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Audit finds U.S. Department of Defense wasted millions of taxpayer dollars

February 9, 2018
Senator Chuck Grassley , Dysart Reporter

I can't name a single person who likes having their money wasted. It's even worse if the careless spending of your money is done by someone else particularly the federal government.

Every year, Americans dutifully pay their federal taxes. The United States government collects trillions of dollars for the purpose of funding essential functions, such as national security efforts and vital public services and programs. However, taxpayer dollars are often misused, misallocated and wasted. That has unfortunately been the case within one of the federal government's most essential agencies the United States Department of Defense.

I've conducted extensive oversight work of the Defense Department for years, particularly and most recently regarding federal spending in Afghanistan. In many instances, U.S. projects aimed at rebuilding Afghanistan have been mismanaged and lack proper documentation. A number of those instances are outlined in a recently released audit of the now-defunct Task Force for Business and Stability Operations (TFBSO). The audit, conducted by the Special Inspector General for Afghanistan Reconstruction (SIGAR), the watchdog agency tasked with oversight of Afghanistan reconstruction operations, reveals disturbing evidence of waste, potential fraud and abuse of taxpayer dollars.

The catalyst for the audit, which I called for in 2016 with former Senator Kelly Ayotte, was an alarming report that TFBSOspent nearly $43 million to build a gas station in Afghanistan as part of rebuilding operations. The Hill recently published an op-ed that specifically disputes the $43 million price tag, claiming instead that the direct cost to build the gas station was actually a little over $5 million. According to the SIGAR audit, that is factually correct but incomplete. The op-ed's author, Jeff Goodson, failed to acknowledge that in addition to the $5 million, TFBSO spent millions in massive overhead costs that were allocated to the project, pushing its total cost to just under $43 million. He also failed to realize the larger picture, which is that tens of millions of taxpayer dollars were wasted overseas with little to no return on investment for America.

The $43 million gas station wasn't the only egregious finding in the SIGAR audit. Congress appropriated $823 million for TFBSO projects. SIGAR auditors found rock-solid documentation for $435 million, leaving hundreds of millions of dollars unaccounted for. The financial discrepancy is due to careless bookkeeping and means American taxpayers may never know what happened to the rest of their money.

Goodson also pointed out that "the audit reports that 28 of the 35 Task Force projects fully 80 percent met some, all or most of their deliverable targets," meaning that one out of every five taxpayer dollars vanished without explanation. He further noted that while it's "not perfect," the overall results of Task Force projects in Afghanistan were "far from bad."

Eighty percent is not an acceptable success rate for federally funded government projects. "Far from bad" is not an acceptable standard for federally funded government projects. Wasting one out of every five taxpayer dollars is not acceptable, and I think American taxpayers would agree.

As for the 80 percent of projects that "met some, all or most of their deliverable targets," it's important to note that the term "deliverable targets" does not necessarily mean projects were worthwhile or sustainable. According to the audit, only nine of the 35 projects started are still in operation. In my book, that is a 75 percent failure rate. Further, out of 124 contracts awarded by TFBSO, only 89 had complete files.

Another alarming finding is that nearly 50 percent of contracts were awarded noncompetitively, meaning the DOD did not seek out alternative, cost-effective contractors that may have done higher quality work less expensively. Also, $35 million in contracts were awarded to firms employing former TFBSO senior staff members in executive roles, raising serious concerns about favoritism in contracting practices.

The information revealed in this audit is disturbing to say the least and is just one more example of the breakdown of the Defense Department's internal controls. SIGAR's findings highlights the need for DOD to provide accountability for its programs and personnel agency-wide and speaks to the fact that the DOD is the only federal agency that has failed to produce a clean audit. That's despite the Chief Financial Officers Act, a federal law Congress passed in 1990 requiring one from every agency.

The squandering of hundreds of millions of dollars in the name of Afghanistan reconstruction casts a cloud over the Department of Defense when America depends on it to spend every dollar as effectively and efficiently as possible for our military readiness and national security. The DOD needs to put an end to indefensible waste and abuse of the public trust. It has an obligation to assure the taxpaying public that its investments in our military are being protected. The SIGAR audit adds to the degradation of the public's confidence in the DOD's ability to manage federal money. The agency must take immediate steps to clean house, hold employees and contractors accountable and regain that confidence.

Oversight, enforcement and transparency are vital tools to fight fraud and wasteful government spending. I will continue pressing the DOD to be the fiscal steward American taxpayers expect it to be, and to use its resources responsibly and for projects that benefit its core mission of defense and national security.

Grassley is chairman of the Judiciary Committee.

 
 

 

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