Lost Trillions

In a previous life, I worked as a bookkeeper, so I have a modest familiarity with accounting principles. So that added an extra fillip of horror as I read Matt Taibbi's article, The Pentagon's Bottomless Money Pit. I knew the Pentabon's budget was an obscene, bloated mess, but OMG, it's even worse than that.

It’s illegal for any government agency to spend money appropriated for one purpose on a different program. But the military — either hilariously or horribly, depending on your perspective — created a program that algorithmically produced such violations of the law. They weren’t minor violations: Grassley has fought for years against such automatic payments, saying bureaucrats use them to “avoid violations of the Antideficiency Act — a felony.” Last year’s audit found the Antideficiency Act was one of five laws the agency violated.

MOCAS still exists, but it’s unclear how or if it’s been updated. In any case, Defense still lacks rec-ords showing that it’s paying for the right programs from the right accounts. Out of terror that it might have to return money as a result, the DoD orders its accountants to make numbers fit. 

Those DFAS accountants in the Reuters exposé were told by superiors that if they couldn’t find invoices or contracts to prove the various services spent their one-year money and two-year money and five-year money on time, they should execute “unsubstantiated change actions,” i.e., lie.
The accountants systematically “plugged” in fake numbers to match the payment schedules handed down by the Treasury. These fixes are called “journal voucher adjustments” or “plugs.”

As a result, those year-end financial statements will look like they match congressional intentions. In truth, the statements packed with thousands of plugs are fictions, a form of systematic accounting fraud Congress has quietly tolerated for decades.

If I had tried something like "plugs" when I was bookkeeping at James Lorimer or Alacrity, I'd almost certainly ended up in prison.

To paraphrase the he famous adage by J. B. S. Haldane: Now, my own suspicion is that the budget is not only queerer than we suppose, but queerer than we can suppose."