Sunday, May 21, 2017

Impossible to audit


But every once in a while it is possible to glimpse the exotic accounting practices of the Pentagon as they seek the impenetrability of Hollywood accounting. Our latest peek at their machinations comes from the metod used to purchase the vast amounts of fuel used by the individual services.
The Pentagon has generated almost $6 billion over the past seven years by charging the armed forces excessive prices for fuel and has used the money — called the “bishop’s fund” by some critics — to bolster mismanaged or underfunded military programs, documents show.

Since 2015, the Defense Department has tapped surpluses from its fuel accounts for $80 million to train Syrian rebels, $450 million to shore up a prescription-drug program riddled with fraud and $1.4 billion to cover unanticipated expenses from the war in Afghanistan, according to military accounting records.

The Pentagon has amassed the extra cash by billing the armed forces for fuel at rates often much higher — sometimes $1 per gallon or more — than what commercial airlines paid for jet fuel on the open market.

Under a bureaucracy that dates to World War II, the Defense Department purchases all of its fuel centrally and then resells it at a fixed price to the Air Force, Navy, Army, Marine Corps and other customers, who pay for it out of their own budgets. The system is intended to reduce duplication and promote efficiency.

The Defense Department is the largest single consumer of fuel in the world. Each year, it buys about 100 million barrels, or 4.2 billion gallons, of refined petroleum for its aircraft, warships, tanks and other machines.

The practice of exploiting fuel revenue to plug unrelated gaps in the defense budget has escalated in recent years, prompting allegations — and official denials — that the accounts are being used as a slush fund.

Pentagon officials defended the arrangement.

Congress has routinely approved their requests to skim off the fuel-purchasing accounts as a straightforward way to balance the Defense Department’s books. Lawmakers, however, are increasingly questioning the budgeting methods that have enabled the Pentagon to accumulate large windfalls from fuel sales in the first place.

The obscure accounting policy exemplifies the enormous scale and complexity of the U.S. military’s business operations, and how waste and inefficiency in the defense bureaucracy can dwarf what Washington spends on other parts of the federal government.

Such fiscal problems are deeply rooted. For the past
quarter-century, the Defense Department has failed to meet a congressional mandate to clean up its books so it can pass an audit — the only federal agency that has failed to do so.

Meanwhile, the Pentagon is preparing for a military buildup. President Trump has said that he will ask Congress to add $54 billion to next year’s defense budget, about a 10 percent spike over current spending caps.
Lord knows how much the brass will skim if they get an extra, unnecessary $54 Billion. They are doing quite well with the current pittence Congress allots them. An I hope you will never again wonder why we can't have good things in this country anymore.

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