Despite a handful of new laws designed to force the Pentagon to submit to at least a partial audit in the next few years, Reuters's investigation indicates that they'll miss those deadlines. Why? In recent years, the department wasted billions of dollars installing faulty software intended to make them audit-ready.
In the meantime, a disparate patchwork of offices in the Defense Department attempt to do the best they can to "balance" the budget against what the U.S. Treasury says they should have spent. This is a monthly process, and it often involves a healthy imagination. Here's an example from the Navy's bookkeeping at the Defense Finance and Accounting Service:
Every month, they encountered the same problem. Numbers were missing. Numbers were clearly wrong. Numbers came with no explanation of how the money had been spent or which congressional appropriation it came from ... The data flooded in just two days before deadline. As the clock ticked down ... staff were able to resolve a lot of the false entries through hurried calls and emails to Navy personnel, but many mystery numbers remained. For those, Woodford and her colleagues were told by superiors to take “unsubstantiated change actions” - in other words, enter false numbers, commonly called “plugs,” to make the Navy’s totals match the Treasury’s.