What it means to be non-auditable

Thomson Reuters is an English company but they have the most detailed report on the accounting woes of our Department of Defense that I have seen.  It "has found that the Pentagon is largely incapable of keeping track of its vast stores of weapons, ammunition and other supplies; thus it continues to spend money on new supplies it doesn't need and on storing others long out of date. It has amassed a backlog of more than half a trillion dollars in unaudited contracts with outside vendors; how much of that money paid for actual goods and services delivered isn't known. And it repeatedly falls prey to fraud and theft that can go undiscovered for years, often eventually detected by external law enforcement agencies." Yet, we give carte blanche to DOD in how it spends our money.

Can it be managed responsibly?  Robert Gates seems to doubt it when in 2011 he said that DOD is "an amalgam of fiefdoms without centralized mechanisms to allocate resources, track expenditures, and measure results. ... My staff and I learned that it was nearly impossible to get accurate information and answers to questions such as ‘How much money did you spend' and ‘How many people do you have?' "

Reuters has grouped the blunders into five categories:
TOO MUCH STUFF

Here's a comment from Navy Vice Admiral Mark Harnitchek, the director of the Defense Logistics Agency,"We have about $14 billion of inventory for lots of reasons, and probably half of that is excess to what we need."  Yet, they keep buying; as of September 30, 2012, they had $733 million worth of supplies and equipment on order that was already stocked in excess amounts on warehouse shelves. That figure was up 21% from $609 million a year earlier. The Defense Department defines "excess inventory" as anything more than a three-year supply.

OLD AND DANGEROUS

Supply depots have runway flares from the 1940s. More than one-third of the weapons and munitions the Joint Munitions Command stores at depots is obsolete.

COSTLY REPAIRS
The report rattles off  a number of computer systems that didn't do the job, costing us billions of dollars.

CONTRACT HITS

The Defense Contract Audit Agency is charged with making sure that a contract was fulfilled and the money ended up in the right place. They have a 'small' backlog of over 20,000 contracts to audit; some go back to 1996. Did we get what we paid for? Who knows?

PLUGGING ALONG
This refers to cases where DOD's numbers don't match Treasury's. DOD makes up the numbers and calls them "reconciling amounts". This amounted to $9.22 billion in 2012.