Why These Government Bureaucrats Get Paid To Cook The Books

Wednesday Waste | November 27, 2013

Accountants don’t have the most exciting job, but they do have an important job. With a bureaucracy the size of the U.S. government, accountants are part of the system to ensure taxpayer dollars are spent responsibly.


Or at least they should be.


That’s why the results of a Reuters investigation into the Pentagon’s accounting practices are so baffling. According to the report, rather than making sure waste and mismanagement are identified, the Pentagon’s accountants spend most of their time covering it up.




The office of the Defense Finance and Accounting Service (DFAS), the Pentagon’s main accounting agency, is responsible for making sure the military’s spending reports match up with the U.S. Treasury’s. What happens when they don’t? Like when spending data from the military has missing or incorrect numbers?


Well, the DFAS accountants just make something up.


By inputting false numbers, called plugs, which match up with the Treasury’s expected numbers, DFAS eliminates inconsistencies. That way the Treasury won’t send back the reports with pesky accounting questions like, “How much money is the military spending and on what?”


How can the DFAS do this without getting caught?


They don’t need to avoid getting caught. It’s apparently standard operating procedure to use plugs. They even need to be approved by supervisors. “Former military service officials say record-keeping at the operational level throughout the services is rife with made-up numbers to cover lost or missing information.” Mismanagement in the Pentagon’s bookkeeping extends beyond funding, into much needed supplies, which can end up lost and unaccounted for.


America has a pretty substantial defense budget…just how much money are we talking about?


Because of its persistent inability to tally its accounts, the Pentagon is the only federal agency that has not complied with a law that requires annual audits of all government departments. That means that the $8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996, the first year it was supposed to be audited, has never been accounted for. That sum exceeds the value of China’s economic output last year.


This type of mismanagement is all the more frustrating, considering how quickly the Pentagon is willing to cut pay and benefits of employees when its budget is called into question. As we have said before, it’s time for the Pentagon to start dealing with the real problem: wasteful spending.


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