps was able to provide supporting documentation that allowed auditors to test military pay, civilian pay, and recoveries throughout the year. Auditors tested more samples and these samples passed at a higher rate than in FY 2019.” The IG’s office intends to issue a report in January that will lay out, specifically in layperson terms, what work has been accomplished and what more needs to be done. “Despite challenges presented by the COVID-19 pandemic, the Department of Defense demonstrated improvement in its financial management processes in FY 2020," said Sean O’Donnell, the acting DoD Inspector General , in a statement. "The Department still has significant challenges to overcome before achieving a clean opinion. The DoD Office of Inspector General remains committed to fully and fairly auditing the financial statements, identifying deficiencies, and providing clear information to the DoD on what is necessary to fix these like this deficiencies.” A unique wrinkle for this year’s audit came in the form of COVID-19, which shut down a number of planned trips for auditors to bases around the world. “As the audit unfolds, the auditors pull items to test as part of their audit. When they do tests of property, one of the challenges we faced this year during COVID was the travel ban,” Harker explained.

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