House lawmakers and government watchdogs expressed skepticism Wednesday about the Defense Department’s ability to produce a clean financial audit by a Dec. 31, 2028, statutory deadline.
The House Committee on Oversight and Government Reform held a hearing on the DoD years-long struggle to produce a clean financial audit despite claiming around half of the government’s discretionary spending.
Congress passed a measure as part of the 2024 National Defense Authorization Act that requires the DoD to produce a clean audit by Dec. 31, 2028. “Clean” means a clear enough accounting of the military’s assets, what was budgeted and spent, along with evidence and documentation, so that the Government Accountability Office can make an accurate assessment of the entire federal government’s finances.
The Marine Corps has been the only service to pass an audit since 2018, when it was first mandated to conduct a full audit. To date, the DoD has never passed a full, clean audit, according to the GAO.
Over the course of Wednesday’s hearing, both the members of the subcommittee on government operations and some of the witnesses had some concern about the department’s ability to pull it off.
“That’s a standard that every other large [government] agency is able to meet, and meet regularly,” Rep. Kweisi Mfume, D-Md., said in his opening remarks.
Knowing that the Pentagon has failed to deliver on that, Mfume said he could not vote for the proposed massive increase to DoD’s budget — from around $901 billion for fiscal 2026 to $1.5 trillion for fiscal 2027.
In 2024, the committee instituted a new system for the DoD’s auditing process, which follows a rubric or scorecard. Since that strategy was implemented, committee chairman Pete Sessions, R-Texas, said, “Progress was made but not enough to ensure full financial transparency and accountability. Financial transparency and accountability are core principles of good government.”
The underlying problems, as both Sessions and Asif Khan, director of the GAO, pointed out, are the internal accounting, budget and expenditure mechanisms across the DoD.
This is not a new issue; in fact, it has been going on for 30 years, according to Khan’s pre-hearing witness testimony.
“In 1995, GAO designated DoD financial management as a high-risk area because of pervasive weaknesses in its financial management systems, business processes, internal controls, corrective action plans, acquisition management and financial monitoring and reporting,” the testimony reads. “In 2025, we expanded DoD’s financial management high-risk area to include fraud risk management.”
That potential for fraud rises with a budget increase like the one proposed, one witness said.
“Any time there is an influx of cash or funds into any organization, the likelihood of increased risk of fraud, waste, and abuse coincides with that,” Brett Mansfield, deputy inspector general for audit in DoD’s Office of the Inspector General.
“I’m not sure if it’s a one-for-one [but] there is definitely a positive relationship between an influx of funds and the increased risks,” he added.