Lifetime Citizen Portal Access — AI Briefings, Alerts & Unlimited Follows
Subcommittee hearing: DoD still short of department‑wide clean audit; Marine Corps cited as model
Loading...
Summary
At a House Oversight & Reform Subcommittee hearing, witnesses said the Department of Defense has not produced a department‑wide clean audit despite progress in some components — notably the U.S. Marine Corps — and GAO added fraud risk management to its scorecard tracking DoD audit readiness.
At a hearing of the House Committee on Oversight and Reform’s Subcommittee on Government Operations, witnesses told lawmakers the Department of Defense still cannot produce a department‑wide clean audit even as the U.S. Marine Corps reported unmodified opinions for fiscal years 2023 and 2024.
The hearing focused on why DoD has repeatedly failed consolidated financial audits, what the Marine Corps did differently to win a clean opinion, and newly added measures to track fraud risk. Subcommittee members and witnesses described persistent problems with legacy IT systems, fragmented accounting practices across components, missing contract and spare‑parts records for programs such as the Joint Strike Fighter, and long‑standing “material weaknesses” in internal controls.
Lieutenant General James Adams III, the Marine Corps’ deputy commandant for programs and resources, told the subcommittee that the Marine Corps “received an unmodified audit opinion on our fiscal year 2023 full financial statement audit and maintain that opinion for the fiscal year 2024.” Adams credited “a deliberate and long term effort,” sustained leadership and an approach that allowed the Marine Corps to extend the usual audit timeline and complete testing over two years.
Brett Mansfield, deputy inspector for government audits at the DoD Office of Inspector General, said fiscal year 2024 marked the seventh full‑scale audit that produced a disclaimer of opinion at the consolidated, agency‑wide level. Mansfield said entity‑level results were mixed: 11 reporting entities received clean opinions, one a qualified opinion and 12 received disclaimers. He told lawmakers those results produced 28 agency‑wide material weaknesses when consolidated, even as some individual components closed or downgraded weaknesses.
Aslief Khan, director of financial management and assurance at the Government Accountability Office, told the panel that GAO expanded its DoD scorecard to include fraud risk management and emphasized that the department must improve planning, milestone management and realistic resourcing if it is to meet the congressional goal of a clean audit by 2028. Khan said DoD “spends over a trillion dollars annually” and obligated about $450 billion for contracting in fiscal year 2023, and that confirmed fraud reported to DoD totaled more than $10 billion for fiscal years 2017–2024.
Witnesses and members described several recurring technical and governance barriers to auditability: thousands of legacy systems (GAO and OIG witnesses cited more than 400 systems relevant to financial management and about 2,000 interfaces), manual workarounds that replace automated controls, inconsistent policies across components, and data gaps where contractors hold government property or manage spare‑parts pools. Mansfield and Khan both highlighted the Joint Strike Fighter spare‑parts arrangements as an example where required contractor data are not consistently flowing into DoD financial records, producing material misstatements or uncertainty about the value and location of government property.
Members pressed for accountability and leadership. Ranking Member Kweisi Mfume emphasized the political stakes and repeated failures: “There have been seven straight audits that have been failed by the Department of Defense,” he said, and urged continued oversight. Several members said they plan to visit Pentagon officials to press for direct engagement on remediation and to press DoD leadership to adopt the management practices the Marine Corps used.
Committee leaders said they will continue oversight and requested additional written materials and follow‑up. The subcommittee also unveiled the new scorecard section on fraud risk management and signaled plans to press DoD on systems modernization, clearer contract requirements for contractor‑held government property, and the department’s milestone and accountability plans to support the 2028 audit goal.
Documentation and hearing record show no formal votes or binding committee action on the floor during the hearing; the session concluded after members were given five legislative days to submit additional questions for the record.
