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GAO Says Pentagon Making Little Progress to be Audit Ready

DoD photo: Master Sgt. Ken Hammond

The Defense Department hopes to be able to pass an audit by 2017 but has not taken effective steps to achieve that goal, according to testimony on Friday from the Government Accountability Office.

Asif Khan, GAO director of financial management and assurance, told a House Oversight Committee subpanel the Pentagon has been on GAO’s high-risk list since 1995 regarding its financial management practices.

“Pervasive deficiencies in financial management processes, systems, and controls, and the resulting lack of data reliability, continue to impair management’s ability to assess the resources needed for DoD operations,” Khan said in written remarks.

Khan cited, among other reasons, complex and inefficient payment processes and weak internal control as impairing the Pentagon’s ability to better manage its finances.

Khan told the subpanel some recent Pentagon initiatives showed encouraging signs, including the Financial Improvement and Audit Readiness Plan for improving financial management and reporting.

The National Defense Authorization Act of 2010 requires the Defense Department’s financial statements to be validated as ready for audit by Sept. 30, 2017.

Click here to watch the full hearing. The hearing also features testimony from Mark Easton, the Pentagon’s deputy CFO, and Daniel Blair, the Pentagon’s deputy inspector general for auditing.

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