DOD Financial Management: Accelerated Timelines Needed to Address Long-standing Issues and Fraud Risk , April 29 , 2025
DOD Financial Management: Accelerated Timelines Needed to Address Long-standing Issues and Fraud Risk , April 29 , 2025
From the report: “The Department of Defense (DOD) has made some progress in improving its financial management efforts. However, more remains to be done to address significant remaining issues and for DOD to realize its goal of achieving an unmodified (“clean”) audit opinion by the end of 2028. In February 2025, GAO found that DOD’s efforts to address its financial management and business systems modernization high-risk areas demonstrated leadership’s commitment to addressing them. However, GAO also found that other areas, such as action plans and demonstrating results, needed further attention. GAO also expanded the financial management high-risk area to include fraud risk management. For fiscal years 2017 through 2024, DOD reported about $10.8 billion in confirmed fraud. The full extent of fraud affecting DOD is not known but is potentially significant. Until DOD implements a comprehensive antifraud strategy that effectively aligns with leading practices, as GAO has recommended, its programs and significant expenditures will remain at substantial risk of fraud.
DOD has also taken steps to address audit findings in pursuit of its goal of achieving a clean audit opinion in 2028. These have included identifying priority areas and developing a strategy, plans, and roadmaps to systematically address major impediments. According to DOD, it is also studying lessons learned from the Marine Corps’ approach, which resulted in clean audit opinions for fiscal years 2023 and 2024. Nevertheless, the DOD Inspector General has identified 17 scope-limiting material weaknesses that are significant roadblocks to DOD’s clean audit opinion goal. DOD has developed a timeline for addressing these weaknesses (see figure).”
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