World

US Army committed $6.5 trillion accounting fraud

21 Aug 2016 | By Shiladitya
US Defense Department's multi-trillion dollar accounting fraud.

The Inspector General of the United States Department of Defense submitted a report in June 2016 stating that the US Army's financial statements for 2015 were "materially misstated".

The report went on to state that the US Army had conjured $6.5 trillion worth of "improper adjustments" to make its books look balanced.

The Army lacked receipts or invoices to account for the missing money.

In context: US Defense Department's multi-trillion dollar accounting fraud.

The reportDetails of the Inspector General's report

Apart from revealing the US Army's financial inconsistencies for 2015, the report submitted by the Inspector General in June focused on the US Army's General Fund.

The General Fund is thought to have assets worth $282.6 billion, however, it cannot be completely ascertained as the US Army either lost or did not keep the relevant financial data.

Furthermore, much of its data was inaccurate.

The Inspector General's disclaimer

Due to the dicey nature of the US Army's financial statements, the Inspector General, for years, has inserted a disclaimer on military annual reports stating, "the basic financial statements may have undetected misstatements that are both material and pervasive".
Love World news?
Stay updated with the latest happenings.
Previous instances of accounting frauds in US defense

Previous instancesPrevious instances of accounting frauds in US defense

In 2013, a report by Reuters revealed that $8.5 trillion given to the Pentagon by the Congress since 1996 was unaccounted for, lost in a mess of unauditable ledgers, corrupted data and erroneous reports.

In another similar instance, the US Army lost track of $5.3 trillion worth of supplies between the years 2003 and 2011.

ImplicationsImplications of the DoD's accounting fraud

The biggest implication of the accounting fraud by the Department of Defense is that there is no way to find out what they do with taxpayers' money.

However, the deadline for the audit of the US Department of Defense is drawing nearer.

In 2009, Congress had passed a law calling for the US DoD to be ready for an audit by 30th September, 2017.

Impossible to get accurate information!

In May 2011, the then-Secretary of Defense Robert Gates said that the Pentagon's operations were "an amalgam of fiefdoms without centralized mechanisms to allocate resources, track expenditures, and measure results. It was nearly impossible to get accurate information and answers".

21 Aug 2016US Army committed $6.5 trillion accounting fraud