That sum is indeed $21 trillion — tens of trillions of dollars — spent by the DoD and Housing and Urban Development (HUD) on … well, no one really knows what.

Not just that, but this rather bewildering amount slipped through cracks in only seventeen years — from 1998, the year legislation passed mandating annual audits of every government agency, through 2015.

Michigan State University Professor of Economics Mark Skidmore, who specializes in public finance, authored the study, which became his brainchild after hearing Catherine Austin Fitts, former Assistant Secretary of Housing and Urban Development during the presidency of George H.W. Bush, remark on a report from the Office of the Inspector General (OIG) revealing no less than $6.5 trillion unaccounted for, but spent, by the DoD.

Skidmore, flabbergasted, had presumed from experience with previous public financing matters the astronomical figure too high not to be a mistake.

“Sometimes you have an adjustment just because you don’t have adequate transactions,” he explained of what typically happens when funds aren’t accounted for, in an interview in early December, “so an auditor would just recede. Usually it’s just a small portion of authorized spending, maybe one percent at most. So for the Army one percent would be $1.2 billion of transactions that you just can’t account for.”

Except, the erstwhile ‘missing’ monies didn’t total in the billions, and Skidmore soon confirmed the preposterous sum published in the OIG report, “Army General Fund Adjustments Not Adequately Documented or Supported,” on July 26, 2016. On December 8 — the day following the Pentagon’s audit announcement — he and Boston University Economics Professor Laurence Kotlikoff co-authored a column for Forbes explicating the research and expanding on the problematic OIG report, stating,

“The report indicates that for fiscal year 2015, the Army failed to provide adequate support for $6.5 trillion in journal voucher adjustments. According to the GAO’s Comptroller General, ‘Journal vouchers are summary-level accounting adjustments made when balances between systems cannot be reconciled. Often these journal vouchers are unsupported, meaning they lack supporting documentation to justify the adjustment or are not tied to specific accounting transactions … For an auditor, journal vouchers are a red flag for transactions not being captured, reported, or summarized correctly.’”

He continues, “Given that the entire Army budget in fiscal year 2015 was $120 billion, unsupported adjustments were 54 times the level of spending authorized by Congress.  The July 2016 report indicates that unsupported adjustments are the result of the Defense Department’s ‘failure to correct system deficiencies.’ The result, according to the report, is that data used to prepare the year-­end financial statements were unreliable and lacked an adequate audit trail. The report indicates that just 170 transactions accounted for $2.1 trillion in year-end unsupported adjustments. No information is given about these 170 transactions. In addition many thousands of transactions with unsubstantiated adjustments  were, according to the report, removed by the Army. There is no explanation concerning why they were removed nor their magnitude. The July 2016 report states, ‘In addition, DFAS (Defense Finance and Accounting Service) Indianapolis personnel did not document or support why DDRS (The Defense Department Reporting System) removed at least 16,513 of 1.3 million feeder file records during the Third Quarter.’”

Affirming the jaw-dropping anomalous figure led Skidmore promptly to enjoin Fitts for a collaboration with graduate students examining thousands of additional Inspector General reports, dating from 1998 through 2015, the last year for which data was available at the time of the project — concentrating solely on the Defense Department and the Department of Housing and Urban Development.

“This is incomplete,” Skidmore advised, “but we have found $21 trillion in adjustments over that period. The biggest chunk is for the Army. We were able to find 13 of the 17 years and we found about $11.5 trillion just for the Army.”

Although even the preliminary numbers would sound nearly anyone’s alarm bells, Skidmore refused to propound on the nature of the unaccounted funds — whether it could have been allotted toward covert but legitimate projects, misallocated, brazenly wasted, or otherwise — but did characterize the raw findings as profoundly telling of a dearth in transparency in funding and parallel evisceration of due process in budgeting at the federal level of government.

Whether the Pentagon’s vanishing funds will ever be matched to tangible ends in its first or future financial post-mortem seems optimistically unrealistic; however, that the ball is finally rolling presents to the disgruntled public a momentous opportunity to pressure officials to be held accountable for squandering such embarrassing sums of taxpayer income.

After all, they’re listening — Skidmore’s interview with USAWatchdog came out on December 3 — with the Pentagon’s announcement following just four days later, on the 7th. Further, Skidmore noted peremptorily that, as he and Fitts scoured figures online, they observed something suspicious on the website for the Office of Inspector General, asserting in a side note,

“[A]fter Mark Skidmore began inquiring about OIG-reported unsubstantiated adjustments, the OIG’s webpage, which documented, albeit in a highly incomplete manner, these unsupported ‘accounting adjustments,’ was mysteriously taken down. Fortunately, Mark copied the July 2016 report and all other relevant OIG reports in advance [available at this link]. Mark has repeatedly tried to contact Lorin Venable, Assistant Inspector General at the Office of the Inspector General.  He has emailed, phoned, and used LinkedIn to ask Ms. Venable about OIG’s disclosure of unsubstantiated adjustments, but she has not responded.”

In fact, as noted previously by The Mind Unleashed, the Department of Defense also recently edited its original audit announcement in a superficially innocuous yet potentially insidious detail — halving the total number of auditors to descend on the military, as seen in an internet archive of the page, to just 1,200 — without explanation, notation of adjusted figure, nor any other remark explicating the adjustment a simple mistake or otherwise.

Despite a remarkable $21 trillion essentially having evaporated from just two albeit notoriously thriftless governmental agencies, Skidmore fears public apathy will reign — with predictably wearisome results.

“If the American people don’t stand up and say this is unacceptable,” the economist admonished, “nothing is going to happen. This is just wrong.”

Image: DOD, fnr.

To reiterate, the United States Department of Defense — whose Fiscal Year 2018 budget hovers near a profane $700 billion despite heinous bookkeeping wherein no on is entirely sure what happened to over $10 trillion allotted it in annual budgets over the past three decades — has never faced an audit, ever, in departmental history.

Until now.

“The Defense Department is starting the first agencywide financial audit in its history, Pentagon officials announced today,” a statement on Thursday explained.

Defense Department Comptroller David Norquist told the press he had received notification from the Office of the Inspector General announcing the first-ever audit of the Pentagon beginning this month — an endeavor so momentous in scope, no less than 1,200 auditors will be unleashed across the department to help ensure its completion. [Notably, the original DoD statement cited the number of auditors to execute the probe at 2,400 — a figure which changed remarkably and without additional notation or explanation from the Pentagon as to the nature, typo or otherwise, of the error.]

For good reason — the colossal undertaking will delve into every facet of the Pentagon’s inner workings — from weapons and personnel, to supplies, property, and bases, of which purportedly the exact number remains unknown.

“Starting an audit is a matter of driving change inside a bureaucracy that may resist it,” Norquist told members of the House Armed Services Committee during his tenure as CFO at the Department of Homeland Security, on the feasibility of carrying out an audit, when the time came for DHS to endure its own government-mandated, fine-toothed comb.

While this will be the Defense Department’s first audit in its history, it won’t be the last — Norquist tacitly acknowledged coming somewhat into compliance with the 90s-era law, announcing the Pentagon would undergo audits annually, “with reports issued every November 15.”

“With consistent feedback from auditors, we can focus on improving the processes of our day-to-day work,” the comptroller stated, championing the efficacy of the process. “Annual audits also ensure visibility over the quantity and quality of the equipment and supplies our troops use.”

For years, Defense officials proclaimed the infeasibility of auditing the Pentagon and its myriad branches, asserting without irony that, because an audit would be so massive, one could never be effectively or thoroughly performed.

“Over the last 20 years, the Pentagon has broken every promise to Congress about when an audit would be completed,” Rafael DeGennaro, director of Audit the Pentagon, told the Guardian at the beginning of the year. “Meanwhile, Congress has more than doubled the Pentagon’s budget.”

Indeed, the lack of collective bookkeeping and, in essence, oversight have left DoD records in such disarray, it has been said no one at the Pentagon knows where some $10 trillion went — from supplies to weapons to bases to personnel to munitions stockpiles — and an audit proffers no guarantees the sum total will ever be ‘found.’

This stems from a plethora of terrible business practices — some, fomented directly as a stopgap when relevant information lacks.

For instance, a report from Reuters more than three years ago divulged, among a sizable laundry list of additional eyebrow-scratchers, the anything-but-ordinary, yet standard operating procedure, termed, “plugging,” as explained by dedicated 15-year Pentagon employee, Linda Woodford — whose entire career quite literally entailed “inserting phony numbers in the U.S. Department of Defense’s accounts.”

According to Reuters, at crunch time, Woodford and her colleagues — who were required to reconcile U.S. Navy ledgers with those of the Treasury — regularly compensated for missing numbers, errant figures, and information without context with plugs. Straight lies, some, while other plugs were used to account for time discrepancies with financial institutions clearing checks.

However, although employees would attempt to reckon numbers afterward by entering updated and corrected information, such edits were not the rule, according to sources speaking with Reuters, and adding “unsubstantiated change actions” to the books was in 2013, if not still, par for the course at the Pentagon.

Beyond bookkeeping legerdemain, the DoD apparently harbors as much an issue with consumerism as the rest of the U.S. government — at least, judging by a single, telling glance into the ludicrous arrangement that are the Pentagon’s supply stockpiles and protocols for ordering, a morass of red tape courtesy of the Defense Logistics Agency.

If you want to find the missing trillions, one pertinent starting point would be the DLA, about which Reuters deadpanned, “keeps buying more of what it already has too much of.

“A document the Pentagon supplied to Congress shows that as of September 30, 2012, the DLA and the military services had $733 million worth of supplies and equipment on order that was already stocked in excess amounts on warehouse shelves. That figure was up 21% from $609 million a year earlier. The Defense Department defines ‘excess inventory’ as anything more than a three-year supply.

“Consider the ‘vehicular control arm,’ part of the front suspension on the military’s ubiquitous High Mobility Multipurpose Vehicles, or Humvees. As of November 2008, the DLA had 15,000 of the parts in stock, equal to a 14-year supply, according to an April 2013 Pentagon inspector general’s report.

“And yet, from 2010 through 2012, the agency bought 7,437 more of them — at prices considerably higher than it paid for the thousands sitting on its shelves. The DLA was making the new purchases as demand plunged by nearly half with the winding down of the Iraq and Afghanistan wars. The inspector general’s report said the DLA’s buyers hadn’t checked current inventory when they signed a contract to acquire more.”

Though the manipulation of trillions of tax dollars in part through ‘plugs’ and the hoarding of absurdly excess Humvee parts might provide superficial if nihilistic entertainment in print, that the United States Department of Defense — and its war machine apparatus squeezing its tentacles around the planet — hasn’t found mandatory audits necessary until this late date should particularly offend those opposed to an imperialist agenda.

Empire isn’t hidden in such smaller-scale erroneous numbers, Humvee parts, bullets, airplane parts, zippers, or pens — but without a shred of accountability, it might.

Image: Pentagon/Globalresearch.ca.