Problems with the federal government”s accounting systems
The military”s money managers last year made almost $7 trillion in adjustments to their financial ledgers in an attempt to make them add up, the Pentagon”s inspector general said in a report released yesterday. The Pentagon could not show receipts of $2.3 trillion of those changes, and half a trillion dollars of it was just corrections of mistakes made in earlier adjustments. . . . The magnitude of accounting entries required to compile the financial statements highlights the significant problems [the Pentagon] has producing accurate and reliable financial statements with existing systems and processes . . . the military can”t measure the results of closing a base; can”t rationally decide whether to contract out a service or keep it in government hands; and may inaccurately peg the cost of programs under debate, from national missile defense to retirees” health care.
REQUIRED:
Discuss problems that might arise due to the significant weaknesses of the Pentagon”s accounting systems.