In mid-October, Defense Secretary Leon Panetta told the House Armed Services Committee he wanted the Pentagon to be ready for an audit by 2014, three years earlier than the deadline mandated by Congress.
Later in a memo to Pentagon comptroller Robert Hale Panetta ordered the department’s statement of budgetary resources — part of the audit — to be ready for inspection by 2014, according to Federal News Radio.
Wednesday, the Senate approved an amendment offered by Sen. Kelly Ayotte (R-N.H.) to the Fiscal 2012 National Defense Authorization Act, making Panetta’s goal into law and instead requiring a full department-wide audit, Ayotte’s office announced.
The full Senate voted 88-1 Wednesday to move forward with the authorization bill, according to The Hill newspaper.
“The Defense Department must be auditable to ensure that we’re responsible stewards of taxpayer money,” Ayotte said. “To distinguish between necessary defense budget cuts and reductions that would harm our troops and threaten readiness, we need reliable financial data and effective business processes and systems. I applaud Secretary Panetta’s commitment to achieve audit readiness by 2014, and my amendment will help ensure the Pentagon meets this critical goal.”
Current law requires the Pentagon to be ready for a full inspection of its books by the close of business on Sept. 30, 2017. To meet this deadline, the department established the Financial Improvement and Audit Readiness Plan.
Hale said in an interview with Federal News Radio the department has sought the expertise of Deloitte and other firms to get ready for an audit. The department’s challenge, Hale said, is that its business approach is set up to meet military missions instead of passing an audit.
Audits will force the Pentagon to make improvements to its business process more effectively manage its resources, Hale said.
“But the big issue in my mind is public confidence in us as reasonable stewards of their funds,” he said.