House lawmakers on Wednesday applauded the Pentagon’s effort to finally undergo a full audit, even though Defense Department Comptroller David Norquist said the effort could lead to almost $1 billion in costs this year.
Those costs include $367 million on the actual audit process that was announced and launched by Norquist last month. He also said the military expects to pay $551 million to fix the problems uncovered by the audit.
Norquist, the brother of tenacious tax activist Grover Norquist, was appointed by President Trump in May and vowed a get-tough approach to finally putting the military’s financial books in order after years of delays. The Pentagon has about $2.4 trillion in assets but has never gone through a full financial audit.
“The [$551 million] number comes from talking to the services about what funding they have planned for this year and whether they have it in the budget to address these requirements,” Norquist said.
The fixes will likely involve defense and military systems that are not storing data properly or are not transmitting that data properly, Norquist said. Those underlying systems, such as for property records, must be improved.
“Those are the things that are driving those types of costs,” Norquist said.
Some problems have already been found. In an initial audit, the Army found 39 Black Hawk helicopters that weren't on the books, he said.
About $181 million of the audit cost will go to contractors and only accounts for 1/30 of one percent of the Pentagon’s budget, which is about the same as what Fortune 100 companies spend on audit work, Norquist said.
By spring and early summer, the Department of Defense will have 1,200 auditors working on its first financial statement audit.
Rep. Mac Thornberry, R-Texas, the House Armed Services Committee chairman, said it is "likely that the result of the first audit will not be pretty."
House Armed Services Committee members showed a mix of relieved frustration and satisfaction that the military has commenced a full financial audit. Rep. Walter Jones, R-N.C., said Wednesday that the Pentagon’s decision to finally embark on a full financial audit is some of the best news he has gotten during more than two decades in Congress.
Federal law has required agencies to perform the audits since the 1990s, and Congress has ordered audits in recent National Defense Authorization Acts.
“The most shocking thing about being in Congress that there has never been a comprehensive audit of the DoD,” said Rep. Salud Carbajal, D-Calif., who is a freshman member of the committee. “I think if we don’t get it together, we are going to lose the American people’s trust in what we are trying to do here.”