In 2011, former Secretary of Defense Robert Gates publicly spoke
out against the decentralized accounting mechanisms within the Pentagon,
stating: “My staff and I learned that it
was nearly impossible to get accurate information and answers to questions such
as ‘How much money did you spend’ and ‘How many people do you have?’” A recent
report from Reuters targets this exact issue: the lack of accountability within defense
spending and the overlapping accounting mechanisms within the security community. In a particularly disturbing anecdote, the
report details how the office of Defense Finance and Accounting Service (DFAS, the
Pentagon’s main accounting agency) regularly “fixes” their spending numbers so
that they are in accordance with the budget provided by the U.S. Treasury. DFAS employees are usually able to correct inaccurate
or missing numbers through hurried emails and phone calls before submitting
their monthly reports; but any remaining inaccuracies are ameliorated through “plugs,”
false numbers entered to make monthly expenditure numbers match those in the
Treasury budget.
It is commonly understood that no one knows how much the
defense community is truly spending. In
fact, as Defense Secretary Hagel recently
stated, “The Department of Defense is the only federal agency that has not
produced audit-ready financial statements, which are required by law. That’s unacceptable.”
Unacceptable.
While the report focuses on the need for greater oversight of
defense spending, which I wholeheartedly support, I wish to briefly focus on
the fractured nature of the current defense budgetary system. Former Secretary Gates likened
the current business operations of the Pentagon as an “amalgam of fiefdoms
without centralized mechanisms to allocated resources, track expenditures, and
measure results.” His choice of the word
“fiefdom” invokes images of territorial and competitive organizations and
bureaucracies - and certainly this is what the defense community has
become: A series of organizations and
groups within organizations vying for resources and opportunities to promote
their desired projects. Much like how
the unwieldy growth of the defense community following the September 11th
attacks has created incredible
bureaucratic overlap, the same overlap of organizational purpose and goals
is reflected in its unaudited expenditures.
The expansive organization of the Defense Department (which does not include the money spent on contracted employees) |
Indeed, the theory of organizational or bureaucratic competition explains how policy decisions result from infighting between organizations, particularly as organizations seek more resources, autonomy, and influence within the greater national security infrastructure. As each agency or organization within the security community has pursued its own goals in order to achieve greater influence in policy decisions, excessive funds have been spent on amassing "stuff" -- ultimately resulting in wasted resources. As a Navy vice admiral told Reuters, about have of their $14 billion inventory is in excess of what they need. Multiple this excess across all branches and facets of the defense community and a true picture of organizational waste begins to emerge.
It is truly alarming to find so many wasted resources within the defense community. Until greater oversight and accurate auditing procedures are achieved, inefficiencies will remain in the defense apparatus -- inefficiencies that ultimately threaten the functioning of our security system.
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