Bipartisan Senate group introduces bill to force clean audit of Pentagon funding amid price gouging concerns

A bipartisan group of Senators introduced legislation Wednesday to ensure the Defense Department passes a clean audit next year, with the bill following repeated concerns from Congress about fraud, waste and abuse in the Pentagon.

The Audit the Pentagon Act of 2023 would require the Defense Department to pass a full, independent audit in fiscal 2024.

Agencies within the Pentagon that fail to pass a clean audit would be forced to return 1 percent of its budget for deficit reduction, according to the legislation.

The legislation comes after the Pentagon failed its fifth budget audit last year and after a CBS News report found defense contractors overcharged the Defense Department by nearly 40 percent to 50 percent. According to the Office of the Inspector General for the Defense Department, sometimes overcharging reached more than 4,000 percent.

Sen. Bernie Sanders (I-Vt.) said the Pentagon “and the military industrial complex have been plagued by a massive amount of waste, fraud, and financial mismanagement for decades.”

“That is absolutely unacceptable,” Sanders said in a statement announcing the legislation. “If we are serious about spending taxpayer dollars wisely and effectively, we have got to end the absurdity of the Pentagon being the only agency in the federal government that has never passed an independent audit.”

The Hill has reached out to the Pentagon for comment.

The legislation is backed by GOP Sens. Chuck Grassley (Iowa), Mike Lee (Utah), Mike Braun (Ind.) and Rand Paul (Ky.).

Democratic supporters include Ed Markey (Mass.), Tammy Baldwin (Wis.), Ron Wyden (Ore.), Elizabeth Warren (Mass.) and Jeff Merkley (Ore.).

In the wake of the CBS report, several of the senators also signed a letter last month calling on Defense Secretary Lloyd Austin to investigate the systematic price gouging from defense contractors.

The Defense Department failed its fifth audit last year and was unable to account for more than half of its assets, or more than $3 trillion.

The Pentagon accounts for more than half of the federal government’s discretionary spending and nearly two-thirds of the federal government’s contract spending. The budget request for next fiscal year is $886 billion, the highest it’s ever been.

The Government Accountability Office (GAO) found in 2021 that the Pentagon has failed to implement a systemic approach to combating waste and fraud, while a GAO report this year found accounting systems are not reliably generating accurate information.

Grassley said the Pentagon “should have to meet the same annual auditing standards as every other agency.”

“From buying $14,000 toilet seats to losing track of warehouses full of spare parts, the Department of Defense has been plagued by wasteful spending for decades,” the Iowa senator said in a Wednesday statement. “Every dollar the Pentagon squanders is a dollar not used to support service members, bolster national security or strengthen military readiness.”