President Joe Biden’s nominee to serve as the Pentagon’s next comptroller said Tuesday it will likely be “a few more years” before the department’s financial audit receives a clean opinion, adding he will focus on information access and control measures that could help reduce areas of wasteful spending.
Michael McCord, who previously held the same role during the Obama administration, told the Senate Armed Services Committee (SASC) that progress on the financial audit won’t solve the full swath of the department’s management challenges but can act as a catalyst for instituting improved business reforms.
“It is not the answer to every question, certainly. An audit won’t tell you whether the particular airplane you bought was the right airplane for the mission, for example, or whether the contractor overcharged you. Those are all different aspects of control that are above and beyond the financial audit,” McCord said during his confirmation hearing. “The business process reforms that are necessary for an audit are things the department needs to be doing anyway, and the audit is a good forcing function for the direction the department needs to go.”
The Pentagon announced last fall it failed its latest full financial audit, with officials telling reporters the department expects to achieve its first “clean opinion” by 2027 (Defense Daily, Nov. 17).
McCord’s nomination was considered alongside Ronald Moultrie, the nominee for under secretary of defense for Intelligence and Security, with lawmakers signaling bipartisan support and a likely swift confirmation for both officials.
On the Pentagon’s audit findings to date, McCord said the results have highlighted a need to improve inventory management and bolster cybersecurity controls that could prove to be substantial fixes in the push to reach a clean opinion.
“A large part of the findings the auditors have made are that the controls still need to be better, in terms of access to information and only having authorized people access that information,” McCord said.
At a SASC hearing on April 27, a panel of experts told lawmakers the Pentagon’s perennial failure to receive a clean financial audit could be improved with bolstered data systems for personnel, acquisition and logistics information (Defense Daily, April 27).
McCord also signaled support for the burgeoning push to reform the Pentagon’s Planning, Programming, Budgeting, and Execution (PPBE) process with greater agility.
“The [PPBE] process as a whole is heavily legislated in what I would call the back-end execution. There are thousands of pages of laws and regulation governing how government funds may be expended. It is very lightly legislated on the front-end, the planning and programming process in particular. So as you move through the process, the amount of statutory and regulatory guidance increases fairly exponentially with regard to how taxpayer funds are used,” McCord said.