,i #aaeth ,,congress #ast ,session ,h4 ,r4 #cjgi ,,in ,,the ,,house ,,of ,,representatives ,june #bg1 #bjag,ms4 ,lee 7for herself1 ,mr4 ,burgess1 ,ms4 ,clarke of ,new ,york1 ,mr4 ,conyers1 ,mr4 ,ellison1 ,mr4 ,evans1 ,mr4 ,grijalva1 ,ms4 ,norton1 ,mr4 ,huffman1 ,ms4 ,jackson ,lee1 ,ms4 ,jayapal1 ,ms4 ,kelly of ,illinois1 ,mr4 ,mc,govern1 ,ms4 ,moore1 ,mr4 ,moulton1 ,mr4 ,nolan1 ,mr4 ,pocan1 ,mr4 ,polis1 ,mr4 ,raskin1 ,ms4 ,schakowsky1 ,mr4 ,biggs1 ,mr4 ,blumenauer1 ,mr4 ,gosar1 ,mr4 ,lance1 ,mr4 ,labrador1 ,mr4 ,massie1 ,mr4 ,jones1 ,mr4 ,stivers1 ,mrs4 ,watson ,coleman1 ,mr4 ,welch1 ,mr4 ,cohen1 ,mr4 ,khanna1 ,mr4 ,de,saulnier1 and ,mr4 ,amash7 introduced the following bill2 which was referred to the ,committee on ,armed ,services ,a ,,bill ,to reduce by one-half of one percent the discretionary budget authority of the ,department of ,defense for a fiscal year if the financial statement of the ,department of ,defense 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 #bjag4 #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 civilian employees of the ,department who want to ensure proper accounting and prevent waste1 fraud1 and abuse4 #c4 ,findings ,congress finds the following3 7#a7 ,the #bjaf ,financial ,report of the ,united ,states ,government found that1 the ,department of ,defense again had a disclaimer because it lacked any auditable reporting or accounting available for independent review4 ,the ,department of ,defense is the only covered major agency that has always had such disclaimers and has never had a clean audit4 7#b7 ,the financial management of the ,department of ,defense has been on the ,high-,risk list of the ,government ,accountability ,office 7,,gao7 since #aiie because it has never achieved an unqualified audit opinion4 ,the ,,gao's #bjae ,high-,risk ,report found that ,the ,department of ,defense 7,,dod7 is responsible for more than half of the ,federal ,government's discretionary spending4 ,significant financial and related business management systems and control weaknesses have adversely affected ,,dod's ability to control costs2 ensure basic accountability2 anticipate future costs and claims on the budget2 measure performance2 maintain funds control2 prevent and detect fraud1 waste1 and abuse2 address pressing management issues2 and prepare auditable financial statements4 ,without accurate1 timely1 and useful financial information1 ,,dod is severely hampered in making sound decisions affecting the department's operations44 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 ,i 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 originally required 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 of ,defense 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 7#i7 ,then ,secretary of ,defense ,ashton ,carter said in a statement to the ,defense ,subcommittee of the ,committee on ,appropriations of the ,house of ,representatives on ,february #be1 #bjaf1 ,i cannot ask for more taxpayer dollars for defense without being candid about the fact that not every defense dollar is spent as wisely or responsibly as it could be1 and also being determined to change that and make our department more accountable44 7#aj7 ,then ,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#aa7 ,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 ,department of ,defense spending reductions in absence of submitted financial statements or failure to achieve unqualified or qualified independent audit opinion 7a7 ,definitions ,in this section3 7#a7 ,the terms financial statement and external independent auditor have the meanings given those terms in section #ceba7;e7 of title #ca1 ,united ,states ,code4 7#b7 ,the term qualified1 with respect to the audit status of a financial statement1 includes the characterization modified4 7#c7 ,the term unqualified1 with respect to the audit status of a financial statement1 includes the characterizations clean and unmodified4 7b7 ,reduction ,to ,encourage ,financial ,accountability ,if1 by ,march #b of a fiscal year1 the ,department of ,defense has not submitted a financial statement for the previous fiscal year1 or if1 by such date1 such financial statement has been submitted but has not received either an unqualified or a qualified audit opinion by an independent external auditor1 the discretionary budget authority available for the ,department of ,defense shall be reduced by 4#e percent4 7c7 ,application of reduction ,consistent with applicable laws1 the ,secretary of ,defense shall apply any reduction under subsection 7b7-- 7#a7 proportionately to each ,department of ,defense account 7other than an account listed in subsection 7e7 or an account for which a waiver is made under subsection 7f772 and 7#b7 in a manner that minimizes any adverse effect on national security4 7d7 ,deficit reduction ,an amount equal to the total amount of any reduction under subsection 7b7 shall be retained in the general fund of the ,treasury for the purposes of deficit reduction4 7e7 ,accounts excluded ,the following accounts are excluded from any reductions under subsection 7b73 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 7f7 ,waiver ,the ,president may waive subsection 7b7 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 deployed in combat zones4 7g7 ,report ,not later than #fj days after a reduction takes effect under subsection 7c71 the ,director of the ,office of ,management and ,budget shall submit to ,congress a report specifying each ,department of ,defense subject to reduction and the amount of the reduction4 #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 of ,defense 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 ,armed ,forces by reducing wounded warrior accounts or vital protection 7such as body armor7 for members of the ,armed ,forces serving 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