The Pentagon has failed its 7th annual audit in a row

The Department of Defense (DoD) was unable to fully account for its $824 billion budget in its latest audit, although officials expressed optimism that the agency is making progress in addressing its financial challenges.

The audit resulted in a disclaimer of opinion, meaning auditors lacked sufficient information to form an accurate judgment about the department’s financial accounts. Among the 28 DoD reporting entities audited, nine received unmodified opinions (indicating a clean audit), one received a qualified opinion, 15 were issued disclaimers, and three opinions are still pending, according to the Pentagon.

Michael McCord, Under Secretary of Defense (Comptroller) and Chief Financial Officer, highlighted the department’s goal of achieving a clean audit by 2028, as mandated by the National Defense Authorization Act. "Momentum is on our side, and throughout the Department there is strong commitment—and belief in our ability—to achieve an unmodified audit opinion," McCord stated.

At a Friday briefing, McCord emphasized the department’s progress, noting that about half of the audit opinions were clean. "If someone had a report card that is half good and half not good, I don’t know that you call the student or the report card a failure," he remarked.

Independent public accountants and the DoD Office of Inspector General conducted detailed reviews of the financial statements. McCord acknowledged that significant work remains but reiterated that the audit process has been a catalyst for reform across the department.

"The annual audit continues to drive Department-wide financial management improvements, resulting in greater financial integrity, transparency, and better-supported warfighters," he said.

The Pentagon’s efforts reflect a commitment to improving accountability and meeting its 2028 target for a clean audit opinion.