The US Defense Department’s watchdog knowingly turned a blind eye to financial irregularities, leading to the Pentagon signing off on an audit. This has led to questions regarding just how transparent the government auditing process actually is.
A special investigation by Reuters revealed that a senior member of the Department of Defense’s (DoD) Inspector General team had colluded with an independent auditing company, Grant Thornton LLP, to falsely keep the US Marine Corps books clean.
The DoD remained the only federal organization that had not abided with a 1992 law passed by Congress to undergo an audit. This was despite the DoD receiving in excess of $500 billion a year, which is by far the largest appropriation of any department. The Pentagon remains unaudited because of disarray in its bookkeeping http://t.co/pnJuRnS4Zf pic.twitter.com/iGFvQmRCl3 – Special Reports (@specialreports) May 20, 2015 The audit only included the Marine Corps section of the DoD and to make things even simpler, it only included records for the financial year that ended on September 30, 2012. The audit would look to try and account for $29.4 billion spent by the organization.
The independent accounting firm Grant Thornton was chosen to undertake the work. It had already been fulfilling contracts for the Marine Corps after winning a competitive bidding process in 2009. This was despite the inspector general having found on previous occasions that Grant Thornton had been responsible for serious flaws in a series of smaller, unrelated audits. Pentagon employees used govt credit cards for ‘gambling, escorts,’ audit reveals A quality control review in February 2013 of Grant Thornton’s audit of defense funds, which had been paid to the Center for Naval Analyses Corp, found that the audit “was not adequately planned, executed, and documented.”