,i  #aac? ,,congress  #a/ ,session  ,h4 
,r4 #eei  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,febru>y #f1 #bjac    
,ms4 ,lee ( ,cali=nia 7= h]self1 ,ms4   
,s*ak[sky1 ,mr4 ,ellison1 ,mr4          
,grijalva1 ,mr4 ,cony]s1 ,mr4 ,lewis1   
,mr4 ,honda1 ,ms4 ,cl>ke1 ,mr4 ,burgess1
 ,mr4 ,ru%1 ,mr4 ,s*rad]1 & ,mr4        
,blum5au]7 introduc$ ! foll[+ bill2 :i* 
0 ref]r$ to ! ,committee on ,ov]sight & 
,gov]nm5t ,re=m1 & 9 addition to !      
,committee on ,arm$ ,s]vices1 = a p]iod 
to be subsequ5tly det]m9$ by ! ,speak]1 
9 ea* case = consid]ation ( su*         
provisions z fall )9 ! jurisdiction ( ! 
committee conc]n$  ,a ,,bill  ,to r$uce 
by #e p]c5t ! discretion>y budget       
au?ority ( any ,f$]al ag5cy = a fiscal  
ye> if ! f9ancial /atem5t ( ! ag5cy = ! 
previ\s fiscal ye> does n receive a     
qualifi$ or unqualifi$ audit op9ion by  
an ext]nal indep5d5t auditor1 & = o!r   
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,audit ! ,p5tagon ,act (   
#bjac4  #b4 ,purposes ,! purposes ( ?is 

,act are z foll[s3  7#a7 ,to /r5g!n     
,am]ican national security by ensur+ t--
  7,a7 milit>y plann+1 op]ations1       
weapons developm5t1 & a long-t]m        
national security /rategy are connect$  
to s\nd f9ancial controls2 &  7,b7      
def5se doll>s are sp5t effici5tly4  7#b7
 ,to in/ill a culture ( acc\ntability at
 ! ,dep>tm5t ( ,def5se t supports ! va/ 
majority ( d$icat$ memb]s ( ! ,arm$     
,=ces & civilians :o want to ensure     
prop] acc\nt+ & prev5t wa/e1 fraud1 &   
abuse4  #c4 ,f9d+s ,congress f9ds !     
foll[+3  7#a7 ,! #bjab ,f9ancial ,report
 ( ! ,unit$ ,/ates ,gov]nm5t f\nd t #ba 
( #bd major ,f$]al ag5cies receiv$ clean
 audit op9ions4 ,two m1 ! ,dep>tm5t (   
,homel& ,security & ! ,dep>tm5t ( ,/ate1
 receiv$ qualifi$ audit op9ions b are   
mak+ progress4 ,only ! ,dep>tm5t (      
,def5se _h a disclaim] because x lack$  
any auditable report+ or acc\nt+        
available = indep5d5t review4 ,9 !      
,f9ancial ,report1 ! ,treasury ,dep>tm5t
 summ>iz$3 ,ov] ! pa/ #bj ye>s1 an      

increas+ numb] ( ,f$]al ag5cies h       
initiat$ & su/a9$ discipl9$ & consi/5t  
f9ancial report+ op]ations1 implem5t$   
effective int]nal controls ar\nd        
f9ancial report+1 & h successfully      
integrat$ transaction process+ & acc\nt+
 records4 ,^! ef=ts h result$ 9 improv$ 
results on f9ancial /atem5t audits4     
,h[ev]1 weaknesses 9 basic f9ancial     
managem5t practices & o!r limitations   
cont9ue to prev5t "o major ag5cy1 & !   
,gov]nm5t z a :ole1 f a*iev+ an audit   
op9ion44  7#b7 ,! f9ancial managem5t ( !
 ,dep>tm5t ( ,def5se has be5 on !       
,high-,risk li/ ( ! ,gov]nm5t           
,acc\ntability ,(fice 7,,gao74 ,! ,,gao 
f\nd t ! ,dep>tm5t is n consi/5tly able 
to control co/s2 ensure basic           
acc\ntability2 anticipate future co/s & 
claims on ! budget2 measure p]=mance2   
ma9ta9 funds control2 & prev5t & detect 
fraud1 wa/e1 & abuse4  7#c7 ,at a       
,septemb] #bjaj he>+ ( ! ,s5ate1 !      
,gov]nm5t ,acc\ntability ,(fice /at$ t  
pa/ exp5ditures by ! ,dep>tm5t ( ,def5se

 ( #e1hjj1jjj1jjj to improve f9ancial   
in=mation1 & billions ( doll>s m (      
anticipat$ exp5ditures on new in=mation 
te*nology sy/ems = t purpose1 may n     
suffice to a*ieve full audit read9ess ( 
! f9ancial /atem5t ( ! ,dep>tm5t4 ,at t 
he>+1 ! ,gov]nm5t ,acc\ntability ,(fice 
c\ld n pr$ict :5 ! ,dep>tm5t w\ld a*ieve
 full audit read9ess ( su* /atem5ts4    
7#d7 ,section #i ( article #a ( !       
,con/itution ( ! ,unit$ ,/ates requires 
all ag5cies ( ! ,f$]al ,gov]nm5t1       
includ+ ! ,dep>tm5t ( ,def5se1 to publi%
 a regul> /atem5t & acc\nt ( ! receipts 
& exp5ditures ( all public money4  7#e7 
,section #cjc7;d7 ( ! ,*ief ,f9ancial   
,(fic]s ,act ( #aiij 7,public ,law      
#aja-egf7 requir$ t f9ancial /atem5ts be
 prep>$ & indep5d5tly audit$ = !        
,dep>tm5t ( ! ,army by ,m>* #ca1 #aiib1 
& = ! ,dep>tm5t ( ! ,air ,=ce by ,m>*   
#ca1 #aiic4 ,nei!r ! ,dep>tm5t ( ! ,army
 nor ! ,dep>tm5t ( ! ,air ,=ce has      
compli$4  7#f7 ,section #ceae ( title   
#ca1 ,unit$ ,/ates ,code1 requires !    

ag5cies ( ! ,f$]al ,gov]nm5t1 includ+ ! 
,dep>tm5t ( ,def5se1 to pres5t auditable
 f9ancial /atem5ts beg9n+ n lat] ?an    
,m>* #a1 #aiig4 ,! ,dep>tm5t has n      
compli$ ) ?is law4  7#g7 ,! ,f$]al      
,f9ancial ,managem5t ,improvem5t ,act ( 
#aiif 7#ca ,u4,s4,c4 #ceab note7        
requires f9ancial sy/ems acquir$ by !   
,f$]al ,gov]nm5t1 includ+ ! ,dep>tm5t ( 
,def5se1 to be able to provide in=mation
 to lead]s to manage & control ! co/ (  
gov]nm5t4 ,! ,dep>tm5t has n compli$ )  
?is law4  7#h7 ,! ,national ,def5se     
,au?orization ,act = ,fiscal ,ye> #bjjb 
7,public ,law #ajg-ajg7 requires !      
,secret>y ( ,def5se to report to        
,congress annually on ! reliability ( ! 
f9ancial /atem5ts ( ! ,dep>tm5t (       
,def5se1 to m9imize res\rces sp5t on    
produc+ unreliable f9ancial /atem5ts1 & 
to use res\rces sav$ to improve f9ancial
 managem5t policies1 proc$ures1 &       
int]nal controls4  7#i7 ,9 #bjje1 !     
,dep>tm5t ( ,def5se creat$ a ,f9ancial  
,improvem5t & ,audit ,read9ess 7,,fi>7  

,plan1 ov]se5 by a directorate )9 !     
(fice ( ! ,"u ,secret>y ( ,def5se       
7,comptroll]71 to improve ,dep>tm5t     
bus9ess processes ) ! goal ( produc+    
timely1 reliable1 & accurate f9ancial   
in=mation t c\ld g5]ate an audit-ready  
annual f9ancial /atem5t4 ,9 ,decemb]    
#bjje1 t directorate1 kn[n z ! ,,fi>    
,directorate1 issu$ ! fir/ ( a s]ies (  
semiannual reports on ! /atus ( !       
,f9ancial ,improvem5t & ,audit ,read9ess
 ,plan4  7#aj7 ,! ,national ,def5se     
,au?orization ,act = ,fiscal ,ye> #bjaj 
7,public ,law #aaa-hd7 requires regul>  
/atus reports on ! ,f9ancial ,improvem5t
 & ,audit ,read9ess ,plan describ$ 9    
p>agraph 7#i71 & codifi$ z a /atutory   
requirem5t ! goal ( ! ,plan 9 ensur+ t  
,dep>tm5t ( ,def5se f9ancial /atem5ts   
are validat$ z ready = audit n lat] ?an 
,septemb] #cj1 #bjag4  #d4 ,sp5d+       
r$uctions = ag5cies )\t clean audits    
7a7 ,applicability  7#a7 ,9 g5]al       
,subject to p>agraph 7#b71 ?is section  
applies to ea* ,f$]al ag5cy id5tifi$ by 

! ,director ( ! ,(fice ( ,managem5t &   
,budget z requir$ to h an audit$        
f9ancial /atem5t "u section #ceae (     
title #ca1 ,unit$ ,/ates ,code4  7#b7   
,applicability to milit>y dep>tm5ts &   
def5se ag5cies ,= purposes ( p>agraph   
7#a71 9 ! case ( ! ,dep>tm5t ( ,def5se1 
ea* milit>y dep>tm5t & ea* ,def5se      
,ag5cy %all be treat$ z a sep>ate ,f$]al
 ag5cy4  7b7 ,def9itions ,9 ?is section1
 ! t]ms f9ancial /atem5t & ext]nal      
indep5d5t auditor h ! same mean+s z ^?  
t]ms h "u section #ceba7;e7 ( title #ca1
 ,unit$ ,/ates ,code4  7c7 ,adju/m5ts = 
,f9ancial ,acc\ntability  7#a7 ,on ,m>* 
#b ( fiscal ye> #bjad & ea* subsequ5t   
fiscal ye>1 ! discretion>y budget       
au?ority available = ea* ,f$]al ag5cy = 
su* fiscal ye> is adju/$ z provid$ 9    
p>agraph 7#b74  7#b7 ,if a ,f$]al ag5cy 
has n submitt$ a f9ancial /atem5t = !   
previ\s fiscal ye>1 or if su* f9ancial  
/atem5t has n receiv$ ei!r an unqualifi$
 or a qualifi$ audit op9ion by an       
indep5d5t ext]nal auditor1 !            

discretion>y budget au?ority available =
 ! ,f$]al ag5cy is r$uc$ by #e p]c5t1 ) 
! r$uction appli$ proportionately to ea*
 acc\nt 7o!r ?an an acc\nt li/$ 9       
subsection 7d7 or an acc\nt = :i* a     
waiv] is made "u subsection 7e774  7#c7 
,an am\nt equal to ! total am\nt ( any  
r$uction "u p>agraph 7#b7 %all be reta9$
 9 ! g5]al fund ( ! ,treasury = !       
purposes ( deficit r$uction4  7d7       
,acc\nts exclud$ ,! foll[+ acc\nts are  
exclud$ f any r$uctions ref]r$ to 9     
subsection 7c77#b73  7#a7 ,milit>y      
p]sonnel1 res]ve p]sonnel1 & ,national  
,gu>d p]sonnel acc\nts ( ! ,dep>tm5t (  
,def5se4  7#b7 ,! ,def5se ,heal?        
,program acc\nt ( ! ,dep>tm5t ( ,def5se4
  7e7 ,waiv] ,! ,presid5t may waive     
subsection 7c77#b7 ) respect to an      
acc\nt if ! ,presid5t c]tifies t apply+ 
! subsection to t acc\nt w\ld h>m       
national security or memb]s ( ! ,arm$   
,=ces :o are 9 combat4  7f7 ,report ,n  
lat] ?an #fj days aft] an adju/m5t "u   
subsection 7c71 ! ,director ( ! ,(fice (

 ,managem5t & ,budget %all submit to    
,congress a report describ+ ! am\nt &   
acc\nt ( ea* adju/m5t4  #e4 ,report on  
,dep>tm5t ( ,def5se report+ requirem5ts 
,n lat] ?an #ahj days aft] ! date ( !   
enactm5t ( ?is ,act1 ! ,"u ,secret>y (  
,def5se 7,comptroll]7 %all submit to    
,congress a report sett+ =? a li/ ( ea* 
report ( ! ,dep>tm5t requir$ by law to  
be submitt$ to ,congress :i*1 9 ! op9ion
 ( ! ,"u ,secret>y1 int]f]es ) !        
capacity ( ! ,dep>tm5t to a*ieve an     
audit ( ! f9ancial /atem5ts ( !         
,dep>tm5t ) an unqualifi$ op9ion4  #f4  
,s5se ( ,congress ,x is ! s5se (        
,congress t--  7#a7 z ! ov]all def5se   
budget is cut1 congressional def5se     
committees & ! ,dep>tm5t ( ,def5se %\ld 
n endang] ! ,nation's troops by r$uc+   
w\nd$ w>rior acc\nts or vital protection
 7su* z body armor7 = memb]s ( ! ,arm$  
,=ces 9 h>m's way2  7#b7 ! valuation (  
legacy assets by ! ,dep>tm5t ( ,def5se  
%\ld be simplifi$ )\t compromis+        
ess5tial controls or g5]ally accept$    

gov]nm5t audit+ /&>ds2 &  7#c7 no?+ 9   
?is ,act %\ld be con/ru$ to require or  
p]mit ! declassification ( acc\nt+      
details ab\t classifi$ def5se programs1 
&1 z requir$ by law1 ! ,dep>tm5t (      
,def5se %\ld ensure f9ancial            
acc\ntability 9 su* programs us+ prov5  
practices1 includ+ us+ auditors )       
security cle>ances4