On September 10, 2001, Defense Secretary Donald Rumsfeld came right out and identified one of the biggest threats to national security. He said, “It’s really about the security of the United States of America. And let there be no mistake, it is a matter of life and death.” And after September 11, that great threat to national security got swept under the rug.

The Department of Defense has such messy accounting that it frequently loses track of materiel, even tanks and planes, underpays or overpays servicemembers and contractors, and hardly even knows how much money it has.

In fact, the books are so messy that government auditors have long since given up trying.

“We don’t know how badly managed it is,” said Winslow T. Wheeler, director of a military reform project at the Center for Defense Information, an independent monitor of the military. “It’s not that DOD flunks audits, it’s that DOD’s books cannot be audited. DOD aspires for the position where it flunks an audit. If this were a public company, it would have gone belly up before World War II.”

The accounting problems would cost taxpayers $13 billion in 2005, Gregory D. Kutz, a managing director for the investigative arm of Congress, the Government Accountability Office, told lawmakers last summer.

“That’s $35 million a day,” he added for emphasis. — The News & Observer

Compounding the problem is DoD’s numerous incompatible computer systems and data formats. Consider the 713 separate human resources systems, and the inventory systems for the Army, Navy and Air Force, which all use different codes even for the same items.

As it turns out, until the 1990s, the Pentagon didn’t really keep books in the same manner as a business might. “The Pentagon wasn’t in the business of making money, so they never needed an income statement,” said Jim Minnery, an Ohio accountant and whistleblower who works for the Defense Finance and Accounting Service. “They expensed their assets like planes and buildings and such. They dished money out, and they never kept track of what they owned.”

DoD had been shooting for a “clean audit” by 2007, but even now, it’s clear that that target will be missed, and it’s not at all clear when DoD may have its books in order.

Why is this so important? In a 2000 audit, DoD couldn’t account for 56 planes, 32 tanks and 36 missile launchers. It had no idea. They had just disappeared, as far as anyone could tell.

In Iraq, while the computers always say there are plenty of supplies, anyone on the ground can tell you about frequent shortages of everything from tanks to water. And when the computers say the supplies have already been delivered, some poor soldier has to drive around for miles to locate them and bring them back, if they’re even in theater at all.

And the worst part of this is nobody seems to know how much it’s going to cost to fix.