Debunked: Missing $21 Trillion / $6.5 Trillion / $2.3 Trillion - Journal Vouchers

Mick West

Administrator
Staff member
Metabunk 2018-05-16 15-09-30.jpg

A comedy show on Russia Today starring Lee Camp (stand-up comedian and former writer for The Onion) has become the latest outlet to push an old debunked story - the idea that there are trillions of dollars missing from the Pentagon. This myth arose because the the Pentagon (i.e. the Department of Defense) has multiple different accounting systems across multiple departments. These systems have a serious problem: they are not "interoperable". This means that entries on one system do not automatically flow to another system.

So when the military has to make quarterly or year-end financial statements, some entries, like the value of certain assets (like aircraft carriers) or liabilities (like pensions), have to be transferred either manually or by an automated but uncertified system. Because of this it's marked as "unsupported" because it lacks a rigorous audit trail. But it's not missing. It's just a long list of entries, like the value of the Navy's ships, that don't meet proper accounting standards. Since these things don't go away, the same entries can be made year after year, and you can add the numbers up to get bigger and bigger amounts. But it's not missing money or undocumented spending.

This can be a difficult thing to understand. On a House Armed Services Committee hearing held on Jan 10 2018, Representative Walter Jones raised the issue, reading from a Reuter's article. Jones seem to have thought that the money was missing. Defense Department Comptroller, David L. Norquist, explained it to him.

Source: https://www.youtube.com/watch?v=NoOFhjDjGqU


REP. WALTER JONES
Of all the articles I've seen about waste in the 22 years that I've been here, probably this is in the top four or five. It's from two years ago [reading] "US Army fudged its accounts by trillions of dollars, auditors find. The Defense Department Inspector General, in a June report, two years ago, said the army made a $2.8 trillion in wrongful adjustments to accounting entries in one quarter alone in 2015 and $6.5 trillion for the year, yet the Army lacks receipts and invoices to support these numbers, or simply made them up." This would be something, I would think, would be under your department's jurisdiction. [...]

DAVID NORQUIST:
Let me address that, that's a very important one. One of the issues you're talking about related to journal vouchers, which occurs after the money is spent. So when you see in the article it says trillions of dollars and you realize we only receive about $600 billion in a year, there's a mismatch in the story. What this refers to is: we have systems that do not automatically pass data from one to the other. The army [and others] goes in at the end of their financial statements, finds the number from their property book and writes it into their general ledger. That is called a journal voucher entry. Depending on the property it could be hundreds of billions of dollars. Because they don't have adequate support for that journal voucher, the whole entry is considered unsupported. Now from a management point of view this is bad. It's not the same as not being able to account for money that the Congress has given you to spend, but it's still a problem that needs to be fixed. Part of that relates to systems that were built as "stove-pipes", and in private sector they don't talk to each other, you wouldn't let them field a system that wouldn't automatically pass up its data. So we are addressing exactly that type of challenge and one of my concerns is — only by eliminating the types of ones that are just an entry issue can you find underlying issues that are hidden among inaccurate data. So it's important, I wouldn't want the taxpayer to confuse that with something like the loss of trillion of dollars, that wouldn't be accurate. But it's an accounting problem that does need to be solved because it can help hide other underlying issues.
Content from External Source
And this is not a new story, it dates back to 2001 and before, in an April 2001 report, the DoD explained what the entries typically were for:
http://archive.defense.gov/news/Jul2001/d20010710finmngt.pdf
DoD notes that many of these entries included end-of- period estimates for such items as military pension actuarial liabilities and contingent liabilities, and manual entries for such items as contract accounts payable and property and equipment values.
Content from External Source
  • "Military pension actuarial liabilities" are "The amounts calculated based on actuarial assumptions that represents the present value of the pension benefits accrued in pension plans" - i.e. it's totals that will vary from year to year, but represents an estimate of how much money is needed in the future.
  • "Contingent liabilities" are amounts that the department will probably be liable for, things like class action lawsuits or defaulted loan guarantees. These estimates vary, can last for years, and again don't represent spending.
  • "Contract accounts payable" are amounts owed to contractors. The DoD pays slowly and the account goes though various stages. Here there are estimates of the totals of these various stages in different departments.
  • "Property and equipment values" are estimates of the values of things that the DoD owns. Things like buildings, weapons, fighter jets, fuel, battleships, etc. This is not spending, as they have already spent the money to acquire the asset. It's an estimate for things like depreciation, insurance, and replacement budgeting.
All these things are accounting things that, as Norquist says "occur after the money is spent". They are things that you want to get right in your accounting, but if you get the values wrong then it does not mean you've lost the money. It means you've got some estimate wrong, and you'll put to little or to much in one fund or another.

Nobody is saying that the defense department does not waste money. It very obviously does. Hundreds of millions, possibly even billions of dollars are wasted through inefficiencies, incompetence, and corruption. It is probably a measurable percentage of the Pentagon's budget. But the Pentagon's budget is around $600 billion. A measurable percentage of the Pentagon's budget is not $6.5 Trillion. That's ten times the amount of money that went into the Pentagon that year, and they still had to run the military. Clearly it's impossible to both spend most of the money you've been given, and also lose ten times that amount.

Lee Camp spends a good portion of his comedy segments illustrating just how much money $6.5 Trillion (or $21 Trillion) is with comparisons to the GDP of the UK, and illustrations like how tall a stack of $1000 bills worth $6.5 trillion would be. These comparisons elicited only somewhat strained laughter from the RT studio audience, but that does perhaps illustrate the unfamiliarity most people have with "trillions", and the reason why this story continues to have legs. Losing $6.5 trillion from a budget of $600 billion almost looks like it makes sense. But is you put it like losing $6,500 billion from $600 billion, then the impossibility is a bit more apparent.

How did we get here? The $6.5 Trillion number comes from a Jul 2016 report titled: Army General Fund Adjustments Not Adequately Documented or Supported, which goes some way to describe the complexity of the issue. But the $21 trillion comes from later work by Mark Skidmore, a Professor of Economics at Michigan State University, who added up a number of similar reported journal voucher issues over several years to come up with the larger number. This is just more of the same though, still not missing money, still just unsupported accounting information transfers.

Skidmore has been skirting the conspiracy circuit with this idea. He co-authored a Forbes blog piece with Laurence Kotlikoff, he collaborated with Catherine Austin Fitts (a frequent guest on Coast-to Coast AM, and sometime 9/11 conspracist) in searching for the journal voucher adjustments, and he gave an interview with Greg Hunter supporting the idea that the numbers represented missing money. This insinuation has been accepted as fact by the more overt conspiracy community, like Alex Jones and David Wolfe.

Like Norquist says, "it's an accounting problem that does need to be solved because it can help hide other underlying issues." It's helping hide the very real (but much smaller) amounts of money that the Pentagon wastes every year. But it's also being falsely used for a broader purpose — to legitimize implausible conspiracy theories like 9/11 controlled demolitions or even chemtrails. If the Government can steal trillions of dollars from us (the argument goes) who knows what else they would do, especially now they can afford it?

But nobody stole trillions of dollars, it's impossible, and it's just adding up a bunch of accounting. It's accounting that's difficult to follow. So unfortunately, because of this difficulty, this particular myth is going to stick around for a while.



See also:
 

Attachments

  • July 26 2016 Army General Fund Adjustments Not Adequately Documented or Supported DODIG-2016-113.pdf
    4 MB · Views: 927
  • Oct 2017 Additional Actions Needed to Complete the Army’s Analyses 687895.pdf
    2.1 MB · Views: 903
Last edited:

Mick West

Administrator
Staff member
Part of the conspiracy aspect of this story is the claim that after Skidmore and Fitts started looking into it, then the files were removed.

https://missingmoney.solari.com/dod-and-hud-missing-money-supporting-documentation/
On October 5, 2017 we discovered that the link to the report “Army General Fund Adjustments Not Adequately Documented or Supported” had been disabled. Within a several days, the links to other OIG documents we identified in our search were also disabled. The sequential non-random nature of this disabling process suggests a purposeful decision on the part of OIG to make key documents unavailable to the public via the website, as opposed to website reorganization, etc. We also revisited the website intermittently to see whether the documents had been reposted under different URLs—until very recently they had not been reposted.
Content from External Source
They give the old URL as:
http://www.dodig.mil/pubs/documents/DODIG-2016-113.pdf
And the new one as:
https://media.defense.gov/2016/Jul/26/2001714261/-1/-1/1/DODIG-2016-113.pdf

But this just seems to normal web-site restructuring. It's not uncommon for URLs to change after a year or so. And a sequential move makes some sense if they had to manually update links. The best evidence of this is the change in the structure of the URL from a simple "documents" directory, to a more structured one typical of a well designed long term archive with lots of files. The short URL was probably a temporary one - the DoD IG is not going to store all their files in one directory.

And the file was also available here:
https://www.oversight.gov/sites/default/files/oig-reports/DODIG-2016-113.pdf
 
Last edited:

Mick West

Administrator
Staff member
A relevant statement from Bruce Anderson, chief of communications for the Office of Legislative Affairs and Communications in the Department of Defense Office of Inspector General, published on Michigan NPR's site:
http://michiganradio.org/post/did-federal-government-spend-21-trillion-wasn-t-authorized-congress

As discussed in the report, we concluded that the Army and Defense Finance and Accounting Service (DFAS) personnel were unable to provide the underlying detailed transaction level documentation to support the $6.5 trillion in adjustments. The $6.5 trillion represents the amount of unsupported adjustments DFAS created for the FY15 Yearend Army General Fund Financial Statements. The number is not cumulative and is not an estimate. We reported that the JV adjustments were unsupported. Without this supporting documentation, we simply could not determine whether the adjustments were necessary or correct. We include in the report data showing the considerable number of unsupported and supported JV adjustments.

  1. The $803 billion in unsupported FBWT adjustments are not transfers from the U.S. Treasury. As footnoted on p. 28 of the report, DFAS Indianapolis personnel stated that the majority of these adjustments were related to budget execution adjustments from prior years that must be applied to establish the correct beginning balances for the general ledger account. This net number is a result of 33,389 adjustments made by DFAS personnel or generated by DFAS systems. These adjustments were considered unsupported because they did not provide sufficient transaction level documentation to support the adjustments. Without sufficient supporting documentation for the adjustments, we could not determine whether the adjustments were warranted and accurate, or whether the values in the financial statements were accurate.
  2. As stated on p. 6 of our report, the 170 adjustments were unsupported because they forced general ledger amounts to agree with other data sources without reconciling the differences or determining which data source was correct; corrected errors or reclassified amounts to other accounts without adequately documenting why the adjustments were needed; or changed general ledger data without adequate documentation to support the adjustments.
  3. The $903 billion in unsupported A/P adjustments are not amounts due to specific vendors or individuals. As footnoted on p. 28 of the report, DFAS Indianapolis personnel stated that the majority of these adjustments were related to budget execution adjustments from prior years that must be applied to establish the correct beginning balances for the general ledger account. This net number is a result of 22,536 adjustments made by DFAS personnel or generated by DFAS systems. These adjustments were considered unsupported because they did not provide sufficient transaction level documentation to support the adjustments. Without sufficient supporting documentation for the adjustments, we could not determine whether the adjustments were warranted and accurate, or whether the values in the financial statements were accurate.
As to what prompted the audit, I invite you to review the project announcement posted September 8, 2015.

http://www.dodig.mil/reports.html/A...general-fund-financial-statement-compilation/

These audits have been required by law for some time now. You can find similar audits on our website.

With regard to the assertion that we disabled the links to the applicable documents, I have to inform you that the reports remained available on the website. We did migrate our content to a new server October 5, and kept the same base URL. This required us to use new URLs for every document. I imagine Mr. Skidmore tried to get to the documents using old URLs, which regrettably but unavoidably no longer worked. A little searching would have resulted in finding the reports.

Again, the documents were available on the website. One would have had to look for them, which is certainly more work than using previously identified links, but it is inaccurate to imply that the reports were no longer available.
Content from External Source
 

Mick West

Administrator
Staff member
The term FBWT above means "Fund Balance With Treasury". It represent a kind of checking account that each federal department has with the treasury. The amount "in" the account represents how much of the federal budget that department is authorized to spend.
 

Alexandria Nick

Active Member
If I may, the date of the supposed "hiding" has mundane significance too. That's just a few days after the end of the Federal fiscal year. October is a pretty busy month for any office that has significant end of the year reporting, as a most of those materials have to be published in early to mid November. A lot of web site housekeeping transpires in October to make way for the November publication dump.

Also, the short URL used for a recently published report is entirely consistent with report web postings at a variety of agencies.
 

Joe Dante

New Member
how is this debunked? if one report says they have 500 billion of tanks on hand and another says 800 billion of tanks on hand and someone just adds 300 billion of tanks to the 500 to make the numbers match that very easily could mean 300 billion in tanks were stolen, sold without authorization and money pocketed, not even manufactured but paid for, or a million other things. just saying they needed the numbers to match and the money was already spent anyway doesn't remove the problem or the possibility of theft/wrongdoing.

So what actually happened is:
the DoD used "unsupported adjustments" (ie made up numbers) for 600 billion dollars that it claims were because of "faulty software" or "user entries done to match discepencies in the totals" and it entered totals multiple times on its accounting books but left footnotes explaining these were double? triple? entries that occurred because the number at the start of the accounting year was incorrect and they had to just put something there?

This seems irresponsible to just grab someone who exaggerated the claim and depict it as debunked because they responded with a report but with no documentation or actual proof of claims. is the actual 63-page report, released July 26 at the direction of Principal Deputy Inspector General Glenn A. Fine debunked? in it he claims:
"The Office of the Assistant Secretary of the Army (Financial Management & Comptroller) (OASA[FM&C]) and the Defense Finance and Accounting Service Indianapolis (DFAS Indianapolis) did not adequately support $6.5 trillion in year-end JV adjustments made to AGF data during FY 2015 financial statement compilation. The unsupported JV adjustments occurred because OASA(FM&C) and DFAS Indianapolis did not prioritize correcting the system deficiencies that caused errors resulting in JV adjustments, and did not provide sufficient guidance for supporting system‑generated adjustments.

In addition, DFAS Indianapolis did not document or support why the Defense Departmental Reporting System‑Budgetary (DDRS-B), a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015. This occurred because DFAS Indianapolis did not have detailed documentation describing the DDRS-B import process or have accurate or complete system reports.

As a result, the data used to prepare the FY 2015 AGF third quarter and year-end financial statements were unreliable and lacked an adequate audit trail. Furthermore, DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions."
Content from External Source
is there some proof these claims are wrong? or are we just supposed to take their response at face value? is this debunked: "DoD makes unsupported adjustments totalling 600 billion dollars" ?
 
Last edited by a moderator:

Mick West

Administrator
Staff member
is this debunked: "DoD makes unsupported adjustments totalling 600 billion dollars" ?

You seem to be confusing figures. $600 Billion was the DoD budget in 2015. The amount of unsupported adjustments was $6,500 Billion ($6.5 Trillion) for that year.

So I think you need to be more specific. Please check the top post again, and read and/or listen to what Norquist is saying.
 

Shen Dao

New Member
There are two articles published by Forbes in regards to the matter of the missing $21 trillion. The first article was published by Forbes on December 8th, 2017. This first article (December 2017) is indeed linked to the original post. But there is a second follow-up article regarding this same matter published by Forbes on July 21st, 2018. This second and most recent Forbes article (July 21, 2018) is a direct rebuttal to the original post and it deserves a place in this thread.

The whole article is worth reading, and raises a many interesting points, but here are two key excerpts directly arguing against Norquist video.

The first excerpt from the article says:
If we were present at the hearing, we would have asked Mr. Norquist follow-up questions. The report highlighting unsupported adjustments of $6.5 trillion does indeed indicate that $164 billion in undocumentable adjustments were needed to address issues related to “property” (see page 27 of the report). Clearly, $164 billion in adjustments is substantial. Yet there is no indication as to why properties, equipment, etc. required such enormous changes in valuation. Moreover, the $164 billion accounts for less than 2 percent of the $6.5 trillion. Why were an additional $6.3 trillion in unsupported adjustments needed? To our knowledge, there are no public reports with detailed explanations or additional data. Furthermore, the DOD's OIG's failure to respond to reasonable inquiries and Mr. Norquist's clearly inadequate explanation suggests our government accountants can't figure out what's going on when it comes to trillions in "unsupported"
Content from External Source

The second relevant excerpt from the article says:
While Norquist’s description of the unsupported adjustments is not the only one that has been offered, some evaluation to assess the veracity of this explanation is possible. Consider the case of the Army for which we found $11.5 trillion in unsupported adjustments over the 1998-2015 period. During this time period, authorized general fund Army spending was about $2 trillion. We know from other sources that about 40 percent of the Army’s budget is allocated to personnel costs, and thus was not used for purchasing property, equipment, and the like. For purposes of this exercise, assume that the remaining amount (60 percent of the $2 trillion, or $1.2 trillion) is used to purchase property, equipment, etc., and suppose all of this spending is fully written off at 100 percent. For how many years could the Army write off all non-personnel spending and then call it an unsupported adjustment? Between 1998 and 2015, the Army’s average annual budget was about $118 billion, of which about $71 billion annually was for non-personnel spending. Dividing $11.5 trillion by $71 billion shows that the Army could have fully written off all non-personnel spending for the past 163 years (assuming a stable budget allocation in real terms), and then called it an unsupported adjustment. From this evaluation, it seems that Mr. Norquist’s explanation does not pass the sniff test.
Content from External Source

Here is the link:
https://www.forbes.com/sites/kotlik...-hiding-21-trillion-in-spending/#4d4953dd4a73
 

Shen Dao

New Member
Part of the conspiracy aspect of this story is the claim that after Skidmore and Fitts started looking into it, then the files were removed.

In Mr West's comment, he demonstrates that documents from pre-2017 were available elsewhere, so the original conspiracy argument loses some of its steam. However, now, the most recent published data by the Department of Defense (fiscal year 2017) has been released with all the relevant information redacted. I believe this re-opens the conspiracy debate.

Here are two excerpts from Professor Mark Skidmore's update (June 2018) on the unresolved issue of the $21 trillion in unsupported adjustments:

The first excerpt:
Over the past several months, I have repeatedly tried to contact the Office of the
Inspector General (OIG) in an effort to obtain additional information regarding the nature of the
unsupported adjustments. However, no information has been provided and the OIG is no longer
responding to inquiries.
Content from External Source
The second excerpt:
In late May 2018, a graduate student at Michigan State University found on the OIG website the most
recent report for the DoD, which summarizes unsupported adjustments for fiscal year 2017. However,
this document differs from all previous reports in that all the numbers relating to the unsupported
adjustments were redacted. That is, all the relevant information was blacked out.
Content from External Source
And here is the link to Professor Skidmore's post:
https://missingmoney.solari.com/wp-content/uploads/2018/08/Missing_Money_Update.pdf
 

Mick West

Administrator
Staff member
. However, now, the most recent published data by the Department of Defense (fiscal year 2017) has been released with all the relevant information redacted. I believe this re-opens the conspiracy debate.
Can you post examples of these redactions please.
 

Shen Dao

New Member
Can you post examples of these redactions please.

Here is the link to the document that Dr Skidmore is referring to:
https://media.defense.gov/2018/Jun/18/2001932675/-1/-1/1/DODIG-2018-057.PDF

Here is an example of the redaction, from the key section, labeled "Findings" (on page 3):
REDACTED Adjustments made to the REDACTED data during the FY 2017 financial statement compilation process were not adequately documented and supported in accordance with the DoD FMR. This occurred because the REDACTED JV standard operating procedures did not include specific instructions tied to the DoD FMR. Until the REDACTED consistently follows the DoD FMR to maintain fully documented JVs, the Navy's financial statements will remain unsupported and will be potentially misstated.
Content from External Source
In your original post above, the 2016 version of this report is linked. The 2016 document is not redacted. Here is how the key finding of the 2016 report (stated on page 3) appears:
The Office of the Assistant Secretaryof the Army (Financial Management & Comptroller) (OASA[FM&C]) and the
Defense Finance and Accounting Service Indianapolis (DFAS Indianapolis) did not adequately support $2.8 trillion
in third quarter journal voucher (JV) adjustments and $6.5 trillion in year-end JV adjustments made to AGF data during FY 2015 financial statement compilation.
Content from External Source
Dr Skidmore started out as a skeptic about the missing money, as he states in the video linked to your original post. At 4:05 to 4:25 of this video he states:
When she (Catherine Austin Fitts) said $6.5 trillion, I said, "That cannot be right." ... So i went and looked up the report myself.
Content from External Source
On the website for the Department of Defense, Office of Inspector General, there is a statement (dated May 18, 2017) which says:
May 18, 2017 — We plan to begin the subject audit in May 2017. Our audit objective is to determine whether adjustments made to Navy Systems Management Activity data during the FY 2017 financial statement compilation process were adequately documented and supported in accordance with the DoD Financial Management Regulation. We will also review the Navy Systems Management Activity’s process for validating its information technology corrective actions plans.
Content from External Source
This, by the way, is only included because it comes from a link sent to me by one of this site's administrators in response to a post that was refused:
kinda silly since their project plan is still online and identifies the agency
http://www.dodig.mil/reports.html/A...systems-management-activitys-financial-state/
But this link you sent is from 2017 and predates the redacted report and everything else in this thread, so i am not sure how it is relevant.

Let me briefly summarize my own position and my reasons for posting: I value this Metabunk community and the clarity and level-headedness that everyone brings. I am hoping to read some well-considered and logical comments about this missing money. But until there is a reasonable explanation, especially one which can satisfy experts like Dr Skidmore, then i believe it is premature to label this thread "Debunked".
 

deirdre

Senior Member.
But this link you sent is from 2017 and predates the redacted report and everything else in this thread, so i am not sure how it is relevant.
your audit is examining fiscal year 2017.
https://media.defense.gov/2018/Jun/18/2001932675/-1/-1/1/DODIG-2018-057.PDF

the "FY" in both those documents means "Fiscal Year"

Here is an example of the redaction,
none of your redactions indicate a money amount is redacted as is claimed. [Agency] Identification information is redacted as per the Privacy Act.

I sent you the program proposal because it shows the audit title in full.

It looks like money amounts were excluded from the text, but a quick scan didn't show me anywhere that "numbers" were redacted. Your example is redacting an agency or company name, not numbers.
 

Shen Dao

New Member
none of your redactions indicate a money amount is redacted as is claimed

According to Merriam-Webster Dictionary, redacted means:
edited especially in order to obscure or remove sensitive information
Content from External Source
 

deirdre

Senior Member.
According to Merriam-Webster Dictionary, redacted means:
edited especially in order to obscure or remove sensitive information
Content from External Source

so? what is your point?

Your example that allegedly supports the claim (*bold text is yours)
However,
this document differs from all previous reports in that all the numbers relating to the unsupported
adjustments were redacted. That is, all the relevant information was blacked out

is:
REDACTED Adjustments made to the REDACTED data during the FY 2017 financial statement compilation process were not adequately documented and supported in accordance with the DoD FMR. This occurred because the REDACTED JV standard operating procedures did not include specific instructions tied to the DoD FMR. Until the REDACTED consistently follows the DoD FMR to maintain fully documented JVs, the Navy's financial statements will remain unsupported and will be potentially misstated.
Content from External Source

I'm going to use "Department of Homeland Security" in my example. But only because I know the acronym for DHS off the top of my head.

which of these two paragraphs sounds normal?

1. (U/DHS) Adjustments made to the Department of Homeland Security data during the FY 2017 financial statement compilation process were not adequately documented and supported in accordance with the DoD FMR. This occurred because the DHS JV standard operating procedures did not include specific instructions tied to the DoD FMR. Until the DHS consistently follows the DoD FMR to maintain fully documented JVs, the Navy's financial statements will remain unsupported and will be potentially misstated.


2. 2.8 trillion Adjustments made to the 2.8 trillion data during the FY 2017 financial statement compilation process were not adequately documented and supported in accordance with the DoD FMR. This occurred because the 2.8 trillion JV standard operating procedures did not include specific instructions tied to the DoD FMR. Until the 2.8 trillion consistently follows the DoD FMR to maintain fully documented JVs, the Navy's financial statements will remain unsupported and will be potentially misstated.



I fear your queries might be going a bit too off topic, what does crappy accounting procedures (that the audit review was investigating) have to do with the claim (thread topic) that trillions of dollars are MISSING?

Our audit objective is to determine whether adjustments made to Navy Systems Management Activity data during the FY 2017 financial statement compilation process were adequately documented and supported in accordance with the DoD Financial Management Regulation. We will also review the Navy Systems Management Activity’s process for validating its information technology corrective actions plans.
 

Shen Dao

New Member
I fear your queries might be going a bit too off topic, what does crappy accounting procedures (that the audit review was investigating) have to do with the claim (thread topic) that trillions of dollars are MISSING?
Yes, this is getting a little off topic. How about we get back to my posts above, which are simply trying to point out that the expert here is Dr Skidmore (certainly not me) and he summarizes this whole dilemma in his most recent post (June 2018) as follows:


Here is a summary of three notable developments since the fall of 2017:
1) The OIG has not provided any additional information and has not responded to the questions we posed in our report, despite having offered to provide more information following an interview I gave on Michigan Radio in January 2018.

2) The latest OIG report regarding DoD unsupported adjustments in fiscal year 2017 is now available, but all numbers and figures referring to unsupported adjustments have been redacted. Thus, is not possible to ask questions about unsupported adjustment for fiscal year 2017. If undocumentable adjustments simply reflect computer communication problems, why has the DOD OIG redacted the numbers in their report regarding undocumentable adjustments in fiscal year 2017?

3) The explanation offered by Mr. Norquist regarding the $6.5 trillion in unsupported adjustments for the Army in fiscal year 2015 is appears to be insufficient and does not appear to hold up to scrutiny.
Content from External Source
Here is the link to Dr Skidmore's post:
https://missingmoney.solari.com/wp-content/uploads/2018/08/Missing_Money_Update.pdf
 

Shen Dao

New Member
can you give an example of a number being redacted?

I thought we were going to get back on topic? :confused:
Where is the explanation for the money from the 2016 document? Why hasn't the 2016 money been properly accounted for? Why is the OIG refusing to discuss the matter? These are the questions that should be addressed.

What is the Metabunk community response to the rest of Dr Skidmore's three notable developments (see my previous post)?
 

deirdre

Senior Member.
What is the Metabunk community response to the rest of Dr Skidmore's three notable developments
Everyone, including Nordquist, has conceded that the poor accounting procedures are a problem and need to be resolved. Hence the audit reviews.

I imagine it is going to take a while for the accounts to get squared away.

As far as why the 2016 released Army General fund audit report has no redactions and doesn't say "Secret" on the document, and why the 'new' 2018 released Navy audit does say "Secret" and has redactions... I don't personally know. But a FOIA request can be made for the Navy audit and if it comes with redactions then that decision can be appealed. Technically when things are redacted they should have little numbers on the redactions indicating the exemption law used to warrant each redaction.
 

Mick West

Administrator
Staff member
What is the Metabunk community response to the rest of Dr Skidmore's three notable developments (see my previous post)?

The rest of them? There's nothing there. #1 and #3 just say Skidmore has not yet figured out what is going on, and has been unable to get more info from the OIG. And #2 claims without supporting evidence or examples that " all numbers and figures referring to unsupported adjustments have been redacted"

I suspect that if there are figures missing, then they have probably decided to no longer give figures like the sum of all unsupported transactions precisely because of the likelihood of misinterpretation of it as money that is "missing".

The basic point still stands here. It's not missing money. It's bad accounting practices. It may well help hide some some missing money from inefficiencies, fraud, and even extra-governmental operations, but there's nothing at all to indicate trillions of dollars going missing every year.
 

Nephre

New Member
[...]

What these authors are leaving out of the tale is that the military receives far more than the published amounts of money officially allocated to their basic budget.

[... off topic material removed]
 
Last edited by a moderator:

Mick West

Administrator
Staff member
Can someone explain how Contract AP is thought as an accounting principle that occurs after the money is spent?

In this case, it's after a liability has been incurred - i.e. the money has essentially been spent, just not delivered to the contractor. Here the unsupported adjustment would be in something like the total of contract accounts payable for one department.
 
Is this really debunked? There are legitimate articles coming out that the DoD is failing independent audits:
Now, a Nation investigation has uncovered an explanation for the Pentagon’s foot-dragging: For decades, the DoD’s leaders and accountants have been perpetrating a gigantic, unconstitutional accounting fraud, deliberately cooking the books to mislead the Congress and drive the DoD’s budgets ever higher, regardless of military necessity. DoD has literally been making up numbers in its annual financial reports to Congress—representing trillions of dollars’ worth of seemingly nonexistent transactions—knowing that Congress would rely on those misleading reports when deciding how much money to give the DoD the following year, according to government records and interviews with current and former DoD officials, congressional sources, and independent experts.

Source: Exclusive: The Pentagon’s Massive Accounting Fraud Exposed
 

Mick West

Administrator
Staff member
Is this really debunked? There are legitimate articles coming out that the DoD is failing independent audits:

It's the same story, based on Skidmore's work, which does not actually show missing money, just these same adjustments to records of money that is already spent. (i.e. things like the value of the Navy's ships).

Again, it's literally impossible to lose ten times as much money as you have.
 
It's the same story, based on Skidmore's work, which does not actually show missing money, just these same adjustments to records of money that is already spent. (i.e. things like the value of the Navy's ships).

Again, it's literally impossible to lose ten times as much money as you have.

I wouldn't say this is necessarily the same story, it appears that this subject has hovered around losing $21 trillion when the actual story is that of course $21 trillion isn't actually missing but that the DoD has been making up numbers to Congress. These imaginary figures have made up the figurative $21 trillion. In reality, it seems that they've been doing this to cover whatever spending habits have actually been occurring. Doesn't it seem a bit odd that even after Skidmore's report, independent investigations have been done and they still have failed to come even close to an actual number? Without trying to make this into an actual crazy conspiracy theory that might've been suggested by Lee Camp. It seems quite possible that there is actually fraud happening in the DoD.
 

Mick West

Administrator
Staff member
It seems quite possible that there is actually fraud happening in the DoD.
Of course there is. It's like the largest organization in the world. There inevitably will be some corruption, and probably totally in the billions over time.

But the claim here is that TRILLIONS are missing. That is not supported by the evidence.

And there are no "independent investigations" that I'm aware of, unless you mean the attempted audit.
 
Of course there is. It's like the largest organization in the world. There inevitably will be some corruption, and probably totally in the billions over time.

But the claim here is that TRILLIONS are missing. That is not supported by the evidence.

And there are no "independent investigations" that I'm aware of, unless you mean the attempted audit.

Point taken, I don't know if I'd agree that there would "inevitably" be some corruption (almost as if we should accept that) but I don't see any accounts for there being Trillions missing outside of hearsay. I've been trying to get in contact with David Degraw who claimed to have come up with those numbers as well. Yes, the attempted audit you might be referring to is apart of the independent audit. Although this might be debunked, I still feel that it's still very serious whether there are trillions, billions, or even just millions missing that it's important that people take these matters seriously.
 

Mick West

Administrator
Staff member
I certainly don't think we should accept corruption — I just think it's something that historically has been shown to happen in any very large organization.

There's probably a lot more waste than losses from corruption.
 

Josh Callman

New Member
Interesting discussion. Here is a link to Kotlikoff's latest article in Forbes:

Holding U.S. Treasurys? Beware: Uncle Sam Can't Account For $21 Trillion


According to Kotlikoff:
The FASAB recommendation effectively institutionalizes opacity in federal financial reporting. Up till now, many aspects of federal finances have been non-transparent because the government has failed to comply with existing financial reporting laws. However, at least citizens had the laws working in their favor. Now citizens have no recourse; opacity is now the law of the land, controlled by executive branch authority and policy.
Content from External Source
 

Z.W. Wolf

Senior Member.
I don't see the need for an elaborate explanation. People are only going to work as hard as they have to. The military doesn't need to establish and follow good accounting practices, so it hasn't.
 

Mrantala

New Member
I'm sure someone else in this thread has already expressed this same opinion, but if not here you go.

First of all, it always amazes me when the government just can't seem to find a way to correctly account for larger sums of money... such as millions, billions, and yes.. over years... trillions of dollars. However, when I filed my 2014 Federal tax returns, and I was off by $150.00.... they certainly were able to correct me, and tell me that I was actually off by $150... AND 43 CENTS. Wow... they certainly have there accounting systems tied together then. Maybe this year for 2019, could I have Pentagon do my Federal Returns ...?

Everybody... it's a shell game that their playing. And when they say an "Audit"... it's not an audit, and another shuffle of the shells and make us go another year guessing.

And of course it's in the Trillions of Dollars. You can't fund secret government projects (and no I'm no going to conspiracy right now) such as advanced weapon developments, new aircraft/spacecrafts designs, etc with PUBLIC funds. If you do that, you have disclose what they are and how much their costing, and they don't want to do that. When SpaceX is putting into orbit a "secret and undisclosed payload" - who do you think is paying for that, and where do you think the money is coming from ? They're no paying Monopoly Money !!

Either way, the American people who are stuck in the middle class are getting squeezed harder and harder until their backs break. It's not going to get any better. Look at the example of the douche we have in the White House now. I don't think he's setting an example of being true and open disclosure when it comes to money, is he ?
 

Alexandria Nick

Active Member
You can't fund secret government projects (and no I'm no going to conspiracy right now) such as advanced weapon developments, new aircraft/spacecrafts designs, etc with PUBLIC funds. If you do that, you have disclose what they are and how much their costing, and they don't want to do that.

They can do that, they do it, and they don't have to disclose it.

Fold them up into vaguely named budget lines that just say things like "other procurement" without any elaboration or exist as code names with perfunctory descriptions. There's also two versions of the budget: the declassified one that you can get from any .gov and the classified ones that the White House submits and Congress approves behind closed doors where there are break-outs for the classified work. And not everyone in Congress gets to see that one either.

None of this is speculative or conspiratorial. They do exist and there was a minor flap in 1990 when Aviation Week discovered a budget a few years earlier had inadvertently included an actual break-out for something that we now generally accept to have been the B-2 Spirit* when it was lurking in the black budget between 1979 and 1989. It had spent those years under the vague and ambiguous line of "Other Production Charges" in the Aircraft Procurement numbers. That code means something, as the Navy (for instance) has the same line. However, at the time, they had a budget of just $50 million while the Air Force was at $3.5 billion. The Navy, I would wager, would be much more forthright in telling you what they were doing. The Air Force might have said something similar to what the Navy says, but their numbers are a gigantic one that seems wildly out of place compared to what the Navy said. There's a big old lump of black project sitting right out in the open. But the error with the roll-up only happens in one budget in that decade. Simple math over the period from 1979 to 1989, even without the error, would have told you they were paying for something expensive that hadn't seen the light of day.

Another example is no one knows (I mean someone does) what the heck the NRO is spending all its money on. They're buying something and generally we can believe some of it goes towards satellites. What they are and how much they cost is another thing. So when they show up at NASA saying "hey you guys want these optics from project that failed? You could use them for more telescopes." and NASA looks at literally billions of dollars in hardware that got thrown in the trash, more or less, it is entirely consistent with how much the NRO gets and what their mission is. But virtually no one knew they had all this stuff laying around.

* I say generally accept because the Advanced Tactical Bomber (the B-2), Senior Trend (the F-117), and the Advanced Tactical Fighter (the F-22) were all black projects at the time. The peak and decline of funding in the Other Production Charges item and the transition into the declassified B-2 funding implies it was a single aircraft type.
 

Cantonear1968

New Member
Debunked: Missing $21 Trillion / $6.5 Trillion / $2.3 Trillion - Journal Vouchers

Just to add this here as an FYI because it's a claim that I've only recently started to see. By recent I mean probably within the last year. The claim going around now is that the Pentagon was specifically targeted where it was because the people working in this office were working on "finding" the "missing" money. I believe it's well established that the impact zone of the Pentagon was at least one of their accounting offices, but I've seen nothing to establish that this particular one was working specifically on this case. Or the ridiculous notion that the Pentagon keeps its 50 year budget on a few desktops in one office (for bonus CT points they claim that WTC7 was the off-site back up, which is why it had to be destroyed).

This thread well establishes the ongoing work to correlate the "missing" funds so just a bold assertion with no backing evidence.
 

MikeG

Senior Member.
Rolling Stone.png
Rolling Stone
reporter Matt Taibbi published a very good examination of Pentagon finances.

A retired Air Force auditor — we’ll call him Andy — tells a story about a thing that happened at Ogden Air Force Base, Utah. Sometime in early 2001, something went wrong with a base inventory order. Andy thinks it was a simple data-entry error. “Someone ordered five of something,” he says, “and it came out as an order for 999,000.” He laughs. “It was probably just something the machine defaulted to. Type in an order for a part the wrong way, and it comes out all frickin’ nines in every field.” Nobody actually delivered a monster load of parts. But the faulty transaction — the paper trail for a phantom inventory adjustment never made — started moving through the Air Force’s maze of internal accounting systems anyway. A junior-level logistics officer caught it before it went out of house. Andy remembers the incident because, as a souvenir, he kept the June 28th, 2001, email that circulated about it in the Air Force accounting world, in which the dollar value of the error was discussed.

Wanted to keep you all informed of the massive inventory adjustment processed at [Ogden] on Wednesday of this week. It isn’t as bad as we first thought ($8.5 trillion). The hit...$3.9 trillion instead of the $8.5 trillion as we first thought.

The Air Force, which had an $85 billion budget that year, nearly created in one stroke an accounting error more than a third the size of the U.S. GDP, which was just over $10 trillion in 2001. Nobody lost money. It was just a paper error, one that was caught.

“Even the Air Force notices a trillion-dollar error,” Andy says with a laugh. “Now, if it had been a billion, it might have gone through.”
Content from External Source
https://www.rollingstone.com/politics/politics-features/pentagon-budget-mystery-807276/
 
Top