US Army Falsified Trillions of Dollars, Auditor Finds

The U.S. Army made $6.5 trillion in wrongful adjustments to create the illusion its books were balanced.

The Defense Department’s Inspector General found the Army lacked proper receipts and invoices to back up many of its financial claims. Many of the numbers stated were simply made up, reports Reuters. In one quarter alone, the Army fudged $2.8 trillion in its accounting entries.

The 2015 financial statements were reported to be "materially misstated," according to the auditor, and ultimately useless as the “[Department of Defense] and Army managers could not rely on the data in their accounting systems when making management and resource decisions.”

This is only one incident in a long history of the Army manipulating its finances. As a result, it's impossible to know how the Defense Department -- which receives the largest portion of the federal budget -- spends public money.

"Where is the money going? Nobody knows," retired military analyst for the Pentagon Franklin Spinney told Reuters.

The Army General Fund received $282.6 billion in federal funds in 2015. But, according to the Inspector General, the Army either lost or simply didn't keep track of the required data, meaning much of the financial information reported was inaccurate or made up.

It's difficult to imagine how the Army could fudge trillions of dollars when it only have a budget in the billions. Jack Armstrong, former Defense Inspector General official, explains that the manipulation of funds happens when the Army tries to make its financial report match its budget report. By falsifying one account, the Army then has to change many sub-accounts, creating a domino effect. Eventually, the amount totals up. 

"They don’t know what the heck the balances should be,” Armstrong said.

The Army is set to undergo yet another audit starting late August, this time of its electronic health records system. Both the public and private health sectors have seen their fair shares of cyberattacks and thousands of confidential health records have been compromised. 

Fierce Healthcare reports that this upcoming audit “is to determine whether the Army designed and implemented effective security protocols to protect electronic health records and individually identifiable health information from unauthorized access and disclosure.”

Sources: Reuters, Fierce Healthcare / Photo credit: Staff Sgt. Jason T. Bailey/Flickr

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