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Saturday, August 20, 2016

The US Department of War, Fraud and Outrageous Corruption: $6,500,000,000,000 CAN’T BE ACCOUNTED FOR

U.S. Army fudged its accounts by trillions of dollars, auditor finds

By Scot J. Paltrow | NEW YORK
The United States Army’s finances are so jumbled it had to make trillions of dollars of improper accounting adjustments to create an illusion that its books are balanced.
The Defense Department’s Inspector General, in a June report, said the Army made $2.8 trillion in wrongful adjustments to accounting entries in one quarter alone in 2015, and $6.5 trillion for the year. Yet the Army lacked receipts and invoices to support those numbers or simply made them up.
As a result, the Army’s financial statements for 2015 were “materially misstated,” the report concluded. The “forced” adjustments rendered the statements useless because “DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.”
Disclosure of the Army’s manipulation of numbers is the latest example of the severe accounting problems plaguing the Defense Department for decades.
The report affirms a 2013 Reuters series revealing how the Defense Department falsified accounting on a large scale as it scrambled to close its books. As a result, there has been no way to know how the Defense Department – far and away the biggest chunk of Congress’ annual budget – spends the public’s money.
The new report focused on the Army’s General Fund, the bigger of its two main accounts, with assets of $282.6 billion in 2015. The Army lost or didn’t keep required data, and much of the data it had was inaccurate, the IG said.
“Where is the money going? Nobody knows,” said Franklin Spinney, a retired military analyst for the Pentagon and critic of Defense Department planning.
The significance of the accounting problem goes beyond mere concern for balancing books, Spinney said. Both presidential candidates have called for increasing defense spending amid current global tension.
An accurate accounting could reveal deeper problems in how the Defense Department spends its money. Its 2016 budget is $573 billion, more than half of the annual budget appropriated by Congress.
The Army account’s errors will likely carry consequences for the entire Defense Department.
Congress set a September 30, 2017 deadline for the department to be prepared to undergo an audit. The Army accounting problems raise doubts about whether it can meet the deadline – a black mark for Defense, as every other federal agency undergoes an audit annually.
For years, the Inspector General – the Defense Department’s official auditor – has inserted a disclaimer on all military annual reports. The accounting is so unreliable that “the basic financial statements may have undetected misstatements that are both material and pervasive.”
In an e-mailed statement, a spokesman said the Army “remains committed to asserting audit readiness” by the deadline and is taking steps to root out the problems.
The spokesman downplayed the significance of the improper changes, which he said net out to $62.4 billion. “Though there is a high number of adjustments, we believe the financial statement information is more accurate than implied in this report,” he said.
"THE GRAND PLUG"
Jack Armstrong, a former Defense Inspector General official in charge of auditing the Army General Fund, said the same type of unjustified changes to Army financial statements already were being made when he retired in 2010.
The Army issues two types of reports – a budget report and a financial one. The budget one was completed first. Armstrong said he believes fudged numbers were inserted into the financial report to make the numbers match.
“They don’t know what the heck the balances should be,” Armstrong said.
Some employees of the Defense Finance and Accounting Services (DFAS), which handles a wide range of Defense Department accounting services, referred sardonically to preparation of the Army’s year-end statements as “the grand plug,” Armstrong said. “Plug” is accounting jargon for inserting made-up numbers.
At first glance adjustments totaling trillions may seem impossible. The amounts dwarf the Defense Department’s entire budget. Making changes to one account also require making changes to multiple levels of sub-accounts, however. That created a domino effect where, essentially, falsifications kept falling down the line. In many instances this daisy-chain was repeated multiple times for the same accounting item.The IG report also blamed DFAS, saying it too made unjustified changes to numbers. For example, two DFAS computer systems showed different values of supplies for missiles and ammunition, the report noted – but rather than solving the disparity, DFAS personnel inserted a false “correction” to make the numbers match.
DFAS also could not make accurate year-end Army financial statements because more than 16,000 financial data files had vanished from its computer system. Faulty computer programming and employees’ inability to detect the flaw were at fault, the IG said.
DFAS is studying the report “and has no comment at this time,” a spokesman said.

(Edited by Ronnie Greene.)

31 comments:

  1. Raise the flag higher boys. Let’s hear that OOrah, one more time. Git back and avert your eyes, a general is passing.

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  2. The Pentagons war against the US taxpayer
    This essay was originally published by TomDispatch.



    From spending $150 million on private villas for a handful of personnel in Afghanistan to blowing $2.7 billion on an air surveillance balloon that doesn’t work, the latest revelations of waste at the Pentagon are just the most recent howlers in a long line of similar stories stretching back at least five decades. Other hot-off-the-presses examples would include the Army’s purchase of helicopter gears worth $500 each for $8,000 each and the accumulation of billions of dollars’ worth of weapons components that will never be used. And then there’s the one that would have to be everyone’s favorite Pentagon waste story: the spending of $50,000 to investigate the bomb-detecting capabilities of African elephants. (And here’s a shock: they didn’t turn out to be that great!) The elephant research, of course, represents chump change in the Pentagon’s wastage sweepstakes and in the context of its $600-billion-plus budget, but think of it as indicative of the absurd lengths the Department of Defense will go to when what’s at stake is throwing away taxpayer dollars.

    Keep in mind that the above examples are just the tip of the tip of a titanic iceberg of military waste. In a recent report I did for the Center for International Policy, I identified 27 recent examples of such wasteful spending totaling over $33 billion. And that was no more than a sampling of everyday life in the twenty-first-century world of the Pentagon.

    {...}

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    1. {,,,{

      The staggering persistence and profusion of such cases suggests that it’s time to rethink what exactly they represent. Far from being aberrations in need of correction to make the Pentagon run more efficiently, wasting vast sums of taxpayer dollars should be seen as a way of life for the Department of Defense. And with that in mind, let’s take a little tour through the highlights of Pentagon waste from the 1960s to the present.

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    2. {...}

      How Many States Can You Lose Jobs In?

      The first person to bring widespread public attention to the size and scope of the problem of Pentagon waste was Ernest Fitzgerald, an Air Force deputy for management systems. In the late 1960s, he battled that service to bring to light massive cost overruns on Lockheed’s C-5A transport plane. He risked his job, and was ultimately fired, for uncovering $2 billion in excess expenditures on a plane that was supposed to make the rapid deployment of large quantities of military equipment to Vietnam and other distant conflicts a reality.

      The cost increase on the C-5A was twice the price Lockheed had initially promised, and at the time one of the largest cost overruns ever exposed. It was also an episode of special interest then, because Secretary of Defense Robert McNamara had been pledging to bring the efficient business methods he had learned as Ford Motors’ president to bear on the Pentagon’s budgeting process.

      No such luck, as it turned out, but Fitzgerald’s revelations did, at least, spark a decade of media and congressional scrutiny of the business practices of the weapons industry. The C-5A fiasco, combined with Lockheed’s financial troubles with its L-1011 airliner project, led the company to approach Congress, hat in hand, for a $250 million government bailout.

      Wisconsin Senator William Proxmire, who had helped bring attention to the C-5A overruns, vigorously opposed the measure, and came within one vote of defeating it in the Senate.

      In a time-tested lobbying technique that has been used by weapons makers ever since, Lockheed claimed that denying it loan guarantees would cost 34,000 jobs in 35 states, while undermining the Pentagon’s ability to prepare for the next war, whatever it might be. The tactic worked like a charm. Montana Senator Lee Metcalf, who cast the deciding vote in favor of the bailout, said, “I’m not going to be the one to put those thousands of people out of work.” An analysis by the New York Times found that every senator with a Lockheed-related plant in his or her state voted for the deal.

      By rewarding Lockheed Martin for its wasteful practices, Congress set a precedent that has never been superseded. A present-day case in point is — speak of the devil — Lockheed Martin’s F-35 combat aircraft. At $1.4 trillion in procurement and operating costs over its lifetime, it will be the most expensive weapons program ever undertaken by the Pentagon (or anyone else on Planet Earth), and the warning signs are already in: tens of billions of dollars in projected cost overruns and myriad performance problems before the F-35 is even out of its testing phase. Now the Pentagon wants to rush the plane into production by making a “block buy” of more than 400 planes that will involve little or no accountability regarding the quality and cost of the final product.

      {...}

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    3. TIME FORWARD AND GUESS WHAT?

      Predictably, almost five decades after the C-5A contretemps, Lockheed Martin has deployed an inflationary version of the jobs argument in defense of the F-35, making the wildly exaggerated claim that the plane will produce 125,000 jobs in 46 states. The company has even created a handy interactive map to show how many jobs the program will allegedly create state by state. Never mind the fact that weapons spending is the least efficient way to create jobs, lagging far behind investment in housing, education, or infrastructure.

      {...}

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    4. It Took $6 Billion Not to Audit the Pentagon

      The poster child for waste in the first decade of the twenty-first century was certainly the billions of dollars a privatizing Pentagon handed out to up-armored companies like Halliburton that accompanied the U.S. military into its war zones and engaged in Pentagon-funded base-building and “reconstruction” (aka “nation building”) projects in Iraq and Afghanistan. The Special Inspector General for Afghan Reconstruction (SIGAR) alone seems to come out with new examples of waste, fraud, and abuse on practically a weekly basis. Among Afghan projects that stood out over the years was a multimillion-dollar “highway to nowhere,” a $43 million gas station in nowhere, a $25 million “state of the art” headquarters for the U.S. military in Helmand Province, with all the usual cost overruns, that no one ever used, and the payment of actual salaries to countless thousands of no ones aptly labeled “ghost soldiers.” And that’s just to begin enumerating a long, long list. Last year, Pro Publica created an invaluable interactive graphic detailing $17 billion in wasteful spending uncovered by SIGAR, complete with information on what that money could have purchased if it had been used productively.

      MORE IF YOU CAN STAND IT?

      http://www.counterpunch.org/2016/04/11/how-not-to-audit-the-pentagon/

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    5. I can't stand it.



      I want to go to Earth Proxima and take a few selected with me, and maybe Quirk for entertainment, and start over.

      Delete
  3. I want to go to Earth Proxima and take a few selected with me, and maybe Quirk for entertainment, and start over.

    *************

    Hey, Ash, Manafort and the Podesta Group seem joined at the hip.

    The Donald canned Manafort. Why is The Hag still connected to the Podesta Group ?

    When is she going to fire her campaign manager ?

    Tony is the brother of John Podesta, Hillary Clinton’s campaign chairman


    Manfort firm, Podesta Group being investigated by Justice Department


    posted at 8:41 pm on August 19, 2016 by John Sexton

    The FBI is investigating work done by Paul Manafort and his firm for a former president of Ukraine. From CNN:


    FBI and Justice Department prosecutors are conducting an investigation into possible US ties to alleged corruption of the former pro-Russian president of Ukraine, including the work of Paul Manafort’s firm, according to multiple US law enforcement officials.

    The investigation is broad and is looking into whether US companies and the financial system were used to aid alleged corruption by the party of former president Viktor Yanukovych.

    Manafort’s firm is said to not be the focus of the investigation (though that could presumably change). Another firm being looked at by Justice Department investigators is the Podesta Group, a lobbying group run by Tony Podesta. Tony is the brother of John Podesta, Hillary Clinton’s campaign chairman....


    http://hotair.com/archives/2016/08/19/manfort-podesta-firms-being-investigated-by-justice-department/


    Deuce will explain all these connections by saying they are all part of the same rotten stinking chunk of moldy cheese.....and he'll be right.....and most here will agree with him, save perhaps Rufus, whose Queen Hillary can't do no wrong.


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    1. Which means vote for The Donald, as he at least threw his slice of stinking cheese out.

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    2. Then of course there's this twist....The Justice Department, doing the 'investigating', is itself corrupt....

      As a practical matter this probably means Manafort will get his and the Podesta Group will skate....

      Delete
  4. You want to shut down an agency, close the Pentagon. Think it can’t be done and at the same time improve real US defense? You bet it can:

    Admiral Mike Mullen, former chairman of the Joint Chiefs of Staff, said that “the greatest threat to our national security is our debt.” Senator Coburn said on “Morning Joe” on Feb 13, 2013 that “$100 billion could be cut.” Ron Paul says that only about half the defense budget is for defense, the other half is for militarism abroad.



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  5. The military is top-heavy with officers and generals compared to enlisted men, with far more proportionately today than during World War II.

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  6. Every US aircraft carrier would not last 24 hours with a war against a host of new missile and drone systems.

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  7. The number of civilian employees employed by the Pentagon has grown to over 800,000.

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  8. Tricare costs the Pentagon budget over $50 billion per year to provide almost free healthcare to all military retirees and their families for life, even if they are working in other jobs with health insurance.

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  9. Senator Coburn complained in Congress that the military schools were costing $50,000 per student.

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  10. Rep. Mike Coffman detailed 15 ways some $50 billion per year could be saved—for example, some $100 billion over 10 years by adopting “sea swap” policies for cruisers, destroyers, and amphibious ships by flying crews out to ships instead of changing crews at home ports.

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  11. The military is paid vastly more than civilians. Officers and enlisted men earn an average cash income some 80 percent higher than civilians with similar skills and education. Their pension and medical benefits put them far beyond what any worker in the private sector earns.

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    1. 80 percent of the jobs in the military are non-combat occupations. They are not at risk and there is no cost benefit to pay higher than the civilians paying their salaries and benefits. In a volunteer army, the obvious incentive to join is higher wages and benefits.

      Delete
  12. Fewer foreign interventions would save hundreds of billions, if not trillions, of dollars.

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  13. The F-35 has 1,300 suppliers in 45 states in key congressional districts and is now estimated to cost up to $300 million per plane.

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    1. You mean a decent PowerBall win would only net me ONE plane ?

      Jeez

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  14. Replies
    1. It would take current humans, what, maybe a hundred years to screw it up.

      A hundred years of relative peace and quiet is not to be sneered at.

      Delete
  15. It simply comes down to this. Since WWII which US war of choice made the US more safe? IMO, none of them.

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  16. The biggest threat to peace and domestic tranquility is economic collapse and all the misery that comes with it.

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  17. Of the two candidates, there is only one that actually built things and knows how to budget costs. Trump, like a lot of non-military experienced politicians is awed by the military. Thats is too bad. It only took one trip on Air Force One and a few snappy salutes for Obama to find his inner OOrah.

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  18. Air Force One doesn't have gold fixtures.

    It's not going to awe The Donald.

    The 'Nuclear Button' might do it, though.

    All his building career and buildings and property gone in one flash with the push of a button from the absolutely certain retaliation.

    Awe him to caution, hopefully.

    *********

    Did you know Teddy Roosevelt banned Moslems ?

    http://www.frontpagemag.com/fpm/263879/when-teddy-roosevelt-banned-muslims-america-daniel-greenfield

    Used the 'polygamy opening'....


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    1. Here's the opening Teddy could have used, the one I like, the 'Koran opening'....

      Confirmed: Islam, Not ‘Grievances,’ Fuels Muslim Hate for the West

      ISIS settles the debate—but will Western leaders still disseminate lies?

      August 19, 2016

      Raymond Ibrahim

      http://www.frontpagemag.com/fpm/263874/confirmed-islam-not-grievances-fuels-muslim-hate-raymond-Ibrahim

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  19. How low can Hillary go ?

    Hillary To FBI: Colin Powell Told Me To Use Private E-Mail

    http://hotair.com/archives/2016/08/19/hillary-to-fbi-colin-powell-told-me-to-use-private-e-mail/

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    1. Hillary, our Champion Limbo Dancer....

      Delete