Pentagon Play Money

Don't know where the Pentagon is storing billions of dollars' worth of inventory–everything from ammunition to weapon systems to medical supplies? You're not alone: Neither does the Pentagon.

Without knowing what material it already owns or where it is located, the Department of Defense is wasting billions each year buying redundant items. A full 58 percent of items "on-hand"–worth over $36 billion–are unnecessary, according to the General Accounting Office.

Several branches of the armed services lack proper inventory records, especially when material is transferred to a different location and soldiers lose track of it. Neither the Air Force nor the Army keeps adequate records of material moved or knows its value, according to recent audits. And as a result of the Navy's failure to notify inventory managers of shipments, items worth billions have been declared "lost during shipment."

The GAO also recently accused the Defense Department of gross financial mismanagement. No major component of the department has ever passed an independent audit. According to GAO testimony (viewable at www.gao.gov/new.items/a400163t.pdf), this is due to "pervasive weaknesses in [the department's] financial management systems, operations, and controls," weaknesses that in 1995 convinced the GAO to put the Pentagon on its high-risk list of areas "vulnerable to waste, fraud, abuse, and mismanagement." Five years later, it's still there.