Floor Remarks by Senator Chuck Grassley of Iowa
Senate President Pro Tempore
“Oversight of Department of Defense Financial Audit”
Wednesday, October 15, 2025
I come to the floor to speak about the Pentagon’s unending audit failures and to once again call for corrective action.
People who have been in the Senate a while know I’ve been continually talking about this issue for [a long time]. So many [times] that I don’t know how many.
But I think it’s something I need to keep beating the drum about.
The fact is that the Pentagon is the only government agency that can’t get what’s called a “certified audit,” or sometimes referred to as a clean audit – the only agency of the federal government.
I have been conducting oversight on this issue since the audits began in 1993 and [have] spoken about it many times.
Today, I provide my colleagues with a new update.
Recent Government Accountability Office testimony may have pinpointed the root cause [of the] audit problem.
It’s called the “Universe of Transactions.”
It’s a special bucket of transactions manually transferred from several hundred systems. It should play a pivotal role in the audit process.
In theory, the Universe of Transactions is an accurate record of every transaction in financial statement balances. Auditors should be able to follow audit trails to verify samples taken from those balances.
In practice, it doesn’t work.
The data is inaccurate and incomplete. Transactions can’t be matched. Audit trails don’t exist.
So, audits fail.
I found essentially the same disconnect in the Inspector General’s first audits 30 years ago.
Those audits contain these telling words: “No audit trail found.”
It’s the same old problem. No controls over transactions then, none today.
The Marine Corps recently developed a work-around for the “no audit trail.” It’s a predicament that needed attention, and they gave it some attention, and as a result of giving it some attention, the Marine Corps earned two clean opinions, but they did it the hard way.
The Marines had to create missing audit trails with labor-intensive pick-and-shovel work. They dug up, ran down, matched and verified each transaction.
Obviously, the Marines deserve credit for a job done well.
But manual audit trail reconstruction is not a very cost-efficient alternative to modern accounting systems.
Fully integrated systems are the solution. They are called for in the Chief Financial Officers Act that mandated the audits that I’m talking about.
Instead of investing in modern systems, Pentagon bureaucrats keep pouring millions year after year into ancient systems that belong on the junk heap.
Thirty-five years and billions of dollars down the rat hole and the [Department of Defense] is still scratching their heads wondering how to control transactions.
Surely they know traders solved that problem thousands of years ago when records were first kept on clay tablets.
So why is the Pentagon still in the stone age?
Is it due to incompetence or deliberate bureaucratic foot-dragging or whatever?
Getting a handle on every transaction is the key to success, and therein lies the rub.
Integrated systems are needed, but there’s relentless resistance to acquiring them.
I call on Secretary of War Hegseth to create a team of independent systems experts to examine and resolve the problem.
Controlling transactions is the heart and soul of every accounting system – except, as you see, in the Pentagon.
Until that truth is accepted, clean opinions will remain a pipe dream.
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