PENTAGON MISMANAGES ITS MONEY, GAO BOSS SAYS
Aspin told problem involves billions

by Richard H.P. Sia
Baltimore Sun (30 April 1993)

   WASHINGTON -- The Pentagon is increasingly unable to "safeguard,
manage and control the hundreds of billions of dollars of resources
entrusted to it," the U.S. comptroller general has warned.

   In a strongly worded letter to Defense Secretary Les Aspin, Charles
Bowsher wrote this week that the financial mess at the Pentagon
involves billions of dollars in discrepancies in the military's
financial records.

   The General Accounting Office, a congressional watchdog agency
that ferrets out government waste and abuse, found:

o  $18.4 billion in ammunition that didn't show up in Army records.
The Army also could not account for another $800 million in ammunition
still in production or being shipped to Army facilities.

o  $12.3 billion paid by the Navy for undocumented expenses last
year, which Bowsher called "analogous to writing checks but not
knowing what bills were paid."  By failing to keep track of its
finances, the Navy risked "making improper and fraudulent payments"
or spending in ways Congress never intended.

o  Billions of dollars in discrepencies between Air Force inventory
records and the actual equipment it has on hand.  The staff at Air
Force logistics centers failed to investigate and "made billions of
dollars" in false entries to balance their books.

o  Poor care and security at Army maintenance and storage depots,
which put "hundreds of millions of dollars" in weapons and equipment
at risk of severe corrosion or theft.  At one depot, diesel engines
that were left unprotected in an outdoor storage area rusted so badly
that 70 percent of them had to be scrapped.

o  More than $630 million paid by the Air Force to contractors for
storing communications satellites that don't exist in Air Force records.

   Efforts to reach Pentagon officials for comment on the GAO findings
were unsuccessful.

   The Pentagon's financial and accounting weaknesses raise the
possibility that "waste, fraud, and abuse will not be detected early
enough to be dealt with effectively," Bowsher said.

   He also warned that the Pentagon cannot rely on its records or
financial reports to make crucial decisions about the defense budget
and military restructuring in the post-Cold War era.

   Fixing all the Pentagon's long-standing financial problems is "a
daunting task," said Bowsher.

   He urged Aspin not to rely too heavily on audits and some corrective
steps taken last year.  Those audits reportedly showed that, with few
exceptions, Pentagon officials were exercising adequate internal
control of taxpayer dollars.