A division of the Department of Defense lost track of more than $800 million in construction projects financed for the Army Corps of Engineers and other agencies, according to an internal audit.
The audit, conducted by Ernst & Young and obtained by Politico, found the Defense Logistics Agency had misstatements on its books related to construction projects that totaled at least $465 million. The audit also found the Defense Logistics Agency lacked sufficient documentation for $384 million in spending for construction projects deemed “in progress.”
In its audit, Ernst & Young found the agency lacked evidence for items that did have some documentation, including records related to $100 million in assets for the Defense Logistics Agency’s computer systems. Additionally, $46 million in computer assets were “inappropriately recorded.”
“The documentation, such as the evidence demonstrating that the asset was tested and accepted, is not retained or available,” the audit stated.
The audit of the Defense Logistics Agency covered through Sept. 30, 2016, and in the document, Ernst & Young warned the agency doesn’t have the ability to track the money it oversees, according to Politico.
With a budget of $40 billion per year, the Defense Logistics Agency has 25,000 employees and is responsible for overseeing 100,000 orders daily from the Army, Navy, Air Force, Marine Corps, as well as other agencies.
The top official with the Defense Logistics Agency has vowed to address the audit’s findings.
“The initial audit has provided us with a valuable independent view of our current financial operations,” Army Lt. Gen. Darrell Williams, the director of the agency, said of the findings. “We are committed to resolving the material weaknesses and strengthening internal controls around DLA’s operations.”
The agency also said in a statement to Politico it expected the audit to reveal deficiencies.
“DLA is the first of its size and complexity in the Department of Defense to undergo an audit so we did not anticipate achieving a ‘clean’ audit opinion in the initial cycles,” the agency said in a statement. “The key is to use auditor feedback to focus our remediation efforts and corrective action plans, and maximize the value from the audits. That’s what we’re doing now.”