Rumsfeld Inherits Financial Mess (DOD loses 1.1 TRILLION)

InsightMag.com ^ | Unknown | Kelly Patricia O'Meara

[babble-on]

At least reading the OIG report one can begin to get a grasp of what the article was talking about. The article implies to me and apparently a lot of others here who read it that 1.1 trillion dollars is missing from the Federal Government. The OIG report, while serious/horrific, does not make any such claim. I am not an accountant, but what the report says is that of 4.4 trillion in total accounting ENTRIES, they found 1.1 trillion that did not have proper documentation. Now, accounting entries on internal ledgers are not the same as "expenses". Items being journaled from one account to another, one military base to another, etc would all create accounting entries. This is why the total accounting entries are so vastly greater than the entire Pentagon budget for the years in question. I'm not defending government accounting. I find it horrible and a travesty that they government doesn't know where its money goes. However, this article is very misleading.

[FormerLurker]

I am not an accountant, but what the report says is that of 4.4 trillion in total accounting ENTRIES, they found 1.1 trillion that did not have proper documentation.

What the report said was, "However, department-level accounting entries of $1.1 trillion were unsupported or improper."

That means unaccounted for, in other words, missing.

[babble-on]

The magazine article is from Sept 3, 2001, and so was probably published a week or two before that.

[babble-on]

I agree that its bad, but it really does not say that 1.1 trillion dollars was stolen. It says that entries in that amount had inadequate documentation. These would in many many cases be entries where a jeep was debited from one base and credied to another, but the paperwork was incorrect. So that's two entries, one + and one - of the same magnitude. The government still owns the jeep, its just accounted for incorrectly. I'm sure fraud is widespread, but you can't steal 4 times more than your annual budget.

[FormerLurker]

For some reason or another the link in post #38 doesn't work, so I'll post it again...

US Government Can't Account For Billions Of Spent Tax Dollars

[FormerLurker]

The magazine article is from Sept 3, 2001, and so was probably published a week or two before that.

Er, the report wasn't even printed until September 19, 2001, and wasn't presented to Congress until May 2002 apparently, so how could there be a magazine article from September 3, 2001 concerning this? Time warp?

[babble-on]

To me the real meaning of the OIG report is that the accounting is so poor and the sums so vast that massive amounts of fraud amounting to billions annually could take place and never ever have a chance of being detected. At least WorldCom got caught eventually. The Pentagon, never.

[babble-on]

http://insightmag.com/main.cfm?include=detail&storyid=139530

Investigative Report Rumsfeld Inherits Financial Mess Posted Aug. 10, 2001 By Kelly Patricia O’Meara

[FormerLurker]

I agree that its bad, but it really does not say that 1.1 trillion dollars was stolen.

Of course it doesn't say it was stolen, it simply says that it's "unaccounted" for..

As far as the resources available to the DOD, here's what the report states...

The FY 2000 DoD Agency-Wide Financial Statements were compiled from the financial statements of the DoD reporting entities: the Army, Navy, and Air Force General Funds; the Army, Navy, and Air Force Working Capital Funds; the Military Retirement Fund; the U.S. Army Corps of Engineers, Civil Works Program; and financial data for the Other Defense Organizations-General Funds and Working Capital Funds. In FY 2000, the DoD Components reported total assets of $616.7 billion, total liabilities of $1.0 trillion, total net costs of operations of $347.5 billion, and total budgetary resources of $656.1 billion.

Funny that the amount unaccounted for is greater than their total liabilities. Me thinks it's probably even worse than what the report implies..

[FormerLurker]

Investigative Report Rumsfeld Inherits Financial Mess Posted Aug. 10, 2001

Thanks for straightening me out on that. I still don't understand how the OIG report came out in September of 2001 when it's mentioned in the article as being presented in May, where the article has now been correctly dated at August 2001. I suppose they could have reported findings to Congress before publishing the report.

Oh well, we finally got it straight at least...

[FormerLurker]

To me the real meaning of the OIG report is that the accounting is so poor and the sums so vast that massive amounts of fraud amounting to billions annually could take place and never ever have a chance of being detected.

A billion for you, a billion for me, a billion here, a billion there, the mind boggles...

[iconoclast]

"How is it that the companies hired to develop financial-management systems for government that never seem to do the job - ....

Fee Fi Fo Fum, I smell Arthur Anderson.

[babble-on]

Absolutely damn right. This is the same government that accounts for pension contributions as current revenue without taking a charge for future liabilities payable. That (social security) is the biggest accounting crime in world history. But these are the wizards who are going to pass judgement on American businesses.

[FormerLurker]

PING!

[StriperSniper]

Bump for later.

[aSkeptic]

So.. As aSkeptic would ask, where did this missing money come from? Sounds like a banal question. But I'm curious about these "budgets" that congress aproves of.. but can't be told what they are for. In the interests of national security. Ok. Alright. Who is to say now that when the DoD goes and asks for 300 million for this or that secret thing we cannot tell you about.. its really just to cover the DoD's ass? This is disgusting beyond COMPREHENSION