,i #aacth ,,congress #b;d ,session ,h4 ,r4 #eabf ,,in ,,the ,,house ,,of ,,representatives ,july #af1 #bjad ,ms4 ,lee of ,california 7for herself1 ,mr4 ,burgess1 ,ms4 ,schakowsky1 and ,mr4 ,benishek7 introduced the following bill2 which was referred to the ,committee on ,oversight and ,government ,reform1 and in addition to the ,committee on ,armed ,services1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to reduce by one-half of one percent the discretionary budget authority of any ,federal agency for a fiscal year if the financial statement of the agency for the previous fiscal year does not receive a qualified or unqualified audit opinion by an external independent auditor1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,audit the ,pentagon ,act of #bjad4 #b4 ,purposes ,the purposes of this ,act are as follows3 7#a7 ,to strengthen ,american national security by ensuring that-- 7,a7 military planning1 operations1 weapons development1 and a long-term national security strategy are connected to sound financial controls2 and 7,b7 defense dollars are spent efficiently4 7#b7 ,to instill a culture of accountability at the ,department of ,defense that supports the vast majority of dedicated members of the ,armed ,forces and civilians who want to ensure proper accounting and prevent waste1 fraud1 and abuse4 #c4 ,findings ,congress finds the following3 7#a7 ,the #bjac ,financial ,report of the ,united ,states ,government found that1 of major agencies1 only the ,department of ,defense had a disclaimer because it lacked any auditable reporting or accounting available for independent review4 ,in the ,financial ,report1 the ,treasury ,department summarized3 ,since the passage of the ,,cfo ,act of #aiij1 the federal financial community has made important strides in instilling strong accounting and financial reporting practices4 ,this year1 #bc of the #bd ,,cfo ,act agencies obtained an opinion from the independent auditors on their financial statements4 ,out of the #bd major ,,cfo ,act agencies1 there were #bb clean opinions1 #a qualified opinion1 and only one remaining disclaimer in ,,fy #bjac4 ''' ,however1 weaknesses in basic financial management practices and other limitations continue to prevent one major agency1 and the ,government as a whole1 from achieving an audit opinion44 7#b7 ,the financial management of the ,department of ,defense has been on the ,high-,risk list of the ,government ,accountability ,office 7,,gao74 ,the ,,gao found that the ,department is not consistently able to control costs2 ensure basic accountability2 anticipate future costs and claims on the budget2 measure performance2 maintain funds control2 and prevent and detect fraud1 waste1 and abuse4 7#c7 ,at a ,september #bjaj hearing of the ,senate1 the ,government ,accountability ,office stated that past expenditures by the ,department of ,defense of #e1hjj1jjj1jjj to improve financial information1 and billions of dollars more of anticipated expenditures on new information technology systems for that purpose1 may not suffice to achieve full audit readiness of the financial statement of the ,department4 7#d7 ,section #i of article #a of the ,constitution of the ,united ,states requires all agencies of the ,federal ,government1 including the ,department of ,defense1 to publish a regular statement and account of the receipts and expenditures of all public money4 7#e7 ,section #cjc7;d7 of the ,chief ,financial ,officers ,act of #aiij 7,public ,law #aja-egf7 required that financial statements be prepared and independently audited for the ,department of the ,army by ,march #ca1 #aiib1 and for the ,department of the ,air ,force by ,march #ca1 #aiic4 ,neither the ,department of the ,army nor the ,department of the ,air ,force has complied4 7#f7 ,section #ceae of title #ca1 ,united ,states ,code1 requires the agencies of the ,federal ,government1 including the ,department of ,defense1 to present auditable financial statements beginning not later than ,march #a1 #aiig4 ,the ,department has not complied with this law4 7#g7 ,the ,federal ,financial ,management ,improvement ,act of #aiif 7#ca ,u4,s4,c4 #ceab note7 requires financial systems acquired by the ,federal ,government1 including the ,department of ,defense1 to be able to provide information to leaders to manage and control the cost of government4 ,the ,department has not complied with this law4 7#h7 ,in #bjje1 the ,department of ,defense created a ,financial ,improvement and ,audit ,readiness 7,,fiar7 ,plan1 overseen by a directorate within the office of the ,under ,secretary of ,defense 7,comptroller71 to improve ,department business processes with the goal of producing timely1 reliable1 and accurate financial information that could generate an audit-ready annual financial statement4 ,in ,december #bjje1 that directorate1 known as the ,,fiar ,directorate1 issued the first of a series of semiannual reports on the status of the ,financial ,improvement and ,audit ,readiness ,plan4 7#i7 ,secretary of ,defense ,robert ,m4 ,gates said in a speech on ,may #bd1 #bjaa3 ,the current apparatus for managing people and money across the ,do,d enterprise is woefully inadequate4 ,the agencies1 field activities1 joint headquarters1 and support staff functions of the department operate as a semi-feudal system--an amalgam of fiefdoms without centralized mechanisms to allocate resources1 track expenditures1 and measure results relative to the department's overall priorities44 7#aj7 ,the accounting problems of the ,department of ,defense result in widespread errors in pay that can be difficult to correct4 ,such payroll errors can impose hardship on members of the ,armed ,forces and their families4 #d4 ,spending reductions for agencies without clean audits 7a7 ,applicability 7#a7 ,in general ,subject to paragraph 7#b71 this section applies to each ,federal agency identified by the ,director of the ,office of ,management and ,budget as required to have an audited financial statement under section #ceae of title #ca1 ,united ,states ,code4 7#b7 ,applicability to military departments and defense agencies ,for purposes of paragraph 7#a71 in the case of the ,department of ,defense1 each military department and each ,defense ,agency shall be treated as a separate ,federal agency4 7b7 ,definitions ,in this section1 the terms financial statement and external independent auditor have the same meanings as those terms have under section #ceba7;e7 of title #ca1 ,united ,states ,code4 7c7 ,adjustments for ,financial ,accountability 7#a7 ,on ,march #b of fiscal year #bjae and each subsequent fiscal year1 the discretionary budget authority available for each ,federal agency for such fiscal year is adjusted as provided in paragraph 7#b74 7#b7 ,if a ,federal agency has not submitted a financial statement for the previous fiscal year1 or if such financial statement has not received either an unqualified or a qualified audit opinion by an independent external auditor1 the discretionary budget authority available for the ,federal agency is reduced by 4#e percent1 with the reduction applied proportionately to each account 7other than an account listed in subsection 7d7 or an account for which a waiver is made under subsection 7e774 7#c7 ,consistent with applicable laws1 the ,secretary of ,defense may make any reduction under paragraph 7#b7 in a manner that minimizes any effect on national security4 7#d7 ,an amount equal to the total amount of any reduction under paragraph 7#b7 shall be retained in the general fund of the ,treasury for the purposes of deficit reduction4 7d7 ,accounts excluded ,the following accounts are excluded from any reductions referred to in subsection 7c77#b73 7#a7 ,military personnel1 reserve personnel1 and ,national ,guard personnel accounts of the ,department of ,defense4 7#b7 ,the ,defense ,health ,program account of the ,department of ,defense4 7e7 ,waiver ,the ,president may waive subsection 7c77#b7 with respect to an account if the ,president certifies that applying the subsection to that account would harm national security or members of the ,armed ,forces who are in combat4 7f7 ,report ,not later than #fj days after an adjustment under subsection 7c71 the ,director of the ,office of ,management and ,budget shall submit to ,congress a report describing the amount and account of each adjustment4 #e4 ,report on ,department of ,defense reporting requirements ,not later than #ahj days after the date of the enactment of this ,act1 the ,under ,secretary of ,defense 7,comptroller7 shall submit to ,congress a report setting forth a list of each report of the ,department required by law to be submitted to ,congress which1 in the opinion of the ,under ,secretary1 interferes with the capacity of the ,department to achieve an audit of the financial statements of the ,department with an unqualified opinion4 #f4 ,sense of ,congress ,it is the sense of ,congress that-- 7#a7 as the overall defense budget is cut1 congressional defense committees and the ,department of ,defense should not endanger the ,nation's troops by reducing wounded warrior accounts or vital protection 7such as body armor7 for members of the ,armed ,forces in harm's way2 7#b7 the valuation of legacy assets by the ,department of ,defense should be simplified without compromising essential controls or generally accepted government auditing standards2 and 7#c7 nothing in this ,act should be construed to require or permit the declassification of accounting details about classified defense programs1 and1 as required by law1 the ,department of ,defense should ensure financial accountability in such programs using proven practices1 including using auditors with security clearances4