By Mike Stone
WASHINGTON, Dec 19 (Reuters) - For the eighth year in a row, the Pentagon has failed an annual audit, the Department of Defense said on Friday, continuing a pattern of financial accountability problems that have drawn bipartisan criticism and emerged as a campaign issue.
The Pentagon's first audit was conducted in 2018 and it consistently failed, reflecting system and accounting problems across its vast bureaucracy that have persisted.
"The Department cannot resolve decades of war, neglect
of America's defense industrial base, and soaring national debt through unchecked spending." Secretary of Defense Pete Hegseth said in a statement released with the audit.
U.S. President Donald Trump on Thursday signed into law a nearly $901 billion annual defense policy bill.
The Department of Defense's assets are vast and decentralized, amounting to $4.65 trillion alongside $4.73 trillion in liabilities. These are located in all 50 states and thousands of sites around the world.
Auditors identified 26 material weaknesses and 2 significant deficiencies in the Department of Defense's (DoD) internal controls over financial reporting for fiscal 2025. A material weakness is worse than a significant deficiency because a material weakness indicates a severe control failure that could lead to a significant misstatement in financial reports.
"The Department of War is committed to resolving its critical issues and achieving an unmodified audit opinion by 2028," the department's CFO wrote in a letter released with the report. Trump has said he was changing the name of the Defense Department to the Department of War, but the change will not be official until it is approved by Congress.
Since the Pentagon began auditing itself in 2018 — the last department to do so after Congress required the practice across the government in 1990 — it has solved some of its accounting problems. The department remains the only Cabinet-level agency that has never earned a clean financial report.
(Reporting by Mike Stone in Washington; Editing by Alex Richardson and Chizu Nomiyama)
