In the ‘80’s I worked on a couple of really expensive classified projects. You’d have been unable to find where the funding came from. I don’t recall details and probably never knew the deeper secrets, but I gather the money was “skimmed.” That would obviously create audit problems. HOWEVER, the projects were regularly audited by the GAO. The audits were thorough and meticulous. But I doubt anyone was ever allowed to square the circle where the budgets the money came from were concerned.
Projects like that are potential war winning technologies. If the money was up front and properly accounted for then the potential enemies would have decades more time to counter them. Also, they’d be able to find who had the contracts and plant spies. All in all, I’m not concerned.
HOWEVER, the projects were regularly audited by the GAO. The audits were thorough and meticulous.
As the GAO found in 2023, "DOD is the only large federal agency that has never achieved a "clean" audit opinion—which is when financial statements are presented fairly and consistent with accounting principles."
The audits may have been thorough and meticulous, but DoD has never successfully passed one.
At the lower level, military accounting is great fun. The goal is always to spend everything allowed to prevent future claims that you could get by on less. That can be difficult with military contracts as they are usually adjustable due to later changes in conditions. The comptroller must have sufficient funds left over from Q4 to cover adjustments made in Q1 of the following fiscal year.
How to obligate >99% of funds ending Q4 and not run the risk of an accounting violation in Q1? That was done by creating bogus service contracts and keeping them on the books through the end of Q1. If funds were needed to cover a contract adjustment, a bogus service contract or two could be canceled. At the end of Q1, all the remaining bogus Q4 service contracts could be canceled. For achieving a 99% obligation rate without an accounting error, the comptroller may get an award.
End of fiscal year is also fun when the comptroller seeks to spend funds on anything and everything to get his obligation rate near 100%. Folks overseas seek out training courses available near home. Once authorized, the member gets leave in conjunction with orders, and gets free air travel both ways, does the training, enjoys leave, and checks in to return overseas. Once checked in to return, any delay is not leave time. None of the travel is leave time.