Zelandakh, on 2017-May-22, 08:29, said:
It comes from an official email statement and is reported,
inter alia, by
Reuters.
The $6.5 trillion figure is correct in as much as that is the total number of adjustments made without supporting evidence as to their validity. But as already mentioned, the vast majority of this figure is the same discrepancy being adjusted across multiple accounts and therefore being counted many times over. This is not the same as the actual amount of cash unaccounted for. That figure is the $62.4 billion. That it surprises you that government figures should be misreported for political reasons on the other hand is priceless!
The Army is downplaying the number to $62.4 billion because they know it is a hot mess. If the financial statements the DoD prepared were indeed reliable, the internal auditors would not render a disclaimer of opinion for the
entire US government financial statements and then specifically reference significant MATERIAL weaknesses in the DoD as the primary concern.
The internal auditors would instead issue a qualified auditor's opinion saying, EXCEPT FOR.... But they aren't doing that, they are not buying the DoD's financial statements as being transparent or reliable or representative of the financial condition of the Department of Defense.
With respect to the $6.5 trillion in unsupported accounting adjustments, true enough, it doesn't have to be ALL cash, it could be (1) inventory (2) accounts receivable (3) materials and supplies (4) property, plant, and equipment or (5) intragovernmental transfers to other U.S. departments or agencies. But if the military doesn't have enough detailed records to know which of these 5 it could be and by how much, then the financial statements are "double speak" and do not conform to generally accepted government accounting standards.
The DoD can't take a physical inventory of its property, plant, and equipment because it doesn't really have a detailed, reliable listing of its property, plant, and equipment...this is still SERIOUSLY SCARY STUFF for an organization as large as the DoD.
The funny thing is the DoD simply doesn't know how big the problem is because it is not politically expedient to get to the bottom of this. What organization really wants to resolve its own gross negligence?
If the DoD knew precisely how big the problem was, the PLUG FACTOR would have been resolved well after 2002 and the internal auditors would have reviewed the supporting documentation and signed off on the financials with something better than a disclaimer of opinion.
However, here we are 15 years later and the DoD is still giving us the same old tired lines about "legacy" computer systems and yet we have some of the best computer minds in the State of Washington who could be contracted to resolve this problem in less than 2 years. IF that was just the problem. . . .
I will say again, if any corporation had to make unsupported accounting adjustments to the tune of $2.3 trillion to $6.5 trillion and did this over a 15 year time span, Wall Street would destroy the corporation's stock and the U.S. government would shut down the accounting firm who gave a "clean" audit report (as the case with Enron and Arthur Andersen LLP accounting firm).