Report: The Pentagon Has No Idea How Much Money It Loses to Improper Payments

The Department of Defense lost roughly $1.1 billion via improper payments in 2011 and that number may be even higher than that, according to a new report from the Government Accountability Office.

The GAO isn’t sure how much money is lost to improper payments because, as the report explains, DOD accounting practices are apparently unreliable.

From the report:

… [the DOD's] long-standing history of pervasive financial management weaknesses, coupled with problematic sampling methodologies and the lack of adequate supporting documentation, contributed to improper payment estimates that were not reliable.

“Things aren't likely to improve any time soon, either,” the Washington Examiner’s Kelly Cohen reports, “because DOD has not fully addressed the causes following 2009 audit, so the Pentagon remains ‘at risk of continuing to make improper payments and wasting taxpayer funds.’”

The GAO’s conclusions are based on a two-year audit of eight DOD programs.

“The Pentagon will spend more than $600 billion this year. That compares to approximately $913 billion expected to be spent by the Department of Health and Human Services,” Cohen explains.

“The way DOD kept track of its improper payments was also faulty, GAO said, because using a random sampling method that didn't account for the complexity of the payments, the dollar amounts found were impaired,” she adds.

And to top it all off, the GAO discovered the DOD doesn’t have appropriate mechanisms in place “to collect and maintain key supporting documentation” to help it track and account for improper payments.

Oh, yeah, DOD officials in 2011 also “refused” to perform a risk assessment on improper payments, despite the existence of President Barack Obama’s 2010 Improper Payments Elimination and Recovery Act.

“Without such an assessment, the department was unable to identify what caused the bad payments, develop solutions or even figure out how to save money,” Cohen adds.

Here’s a complete copy of the GAO report:

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