The U.S. Marine Corps recently became the first U.S. military branch ever to successfully account for its assets.
The Marine Corps earned an “unmodified opinion,” meaning the service had provided independent auditors with sufficient and appropriate evidence to account for all $46.3 billion in assets, the Office of the Inspector General for the Department of Defense (DOD) said on Feb. 23.
The audit was conducted by accountants with Ernst & Young LLP (EY) in accordance with accounting principles accepted throughout the United States. EY accountants, working under the supervision of the DOD inspector general’s office, visited more than 70 Marine installations, assessed more than 25 million sample items, and reviewed more than 3,000 documents.
The successful audit opinion was the culmination of a two-year effort to account for the Marine Corps’s past balances and current-year financial transactions.
“This audit reflects the hard work of hundreds of Marines and civilians,” Gen. Christopher J. Mahoney, the assistant commandant of the Marine Corps, said of the successful audit opinion. “They have put an incredible amount of effort into some groundbreaking work.”
The Marine Corps’s successful audit report comes as the other military branches and the DOD at large are still struggling to properly account for assets.
In November 2023, the DOD announced it had completed its sixth consecutive audit without sufficiently accounting for its assets. The department-wide audit included 29 sub-audits, all of which must pass for the effort to be considered a success. Only seven of the 29 sub-audits returned sufficient information in the past two department-wide audit efforts. In total, the department identified $3.8 trillion in assets and $4 trillion in liabilities.
The Marine Corps previously became the first U.S. military branch to conduct a full financial audit, earning that distinction in 2017. The branch has continued to run ahead of the rest of the military in terms of its accounting efforts.
Upon announcing the DOD’s sixth failed audit in November 2023, Pentagon Comptroller Michael McCord said the department and the larger military branches such as the Army, Navy, and Air Force were “very focused” on seeing the results of the Marine Corps’s two-year audit effort, and looked forward to those findings “as a test case” for the other military components going forward.
Marine Corps leaders had made it a goal to become the first branch to pass a successful audit, both in hopes of reflecting meritoriously on the branch and in hopes of paving the way for the other military branches and the DOD as a whole.
“Now, we can take what we’ve learned and share across the DoD enterprise to improve fiscal processes for all the military services,” Gen. Mahoney said on Feb. 23, following the successful audit report.
Pressure Mounts for Further Pentagon Accountability
Pressure is growing for the DOD to improve its accounting practices as the overall U.S. defense budget continues to grow.The National Defense Authorization Act for Fiscal Year 2024 (FY 2024 NDAA) brought the total U.S. defense budget to $886.3 billion, including $841.5 billion for the Pentagon, more than $32 billion for the National Nuclear Security Administration, and more than $12 billion in defense-related allocations for various other federal agencies.
“It is vital that DoD works to ensure weapons and other forms of security assistance are used for their intended purposes, that they do not fall into the hands of our enemies, and that the risk of waste, fraud, and abuse is mitigated,” the Republican-led committee said in a Feb. 6 letter to Defense Secretary Lloyd Austin.
“The Committee is seeking further documents and information to understand how DoD intends to ensure adequate oversight of defense articles for Ukraine in light of a recent Inspector General report casting doubt on DoD’s prior assurances to the Committee.”
