Pentagon spends $560M to fix failures found by 'largest audit in history'

Nov. 16 (UPI) -- In what it calls the largest audit in history, the U.S. Department of Defense on Friday outlined deficiencies within the Pentagon it says will cost roughly $600 million to fix.

The audit details inventory discrepancies, financial reporting errors and cybersecurity issues as some of the greatest problems found in the department-wide review.

It covered $2.7 trillion in assets and $2.6 trillion in liabilities for fiscal 2018. The assets covered an array of equipment, from battleships and fighter jets to spare parts and invoices.

The department called it "most likely the largest known audit of an organization in history."

The Pentagon said about 1,200 auditors visited more than 600 locations and reviewed hundreds of thousands of items.

Five departmental agencies received a clean opinion, or one with no discrepancies, including the U.S. Army Corps of Engineers. Two, the Medicare-Eligible Retiree Health Care Fund and Defense Commissary Agency, drew modified opinions -- meaning there are some suggested areas for remediation.

The Pentagon said separate audits for its Office of Inspector General and Defense Information Systems Agency are still in progress and should be finished by the end of the year.

The majority of the department received disclaimers, meaning there were issues that need to be resolved, officials said.

The audit took nearly 30 years to complete. Congress first required the Pentagon to undertake the thorough review in 1990, but it didn't do so until late last year, NBC News reported.

Officials said deficiencies found by the audit will help improve readiness. At Hill Air Force Base in Utah, for example, $53 million worth of uninstalled missile motors were listed in "not working condition" when they were actually operational. As a result, the Air Force put them into service.

The department agencies hadn't been audited before, but have already started remediation efforts to fix the problem. The fixes were estimated around $600 million and the Pentagon said it's already spent hundreds of millions.

"We spent approximately $406 million on audit remediation and $153 million on financial system fixes," the department said.

In many cases, the report said, IT security certificates weren't revoked after staffers left. They also used systems experts said could be hacked.

Future audits will likely be competitive among the different services as they try to achieve clean audits, officials said.

Although discrepancies were found, the Defense Department said the review found no indication of criminal violations.

"Auditors did not find any evidence of fraud, nor did they report any problems for civilian or military pay," the department said. "And, all of the services were able to account for the existence and completeness of all major military equipment."