,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #cjgi  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,june #bg1 #bjag,ms4  
,lee 7= h]self1 ,mr4 ,burgess1 ,ms4     
,cl>ke ( ,new ,york1 ,mr4 ,cony]s1 ,mr4 
,ellison1 ,mr4 ,evans1 ,mr4 ,grijalva1  
,ms4 ,norton1 ,mr4 ,huffman1 ,ms4       
,jackson ,lee1 ,ms4 ,jayapal1 ,ms4      
,kelly ( ,ill9ois1 ,mr4 ,mc,govern1 ,ms4
 ,moore1 ,mr4 ,m\lton1 ,mr4 ,nolan1 ,mr4
 ,pocan1 ,mr4 ,polis1 ,mr4 ,rask91 ,ms4 
,s*ak[sky1 ,mr4 ,biggs1 ,mr4 ,blum5au]1 
,mr4 ,gos>1 ,mr4 ,lance1 ,mr4 ,labrador1
 ,mr4 ,massie1 ,mr4 ,jones1 ,mr4 ,/iv]s1
 ,mrs4 ,watson ,coleman1 ,mr4 ,wel*1    
,mr4 ,coh51 ,mr4 ,khanna1 ,mr4          
,de,saulnier1 & ,mr4 ,ama%7 introduc$ ! 
foll[+ bill2 :i* 0 ref]r$ to !          
,committee on ,arm$ ,s]vices  ,a ,,bill 
,to r$uce by "o-half ( "o p]c5t !       
discretion>y budget au?ority ( !        
,dep>tm5t ( ,def5se = a fiscal ye> if ! 
f9ancial /atem5t ( ! ,dep>tm5t ( ,def5se
 = ! previ\s fiscal ye> does n receive a
 qualifi$ 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 (   
#bjag4  #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 &        
civilian employees ( ! ,dep>tm5t :o want
 to ensure prop] acc\nt+ & prev5t wa/e1 
fraud1 & abuse4  #c4 ,f9d+s ,congress   
f9ds ! foll[+3 7#a7 ,! #bjaf ,f9ancial  
,report ( ! ,unit$ ,/ates ,gov]nm5t f\nd
 t1 ! ,dep>tm5t ( ,def5se aga9 _h a     
disclaim] because x lack$ any auditable 
report+ or acc\nt+ available = indep5d5t
 review4 ,! ,dep>tm5t ( ,def5se is !    
only cov]$ major ag5cy t has always _h  
su* disclaim]s & has nev] _h a clean    

audit4  7#b7 ,! f9ancial managem5t ( !  
,dep>tm5t ( ,def5se has be5 on !        
,high-,risk li/ ( ! ,gov]nm5t           
,acc\ntability ,(fice 7,,gao7 s9ce #aiie
 because x has nev] a*iev$ an unqualifi$
 audit op9ion4 ,! ,,gao's #bjae         
,high-,risk ,report f\nd t ,! ,dep>tm5t 
( ,def5se 7,,dod7 is responsible = m ?an
 half ( ! ,f$]al ,gov]nm5t's            
discretion>y sp5d+4 ,significant        
f9ancial & relat$ bus9ess managem5t     
sy/ems & control weaknesses h adv]sely  
affect$ ,,dod's ability 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 & abuse2   
address press+ managem5t issues2 &      
prep>e auditable f9ancial /atem5ts4 ,)\t
 accurate1 timely1 & useful f9ancial    
in=mation1 ,,dod is sev]ely hamp]$ 9    
mak+ s\nd decisions affect+ ! dep>tm5t's
 op]ations44  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  7#d7 
,section #i ( article ,i ( !            
,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 orig9ally     
requir$ ! ag5cies ( ! ,f$]al ,gov]nm5t1 
includ+ ! ,dep>tm5t ( ,def5se1 to pres5t

 auditable f9ancial /atem5ts beg9n+ n   
lat] ?an ,m>* #a1 #aiig4 ,! ,dep>tm5t ( 
,def5se 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 ,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  7#i7 ,!n      
,secret>y ( ,def5se ,a%ton ,c>t] said 9 
a /atem5t to ! ,def5se ,subcommittee ( !
 ,committee on ,appropriations ( ! ,h\se
 ( ,repres5tatives on ,febru>y #be1     
#bjaf1 ,i _c ask = m taxpay] doll>s =   

def5se )\t be+ c&id ab\t ! fact t n e   
def5se doll> is sp5t z wisely or        
responsibly z x c\ld be1 & also be+     
det]m9$ to *ange t & make our dep>tm5t m
 acc\ntable44  7#aj7 ,!n ,secret>y (    
,def5se ,rob]t ,m4 ,gates said 9 a spee*
 on ,may #bd1 #bjaa3 ,! curr5t app>atus 
= manag+ p & money across ! ,do,d       
ent]prise is woefully inadequate4 ,!    
ag5cies1 field activities1 jo9t         
headqu>t]s1 & support /aff functions ( !
 dep>tm5t op]ate z a semi-feudal        
sy/em--an amalgam ( fiefdoms )\t        
c5traliz$ me*anisms to allocate         
res\rces1 track exp5ditures1 & measure  
results relative to ! dep>tm5t's ov]all 
priorities44  7#aa7 ,! acc\nt+ problems 
( ! ,dep>tm5t ( ,def5se result 9        
widespread errors 9 pay t c be difficult
 to correct4 ,su* payroll errors c      
impose h>d%ip on memb]s ( ! ,arm$ ,=ces 
& _! families4  #d4 ,dep>tm5t ( ,def5se 
sp5d+ r$uctions 9 abs5ce ( submitt$     
f9ancial /atem5ts or failure to a*ieve  
unqualifi$ or qualifi$ indep5d5t audit  

op9ion  7a7 ,def9itions ,9 ?is section3 
7#a7 ,! t]ms f9ancial /atem5t & ext]nal 
indep5d5t auditor h ! mean+s giv5 ^?    
t]ms 9 section #ceba7;e7 ( title #ca1   
,unit$ ,/ates ,code4  7#b7 ,! t]m       
qualifi$1 ) respect to ! audit /atus ( a
 f9ancial /atem5t1 includes !           
*>act]ization modifi$4  7#c7 ,! t]m     
unqualifi$1 ) respect to ! audit /atus (
 a f9ancial /atem5t1 includes !         
*>act]izations clean & unmodifi$4  7b7  
,r$uction ,to ,enc\rage ,f9ancial       
,acc\ntability ,if1 by ,m>* #b ( a      
fiscal ye>1 ! ,dep>tm5t ( ,def5se has n 
submitt$ a f9ancial /atem5t = ! previ\s 
fiscal ye>1 or if1 by su* date1 su*     
f9ancial /atem5t has be5 submitt$ b has 
n receiv$ ei!r an unqualifi$ or a       
qualifi$ audit op9ion by an indep5d5t   
ext]nal auditor1 ! discretion>y budget  
au?ority available = ! ,dep>tm5t (      
,def5se %all be r$uc$ by 4#e p]c5t4  7c7
 ,application ( r$uction ,consi/5t )    
applicable laws1 ! ,secret>y ( ,def5se  
%all apply any r$uction "u subsection   

7b7--  7#a7 proportionately to ea*      
,dep>tm5t ( ,def5se acc\nt 7o!r ?an an  
acc\nt li/$ 9 subsection 7e7 or an      
acc\nt = :i* a waiv] is made "u         
subsection 7f772 &  7#b7 9 a mann] t    
m9imizes any adv]se effect on national  
security4  7d7 ,deficit r$uction ,an    
am\nt equal to ! total am\nt ( any      
r$uction "u subsection 7b7 %all be      
reta9$ 9 ! g5]al fund ( ! ,treasury = ! 
purposes ( deficit r$uction4  7e7       
,acc\nts exclud$ ,! foll[+ acc\nts are  
exclud$ f any r$uctions "u subsection   
7b73 7#a7 ,milit>y p]sonnel1 res]ve     
p]sonnel1 & ,national ,gu>d p]sonnel    
acc\nts ( ! ,dep>tm5t ( ,def5se4  7#b7  
,! ,def5se ,heal? ,program acc\nt ( !   
,dep>tm5t ( ,def5se4  7f7 ,waiv] ,!     
,presid5t may waive subsection 7b7 )    
respect to an acc\nt if ! ,presid5t     
c]tifies t apply+ ! subsection to t     
acc\nt w\ld h>m national security or    
memb]s ( ! ,arm$ ,=ces :o are deploy$ 9 
combat zones4  7g7 ,report ,n lat] ?an  
#fj days aft] a r$uction takes effect "u

 subsection 7c71 ! ,director ( ! ,(fice 
( ,managem5t & ,budget %all submit to   
,congress a report specify+ ea*         
,dep>tm5t ( ,def5se subject to r$uction 
& ! am\nt ( ! r$uction4  #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 ( ,def5se 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] ! ,arm$ ,=ces by r$uc+ w\nd$  
w>rior acc\nts or vital protection 7su* 
z body armor7 = memb]s ( ! ,arm$ ,=ces  
s]v+ 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