Dr. Steven Greer: Shocking Report on the Audit of US Military Funds

Dr. Steven Greer:


The United States Army disrupted its accounts for billions of dollars, the
Auditor finds
Scot J. Paltrow

NEW YORK (Reuters) - US Army finances are so confused that it has made billions of dollars of improper accounting adjustments to create the illusion that its books are balanced.

The Inspector General of the Department of Defense, in a June report, said the Army made $ 2.8 trillion in illiquid adjustments to bookkeeping in a quarter only in 2015 and $ 6.5 trillion for the year. However, the Army lacked receipts and invoices to support those numbers or simply invented them.

As a result, the Army's financial statements for 2015 were "materially wrong," the report concluded. "Forced" adjustments made declarations useless because "Department of Defense and Army administrators could not rely on data from their accounting systems when making management and resource decisions.

The disclosure of Army number manipulation is the latest example of serious accounting problems affecting the Department of Defense for decades. The report says a Reuters 2013 series reveals how the Department of Defense falsified large-scale accounting as it struggled to close its books. As a result, there has been no way to know how the Department of Defense - far and far the largest piece of Congress's annual budget - spends the public money.

The new report focused on the Army General Fund, the largest of its two major accounts, with assets of $ 282.6 billion in 2015. The Army lost or failed to maintain the necessary data, and much of the data it had was inaccurate , Said the IG. "Where's the money? No one knows," said Franklin Spinney, a retired military analyst at the Pentagon and a Defense Department planning critic. The importance of the accounting problem goes beyond the mere concern of balancing the books, Spinney said. Both presidential candidates have called for an increase in defense spending amid the current global tension.

Accurate accounting could reveal deeper problems in how the Department of Defense spends its money. Its 2016 budget is $ 573 billion, more than half of the annual budget allocated by Congress.

Errors in the Army account are likely to have consequences for the entire Department of Defense. Congress set a deadline of September 30, 2017 for the department to be prepared to undergo an audit. The Army's accounting problems raise doubts about whether it can meet the deadline - a black mark for Defense, as each other federal agency undergoes an annual audit.

For years, the Inspector General - the official auditor of the Department of Defense - has inserted an exemption from liability in all military annual reports. Accounting is so unreliable that "basic financial statements may have undetected distortions that are both material and omnipresent."

In a statement sent by e-mail, a spokesman said the Army "remains committed to affirming the preparation for the audit" by the deadline and is taking steps to eradicate the problems. The spokesman downplayed the importance of improper changes, which net said to $ 62.4 billion. "Although there are a large number of adjustments, we believe that the information in the financial statements is more accurate than implied in this report," he said.

"THE GREAT PLUG"

Jack Armstrong, a former General Inspector of Defense official in charge of the Army's General Fund audit, said the same type of unjustified changes in the Army's financial statements were already being made when he retired in 2010. The Army issues two types of Reports: And one financial. The budget was completed first. Armstrong said he believes the fraudulent numbers were inserted into the financial report to match the numbers.

"They do not know what the hell things should be," Armstrong said. Some Financial Services and Defense Accounting (DFAS) employees, who handle a wide range of Department of Defense accounting services, sardonically referred to the preparation of the Army's year-end statements as "the big plug" , Armstrong said. "Plug" is the accounting jargon for inserting ready-made numbers. At first glance, adjustments per billion may seem impossible. The amounts drain the entire budget of the Department of Defense. However, making changes to an account also requires making changes at various levels of subaccounts. That created a domino effect where, essentially, fakes continued to fall on the line. In many cases, this chain of daisies was repeated several times for the same accounting element.

The GI report also blamed DFAS, saying it also made unwarranted changes to the numbers. For example, two DFAS computer systems showed different values ​​of supplies for missiles and ammunition, the report pointed out - but instead of resolving the disparity, DFAS personnel inserted a false "correction" to match the numbers.

DFAS was also unable to make successful financial statements for the fiscal year because more than 16,000 financial data files had disappeared from its computer system. The defective GI and the inability of the employees to detect the fault were missing, the GI said. DFAS is studying the report "and has no comments at this time," a spokesman said.

Edited by Ronnie Greene.

Here is the link to the Reuters article:
Https: //www.reuters.