Pentagon Fails Its $3.8 Trillion Financial Audit For Sixth Straight Year😂😹🤣 #BitcoinFixesThis #GotBitcoin

The US Defense Department failed for the sixth consecutive year to score a clean financial audit, a goal routinely achieved annually by businesses that have a fraction of its $3.8 trillion in assets and $4 trillion in liabilities. Pentagon Fails Its $3.8 Trillion Financial Audit For Sixth Straight Year😂😹🤣 #BitcoinFixesThis #GotBitcoin

Pentagon officials nonetheless claimed significant progress in tracking its assets and correcting hundreds of deficiencies in its accounts.

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The failure “is not a surprise,” Pentagon Comptroller Michael McCord told reporters at the Pentagon. “It certainly is not something that we say, ‘it doesn’t matter.’”

About 1,600 auditors and 700 site visits were needed to review the Defense Department’s business processes and activities. The Defense Department spent $187 million on the audit, a small slice of its $853 billion budget.

The Pentagon’s inspector general’s office has been overseeing the audit work. It said in a statement Thursday that working toward a clean audit will make the department’s operations more efficient and increase public trust.

“While we acknowledged enhancements in the DoD’s financial management procedures, significant challenges persist in generating thorough and precise financial statements,” Inspector General Robert Storch said.

‘Improvements, Changes’

“Auditing the Department’s $3.8 trillion in assets and $4.0 trillion in liabilities is a massive undertaking,” McCord said in a news release. But he said “the improvements and changes we are making every day as a result of these audits positively affect” every military member and civilian employee.

One indication of progress is that no new Pentagon-wide material weaknesses were reported this time, the department said.

“When it comes to the Pentagon audits, steady progress is the name of the game versus clean audits quickly,” said Mackenzie Eaglen, a senior fellow at the American Enterprise Institute.

“Almost every year the Defense Department adds new sub-organizations to the list of clean audits, and this is the trend the Pentagon must stay on going forward.

Lawmakers have been pressing the Pentagon to produce a “clean” audit by 2027. But the Pentagon sought to put part of the blame on unreliable budgeting by lawmakers, saying that “Congress can further help by stabilizing the budget process and avoiding continuing resolutions and government shutdowns.”

McCord said this would be the 14th year with the Pentagon funded by continuing resolutions. The most current stopgap proposal would provide funding for the Pentagon until Feb. 2.

Of the 29 Defense Department components undergoing standalone financial statement audits, seven received a clean audit opinion, and one received a qualified opinion.

The results of the financial statement audits of the Marine Corps, the Defense Information Systems Agency Working Capital Fund, and the Pentagon’s Office of Inspector General are still pending, while the rest of the agencies all received disclaimers — financial audits that weren’t clean.

“Failure” in audit lexicon means the review of the 29 defense units resulted in a “disclaimer of opinion.” Disclaimers are issued when auditors can’t form an opinion about the adequacy of the financial records based on a paucity of reliable data, not necessarily that there was a misuse or poor use of fund.

The agencies that received a clean audit are: the Military Retirement Fund, the Defense Commissary Agency, the Defense Contract Audit Agency, the DFAS Working Capital Fund, the US Army Corp of Engineers– Civil Works, the National Reconnaissance Office and the Defense Health Agency – Contract Resource Management.

The Defense Department identified and reviewed $621 million in payments subject to improper payment testing, which resulted in an estimated proper payment rate of 99.76% and $1.4 million in improper and unknown payments.

The department measures audit progress across five areas: workforce modernization, business operations, quality decision-making, reliable networks, and enhanced public confidence.

For example, the Air Force has deployed 65 bots saving approximately 429,000 labor hours and improving the ability to audit its business processes. Auditors for the Army tested its construction-in-progress monitoring control and found no unresolved transactions in the clearing account.

The Navy reviewed $17 billion of unliquidated obligations, validating that 97% of the balances met audit requirements and uncovering an available $330 million, according to a news release.

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U.S. Treatment of CZ, Binance Is ‘Absurd:’ Arthur Hayes

The former BitMEX CEO said the record-breaking penalties imposed on Binance represent an institutional bias against the transformative impact of cryptocurrency and blockchain technology.

Binance and its founder Changpeng “CZ” Zhao have been treated the way they have been in the U.S. because the crypto exchange – and other centralized exchanges – represent a threat to the traditional American-led global financial system, former BitMEX CEO Arthur Hayes argues in a new essay posted on his Substack account.

Last week, Binance and its founder were criminally charged for violating sanctions and money-transmitting laws, agreeing to pay $4.3 billion in fines and prompting Zhao to step down as CEO. Zhao was determined by a court to be a flight risk and must remain in the U.S. until his sentencing early next year.

Compared with penalties given out to large traditional financial institutions, those handed out to Binance and CZ are “absurd” and highlight “the arbitrary nature of punishment at the hands of the state,” Hayes wrote.

“Did Former Goldman Sachs CEO Lloyd Blankfein get the same treatment as GS under his reign helped Former Malaysian Prime Minister Najib Razak and financier Jho Loh steal more than $10 billion,” Hayes wrote, referring to the 1Malaysia Development Bhd. (1MDB) scandal that was uncovered in 2015. Goldman Sachs ended up being fined $2.9 billion in 2020.

“No, Lloyd got to retire with his stock options intact, and GS was not deemed criminally responsible,” he continued, also pointing out that CEOs of major banks weren’t prosecuted for the 2008 financial crisis.

Hayes argues that the treatment of CZ and Binance is indicative of resistance against decentralization and the blockchain revolution, which, he said, directly challenge state power.

“The state powers centralization, and collaboration is achieved through threats of violence,” he wrote. “A problem for the financial and political establishment was that the intermediaries facilitating flows into and out of the industrial revolution named blockchain were not run by members of their class.”

Hayes himself is no stranger to state prosecution. In February 2022, he pleaded guilty to violating the Bank Secrecy Act because he willfully failed to implement an anti-money laundering (AML) program at the exchange. Later that year, he was sentenced to two years of probation.

Pentagon Fails Its $3.8 Trillion Financial Audit For Sixth Straight Year😂😹🤣 #BitcoinFixesThis #GotBitcoin

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