Waste abounds at the Pentagon

The following opinion editorial by UNL Associate Professor of Accountancy (and NFP State Board member) Linda Ruchala was published in the Friday, February 18, 2011 Omaha World-Herald as a “Midlands Voices” contribution and is reprinted with permission. 

On the day before the terrorists attacked on Sept. 11, 2001, Secretary of Defense Donald Rumsfeld admitted that the money wasted by the U.S. military posed a serious threat to our security. He noted that some $2.3 trillion in transactions could not be traced — an amount larger than the current annual deficit.

That news quickly became lost in the events that occurred one day later. However, to at least one group, it was neither news nor forgotten in the run-up to the wars in Iraq and Afghanistan. 

The Government Accountability Office, often called the U.S. government’s accountants or the watchdog of the federal government, has reported “significant weaknesses in the department’s ability to provide timely, reliable, consistent and accurate information for management analysis, decision-making and reporting.”

Each year, for more than 20 years, the GAO has attempted audits of the Department of Defense, and each year the GAO has been unable to issue an opinion on the financial statements because of the problems with the Department of Defense’s financial reporting.

The GAO wrote that the main obstacles were serious financial management problems at the Department of Defense that made its financial statements unauditable. I don’t think Americans would accept that level of financial misfeasance from any other federal agency, and we should not accept that from the military.

That last GAO statement was from the audit of the 2010 U.S. government’s consolidated financial statements. We cannot continue to throw money at a system as incompetently managed as our military.

The annual budget for the government’s military-related activities exceeds $1 trillion. The waste, fraud and mismanagement harm our ability to serve the very soldiers we should be supporting.

As any executive knows, a well-run company requires strong financial information, reporting and analysis. It is hard to imagine that military operations are not significantly impaired by this long-term financial mismanagement.

And now, the magnitude of such mismanagement is so significant that it is hurting not just our military operations but also the basic fiscal soundness of the nation.

U.S. expenditures on the military are more than the combined total of the next 15 largest military budgets in the world. Military spending grew on average by 9 percent annually during the 2000-09 period. Proportionally, discretionary Defense Department spending equaled more than one-half of all federal discretionary spending in fiscal year 2010.

Fifty years ago, President Dwight Eisenhower spoke of the “conjunction of an immense military establishment and a large arms industry [which] is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every statehouse, every office of the federal government.”

He went on to warn that the “potential for the disastrous rise of misplaced power exists and will persist.”

Of course, the rise of misplaced power, he knew, included the acquiescence of the legislative branch in light of political contributions, military-related investments and earmarks for congressional districts.

Just as there is no company that is “too big to fail,” there is no unit of government that should consider itself so untouchable as to mismanage its financial reporting for more than 20 years without being held accountable to citizens.

Sizable reductions in the military budget would accomplish several goals: (1) Begin putting our nation on a more sustainable fiscal footing, (2) begin balancing the domestic and militaristic policies within our country and, finally,(3) send a message to the military that accountability in financial management also applies to its operations.

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February 21st 2011

Mark Welsch - To make a difference, write a short note and send it to your 3 members in Congress, asking them to cut the military budget and require the military to account for every dime they spend. How to contact them is at http://nebraskansforpeace.org/contact-elected-officials