Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

For Immediate Release

Contact

press@sanders.senate.gov

Michael Briggs: (202) 228-6492

 

Press Release

NEWS: New Study Finds DOD Efforts to Combat Waste and Fraud Are Incomplete and Inadequate

Government Accountability Office finds that under Trump Administration, the Pentagon put billions of dollars at risk by failing to identify and fight fraud
WASHINGTON -

The Government Accountability Office (GAO) released a report Monday requested by Senate Budget Committee Chairman Bernie Sanders (I-Vt.) and House Oversight and Reform Committee Chairwoman Carolyn B. Maloney (D-N.Y.) that found the Department of Defense has not finalized and implemented a comprehensive approach to combat department-wide fraud. Despite the Pentagon regularly signing contracts worth hundreds of billions of dollars, the Department’s ability to conduct fraud risk assessments and report procurement fraud risk remain incomplete and inadequate.

“The Pentagon doesn’t seem to want to get serious about combatting the fraud, waste, and financial mismanagement that has been its legacy for decades,” said Sen. Sanders. “They don’t seem to want to get serious about spending taxpayer dollars wisely and effectively. Well, I think we can all agree, that is absolutely unacceptable. Currently, the U.S. spends more on our nation’s military than the next thirteen countries combined. Meanwhile, half of our people are living paycheck to paycheck, just under 40 million Americans are living in poverty, and over 600,000 Americans are homeless including roughly 40,000 veterans. The time is long overdue for the Defense Department to be held to the same level of accountability as the rest of the government.”

“This independent report shows that the Trump Administration utterly failed to address the Pentagon’s longstanding problems with financial management, including procurement fraud,” said Chairwoman Maloney. “This failure to safeguard taxpayer dollars is completely unacceptable, and I urge the Biden Administration to quickly and fully implement GAO’s recommendations and put the Defense Department on a path to operate more efficiently and effectively, with the confidence that it is not spending money on fraudulent contracts.”

The Pentagon is the largest contracting agency in the federal government and generally accounts for about two-thirds of all federal contracting activity, obligating more than all civilian federal agencies combined. GAO’s review examined Department of Defense fraud risk management activities for the period of October 2019 through September 2020.

“Fraud poses a significant risk to program integrity and erodes public trust in the government,” according to GAO’s report. “In fiscal year 2020, DOD obligated approximately $422 billion on contracts. The scope and scale of this activity makes DOD procurement inherently susceptible to fraud.” GAO also reported that, “given the billions of dollars DOD spends annually on procurement, failing to manage and mitigate fraud effectively may ultimately adversely affect DOD’s ability to support the warfighter.”

GAO’s findings included:

  • The full extent of fraud associated with Pentagon contracting cannot be fully determined at this time, due to faulty and incomplete reporting and implementation.
  • DOD’s Fraud Reduction Task Force – a cross-functional team tasked with prioritizing fraud risks and identifying solutions – remains incomplete with almost 20% of positions vacant, including representatives from the Air Force and Army.
  • Half of the components evaluated were not reporting on procurement fraud risks in their most recent risk assessments, as required by DOD.

GAO recommended that DOD takes needed steps to combat procurement fraud, such as filling the vacant positions on the task force and updating policies and practices to strengthen fraud risk assessments.

Even before Chairman Sanders and Chairwoman Maloney requested this report, there was a long-documented history of waste, fraud, and abuse at the Pentagon. In 2018, DOD reported to Congress that from fiscal years 2013 to 2017, over $6.6 billion had been recovered from defense contracting fraud cases. In 2020, the DOD Office of Inspector General reported that 395 of its 1,716 ongoing investigations – or approximately one-in-five – are related to procurement fraud.

Since 1995, DOD financial management has been on GAO’s High-Risk List of operations that are “vulnerable to waste, fraud, abuse, or mismanagement, or in need of transformation.” Congress mandates all federal agencies to comply with annual independent audits, but the Defense Department remains the only U.S. federal agency that is unable to pass a clean audit opinion – preventing GAO from expressing an audit opinion of the entire federal government.

Over the past two decades, virtually every major defense contractor in the U.S. has paid billions of dollars in fines and settlements for misconduct and fraud – all while making significant profits on government contracts. About half of the Pentagon’s budget goes directly into the hands of private contractors.

Read the full GAO study here.

'Donald Trump Has Finally Run Out of Places to Hide' as House Dems Get Tax Returns

"It's no longer a question of if he's hiding something big," one watchdog group asserted, "it's a question of what he's hiding."

Brett Wilkins ·


Democrats, Progressive Groups Push DOJ to Publish Database of 'Corporate Lawbreaking'

"The Corporate Crime Database Act will bring transparency to the corporate crime crisis so that the DOJ and other law enforcement agencies can better reckon with this greed-driven menace," said one advocate.

Kenny Stancil ·


As Corporations Enjoy Record-High Profits, Experts Urge Congress to 'Rein Them In'

"Today's record corporate profits mirror what we have been hearing on earnings call after earnings call: Corporations are gleefully reporting that their strategy to burden families with unnecessary price hikes is working."

Brett Wilkins ·


'Egregious': PFAS Firefighting Foam Spills at Notorious Red Hill Naval Facility in Hawaii

While officials said there is no evidence that drinking water was contaminated, the incident generated further local frustration with the closing fuel storage complex.

Jessica Corbett ·


House Passes Paid Sick Leave for Railway Workers Despite Opposition of 207 Republicans

"Now let's get it through the Senate," said Rep. Jamaal Bowman, who led the fight to add seven days of paid sick leave to a White House-brokered contract that failed to provide any to railroad workers.

Kenny Stancil ·

Common Dreams Logo