Military Spending

How much money are we talking about?  About $200 billion annually spent on weapons, broadly defined

According to the Congressional Budget Office’s “Long-Term Implications of the 2011 Future Years Defense Program”:

“Acquisition primarily covers the development and purchases of weapon systems and other major equipment
and modifications to upgrade the capabilities or extend the service life of weapon systems. For 2011, the Administration requested $189 billion for acquisition, 34 percent of its total request for the Department of Defense
(excluding funding for overseas contingency operations).” (page 33 in your browser, 19 in the document)

http://www.cbo.gov/ftpdocs/120xx/doc12021/02-11-FYDP.pdf

You can also download this document:  CBO_Long-Term-Implications-Of-FYDP.

White House budget proposal for FY2012 breaks down spending on acquisition, RDT&E

Function 050 of the following chart is “national defense”.

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/32_1.pdf
You can also download the White House FY 2012 budget request. It’s 89 pages long and all numbers.

Secretary of Defense Rumsfeld said on September 10, 2001 that DOD couldn’t track $2.3 trillion in transactions

In a mostly forgotten moment of candor before the September 11 attacks, Secretary Rumsfeld said at a Pentagon press conference, “According to some estimates, we cannot track $2.3 trillion in transactions.”  He went on to say, “the taxpayers deserve better. Every dollar we spend was entrusted to us by a taxpayer who earned it by creating something of value with sweat and skill — a cashier in Chicago, a waitress in San Francisco. An average American family works an entire year to generate $6,000 in income taxes. Here we spill many times that amount every hour by duplication and by inattention.”

The next day terrorists attacked the World Trade Center in New York and the Pentagon.  Rumsfeld’s remarks about the need to bring Pentagon spending under control were all but forgotten.

http://www.defense.gov/Speeches/Speech.aspx?SpeechID=430

You can download Secretary Rumsfeld September 10, 2001 speech at Pentagon

Secretary of Defense Donald Rumsfeld says Pentagon “we can’t account for some $2.6 trillion in transactions that exist” (July 16, 2001).

You can find Rumsfeld’s Testimony before the House Appropriations Committee: Fiscal Year 2002 Defense Budget Request, Washington, DC, Monday, July 16, 2001

at the following site:  http://www.defense.gov/speeches/speech.aspx?speechid=408

Search for the term “snarled” and your browser will bring you right to it.

And yet, Congress did nothing about this.  In December, 2001 Congress passed and President Bush signed a bill allowing the DOD to opt out of future audits (see below).  And in October, 2009 the DODIG (Inspector General) wrote, Since FY 2002, DOD has made minimal progress in achieving auditability at the entity financial statement level or at the DOD Agency-wide level.“  (see below).

You can also download the Rumsfeld speech 2 trillion plus unaccounted for.

Hundreds of billions spent but the Department of Defense financial statements have not been audited for the last 9 years.

Generally if you give somebody a million dollars of your hard earned money you’d like to know before hand what they are planning to spend it on and you’d like to know afterwards what they actually spent it on.  That’s for a million dollars.  For a billion dollars (or a hundred billion) here’s how the game is played in Washington, D.C.

There is an incredible story contained in the following document:

It is the OIG Independent Auditor’s October 19, 2009 document which summarized the OIG’s 255 audit reports issued during FY 2004 through FY 2008.  It is Report No. D-2010-002 found at

http://www.dodig.mil/audit/reports/fy10/10-002.pdf

You can also download this document from our website.

Audit Opinion DOD Summary 2004 to 2008

The OIG is the Office of Inspector General.  Many large agencies in the Federal Government each have their own OIG.  One of the OIG’s responsibilities is to audit the agency.  The DOD is the Department of Defense.  The DOD OIG includes an Independent Auditor (IA) whose does these audits.  Or used to until . . .

Here’s the basic story.  You can find this on page 1-2 of the document which shows up as pages 8-9 in your browser using Adobe Reader.

From 1991 to 2001 the DOD OIG (IA) audited the financial statements of the Department of Defense.  The last 3 years that the Office of Inspector General actually audited the DOD financial statements were Fiscal Years 1998, 1999 and 2000.  In those audits the OIG found $1.7 trillion, $2.3 trillion, and $1.1 trillion unaccounted for.  OIG described those entries as “unsupported”, “improper”, “did not contain adequate documentation and audit trails, or did not follow accounting principles” among other terms.

It can’t be said any better than the OIG said it:

Beginning of quotes from Report No. D-2010-02 from the Inspector General, U.S. Department of Defense, October 9, 2009.

”Beginning in 1991, DOD began preparing and submitting financial statements for audit. However, DOD OIG audits of those financial statements for FYs 1991 through 2001 identified pervasive and long-standing material weaknesses which caused those financial statements to be unauditable. As a result, Congress passed the ‘National Defense Authorization Act for Fiscal Year 2002,’ on December 28, 2001, that limits the amount of audit work performed by the DOD OIG under the CFO Act based on management’s representation regarding the reliability of the financial statements.

For FY 2002, the Under Secretary of Defense (Comptroller)/DOD Chief Financial Officer (USD[C]/CFO) represented to the DOD OIG that 8 of the 9 required financial statements1 were not reliable due to the 13 material weaknesses that the DOD OIG had previously identified. Accordingly, the DOD OIG limited audit work and issued a disclaimer of opinion on those eight financial statements. The Military Retirement Fund received a clean audit opinion.

”Since FY 2002, DOD has made minimal progress in achieving auditability at the entity financial statement level or at the DOD Agency-wide level. USD(C)/CFO has continued to represent that the DOD Agency-wide financial statements remain unreliable because of the 13 auditor-identified material weaknesses. For FY 2008, USD(C)/CFO represented that 7 of the 9 financial statements remained unreliable. As a result, the DOD OIG issued a disclaimer of opinion for those seven financial statements.”

End of quotes from Report No. D-2010-02 from the Inspector General, U.S. Department of Defense, October 9, 2009.

There are two absolutely incredible statements in here.  One is that Congress, shortly after the terrorist attacks of September 11, 2001, allowed the Department of Defense to opt out of its previously legally required audits.  The DOD can just say, “We are not very good bookkeepers.  Come back next year and maybe we’ll have done a better job.”  With that the OIG (IA) is gone.  They are prevented by law from performing any audit.

The second incredible statement is, “Since FY 2002, DOD has made minimal progress in achieving auditability at the entity financial statement level or at the DOD Agency-wide level.”  Remember that this document was written by the OIG in October, 2009.  That covers a period of 7 years.

Question:  with all the employees, talent, and money available at the DOD, do you think they are trying to achieve auditability?

This is an exemption that has continued.  The net effect is that despite getting literally hundreds of billions of taxpayer dollars every year, the Department of Defense financial statements have not been audited since Fiscal Year 2000, or 9 years.

Compare this to school districts all across the nation that have been forced to make cuts on top of cuts on top of cuts.  They must account for every dollar spent.  As Teachers and other Educators, you have to do more with less every day.  The situation in Washingtonis just about the opposite.

DOD Budget FY 2011 Procurement programs provide billions for bombs, missiles, and modifications to them.

http://comptroller.defense.gov/defbudget/fy2011/fy2011_p1.pdf

Type the word “missile” in the pdf toolbar and search.

Or just go to page N-10 and N-10A in the document, which appears as pages 84-85 in your browser window.  Notice that we spent $1.052 billion in 2010 on modifications to 24 Trident II missiles.  We are doing the same thing for FY 2011.

Notice that we bought 196 Tomahawk missiles in FY 2010 for $276 million and we are buying another 196 in FY 2011 for $300 million.  That is an increase of $24 million, or an increase of 8.7% in one year.

Go to page A7 which is page 18 in your browser and look at the Patriot System Summary.  Notice that in FY 2010 we bought 58 of these for $341 million and in FY 2011 we are going to buy 78 of them for $480 million.  That is an increase from $5.88 million per missile to $6.15 million, an increase of 4.7% in one year for a missile that has already been researched, developed and built.

You can also download this report from our website

DOD budget FY 2011 procurement P1

U.S. House approves $33 billion more for war in Afghanistan on July 28, 2010, plus another $26 billion for other programs, bringing the total spending package to $59 billion.

http://www.truth-out.org/house-passes-emergency-spending-bill-continue-funding-iraq-afghanistan-occupation61776

The following is for your research.

It is dry and unless you are looking for the documents on Department of Defense spending and in particular the Independent Auditor reports, this may be a wee bit boring.  But it is key to understanding the massive fraud that is going on in the name of “national security”.

The annual reports of the Department of Defense Office of the Deputy Inspector General for Auditing are found at:

http://www.dodig.mil/audit/reports/index.html

In particular see the OIG Independent Auditor’s October 19, 2009 document which summarized the OIG’s 255 audit reports issued during FY 2004 through FY 2008.  It is Report No. D-2010-002 found at

http://www.dodig.mil/audit/reports/fy10/10-002.pdf

DODIG Audit Reports on the Financial Statements FY 1999 through 2009
research by Mark Graham

April, 2010

What follows for each fiscal year is the relevant page numbers on which you can find the Independent Auditor’s report, the document number (which begins with a D), and the link to where you can find the document on line.

In general I found all of these on the following site:

A website for many DOD Office of the Inspector General reports on the DOD budget.

http://www.dodig.mil/audit/reports/

You can also find them, I believe the same documents, on the website for the Performance and Accountability Report.

http://comptroller.defense.gov/par/

Another link to that same site is this:

www.dod.mil/comptroller/par

All you do is select the FY (fiscal year) which you are looking for and then look in the outline for the one that says, “Independent Auditor’s Report on the Principal Statements”, or something like that.  Click on it.

For each fiscal year the number of the fiscal year is first, followed by the web address.

FY 2009, see pages 1-4 (to find the Independent Auditor’s Report)

Audit Report D-2010-016

http://comptroller.defense.gov/afr/fy2009/Addendum_A_Financial_Statements.pdf

For 2009 relevant reports are numbers 21, 18, 16, 13, 10,

FY 2008, see pages 21-25

Audit Report D-2009-021

http://comptroller.defense.gov/cfs/fy2008/01_DoD_Agency-Wide/Fiscal_Year_2008_Department_of_Defense_Agency_Wide_Financial_%20Statements_and_Notes.pdf

FY 2007, see pages 16 – 27

D-2008-023

http://comptroller.defense.gov/par/fy2007/F07DoDAFR.pdf

FY 2006, see pages 74-84

D-2007-020

http://comptroller.defense.gov/par/fy2006/Entire_Document_%287.8_MB%29.pdf

FY 2005, see pages 136-144
D-2006-022

http://comptroller.defense.gov/par/fy2005.html

and more specifically, the auditor’s report is in

http://comptroller.defense.gov/par/fy2005/FY05%20PAR_IAR_part3.pdf

Army, see pages 136-143

D-2006-015

http://comptroller.defense.gov/cfs/fy2005/02_Department_of_the_Army/Fiscal%20Year%202005%20Department%20of%20the%20Army%20Financial%20Statements%20and%20Notes%20.pdf

Navy, see pages 273-279

D-2006-017

http://comptroller.defense.gov/cfs/fy2005/04_Department_of_the_Navy/Fiscal%20Year%202005%20Department%20of%20the%20Navy%20Financial%20Statements%20and%20Notes.pdf

FY 2004
D-2005-017

Agency wide, see pages 274 – 281

http://comptroller.defense.gov/par/fy2004/03-08_Auditors_Report.pdf

http://comptroller.defense.gov/par/fy2004.html

Navy, see pages 241-246

D-2005-013

http://comptroller.defense.gov/cfs/fy2004/FY_2004_Navy_Financial_Report.pdf

Army, see pages 122-124
D-2005-011

http://comptroller.defense.gov/cfs/fy2004/FY_2004_Army_Financial_Report.pdf

Air Force, see pages 106 – 111

D-2005-014

http://comptroller.defense.gov/cfs/fy2004/FY_2004_Air_Force_Financial_Report.pdf

FY 2003 see page 2 and PARpage 337

D-2004-036

http://www.dodig.mil/audit/reports/fy04/04-036.pdf

FY 2002 see page 225
D-2003-050

http://www.dodig.mil/audit/reports/fy03/03-050%20part%20III%20Fin%20Stmts.pdf

http://www.dodig.mil/audit/reports/fy03/03-050%20part%20III%20Fin%20Stmts.pdf

FY 2001 see page 1
D-2002-055

http://www.dodig.mil/audit/reports/fy02/02-055.pdf

http://www.dodig.mil/audit/reports/fy02/02-055.pdf

FY 2000, see page 1 – 5

D-2001-181

http://www.dodig.mil/audit/reports/fy01/01-181.pdf

FY 1999, see pages I – ii

D-2000-179

http://www.dodig.mil/audit/reports/fy00/00-179.pdf

FY 1998, see page 5

99-138

Testimony of Eleanor Hill

http://www.dodig.mil/audit/reports/fy99/99-138.pdf

Here’s the report that summarizes DODIG’s 255 audit reports on FY 2004 through FY 2008 and the DOD’s progress on achieving auditability in their financial reporting and accounting systems:

http://www.dodig.mil/Audit/reports/fy10/10-002.pdf

SUBJECT: Summary of DOD Office of Inspector General Audits of Financial Management (Report No. D-2010-002)

The DOD Office of the Inspector General issued 255 reports during FY 2004 through FY 2008 that pertain to financial management. As part of our audit of the FY 2008 DOD Agency-wide financial statements, DOD management acknowledged that 13 previously-identified material weaknesses continued to exist.

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