Another FAIL: Pentagon audit crisis deepens as accountability efforts stall under Hegseth

By willowt // 2025-05-30

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The Pentagon has failed all audits since 2018, lacking basic accountability for $1 trillion in annual spending.
Defense Secretary Pete Hegseth faces pressure to meet a 2028 clean audit deadline amid systemic failures.
Audits reveal fraud, flawed contracting and outdated financial systems dating to the 1950s.
Billions were misspent in Ukraine aid and Afghan exit ops, while $2B in improper payments went unaccounted for.
Bipartisan lawmakers push to slash budgets for failing departments to force accountability reforms.

The U.S. Department of Defense (DoD) remains mired in financial chaos, with its fourth consecutive audit failure exacerbating concerns over waste, fraud and systemic mismanagement. Defense Secretary Pete Hegseth, appointed by President Trump in January, faces mounting scrutiny as Congress and auditors warn the DoD’s $1.1 trillion budget could soon face punitive cuts unless reforms accelerate. The Pentagon’s repeated audit failures — spanning nearly three decades — have created a fiscal crisis with profound implications for national security. The Government Accountability Office (GAO) reported Tuesday that the DoD risks over $10 billion in confirmed fraud since 2017, while outdated systems and lax oversight threaten critical operations. Hegseth has pledged to deliver a clean audit by 2028, but experts call the timeline unrealistic absent sweeping changes.

Systemic financial woes exposed in latest audits

The Marine Corps alone passed its 2024 general fund audit, while most DoD branches faltered due to “material weaknesses” in financial controls, outdated siloed systems and poor accountability. Restoring News analyzed GAO reports finding the DoD operates 4,700 management systems — from procurement databases to payroll — 400 of which directly influence financial reporting. Many were designed before the era of personal computers, hindering interoperability and reliance on error-prone manual processes. One glaring example: The Army’s handling of Ukraine aid contracts. A December 2024 audit revealed 75% of contracts for Operation Atlantic Resolve violated federal standards, leaving U.S. taxpayers exposed. Meanwhile, $290 million in contracts funded Ukrainian civil servant salaries and housing subsidies, diverting funds from military logistics. “They’re essentially operating out of the Paleolithic era,” said Julia Gledhill, a Stimson Center analyst. “The DoD can’t even balance its books for a single day, let alone a $1.1 trillion budget.”

Fraud, wasteful contracts and national security risks

GAO audits uncovered brazen fraud attempts that endangered forces. Last year, a vendor submitted falsified documents to sell subpar bipod components for machine guns; engineers stopped the shipment before battlefield use, but the incident highlighted systemic vulnerabilities. The Pentagon’s 2024 aid to Ukraine also sparked outrage, with 500 million siphoned into social programs often unrelated to defense, including payments to the designated Foreign Terrorist Organization (FTO) Taliban. AGAO investigation further revealed 1.8 million in payments to Taliban officials for “fees” linked to Afghans employed by the U.S.—violating U.S. sanctions. Closer to home, the TRICARE health system paid 39% higher reimbursements in 2023 compared to 2021 for identical services, with regional disparities as stark as 11,500 vs.3,000 for military personnel’s sleep apnea devices. Auditors noted “reasonable” rates were never defined, costing taxpayers an extra $26 million.

Hegseth’s accountability push faces steep odds

Hegseth, a Trump appointee who once ran a right-wing media outlet, has framed accountability as his top priority. At a February Pentagon town hall, he promised, “By the end of my four years, the Pentagon will pass a clean audit — and taxpayers will know where their dollars are going.” Yet progress has been glacial. A January 2025 Pentagon report found 69% of contracted external auditors violated standards last year, undermining their findings. Meanwhile, Rep. (R-TX) Jody Hice, a measures 34 failed DoD audits cost America an average of $10.8 billion annually in fraud alone. Congressional conservatives are now pushing legislation to slash budgets for failed departments by 20% until compliance is reached. “Until Pentagon leaders treat taxpayer money like it’s their own family’s inheritance, reforms won’t stick,” said one GOP aide.

Beyond band-aids

Reform advocates argue internal controls must outpace Congress’s fiscal handrails. GAO and Pentagon inspectors have issued hundreds of actionable recommendations, including overhauling financial IT systems, mandating real-time contract tracking and prioritizing payment integrity. The Marine Corps’ 2024 success — its second consecutive clean audit — offers proof: centralizing financial systems and instilling cultural accountability among rank-and-file grantees. “Everyone has a PPT [power point] deck and aspirations,” said a Pentagon insider. “But Hegseth will need to fire stubborn leaders to shake up bureaucracy.” As the DoD strains under a record $1 trillion budget, and conflicts on multiple fronts, the 2028 deadline is fast approaching. Without dramatic turns, the Pentagon’s accountability failures could undermine national security even as Cold War-era systems fail.

The fiscal frontline

The Pentagon’s audit failures are more than a bureaucratic hiccup — they’re a beachhead in the broader battle for fiscal sanity. For a defense department that consumes nearly half the U.S. federal budget, accountability isn’t optional. As bipartisan pressure builds, Secretary Hegseth’s leadership will define whether the DoD returns to honor—from its warfighters to its financials. Sources for this article include: YourNews.com Defense.gov ResponsibleStatecraft.org