[Joint House and Senate Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                           BEYOND THE BUDGET:
                  ADDRESSING FINANCIAL ACCOUNTABILITY
                      IN THE DEPARTMENT OF DEFENSE

=======================================================================

                             JOINT HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                    THE BORDER, AND FOREIGN AFFAIRS

                                AND THE

                 SUBCOMMITTEE ON GOVERNMENT OPERATIONS
                       AND THE FEDERAL WORKFORCE

                                 OF THE

               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 13, 2023

                               __________

                           Serial No. 118-49

                               __________

  Printed for the use of the Committee on Oversight and Accountability
  
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                       Available on: govinfo.gov,
                         oversight.house.gov or
                             docs.house.gov
                             
                                __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
53-003 PDF                   WASHINGTON : 2023                    
          
-----------------------------------------------------------------------------------                                  
                            
               COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY

                    JAMES COMER, Kentucky, Chairman

Jim Jordan, Ohio                     Jamie Raskin, Maryland, Ranking 
Mike Turner, Ohio                        Minority Member
Paul Gosar, Arizona                  Eleanor Holmes Norton, District of 
Virginia Foxx, North Carolina            Columbia
Glenn Grothman, Wisconsin            Stephen F. Lynch, Massachusetts
Gary Palmer, Alabama                 Gerald E. Connolly, Virginia
Clay Higgins, Louisiana              Raja Krishnamoorthi, Illinois
Pete Sessions, Texas                 Ro Khanna, California
Andy Biggs, Arizona                  Kweisi Mfume, Maryland
Nancy Mace, South Carolina           Alexandria Ocasio-Cortez, New York
Jake LaTurner, Kansas                Katie Porter, California
Pat Fallon, Texas                    Cori Bush, Missouri
Byron Donalds, Florida               Jimmy Gomez, California
Kelly Armstrong, North Dakota        Shontel Brown, Ohio
Scott Perry, Pennsylvania            Melanie Stansbury, New Mexico
William Timmons, South Carolina      Robert Garcia, California
Tim Burchett, Tennessee              Maxwell Frost, Florida
Marjorie Taylor Greene, Georgia      Summer Lee, Pennsylvania
Lisa McClain, Michigan               Greg Casar, Texas
Lauren Boebert, Colorado             Jasmine Crockett, Texas
Russell Fry, South Carolina          Dan Goldman, New York
Anna Paulina Luna, Florida           Jared Moskowitz, Florida
Chuck Edwards, North Carolina        Vacancy
Nick Langworthy, New York
Eric Burlison, Missouri

                       Mark Marin, Staff Director
       Jessica Donlon, Deputy Staff Director and General Counsel
             Kaity Wolfe, Senior Professional Staff Member
         Grayson Westmoreland, Senior Professional Staff Member
                      Bill Womack, Senior Advisor
      Mallory Cogar, Deputy Director of Operations and Chief Clerk

                      Contact Number: 202-225-5074

                  Julie Tagen, Minority Staff Director
                      Contact Number: 202-225-5051

   Subcommittee On National Security, the Border, and Foreign Affairs

                  Glenn Grothman, Wisconsin, Chairman
Paul Gosar, Arizona                  Robert Garcia, California, Ranking 
Virginia Foxx, North Carolina            Minority Member
Clay Higgins, Louisiana              Stephen F. Lynch, Massachusetts
Pete Sessions, Texas                 Dan Goldman, New York
Andy Biggs, Arizona                  Jared Moskowitz, Florida
Nancy Mace, South Carolina           Katie Porter, California
Jake LaTurner, Kansas                Cori Bush, Missouri
Pat Fallon, Texas                    Maxwell Frost, Florida
Kelly Armstrong, North Dakota        Vacancy
Scott Perry, Pennsylvania            Vacancy

    Subcommittee On Government Operations and the Federal Workforce

                     Pete Sessions, Texas, Chairman
Gary Palmer, Alabama                 Kweisi Mfume, Maryland Ranking 
Clay Higgins, Louisiana                  Minority Member
Andy Biggs, Arizona                  Eleanor Holmes Norton, District of 
Byron Donalds, Florida                   Columbia
William Timmons, South Carolina      Maxwell Frost, Florida
Tim Burchett, Tennessee              Greg Casar, Texas
Marjorie Taylor Greene, Georgia      Gerald E. Connolly, Virginia
Lauren Boebert, Colorado             Melanie Stansbury, New Mexico
Russell Fry, South Carolina          Robert Garcia, California
Chuck Edwards, North Carolina        Summer Lee, Pennsylvania
Eric Burlison, Missouri              Jasmine Crockett, Texas
                                     Vacancy
                        
                        
                        C  O  N  T  E  N  T  S

                              ----------                              
                                                                   Page
Hearing held on July 13, 2023....................................     1

                               Witnesses

                              ----------                              

Mr. John Tenaglia, Principal Director, Defense Pricing and 
  Contracting, U.S. Department of Defense
Oral Statement...................................................     8
Mr. Brett Mansfield, Deputy Inspector General for Audits, 
  Department of Defense Office of Inspector General, U.S. 
  Department of Defense
Oral Statement...................................................     9
Mr. Asif Khan, Director, Financial Management and Assurance, U.S. 
  Government Accountability Office
Oral Statement...................................................    11

 Opening statements and the prepared statements for the witnesses 
  are available in the U.S. House of Representatives Repository 
  at: docs.house.gov.

                           Index of Documents

                              ----------                              


  * Statement for the Record; submitted by Rep. Connolly.

  * List, government auditing agencies, part of the Ukraine 
  Oversight 
  Interagency Working Group; submitted by Rep. Garcia.

  * DoD fact sheet, re: accounting of equipment to Ukraine; 
  submitted by Rep. Garcia.

  * Questions for the Record: to Mr. Mansfield; submitted by Rep. 
  Sessions.

  * Questions for the Record: to Mr. Khan; submitted by Rep. 
  Sessions.

  * Questions for the Record: to Mr. Khan; submitted by Rep. 
  Garcia.

  * Questions for the Record: to Mr. Tanaglia; submitted by Rep. 
  Donalds.

  * Questions for the Record: to Mr. Tanaglia; submitted by Rep. 
  Garcia.


The documents listed above are available at: docs.house.gov.

 
                           BEYOND THE BUDGET:
                  ADDRESSING FINANCIAL ACCOUNTABILITY
                      IN THE DEPARTMENT OF DEFENSE

                              ----------                              


                    Thursday, July 13, 2023

                        House of Representatives

               Committee on Oversight and Accountability

   Subcommittee on National Security, the Border, and Foreign Affairs

  and Subcommittee on Government Operations and the Federal Workforce

                                           Washington, D.C.

    The Subcommittees met, pursuant to notice, at 10:03 a.m., 
in room 2154, Rayburn House Office Building, Hon. Glenn 
Grothman [Chairman of the Subcommittee on National Security, 
the Border, and Foreign Affairs] presiding.
    Present: Representatives Grothman, Sessions, Palmer, Foxx, 
Higgins, Biggs, Mace, Donalds, LaTurner, Timmons, Fallon, 
Burchett, Greene, Boebert, Edwards, Burlison, Robert Garcia of 
California, Mfume, Lynch, Norton, Goldman, Frost, Moskowitz, 
Connolly, Porter, Lee, and Crockett.
    Mr. Grothman. The Joint Subcommittee hearing on the 
Department of Defense's financial management will come to 
order. Welcome, everyone.
    Without objection, the Chair may declare a recess at any 
time. I recognize myself for the purpose of making an opening 
statement.
    Good morning, and welcome to our Joint Subcommittee hearing 
on addressing the financial management challenges at the 
Department of Defense. We are grateful to be joined by our 
colleagues on the Government Operations Subcommittee and would 
like to thank their Chairman, Mr. Sessions, for joining me in 
tackling this important and timely topic since Congress is 
currently debating next year's National Defense Authorization 
Act.
    Since the early 1990's, all Federal departments have been 
required to undergo an independent financial audit. Every 
Federal department has achieved a clean audit since 2013, when 
the Department of Homeland Security had its first clean audit, 
except for the Department of Defense.
    The Pentagon failed its fifth consecutive audit last year. 
DoD was unable to right auditors to an accurate accounting of 
more than 61 percent of its $3.5 trillion in assets.
    The goal for today's hearing is to understand what prevents 
the Pentagon from being able to produce a clean audit like 
every other agency. Testifying before us today is DoD's Deputy 
Inspector General for Audits, Brett Mansfield, to discuss the 
Inspector General's role in overseeing the audit process.
    We would have liked to have someone from the Department of 
Defense Comptroller's Office on this panel, but they chose not 
to participate in today's hearing because their entire senior 
leadership team was either out of the office or on vacation.
    Today, we are also going to address the serious financial 
mismanagement at the Pentagon. President Biden's budget request 
included $910.8 billion for defense-related activities, almost 
a trillion dollars. The U.S. spends more on defense than China, 
Russia, India, Saudi Arabia, the U.K., Germany, France, South 
Korea, Japan, and Ukraine combined.
    The American people work diligently to earn every dollar, 
but it seems the DOT [sic] has become a master of squandering 
those funds without batting an eye.
    I would like to share with you some examples of the 
mismanagement--the extreme mismanagement at the Department of 
Defense. Last week, Chairman Comer and I sent a letter to the 
Pentagon asking for a briefing on the recent accounting error 
by overestimating the value of weapons from Ukraine by $6.2 
billion. That is about the price of an aircraft carrier. The 
Special Inspector General for Afghanistan Reconstruction 
investigated the Pentagon's G222 aircraft program for the 
Afghan Security Forces. They found that after the Pentagon 
spent $549 million on 20 cargo planes, DoD sold them for scrap 
due to unreliability, maintenance issues, and safety complaints 
for about $40,000. In 2018, the U.S. Air Force claimed it spent 
$10,000 on a toilet seat and toilet seat covers for the C-17 
cargo planes.
    I could sit on this chair all day and go over instance 
after instance of the financial mismanagement at the Pentagon. 
And, you know, the Pentagon is the most important organization. 
So, it is especially frustrating that they seem to be the most 
arrogant leaders at mismanaging things.
    While average citizens and small businesses are expected to 
maintain meticulous financial records, the DoD operates under a 
different set of rules, an extravagant game of hide and seek 
where the U.S. taxpayer is the one seeking.
    Today, it is vital we assess the efficiency, transparency, 
and accountability of Department of Defense's financial 
practices. The auditors and evaluators that work to bring 
transparency and accountability to light are working with the 
numbers that will make your head spin faster than a fighter 
jet. I do not know. A fighter jet? Oh.
    But by ensuring the good stewardship of U.S. taxpayer 
dollars to the Department of Defense, we can ultimately enhance 
our Nation's national security and safeguard the interests of 
the American people.
    I hope to hear from our panelists today how their agencies 
work together to identify waste, fraud, and abuse at the 
Pentagon. I would also like to understand their offices' 
recommendations they have to fix Department of Defense's 
financial management issues.
    As we continue to be the world's defenders of freedom, 
assist the Ukrainian people encountering Russian aggression, 
deter China and defend our homeland, we must make sure that our 
own financial accounting is done properly.
    Thank you to our witnesses today for being here and for 
helping us understand financial practices at DoD. I look 
forward to all of your testimony.
    I now recognize National Security Subcommittee Ranking 
Member Garcia for the purposes of his opening statement.
    Mr. Garcia. Thank you, Mr. Chair and also Chairman 
Sessions.
    Auditing the Department of Defense is an incredibly 
important bipartisan priority. The Department's financial 
management has been on the Government Accountability Office 
High Risk List since 1995. And it goes without saying that our 
problems are bigger than any single administration, President, 
or party when it comes to auditing.
    Now, auditing an agency as large as DoD is a complex and 
significant challenge, and it is critical that we work together 
to make this goal possible. The Department spending makes up 
about half of the Federal Government's discretionary spending. 
Its physical assets comprise almost 68 percent of the Federal 
Government's physical assets.
    Now, DoD's financial management faces long-standing issues, 
including ineffective processes, systems, and controls; 
incomplete corrective action plans; and the need for more 
effective monitoring and reporting. These long-standing issues 
limit the ability to identify vulnerabilities and miss out on 
ways to improve operations and, ultimately, save taxpayer 
money.
    Now, as the recent 60 Minute segment on DoD price gouging 
pointed out, without greater visibility and accuracy, DoD 
contractors can use their status as uniquely positioned sole-
source suppliers to overcharge the American public or to profit 
inappropriately from our military. Now, actions like these 
divert fundings from other critical priorities, and we should 
not allow for it. And, DoD should not get a free pass from the 
law, especially when other agencies that invest in priorities 
like healthcare, education, climate change, or economic growth 
are under high scrutiny and take important and difficult steps 
to comply with statutory auditing requirements.
    Now, we should welcome a bipartisan conversation as we make 
sure that our military, which is the most powerful in history 
and in the world, becomes a more effective and transparent 
institution. However, I also need to address a deeply 
concerning issue.
    Now, some of my colleagues in the Majority, including 
Members of this Committee, have continued to push a narrative 
that our aid to Ukraine in particular is not properly overseen 
or is not properly used. Now, Republican leadership is allowing 
amendments to end and to prohibit aid to Ukraine. This should 
not be supported by the American public.
    Now, some have even said on this Committee that there is no 
real oversight of Ukraine aid. I believe this is a false 
narrative, and you do not have to just take my word for it.
    Here is what Republican Foreign Affairs Committee Ranking 
Member Senator John Risch said this week. He said that he has 
seen firsthand that idea that equipment is ending up in the 
wrong hands is, and I will quote him, all baloney. And that, 
quote, ``stuff is going where it is supposed to go and it is 
going quickly,'' end quote. He pointed out that the last 
Ukrainian supplemental had 52 separate oversight provisions, 
saying, and again I quote him, ``that we have got really, 
really strong oversight,'' and I will end quote.
    To further dispel this anti-Ukrainian myth, I am sure that 
the Inspectors General for the Department of Defense, 
Department of State, and USAID will be happy to brief this 
Committee on the whole-of-government oversight efforts for 
Ukraine aid, including the 20 government agencies and hundreds 
of staff working on current and planning for future oversight 
projects. I hope to hear more about that important work and 
look for areas where we can hold agencies appropriately 
accountable.
    Now, thanks to President Biden, we have provided Ukraine 
with the tools to track defensive equipment, which they are 
using even as their country fights for its survival. I am 
disappointed, however, that the Majority decided to move 
forward with this hearing without the Department of Defense 
Comptroller who is best equipped to provide full answers to 
Congress on today's topic, including the oversight of Ukraine 
aid.
    Our fight in Ukraine is a fight for democracy and for the 
global system of trade, peace, and the rule of law that we all 
rely on. America is stronger with our allies and partners, not 
when we are isolated and weak. We need to stand up to global 
authoritarians like Putin who has attacked our democracy, who 
has threatened our allies, and has started a criminal and 
unprovoked war of aggression. And we should not accept any 
effort to distort the truth about our aid to Ukraine.
    Now, I look forward to a productive conversation about 
building a better and stronger DoD, to cracking down on 
corruption in contracting, and to developing a more accountable 
government.
    I want to thank our witnesses for being here today. And, 
Mr. Chairman, I yield back.
    Mr. Grothman. Yes, I would like to clarify. We did try to 
get the Comptroller here. They just are not here because they 
were on vacation or whatever. It is entirely possible we will 
have another Subcommittee hearing and bring them back at a 
future time. But it was a little frustrating that they all 
seemed to be out.
    Now, I would like to ask the Government Operations 
Subcommittee Chairman, Mr. Sessions, for his opening statement.
    Mr. Sessions. Chairman Grothman, thank you very much.
    I want to align myself with the comments that I believe all 
four of us will make this morning, and that is, thank you to 
each of the witnesses. Thank you for your service. We well 
understand that you do want to be the watchdog, so to speak, of 
the organization that is there to ensure that the effectiveness 
of the money that is given by the American people appropriated 
by Congress and used in a way that would be in the best 
interest of not only this Nation, but the long-term investment 
that we make in the United States military.
    It is important that the dollars that we give you, however, 
equally are tracked, known, and understood. Please know that I 
would like to have us focus today on your insight, not 
necessarily the problems of whether we are talking about 
whether you were given access to the Afghanistan debacle or 
otherwise. But I would like for you to be able to provide 
Congress both on--all of us on a bipartisan basis, the things 
that you believe that we might do to strengthen your ability to 
effectively do your job.
    I think financial transparency is critical. It is critical, 
it is much like rule of law. If we do not have insight to how 
things happen, then we will not be able to inflect in that 
debate, in that ability to track, trend, and see things, and 
becomes an investment that over time is diminished.
    What do we want today? We want you to know that we 
appreciate you and the United States military. The Department 
of Defense, we want them to know that we support them. We will 
continue to rely on them to do not only the heavy lifting, but 
also the delivery to support our homeland and our friends 
around the world.
    Our allies around the world are also equally important to 
the United States because they represent our ability to go 
places in this world with a commonality of not just policies 
and directives, but rather what free people and how they will 
move.
    It is important for you to know that we believe in this 
effort, that we are not trying to get at a completely--nor beat 
you up, where is your clean audit, where is your clean audit, 
where is your clean audit? That is not what we are after. We 
recognize that you are working diligently. But in order to 
achieve a clean audit, I am looking for you today to give us 
those facts factors that would help us as we not only ask 
questions, but that we may strengthen within the law.
    We are in the middle of debating the National Defense 
Authorization Act. Now is not the time to be trying to overlay 
in that something that we think is a demand without the proper 
steps to become more accountable. We believe you will help us 
in those steps. We believe you will help us to see your mission 
more clearly and the impediments that might lie in that 
endeavor.
    So, please know that we appreciate what you are doing. I 
appreciate the gentleman, Chairman Grothman, for not only 
having this hearing, but making sure that we receive from it 
very specific and direct information from you on the front 
line.
    So, Mr. Chairman, I want to thank you. I want to thank my 
colleagues on the Democratic side for seeing this issue, I 
think, the same way that we want to, and that is to strengthen 
our military. Every dollar that they need, we need to 
understand that. But every penny that they need, we need to 
also understand they add up to dollars that could be 
inefficient, and that is where we want to empower you.
    Mr. Chairman, thank you very much. I yield back my time.
    Mr. Grothman. I now recognize Government Operations 
Subcommittee Ranking Member, Mr. Mfume, for the purpose of 
making his opening statement.
    Mr. Mfume. Thank you, Chairman Sessions and Chairman 
Grothman. And I want to also thank the witnesses who have 
appeared here today and are prepared to present testimony.
    In my opinion, this hearing could not have come at a better 
time. It will allow us to consider the bloated, and what I 
consider to be outrageous, defense spending package without the 
sort of accountability that we should have with it.
    The Department of Defense, unfortunately, has had a 
critical history of challenges with its financial management 
systems, with its business processes, with its internal 
controls, and with its financial reporting. Those are not my 
findings. Those are the findings of the Government Accounting 
Office.
    And like all of you on this Committee, I, too, support our 
troops and believe we have a special and solemn duty to ensure 
that our Nation is protected from increasing threats at home 
and abroad, but there has to be accountability to the American 
people. And as it stands, correct me if I am wrong, no one 
really knows how much waste, fraud, and abuse is at issue here 
and whether that money could be spent on other critical 
programs, critical outreach efforts, and critical communities 
all across our country.
    As lawmakers, I think we also have a solemn duty to 
maintain accountability of the billions of dollars that 
taxpayers give every year that make up the defense spending 
that we talked about previously in this committee room. It 
comprises half of the Federal Government's discretionary 
spending and 15 percent of the government's total spending.
    Now, in the past, I have supported amendments to the 
National Defense Authorization Act to cut back on excessive 
billions of dollars funneled to the Pentagon because I know of 
the long-standing issues that the Department of Defense and the 
Government Accountability Office has outlined for us on their 
High-Risk List.
    The GAO report specifically details the Department of 
Defense's history of pervasive deficiencies. Those deficiencies 
are in financial management systems; business processes; as I 
indicated before, internal controls; and financial reporting. 
Excuse the redundancy, but I am overwhelmed by the fact that we 
are still here dealing with this same issue again this year.
    Until the Department can restore full faith in 
accountability for these critical dollars, like many of my 
colleagues, I cannot justify inflating their budget again and 
sending tax dollars to an unknown and often untraceable realm.
    Since 2018, auditors have identified increasing material 
weaknesses in a total of 28 separate and distinct areas. These 
material weaknesses are serious deficiencies that impact 
financial reporting and, ultimately, impede the Department's 
ability to achieve a clean audit opinion. In fact, the 
Department is the only major Federal agency unable to receive a 
clean audit opinion because of those deficiencies. I am going 
to repeat that because I find that absolutely amazing. The 
Department is the only major Federal agency unable to receive a 
clean audit opinion because of these deficiencies.
    As we all know, the Department of Defense is the largest 
Federal agency. It employs over 1.4 million Active Duty 
servicemembers, 770,000 civil employees, and an additional 1.1 
million citizens who serve in the National Guard and Reserve 
forces. And I am grateful for their service. I honor their 
sacrifices. I understand that these are hardworking Americans 
that make a sacrifice every day for our defense and for our 
security.
    In an effort to keep our Nation safe, we must ensure that 
our patriots have the most sophisticated, modernized technology 
and systems to eliminate financial errors, to streamline data 
entry, and to ensure that we are getting the most effective 
national security results that we can for the dollars that we 
are putting in.
    Mr. Chairman, I think it is important for Democrats and 
Republicans to continue to investigate this area of technology, 
modernization, the TMF, which helps agencies to update outdated 
legacy IT systems, secure sensitive data, and utilize taxpayer 
dollars in an effort and in a manner in keeping with what we 
ultimately would like to see.
    I just cannot allow another year, another NDAA, another 
failed audit to go by without speaking on the record about what 
I consider to be the severity of this issue. And I implore the 
Department of Defense leadership to end this sort of madness 
and to remedy the underlying material weaknesses within that 
department as soon as possible. It makes no sense for us to 
come back 12 months from now and to have this same discussion.
    I want to thank, again, the witnesses for testifying today 
before us. The security of our Nation remains absolute 
paramount, a concern for all of us, and accountability across 
the Department of Defense must be utmost in terms of efficiency 
and effectiveness. So, I look forward to hearing the 
testimonies.
    I thank both Chairs and my Ranking Member Garcia and those 
who have participated in getting us to this point. I look 
forward to the testimonies, Mr. Chairman.
    Mr. Grothman. Thank you.
    I am pleased to introduce our witnesses here today. First, 
Mr. John Tenaglia, the Principal Director for Defense Pricing 
and Contracting within the Secretary of Defense, and serves as 
Principal Advisor to the Under Secretary of Defense for 
Acquisition and Sustainment.
    Second witness is Dr. Brett Mansfield. He is the Deputy 
Inspector General for audits within DoD's Office of Inspector 
General and has over 24 years working for the IG's office.
    And our final witness is Mr. Asif Khan, the Director of 
Financial Management and Assurance at the U.S. Government 
Accountability Office, where he focuses on improving financial 
management at the Department of Defense.
    Pursuant to Committee Rule 9(g), the witnesses will please 
stand and raise their right hands.
    Do you solemnly swear or affirm that the testimony that you 
are about to give is the truth, the whole truth, and nothing 
but the truth, so help you God?
    Let the record show the witnesses answered in the 
affirmative.
    One more time, appreciate--say one more time that I 
appreciate all of you being here today, and look forward to 
your testimony.
    Let me remind the witnesses that we have read your written 
statements and they will appear in full in the hearing record. 
We are going to try to limit your oral statements to 5 minutes. 
As a reminder, please press the button on the microphone in 
front of you so that it is on, and Members can hear you. When 
you begin to speak, the light in front of you will turn green. 
After 4 minutes, the light will turn yellow. When the red light 
comes on, your 5 minutes has expired, and we would like to ask 
you to wrap up at that time.
    I recognize Mr. Tenaglia to please begin his opening 
statement. Thank you very much.

                       STATEMENT OF JOHN TENAGLIA

                           PRINCIPAL DIRECTOR

                    DEFENSE PRICING AND CONTRACTING

                       U.S. DEPARTMENT OF DEFENSE

    Mr. Tenaglia. Chairman Grothman, Chairman Sessions, Ranking 
Member Garcia, Ranking Member Mfume, and distinguished Members 
of your respective Subcommittees, thank you for the opportunity 
to testify today at this joint hearing to address financial 
accountability in the Department of Defense.
    I am John Tenaglia, the Principal Director, Defense Pricing 
and Contracting, in the Office of the Under Secretary of 
Defense for Acquisition and Sustainment. I am privileged to 
serve as the functional leader of DoD's contracting and pricing 
community. My staff and I provide the policies, guidance, 
regulatory framework, and e-business capabilities that enable 
DoD components to execute the mission. DoD's contracting 
officers are charged with the fiduciary responsibility of 
balancing taxpayer interests, that we pay a fair and reasonable 
price, with the mission imperative to timely deliver combat 
capability for our Nation's warfighters.
    Last year, I testified before the House Oversight and 
Reform Committee to address pricing of contracts for military 
spare parts. Since then, and with the strong support of the 
Congress, the Department has advanced legislation and 
additional policies that reinforced our contracting officers' 
ability to negotiate and administer contracts with the defense 
industry.
    As a team, defense acquisition work force has persevered 
through the pandemic to rapidly respond and fulfill public 
health-related requirements on behalf of our interagency 
partners. The Department executed over $87 billion in support 
of COVID-19 pandemic response. The DoD acquisition work force 
demonstrated the ability to effectively use a variety of 
procurement authorities to rapidly deliver medical 
countermeasures to the American people and strengthen the 
medical industrial base.
    Currently, our acquisition work force is engaging with the 
defense industry to provide security assistance to Ukraine, 
while at the same time modernizing and sustaining our own 
systems.
    Recently, our contracting officers have been challenged to 
navigate with industry through economic conditions that have 
required us to manage the risk of cost and price uncertainty. 
In my written statement, I cited guidance we have issued this 
past year to address inflation mitigation strategies.
    As I asserted in my testimony last year, the price we pay 
matters, because the more we pay, the less combat capability we 
can acquire for our ready force. Ideally, our contract pricing 
is based on competitive market pressures that dictate the 
boundaries of what is fair and reasonable.
    Three months ago, my staff and I published the DoD Contract 
Finance Study. One finding from that study noted that small 
business subcontractors are particularly vulnerable when it 
comes to having cash on hand to cover operating expenses. As we 
seek public feedback in the weeks ahead about prioritization of 
our study recommendations, we look forward to working with the 
Congress in assessing whether statutory changes are necessary 
to support these objectives.
    DoD's acquisition and contracting professionals work 
closely with our colleagues in the DoD financial management 
community. For example, my staff and I have collaborated with 
the OSD Comptroller to jointly develop data standards and 
government property accountability policy and guidance. Sound 
financial management of the precious resources allocated to the 
Department requires our employment of policies, practices, and 
tools that I have described in my written statement.
    The Department of Defense is absolutely committed to 
delivering and sustaining preeminent capabilities for our 
warfighters and our international partners.
    Thank you for the opportunity to testify, and I look 
forward to your questions.
    Mr. Grothman. Thank you.
    Mr. Mansfield?

                      STATEMENT OF BRETT MANSFIELD

                  DEPUTY INSPECTOR GENERAL FOR AUDITS

                         DEPARTMENT OF DEFENSE

                    OFFICE OF THE INSPECTOR GENERAL

    Mr. Mansfield. Chairmen Grothman and Sessions, Ranking 
Member Garcia and Mfume, and Members of the Subcommittee, thank 
you for the opportunity to represent the more than 1,750 
oversight professionals that make up the DoD OIG and to discuss 
financial management within the Department of Defense.
    I am Brett Mansfield, and I am the Deputy Inspector General 
for Audit at the Department of Defense Office of Inspector 
General. Today, I will focus on the DoD's efforts to obtain a 
clean audit opinion and some of its long-standing challenges, 
the importance of internal controls and their impact on 
financial reporting and operational readiness, and the need to 
have persistent all-hands approaches to addressing financial 
management in internal control challenges within the Department 
of Defense.
    The DoD OIG performs the annual audit of the DoD agency-
wide financial statements and oversees into public accounting 
firms as they perform audits of the DoD's component financial 
statements.
    The OIG issued a disclaimer of opinion on the DoD agency-
wide financial statement for Fiscal Year 2022, meaning that the 
OIG could not opine on whether the financial statements were 
presented fairly and in accordance with generally accepted 
accounting principles. This, however, is not a new development. 
In fact, the DoD OIG has issued a disclaimer of opinion on the 
DoD agency-wide financial statements each year since 1996.
    While the DoD has not received a clean opinion on its 
overall financial statements, it has made progress in that 
multiple components have consistently obtained an unmodified 
opinion. While these are positive results, they do not extend 
across the DoD, as there were another 16 entities that received 
disclaimers of opinion for each of the last 5 years, including 
eight CFO Act-required reporting entities.
    The DoD's budget authority for Fiscal Year 2022 was more 
than $775 billion, representing nearly one-half of the Federal 
Government's discretionary budget. In the DoD's $3.2 trillion 
in reported assets, we got nearly 70 percent of the Federal 
Government's assets, making the DoD key to the Federal 
Government's ability to produce clean financial statements.
    During the most recent audit, the DoD OIG identified 28 
material weaknesses at the DoD agency-wide level. Of those 28 
material weaknesses, we consider 16 to be scope limiting, 
meaning that they prevent auditors from performing the 
necessary procedures and steps to draw a conclusion on the 
financial statements and the supporting information.
    And while some material weaknesses are financial in nature, 
such as unsupported accounting adjustments, many others also 
affect DoD operations. For example, government property in the 
possession of contractors is a financial issue, but also tied 
to readiness and supply chain management. In fact, many DoD 
operational systems are the primary source of information used 
to support DoD financial statements. As a result, it is 
important to note that good financial management is not just a 
financial management community responsibility. Rather, it is a 
whole-of-DoD effort that requires consistent attention from 
operators, CIOs, and the financial management community.
    Financial accountability also goes well beyond financial 
statements. It is also the day-to-day management of taxpayer 
resources and the consistency with which the DoD demonstrates 
its commitment to being a good steward.
    In the last year alone, we have reported on issues related 
to the tracking and reporting of supplemental funds, the 
difficulties obtaining fair and reasonable pricing, and the 
accountability of equipment provided to Ukraine through the 
Presidential drawdown authority. In addition, over the last 5 
years, the Defense Criminal Investigative Service, the criminal 
investigative arm of the Department of Defense Office of 
Inspector General, has completed 46 investigations related to 
defective pricing.
    These examples individually and collectively erode the 
confidence of the American public regarding the DoD's ability 
to manage taxpayers' dollars.
    As I close today, I think it is important to remember that 
achieving a clean financial statement opinion on the DoD 
agency-wide financial statements is a long-term and continuous 
effort for the DoD. The DoD has made progress in many areas, 
especially those directly under the charge of the financial 
management community. However, overcoming the DoD's financial 
management challenges will require a commitment from personnel 
across all functional areas within the DoD. The DoD must work 
together to integrate the policies, business practices, and 
systems of its vastly divergent components.
    We believe it is imperative that the DoD focus on 
developing and implementing consistent and sustainable DoD-wide 
processes and internal controls, which will improve operational 
effectiveness and efficiencies and ultimately result in a clean 
financial statement.
    As for the DoD Office of Inspector General, we are 
committed to doing our part as well by providing meaningful, 
independent oversight of the DoD and being transparent with our 
findings and recommendations.
    Thank you, and I look forward to your questions.
    Mr. Grothman. Thank you.
    Mr. Khan?

                         STATEMENT OF ASIF KHAN

                                DIRECTOR

                   FINANCIAL MANAGEMENT AND ASSURANCE

                 U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Kahn. Chairmen Grothman and Sessions, Ranking Members 
Mfume and Garcia, and Members of the Subcommittee, thank you 
for the opportunity for inviting me here to discuss the 
Department of Defense's auditability and systems oversight.
    The Department of Defense is responsible for about half the 
Federal Government's discretionary spending and about 15 
percent of its total spending. However, DoD remains the only 
major Federal agency that has never been able to achieve a 
clean audit opinion.
    A clean opinion is when an auditor finds the statements are 
presented fairly and consistent with accounting principles. Why 
does that matter? Imagine you are preparing to launch a 
spacecraft on a crucial mission. Just as the success of a 
spacecraft mission is of the utmost importance, the Department 
of Defense's role in national security is paramount. The 
spacecraft represents the DoD and the spacecraft's fuel 
signifies the Department's resources, such as personnel, 
taxpayers' money, and equipment. Every bit of fuel is vital for 
the mission's success and every drop should be used optimally.
    The clean audit is not the launch of the flight. It is like 
the preflight checklist. Without it, we might know that the 
spacecraft is using fuel, but we would not know how efficiently 
or effectively. We would not know if some of it is leaking 
unnoticed, if there are parts of the engine that are drawing 
more than necessary, if redundant systems are consuming 
resources that add no value to the mission.
    Achieving a clean audit is like completing this preflight 
checklist. It is not the mission's goal, but it is an essential 
step to ensuring the flight is best positioned for success. It 
shows that the spacecraft is not wasting fuel, that it is being 
directed as efficiently as possible toward the goal. In the 
case of DoD, the goal is the defense and security of our 
Nation.
    Just as the launch of a critical spacecraft mission needs a 
thorough preflight check, the DoD needs to earn a clean audit 
opinion. Fuel efficiency in a spacecraft is crucial to its 
success. Just as the effective use of resources is critical to 
DoD's operations, any waste or any misuse could hinder the 
mission. Just as the checklist helps identify potential issues 
that could jeopardize the mission, a clean audit opinion 
ensures transparency and accountability and DoD's financial 
operations, helping to identify and address any fraud, any 
waste, and any abuse.
    The goal of the Department of Defense is not to achieve a 
clean audit opinion, but to ensure our Nation's security. A 
clean audit opinion, however, would help ensure that the DoD is 
making use of its resources optimally toward this goal.
    The preflight checklist is also representative of 
transparency. Every system and every subsystem of a spacecraft 
is inspected and validated. Nothing is left hidden or 
unaccounted for.
    Similarly, achieving a clean audit opinion would mean that 
the Department's financial transactions and resource allocation 
and expenditures have been examined and are clear for all 
stakeholders to see and to understand. And the preflight 
checklist provides accountability. Each inspected and approved 
element traces back to a specific team or individual 
responsible for readiness.
    Just as a checklist, a clean audit opinion holds various 
components of the Department accountable for their financial 
activities, therefore ensuring each dollar can be accounted for 
and any mismanagement addressed.
    The roadmap toward a clean audit opinion for DoD is not a 
bureaucratic exercise. It is a commitment to a comprehensive 
preflight checklist. This is not just about financial 
management, but fortifying a national defense by ensuring the 
Department directs every drop of fuel and every taxpayer 
dollars as efficiently and effectively toward the mission of 
securing our Nation's security.
    I would be happy to answer any questions that you may have. 
Thank you.
    Mr. Grothman. Thank you very much.
    I will recognize myself first for the purpose of asking you 
guys some questions.
    Both the Department of Defense Inspector General--and this 
is for Mr. Tenaglia and Mr. Khan, either one. Both the 
Department of Defense Inspector General and GAO have identified 
the Joint Strike Fighter F-35 program as one of DoD's most 
costly programs. F-35s cost the taxpayer about $400 billion to 
acquire, and it has been projected it will cost another 1.27 
trillion to operate and sustain them. However, as of February, 
only 53 percent of the 500 F-35s delivered can perform at least 
one of their assigned missions at any given time. Fewer than 
one in three can do them all.
    Why has the F-35 program not been able to produce a clean 
audit, and what problems have your agencies identified that 
prevent an accurate accounting of the F-35 program?
    Mr. Tenaglia. Mr. Chairman, I will start with that.
    The GAO has done some recent work on the F-35. You are 
referring to the audit of property. And our office and the 
Office of the Under Secretary for Acquisition and Sustainment 
recently agreed with, I believe there was four recommendations 
the GAO had, to strengthen the property accountability measures 
on that particular program.
    In my office, we have responsibility for issuing the 
Defense Federal Acquisition Regulation Supplement language that 
goes into the contracts, in this case the F-35 contract, to 
enforce the property provisions and require the contractor to 
account for the property that is in their possession. That is a 
significant aspect of it.
    Our office also, as I indicated in my written statement, 
provides the tools and what we call a GFP Module that enables a 
contractor to report that information. The F-35 program has a 
significant amount of property, and it is complicated by the 
fact that we have a number of international partners as well. 
But we have accepted those recommendations and are prepared to 
improve.
    Mr. Grothman. OK. Does DoD issue clear guidance to 
contractor managers when it comes to keeping track of 
government-furnished property within the F-35 program?
    Mr. Tenaglia. The GAO's criticism of the clarity of that 
guidance was one of the recommendations. And I will say we have 
worked with that program office to make sure that the terms and 
conditions that go in that contract are clear and unambiguous. 
Also, we are working to take those lessons and understand what 
improvements we might make to that clause that is put in every 
contract. We need to be absolutely clear about the 
responsibility of contractors that have property in their 
possession.
    Mr. Grothman. OK.
    Mr. Khan?
    Mr. Kahn. The Joint Strike Fighter of the joint program and 
the government property held by the contractors are two scope 
limiting material weaknesses that Mr. Mansfield mentioned. The 
primary reason for that is that there is not adequate policy 
and procedure and guidance given by the DoD to the contractors 
to be able to account for that information.
    The joint program was designed for the contractors to 
manage that supply chain. However, the financial statement 
auditors were not able to get information from the contractors, 
or if they were able to get the information, it did not match 
up to what the records was. So, it really comes down to flawed 
guidance given by the DoD to its own personnel and then 
consequently what flowed down to the contractors.
    Mr. Grothman. OK. I will give you a general question here. 
On the F-35s, what is the--what do you expect the total cost of 
the program to be, and what was the expected cost when we 
originally started down this path?
    Mr. Tenaglia. Mr. Chairman, I am going to have to take that 
one for the record and have the program office provide you that 
detailed information.
    Mr. Grothman. I am sorry, I did not hear you. Say that 
again.
    Mr. Tenaglia. I am going to have to ask the program office, 
the Joint Program Office to provide that information for you.
    Mr. Grothman. OK. Congress has allocated 113 billion over 
the past 2 years to provide Ukraine with assistance. In 
November of last year, DoD Comptroller and Chief Financial 
Officer, Michael McCord, stated that the war in Ukraine is a 
really great example of why it matters to get this sort of 
thing right of counting inventory, knowing where it is. Through 
the work of the Department of Defense Inspector General and 
GAO, it is clear DoD does not know how much money it has in the 
Treasury or how much equipment it has or even where it is.
    Given that, do you believe the Department of Defense has 
the capability to accurately track the money and equipment we 
have provided Ukraine and ensure it does not fall into the 
hands of our enemies?
    Mr. Mansfield. So, at the Department of Defense Office of 
Inspector General, we have a robust series of projects ongoing 
currently and some recently completed that get to the very 
heart of your question, looking at the controls over end-use 
monitoring, equipment provided to Ukraine, and looking at the 
tracking of equipment that is in process or being shipped to 
Germany to be provided to Ukraine. And then also, looking at 
the training provided Ukraine, how effective and efficient that 
is. And then a number of other projects where we are also 
focused on the impact of that on the DoD itself in terms of its 
operations as it draws down from prepositioned stock to provide 
that to Ukraine.
    So, I do believe that we have a mechanism to provide some 
oversight and provide some assurance or lack of assurance, 
depending on how our audits and evaluations come out on that. 
But I would say, right now, we are still in the process of 
providing and performing a lot of that work.
    Mr. Grothman. Thank you.
    Mr. Garcia?
    Mr. Garcia. Thank you, Mr. Chairman.
    I just want to just start off by just clarifying also for 
the record that the DoD Comptroller Under Secretary wanted to 
be here. I think there was an issue about ensuring that he 
could be here on today's hearing date, so he actually did want 
to be here. So, I just wanted to clarify that as well.
    But thank you again for being here. Today's topic on the 
DoD's challenges to passing an audit is important to all of us. 
The Department's efforts to reach a clean audit will help 
provide greater transparency and visibility so that the funds 
are used as intended.
    I want to also just discuss some of the ongoing audit 
efforts with respect to Ukraine aid. Obviously, this is a very 
important topic for all of us right now.
    Just to start, Mr. Mansfield, how many inspectors general 
offices are part of Ukraine Oversight Interagency Working 
Group?
    Mr. Mansfield. I believe, if memory serves correctly, it is 
around 20 currently. It is led currently by the coalition of 
the DoD, State, and Agency for International Development 
Inspectors General.
    Mr. Garcia. So, a large and robust group?
    Mr. Mansfield. Yes, sir.
    Mr. Garcia. Thank you.
    Mr. Tenaglia, can you tell us how many defense-related 
departments are part of the working group?
    Mr. Tenaglia. Ranking Member Garcia, I believe you are 
referring to the effort in support of Ukraine. I do not refer 
to it as a working group, per se----
    Mr. Garcia. OK.
    Mr. Tenaglia [continuing]. But we have--on the procurement 
end of it, the Army is executing the significant volume of the 
business. It is providing security assistance in the form of 
contracts. Other military departments are contributing as well.
    Mr. Garcia. Thank you. So, there is multiple departments 
within the Department of Defense that are all part of the 
working--or the group as far as it relates to Ukraine aid and 
Ukraine, correct, sir?
    Mr. Tenaglia. Yes, sir.
    Mr. Garcia. Thank you.
    Mr. Khan, is the Government Accountability Office part of 
the working group as well?
    Mr. Kahn. The GAO was requested by Congress to provide 
oversight. We have 24 separate engagement, 10 of them have 
already been initiated, and other dozens will be initiated. We 
coordinate with this interagency working group that you are 
referring to. In addition to that, we coordinate with the 
Inspector General of the DoD, as well as the Inspector Generals 
of the State Department and USAID.
    Mr. Garcia. Thank you very much.
    So, I mean, there are at least 20 organizations, minimum, 
working on Ukraine oversight as part of the interagency working 
group, including at least 15 offices of inspectors general for 
Defense Department components and the GAO. And this number, of 
course, does not reflect of more than 20 organizations, half 
dozen additional OIGs in organizations who have participated in 
meetings within these oversight groups.
    Mr. Chairman, I also would like to ask for unanimous 
consent to enter into the record this list of the 20 government 
auditing agencies that are part of the Ukraine Oversight 
Interagency Working Group.
    Mr. Sessions. [Presiding.] Without objection, it will be 
entered into the record.
    Mr. Garcia. Thank you.
    So, I think it is pretty clear that there is a significant 
amount of professionals, of groups, of departments that are all 
working on the, you know, important work that is happening in 
Ukraine, ensuring the auditing, ensuring that agencies are 
working together to ensure the money and the American public is 
actually understanding what is happening as we are providing 
this important aid.
    I want to note that DoD's Inspector General, Robert Storch, 
noted in the March 2023 joint oversight of the Ukraine response 
that DoD agencies have been, quote, ``positive and productive 
in their response to the Inspector General.''
    So, I just want to be clear, and even though I know that 
some of the Majority has claimed that there is no real 
oversight and no good accounting of the military aid going to 
Ukraine, that is just not the case and not true.
    We should stop advancing a narrative which undermines a 
resistance to Vladimir Putin, who has killed thousands of 
people, caused the gas price increases of 2022, and threatened 
the security of the whole world. We should stop a narrative 
that empowers people who are working to end all of our aid to 
Ukraine and to abandon all of our allies and destabilize the 
whole world. And we should certainly not empower people who 
call Ukrainians Nazis.
    Today on the House Floor, these extremists are pushing pro-
Putin amendments to the National Defense Authorization Act. 
This would sell out the Ukrainian people. And I hope all 
Members will join me in opposing them.
    I yield back.
    Mr. Sessions. Thank you very much. The gentleman makes very 
good points, and I appreciate him being a part of this hearing 
today.
    I will now yield myself such time as I consume--choose to 
consume, which will be about 5 minutes.
    I would like to ask the panel. Perhaps, Mr. Khan, you are 
best at answering this, at least a whack at it first. I am 
interested in, are we giving you the proper tools, the proper 
ability to be able to effectively do your work?
    We see in the GAO has recently estimated that the DoD 
utilizes over 350 different systems for financial management, 
with some of them being not just old but incapable of 
effectively providing data and information inputting and get 
out what you would need.
    First of all, are we providing you with what you need? 
Second of all, have you a list of these things to where you 
have identified weaknesses in your own abilities? Question to 
Mr. Khan, and then the rest of the panel.
    Mr. Kahn. Thank you, Chairman Sessions for that question.
    Yes. Answer to that--your first question is affirmative 
yes. We have the resources and the ability to oversee the 
Department of Defense. And we work through a coalition of other 
overseers of the Department of Defense, including the DoD OIG, 
as well as the public accounting firms who are carrying out the 
financial statement audits. So, it is not just the GAO by 
itself, but we are working with a network of other auditors.
    Mr. Sessions. So, perhaps what you are suggesting is these 
outside auditors may not be able to speak transparently to the 
systems that you would expect them to be able to help you. Is 
that what you are saying?
    Mr. Kahn. We can leverage their work. If there is any 
ambiguity in the information they are providing, we follow up 
with the DoD officials, and we are able to get the information 
to satisfy our questions.
    Mr. Sessions. OK. Well, I am really interested in your 
operation. I do recognize you have outside auditors. I do 
recognize those outside auditors speak to you. I am talking 
about your ability that you control and the things whether we 
are giving you the money, the effort, and the attention to fix 
your own shop in these what might be antiquated systems.
    Mr. Kahn. Right. Congressman Sessions, our--the GAO's own 
operations are working efficiently and effectively. We have the 
resources to be able to carry out our audits at the DoD.
    Mr. Sessions. OK. So, your testimony is that you would 
disagree with what GAO reported that it estimates that DoD 
utilizes over 350 different systems for financial management.
    Mr. Kahn. That is the DoD. That is a correct number. DoD 
uses several hundred systems.
    Mr. Sessions. So, their own financial systems are outdated, 
but you and your oversight, you are up to date. They are the 
ones that do not then--have not chosen to update it to where 
they can then correspond with you or to produce reports. Is 
that your testimony?
    Mr. Kahn. DoD has antiquated systems. GAO has current 
systems. We can go out and audit the DoD----
    Mr. Sessions. OK. Mr. Khan, this Subcommittee of Government 
Operations, as well as National Security, the gentleman, Mr. 
Grothman, and I, I think you could expect a letter from the 
four of us--we will have to see--that would ask for that 
specific list of, let us say, the most critical systems that we 
need to write the DoD and we need to ensure that they are going 
to perform them. Because if that hinders your ability based 
upon a decision that they have made, we need to know about 
that.
    Thank you very much for that answer. That gets us closer.
    Mr. Mansfield?
    Mr. Mansfield. Yes. I would say that we--at the DoD OIG we 
definitely support--appreciate the support we receive from 
Congress in terms of our funding. I think we do have the 
resources currently that we need to do the oversight that we 
perform, both in partnership with GAO and overseeing IPA is 
doing independent work as well.
    That said, I think to your point, are there things within 
the DoD that limit our ability? Absolutely. That is why I have 
identified in our--my written statement as well as in our 
earlier issued report, Understanding the Results of the DoD's 
Financial Statements, what we consider to be scope-limiting 
material weaknesses. And what that means is the DoD does not 
have appropriate systems or controls in place or they do not 
know to how to describe their processes and procedures for 
collecting up information and reporting it out to a great 
enough detail for us to actually be able to test it. So, we 
cannot do our job until the DoD effectively does its own job of 
producing financial statements and tracking transactions, you 
know, assets and all of those things.
    Mr. Sessions. My time has expired, but I am going to extend 
myself an additional minute.
    Would you expect that when they do buy these corresponding 
systems that you need, that there would be an interaction or a 
coordination of communication at the same time? I know they are 
old. I know they are not working. I know. Would you expect us 
to be able to say to them and you need to be able to talk 
together, or are they such large systems you just need to be 
able to access the data?
    Mr. Mansfield. I think it is a combination of both. You 
know, you have a plethora of feeder systems, which are 
traditionally operational systems, so your accounting--your, 
like, inventory systems and whatnot. That contains condition 
information, accountability information, and cost information. 
And those are used by operators. But that also then feeds the 
financial statements. So, do they need to talk? Absolutely.
    I think the other question that I have is whether or not 
they need to have multiple accounting--or, you know, inventory 
systems where is one good enough that they can use in multiple 
places.
    Mr. Sessions. Redundancy.
    Mr. Mansfield. We have an ongoing audit right now looking 
at the DoD's information systems that are relevant to financial 
reporting. We would be happy to come and brief the Committee 
once that report is issued.
    Mr. Sessions. Thank you very much. I think this would be of 
common interest, and I will find out among my colleagues. Thank 
you very much.
    Mr. Mfume, you are recognized.
    Mr. Mfume. Thank you, Mr. Chairman.
    Let me begin by associating my remarks with those of Mr. 
Garcia, the Ranking Member. I could not agree with him more 
that those who would seek to use efforts in the form of 
amendments that ultimately are pro-Putin should be defeated on 
the Floor. Otherwise, they risk this bill being defeated. And I 
do not want that to go by without a comment. So, I associate 
myself totally with his remarks in that regard, and would just 
say again that that sort of effort will--could very well 
imperil the passage of this authorization.
    I would like to go to you, Mr. Tenaglia, for just a moment, 
if I might. You spoke about contractors and the fact that so 
many are holding, for lack of a better term, property. And that 
they are not just here in the United States but all over the 
globe.
    In looking at this practice, for lack of a better term, are 
we able to assign a dollar value or an approximation of the 
value of that property worldwide?
    Mr. Tenaglia. Yes, we are able. I do not have that specific 
number with me today. We can provide that to you, but that is 
part of the process, making sure we have an understanding of 
the exact amount of property, where it is located. The efforts 
that we have underway are all about getting after exactly how 
can we inventory that.
    The nature of government contracts, particularly in DoD, is 
such that it is to our benefit to provide contractors with 
government-furnished property, as we call it. It helps from an 
efficiency standpoint. It helps them reuse the existing 
property that we have available to us. And that is less that we 
would have to pay for a given contract if we are able to give 
them property to use. And so, it is very important for us to 
embed that requirement for accountability into our contractors 
and then to actually enforce those terms.
    Mr. Mfume. So, you will return that information or get that 
information to this Committee?
    Mr. Tenaglia. The total amount, yes, sir.
    Mr. Mfume. Yes. And I am assuming you have had a chance to 
look at the total amount at some point in time. Would you 
consider it to be a staggering amount of money?
    Mr. Tenaglia. Sir, reading what the GAO has observed, it is 
staggering. I believe on the order of $3 trillion, something to 
that effect.
    Mr. Mfume. OK.
    Mr. Tenaglia. But we will get you the specific amount.
    Mr. Mfume. Yes, it is alarming to me. I do not know how 
other people feel about it. That is a lot of money.
    What is the reclamation process for much of this equipment 
after a contract ends?
    Mr. Tenaglia. So, the disposition of property--and I should 
come back to what I was just referring to would be probably the 
total property, not necessarily the property that is in the 
possession of contractors. But the reclamation process goes to 
how we disposition property. For example, in the GAO report, 
they talked about dispositioning spare tires for aircraft that 
is no longer functional. So, there is an adjudication process 
that the government undertakes with the contractor to 
understand whether that property could be destroyed or 
otherwise reused.
    Mr. Mfume. Let me go to you, Mr. Khan, if I might, for just 
a moment. I appreciated the scenario that you drew for us of 
the launching of a spacecraft and how in that process, which is 
rather benign, of course, you have a preflight checklist, if I 
understood you correctly. In that preflight checklist are all 
the things that ought to be in place before there is an attempt 
to try to launch in order to be able to find out where the 
deficiencies are, how to correct them, and how to prevent them 
from happening again. And so, this preflight checklist 
obviously deals with accountability, accountability, and more 
accountability. But at the end of the day, it fortifies our 
national defense.
    I want you to walk me back through that again and talk to 
some extent or even give examples of how inaccurate inventories 
in DoD's financial system can hinder mission-critical needs.
    Mr. Kahn. Thank you for that question, Congressman Mfume.
    The--just speaking about the audit process, the checklist, 
it checks the inventory, it checks where the assets are, what 
the count is, what the condition is, what the location is. That 
has a direct impact on readiness.
    There have been instances as part of the audit process 
where DoD themselves have found assets in warehouses, like 
Black Hawk helicopters which were not on the property records. 
They have found missile motors that were not on the records. 
They have found other assets. As a result, they were able to 
reprioritize those assets, put them where they could be put to 
great use. So, in that respect, getting audit readiness really 
does impact the military's readiness.
    Mr. Mfume. Well, I am glad you brought up these Black Hawk 
helicopters, which I also find amazing. Can you kind of give us 
some background on how that problem even became a problem?
    Mr. Kahn. It goes back to the property records where the 
assets are recorded. It goes back to the older and antiquated 
system. They are meant to really support very localized 
operations, and in many cases, they do not communicate with 
each other.
    So, in this case, the Black Hawk helicopters were in one 
particular system, but they were not communicating with the 
system which was reporting that information higher up. And when 
the team of auditors went to the warehouse, they discovered the 
helicopters in the warehouse, but they were not on the 
inventory records. That is how they were discovered in this 
particular instance.
    Mr. Mfume. So, is it fair to assume that DoD has no 
preflight checklist?
    Mr. Kahn. Yes, analogous with the----
    Mr. Mfume. With the example you gave.
    Mr. Kahn. Yes.
    Mr. Mfume. Thank you, sir.
    Mr. Grothman. [Presiding.] Congresswoman Foxx.
    Ms. Foxx. Thank you, Mr. Chairman.
    Mr. Chairman, I want to tell you, my blood just boils when 
I read about what is happening in DoD and to hear the answers 
that we are hearing today, not because I am angry at the people 
here, but this is ridiculous.
    We claim to be the greatest country in the world, and yet 
we cannot--the Department of Defense cannot produce a clean 
audit. What in the heck is this? It makes no sense. It makes no 
sense. It does not--I love your analogy of a rocket launch. But 
you know it does not take a rocket scientist to figure out how 
to do an audit or how to find things that belong to your 
office.
    I looked up ``systems'' because my staff said, you know, we 
have got lots and lots of systems. What are you all, over 300 
systems in the Pentagon? So, what is the definition of a 
system. A set of principles or procedures according to which 
something is done. A set of things working together as part of 
a mechanism or interconnecting network.
    What is clear is these are not systems, because they are 
not working and nothing gets done from them. Something is 
wrong, deeply wrong in the Department of Defense. And we are 
wasting--they are wasting taxpayer dollars. And that is 
absolutely unacceptable, as far as I am concerned.
    I want to ask a question. I just need a very quick answer. 
Can any one of you name one system in the DoD that is working? 
Each one of you, is there one system? If there are two, just 
tell me. Is there one system that works?
    Mr. Tenaglia. We do have a number of systems that work in 
the procurement field. The standard procurement system needs to 
be retired. It is a legacy system. It works. We are working 
with the Comptroller on the standards to make sure that it 
communicates with the financial system, so it is really all 
about the data standards behind that.
    Ms. Foxx. OK. Well, Mr. Mansfield, I want you to answer 
that question too. But one of the questions I had had to do 
with the fact--you said that that system works. But in 2021, 
the Office of the Special Inspector General for Afghanistan 
reported that the Air Force spent $549 million to purchase 20 
cargo aircraft for the Afghan Air Force, but due to 
unreliability and numerous complaints about safety, the program 
was suspended, the planes were destroyed and turned into scrap 
metal.
    And you just told me that the office of procurement system 
works? You explain that to me. I cannot understand this fact 
and your answer.
    Mr. Tenaglia. I am not familiar with that particular fact, 
but I do not believe that would be part of the standard 
procurement system. I will take that back and understand which 
system presented that fact.
    Ms. Foxx. So, you have a standard procurement system, but 
then you have an organization that works outside the standard 
procurement system. Is that what you are telling me?
    Mr. Tenaglia. There are a number of other systems, logistic 
systems, financial systems. I was just speaking to the system 
that we use to write contracts.
    Ms. Foxx. OK. But I am going to follow up on this with you, 
and I want a response on how you are telling me that the 
procurement system works, but we have a debacle where $500 
million of taxpayer dollars were wasted when you are telling me 
that system works.
    Mr. Mansfield, very quickly, do you know the system that 
works? It better be better than the one he just explained.
    Mr. Mansfield. Unfortunately, what I would say is that 
there are systems that are capable of working. The difficulty 
is whether or not the individuals who are using those systems 
are----
    Ms. Foxx. So, then fire them. Get rid of them if they 
cannot do the job. It sounds to me you have a culture problem.
    Mr. Khan?
    Mr. Khan. I do not know of any system in DoD that works as 
intended.
    Ms. Foxx. That is an indictment that is unbelievable. We 
have 345 systems and not a single one is working as designed.
    I yield back, Mr. Chairman.
    Mr. Grothman. Ms. Lee.
    Ms. Lee. Thank you, Mr. Chairman.
    I want to thank the Joint Subcommittees for holding this 
hearing on the financial mismanagement of the Department of 
Defense. I think this is one of the few areas where I can agree 
with my Republican colleagues on the need and nature of this 
oversight.
    When we dedicate so many of our resources to our military 
while we nickel and dime our other programs, the least we are 
owed is transparency and accountability. When our country 
spends more on defense than the next ten countries combined, we 
rightfully have high expectations for how that department 
functions. Yet year after year, we shovel billions their way, 
15 percent of our total budget. We continue to be disappointed, 
and the American people are let down.
    Mr. Tenaglia, how much did the 2023 National Defense 
Authorization Act authorize for shipbuilding?
    Mr. Tenaglia. I do not have that particular figure. The 
total amount of contract obligations in 2022 was over $400 
billion.
    Ms. Lee. For shipbuilding it authorized $32.6 billion.
    Do you know how many school lunches that amount could 
provide to hungry children in America, where for the one in 
eight children who go to school hungry, that may be the only 
meal they get? All of them, and then some. The school lunch 
program cost $28.7 billion in 2022.
    Mr. Tenaglia, on average how much does the military spend 
on Viagra each year?
    Mr. Tenaglia. I do not have that figure.
    Ms. Lee. About $41.6 million.
    Do you know how many bridges in my district of Pittsburgh 
could be repaired with that amount? About two. The rebuilding 
of the Fern Hollow Bridge which, of course, collapsed the day 
that President Biden happened to be coming to Pittsburgh cost 
about $25.3 million to rebuild.
    Mr. Tenaglia, how much did the Department of Defense spend 
on snow crab and Alaskan king crab in 2018?
    Mr. Tenaglia. I do not have that amount.
    Ms. Lee. According to OpenTheBooks, it was $2.3 million.
    Do you know how much the Pittsburgh City Council spends 
each year serving the county's unhoused population?
    Mr. Tenaglia. No.
    Ms. Lee. Only $1.2 million, but they are certainly not 
being served Alaskan king crabs.
    According to an investigation by this Committee in 2016, 
the F-35 program specifically raked up hundreds of millions of 
dollars in added cost due to mismanagement and negatively 
affected military readiness.
    Mr. Tenaglia, how much is the F-35 joint program estimated 
to cost the Federal Government to produce, operate, and sustain 
over its lifetime?
    Mr. Tenaglia. I believe that the GAO cited that figure. I 
do not have it in front of me, but we can get that for you.
    Ms. Lee. It is about $1.7 trillion, enough to completely 
eradicate student loan debt.
    According to the Government Accountability Office, between 
May 2018 and October 2022, about 1 million F-35 spare parts 
worth $85 million were, quote, ``lost'', just vanished. Losing 
millions of dollars in assets is unacceptable. DoD themselves 
do not oversee or account for certain F-35 spare parts. Only 
the prime contractors maintain this information.
    Mr. Khan, how does this lack of access to contractor 
information hinder accountability in DoD's ability to provide 
accurate reporting in its audit?
    Mr. Khan. It severely impacts DoD's ability to be able to 
provide accountability over those assets.
    Ms. Lee. Mr. Tenaglia, going forward, what steps can your 
office take to improve contract requirements on the front end 
to enable better oversight during the life of the contract?
    Mr. Tenaglia. So, we are taking those actions now, 
improving the clauses, the terms and conditions that go into 
contracts that communicate to contractors what the requirements 
are for property management. And the government-furnished 
property module that I described, it is the means by which 
contractors can communicate how they are dispositioning 
property, how they are receiving property, and we know where 
that property is throughout its life.
    Ms. Lee. OK. Thank you.
    In 2019, this Committee led a bipartisan hearing to hold 
military contractor, TransDigm, accountable for its exorbitant 
profits on DoD contracts for spare parts. This pressure led to 
TransDigm repaying DoD $16.1 million. Last Congress, this 
Committee held a second hearing again on the excess profits 
that TransDigm received.
    I will note that my Republican colleagues did not join our 
call for TransDigm to repay its excess profits, even though 
TransDigm has a track record of fleecing American taxpayers. 
TransDigm likes to acquire companies with sole source DoD 
contracts and then exploit its monopoly position by hiking up 
prices on crucial spare parts.
    Mr. Tenaglia, what policy changes are DoD considering to 
prevent price gouging on sole source contracts? And are there 
specific legislative reforms that would assist this effort?
    Mr. Tenaglia. So, as I indicated in my written statement, 
section 803 of the Fiscal Year 2023 NDAA helps us in that 
regard. It will require contractors to provide the transparent 
cost and pricing data that we need. In the case of commercial 
items, likely that will be uncertified information. But, by the 
same token, our contracting officers need access to that 
information in order to establish a fair and reasonable price.
    Ms. Lee. Thank you.
    It is my time, but I want to say I urge the department to 
do better. Your department accounts for 15 percent of the total 
budget. You need to be more mindful of not only how you spend 
America's tax dollars, but also how you account for it. 
Millions of dollars should not just be lost and failing audits 
should not be the norm. That is unacceptable.
    I yield back.
    Mr. Grothman. Mr. Higgins.
    Mr. Higgins. Thank you, Mr. Chairman.
    Gentlemen, what an uncomfortable hearing. Is it not? Let me 
say it is uncomfortable for the entire American citizenry to 
gaze upon this bizarre realm of D.C. and wonder how it operates 
when we are facing now $32 trillion in debt. We have added $1 
trillion in 1 month, by the way. And the most ravenous 
leviathan of our government that devours the people's wealth is 
the Department of Defense, the Pentagon.
    What a culture we have allowed to become manifest in those 
halls of ultimate power, the military might and expenditure of 
the people's treasure. Yet we were warned on the year of my 
birth, 1961, in his farewell speech, President Eisenhower said 
the following: ``This conjunction of an immense military 
establishment and a large arms industry is the new American 
experience, yet we must not fail to comprehend its grave 
implications. In the councils of government, we must guard 
against the acquisition of unwarranted influence, whether 
sought or unsought, by the military-industrial complex. The 
potential for the disastrous rise of misplaced power exists and 
will persist.''
    I have a copy of the NDAA of that year, the 1962 NDAA as 
drafted in 1961. I have a copy of it on my desk. It is one page 
long. $7.5 billion covers the entire expenditure. My, my, my, 
how we have descended into the belly of this beast.
    In the private sector, a corporate entity or business goes 
to a bank for financial establishment and is, therefore, 
subject to audit. On a regular basis the bank audits that 
business. If the business passes the audit, then the business 
can return to the bank for more money. If the business fails 
the audit, what do you think happens, Mr. Mansfield? Can that 
business go to the bank and get more money?
    Mr. Mansfield. It cannot.
    Mr. Higgins. It cannot. Or maybe it is a minor error. Maybe 
it is a minor error. They make adjustments. They have another 
audit. They fail that audit. Does the bank change course and 
say, ``Well, you tried, we are going to give you money.'' Can 
they get money, Mr. Mansfield?
    Mr. Mansfield. Probably not.
    Mr. Higgins. They cannot.
    Mr. Mansfield. They cannot.
    Mr. Higgins. Thank you for your candor.
    Here is the problem with this bank. We do not even have the 
money. We are giving you $1 trillion a year almost now. We just 
added $1 trillion to our national debt in 1 month. It is an 
arrogantly abusive culture that we have allowed to become 
manifest over there that devours the people's wealth.
    So, let us shift to a positive note, Mr. Mansfield. For the 
record, how long have you been in your position, good sir?
    Mr. Mansfield. My current position, about a year and a 
half.
    Mr. Higgins. Year and a half. You stepped into the fire, 
man. I would imagine you are a patriot, very good at what you 
do. I am sure you envisioned fixing this thing. Did you not?
    Mr. Mansfield. Well, I envisioned the department fixing it. 
Our job is to validate them.
    Mr. Higgins. Through your leadership and guidance and 
supervision, through your skills, you would endeavor to produce 
a clean or relatively clean audit by the DoD?
    Mr. Mansfield. It is not particularly whether the audit is 
clean or not, meaning it really depends on the department 
getting its financial house in order. We just report the facts 
as they are.
    Mr. Higgins. You are in the middle of that, though, aren't 
you?
    Mr. Mansfield. Yes, sir.
    Mr. Higgins. Along with the gentleman sitting next to you.
    In my closing seconds, can any of you gentlemen promise in 
the near future a clean audit?
    Mr. Tenaglia?
    Mr. Tenaglia. Sir, I would ask the Comptroller to help me 
provide you with a timeline that the Comptroller is indicating 
is the pathway to a clean audit.
    Mr. Higgins. We are looking for a glimmer of hope here, 
gentlemen.
    Mr. Mansfield?
    Mr. Mansfield. I can only commit to continuing to assess 
the department and being as transparent as we can with how we 
see it. And as of right now, I do not think their timeline is 
as they say----
    Mr. Higgins. Valiant effort, good sir.
    Mr. Khan?
    Mr. Khan. No. GAO cannot project a time when DoD is going 
to be audible. Through our recommendations, we are forcing them 
to get audible, but it is certainly up to them to implement 
those recommendations and to reach that goal.
    Mr. Higgins. Thank you, gentlemen, for your testimony 
today.
    Mr. Chairman, I yield.
    Mr. Grothman. Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    In the 1990's, Congress passed, Mr. Mansfield, legislation 
requiring Federal agencies to improve their financial 
management processes. That goal included a requirement for 
large agencies to prepare annual agency-wide financial 
statements and have them audited. Congress designed the 
legislation to effectively manage and safeguard taxpayer-
provided resources and to help lawmakers better focus on 
government performance and serving this country.
    The Government Accounting Office placed DoD financial 
management on its High-Risk List in 1995. That, of course, 
indicates financial management was vulnerable to waste, fraud, 
abuse, and mismanagement. Despite decades of preparation, DoD 
did not assert readiness for a full audit of its financial 
statements until Fiscal Year 2018.
    So, Mr. Mansfield, can you provide a brief--or a few brief 
observations on DoD's main challenges preparing for audit 
readiness leading up to 2018?
    Mr. Mansfield. I would say that they are very similar to 
the problems that they face today, in that it is systems that 
are noncompliant with Federal general ledger expectations. It 
is systems that do not communicate. It is a department that 
cannot consistently and repeatedly do the same processes over 
and over. They cannot describe, on occasion, the processes 
through which information are supposed to flow, the controls 
they have in place to ensure the information is accurate. These 
are long-standing issues.
    I would refer you back to our--my prepared statement where 
some of the scope-limiting material weaknesses that I spoke 
about earlier, some of those have been around for nearly 27 
years, so since the DoD and the CFO Act required financial 
statements from the DoD.
    So, information technology, fund balance with Treasury, 
inventory-related property, general property and equipment, and 
government property in possession of contractors, as well as 
environmental liabilities and disposal--or environmental 
disposal liabilities, those have all been issues the department 
has been dealing with since the establishment of the CFO Act 
which you referred to.
    Ms. Norton. Thank you.
    Mr. Khan, since Fiscal Year 2018, DoD's Office of Inspector 
General has coordinated five DoD department-wide financial 
audits, five. Each time DoD has been unable to receive a clean 
audit opinion, meaning that independent auditors could not 
obtain sufficient reliable information on whether DoD presented 
its financial statements fairly and in accordance with 
generally accepted accounting principles.
    For Fiscal Year 2023, DoD's OIG identified improving 
financial management and budgeting as one of the eight top 
management challenges of the agency. Their report stated--and 
here I am quoting--``the DoD will continue to face challenges 
related to financial managements and budgeting due to its size 
and complexity, shortcomings in its current business processes 
and reliance on legacy systems.''
    For example, DoD operates more than 300 different financial 
management systems across the department, which includes some 
legacy systems dating back to the 1960's. We do not actually 
know how many systems there are. Moreover, DoD's OIG has found 
that DoD--and here I am quoting--``historically underestimates 
the time necessary to retire legacy systems.''
    So, Mr. Khan, DoD has been working to improve its financial 
systems environment for more than 30 years. Why is it taking so 
long to modernize these systems?
    Mr. Khan. This was not a priority for DoD until the last 10 
or so years. DoD has many systems, but they are not meant to 
produce reliable financial information. They were put into 
place to support the mission logistics and it has only been in 
the last 10, 15 years that they have realized that financial 
information is important to them primarily because of budget 
constraints.
    So, it is a matter of priority, and that has only happened 
in the last 10 or so years.
    Ms. Norton. Thank you.
    I yield back.
    Mr. Grothman. Thank you.
    Mr. Biggs.
    Mr. Biggs. Thanks, Mr. Chairman.
    This is an incredibly important and timely hearing today. 
Appreciate you gentlemen for being here today. We are 
considering an almost $890 billion NDAA bill this week. The 
only thing that is actually growing faster than the DoD budget 
as a budget unit is our interest on our national debt. That is 
the only thing that is growing faster than that. So, I thank 
you for being here.
    Mr. Tenaglia, I have to tell you I am disappointed that 
your colleagues did not make today's hearing a priority, but I 
am grateful that you are here.
    DoD's budget accounts for nearly half of the Federal 
discretionary budget, and DoD is responsible for nearly 75 
percent of government assets.
    Mr. Khan, DoD's financial management has been on GAO's 
High-Risk List since when?
    Mr. Khan. 1995.
    Mr. Biggs. And this highlights the exposure of taxpayer-
funded resources to waste, fraud, abuse, or mismanagement 
because it is nearly 30 years DoD has been on that High-Risk 
List.
    It has already been discussed today. Last fall, DoD failed 
its fifth consecutive audit and was unable to account for 61 
percent, 61 percent, of it is $3.5 trillion in assets. Yet 
after more than 15 years of audit readiness and mediation 
efforts, DoD is yet to produce a clean audit.
    Mr. Mansfield, how much money has DoD spent on audit 
readiness over the past 15 years?
    Mr. Mansfield. Sir, I do not know, over the past 15 years, 
I do not have that in front of me. But I can tell you since 
2018, audit support, which is responding to auditor requests is 
right around $1 billion. And audit remediation efforts, that is 
putting controls in developing corrective action plans, that is 
around $3 billion.
    Mr. Biggs. $3 billion?
    Mr. Mansfield. Yes, sir.
    Mr. Biggs. So, a total of about $4 billion?
    Mr. Mansfield. That is correct.
    Mr. Biggs. And you still cannot manage to pass a stinking 
audit.
    Mr. Khan, what factors contribute to DoD's inability to 
pass a financial audit?
    Mr. Khan. It is primarily the capacity. It has got two 
parts to that. One is antiquated systems that are unable to 
produce survival information, and the other one is their 
trained work force, people who know the interim DoD business 
processes and they know how to work new Martin systems.
    Mr. Biggs. Same question for you, Mr. Mansfield.
    Mr. Mansfield. I do not have a whole lot to add there. I 
think it really is just antiquated systems and just a lack of 
understanding what their processes and procedures are.
    Mr. Biggs. Mr. Tenaglia?
    Mr. Tenaglia. I think the internal controls and also the 
inability of our systems to communicate with one another. In my 
written statement, I described the procure-to-pay process, the 
end-to-end process, from financial inception of a requirement 
in through contract and payment on that contract. And so, 
behind that we are instituting a number of standards that will 
enable----
    Mr. Biggs. OK. Let me ask you this next question.
    Mr. Tenaglia, what are the consequences for failing to pass 
an audit to DoD?
    Mr. Tenaglia. In the case--well, in the demand that I work 
in, in the procurement and contracting, it relates to our 
inability to----
    Mr. Biggs. What is the consequences?
    Mr. Tenaglia. The consequence, the inability to understand 
where our assets are.
    Mr. Biggs. So, the response of this body is we just keep 
throwing more money there. Right? You do not know where your 
assets are, but we are going to keep giving you more money. So, 
the NDAA top line is increasing by $23 billion this year. 
Inflation adjusted, it will be highest DoD budget since World 
War II, highest.
    And Mr. Higgins here, the audit line, the questioning that 
he was engaged in, the problem is he said Mr. Mansfield 
correctly answered that if you fail an audit, you are not going 
to get more money from the bank. And he says, ``Well, we are 
the bank.'' The problem is the bank just keeping giving you 
more money.
    So, Mr. Tenaglia, there is no consequence. You may not know 
where everything is, but we are going to give you more money. 
It just keeps happening. And that is what is going to happen 
tonight at 10 p.m. We will finish it off tomorrow. We will do 
amendments tonight, and then tomorrow we will pass it out, and 
we will send it to the Senate, and you guys are going to get 
more money than you have ever had.
    I do not think anybody in this audience at home, the four 
people that are watching this on TV, and those of you who are 
in this room, and probably most people on this Committee, I am 
not sure that you even realize this, but it was reported to me 
before we left for the July 4th recess that the $1.8 trillion 
discretionary budget, non-military and military, all the 
discretionary budget, we have to borrow every penny of that 
$1.8 trillion, every penny. That is the problem with us being a 
bank. We are broke, and we just do not acknowledge it or know 
it.
    Yield.
    Mr. Grothman. Ms. Crockett.
    Ms. Crockett. Yes. Thank you, Mr. Chair.
    I do not want to be redundant. I think that if we have not 
figured out by now, we know that you all are constantly 
failing. Right? And, honestly, our job is to win for the 
American people. And so, while this Committee tends to be 
probably the most divided committee in the Congress, especially 
this Congress, it is amazing the times that we can agree. And 
we agree that right now taxpayer dollars are being wasted. I am 
just going to keep it all the way real.
    And what is frustrating to me is that while I applaud my 
colleagues from the other side of the aisle bringing this and 
pointing out that there is definitely a ridiculous amount of 
waste when it comes to defense--and that does not mean on the 
anti-defense before the haters on Twitter start getting crazy, 
because we all want to be free. We all want to feel safe here 
in this country, and we appreciate what defense does for us. 
But everyone has to be held accountable, especially when we are 
dealing with the budget deficits that we are dealing with, 
especially when we are dealing with the inflation that we are 
dealing with.
    And, unfortunately, I sat through Rules Committee this 
week, and it took everything in me not to blow up, because I 
had colleagues from the other side of the aisle as we are 
dealing with NDAA and we have real things to address, such as 
how are we going to get DoD on track, do you know what they 
wanted to talk about? Do you know what these amendments are 
going to deal with? They are going to deal with things that do 
not have anything to do with the budget, such as they want to 
talk about if they are going to deny access to healthcare for 
women.
    That is a priority in NDAA. They wanted to talk about 
whether or not Trans folk would have access to the healthcare 
that they need. That is what they want to talk about. They want 
to deal with the things--and, of course, they want to fight 
about Ukraine and not recognize that it is important that this 
modern-day democracy is upheld.
    So, what I want to talk about is getting to the point that, 
No. 1, we only got here because there were certain people that 
decided that they were going to hold the entire country hostage 
in the debt ceiling fight. And so, as part of the agreement, 
the agreement was that all of those people that need Social 
Security, Medicaid, Medicare, all of those programs that people 
are relying upon, SNAP benefits, as we are dealing with record 
inflation, they got less money and defense got more.
    That is exactly what happened. Somebody got more, somebody 
got less, because we care more about let us try to balance the 
budget on the backs of people that are only getting $6 a day 
for things like SNAP benefits instead of focusing on the waste 
that Is going on here.
    And so, the only question that I have for you is what do 
you need from us? What is needed so that we can actually stop 
being performative? Because what I do not want us to do is try 
to pretend as if we really care about this waste that is going 
on by having this hearing on the same day that, as has already 
been said by my colleague, Mr. Biggs, this is going to get 
voted out, and you all are going to get more money. That is 
going to happen.
    And you know what? We are still going to have more people 
that are facing homelessness in this country. We are still 
going to have more people that are hungry in this country. And, 
honestly, I can promise you I would rather give more people 
that $6 to eat than to sit here and say, ``Well, we just have 
not fixed it.''
    If we know that the problem is that we have not modernized, 
what is the problem with modernizing? Why can't we? Because it 
is not for a lack of resources. Is there anyone that can tell 
me why we cannot modernize, especially since we have the best 
military in this country, but we cannot figure out how to count 
our money and count our guns? We cannot figure that out? 
Somebody help me, anybody. This is a real question. What is the 
problem?
    Mr. Tenaglia. So, with respect to clean audit and 
auditability we--as has been previously said, retirement of 
legacy systems is a significant part of the path to do that. 
So, we do need to get after that. That is the most significant 
from the procurement----
    Ms. Crockett. Let me stop you right there. We need to get 
after that. Tell me why we have not is my question.
    Mr. Tenaglia. I think it is just a matter of the number of 
systems that we are having to evaluate for retirement and 
incorporation of a modernized business process to capture----
    Ms. Crockett. Let me ask you this. So, can we agree that 
all of the systems need to go? I mean, how modern are any of 
these systems? Can we not just agree that we need to scrap it 
and we need to get up to date?
    This is the same body where we are dealing with AI 
conversations. Like we are--I mean, we have not even been 
brought up to today, yet alone the future. Can we not just 
agree that we need to scrap, and we need to move on instead of, 
like, pontificating? Because I feel like that is what is 
happening, and it is happening on the American people's dime.
    Mr. Tenaglia. The parts we are taking is to promulgate 
standards that are feeding the data between the systems. So 
regardless, I do not think it is realistic that we are going to 
be able to clean slate them all and so the systems that we have 
forcing procurement standards and other standards so that the 
systems can talk to one another.
    Ms. Crockett. And, Mr. Chair, I know I am out of time, but 
if I could just ask this last question.
    Can you give me a reasonable amount of time to get through 
to modernizing these systems, just a reasonable number?
    Mr. Tenaglia. I mean, there is systems within my 
responsibility. I could speak to those, but I am not familiar--
--
    Ms. Crockett. OK. So, speak to those.
    Mr. Tenaglia. I would say within a 5-year period.
    Ms. Crockett. Thank you so much.
    With that, I yield.
    Mr. Grothman. Congressman Palmer.
    Mr. Palmer. This has probably already been covered in one 
form or another, but I just want to clarify that the $6.2 
billion error in accounting for the equipment that was sent to 
the Ukraine was an overestimate, not an underestimate and that 
we sent $6.2 billion less than what we thought in terms of the 
value of the equipment. Is that correct?
    Mr. Tenaglia. That is my understanding. The Comptroller 
advised me that the error, as you described it, with respect to 
the valuation of the equipment----
    Mr. Palmer. Give a short answer so we can get to some more 
substantive stuff. It is either a ``yes'' or ``no.''
    Mr. Tenaglia. Yes, sir.
    Mr. Palmer. It was overvalued.
    So, one of the things that I have run into--and I have had 
multiple discussions since I have been a Member of Congress, 
had a discussion with a former procurement officer with the 
Pentagon--is that the Pentagon cannot operate in the same way 
that a business does.
    I formerly worked for two international engineering 
companies. And when we bid on a project, we had a preliminary 
bid based on a proposed design, but what we built was to a 
finalized design. And we were able to do that because we knew 
that we would get paid. If the client needed to make changes, 
we did change orders, and that would get added to the cost of 
the project.
    Part of the problem I think with the Pentagon and what I 
consider--well, I do not know if I call it waste, but the 
inefficiencies is that so many times--and correct me if I am 
wrong, and I have had these discussions before--is that 
oftentimes the Pentagon is so concerned that the next Congress 
will not follow through on the funding that has been 
appropriated by one Congress for a weapon systems, for new 
facilities, whatever, that they begin the construction of 
facilities or the production of the weapon systems or platforms 
before the design is complete.
    Is that an accurate statement? And you wind up with a 
number of overruns and change orders as a result.
    Mr. Tenaglia. We do have a number of systems that have 
concurrent development as--that are ongoing development.
    Mr. Palmer. And current development is another way of 
saying you started the system before the design was complete. 
You need to speak in plain language because I am not here to 
throw you under the bus. I am here to find a way to fix this. 
And part of the solution rests with the Pentagon, but a lot of 
it rests with us, and I do not think we can escape 
acknowledging that.
    And it is not just a problem with the Pentagon. When I was 
on the Science Committee, we had a NASA project that as I 
recall--and my math might be a little--my memory of the math 
might be a little bit fuzzy, but it was a $48 million budget, 
which is not even a drop in the drop in the bucket. But halfway 
through the project construction, they had already gotten $24 
million in change orders. And I asked the individual from NASA 
if it was because they started it before the design was 
complete, and he acknowledged that that was the case.
    Mr. Chairman and Chairman Sessions, I think this is an 
enormous problem that Congress needs to address. Because if we 
are going to invest money in one Congress to build out defense 
systems, weapon systems, and platforms facilities, we should 
not start paying the bill until the design is right. But at the 
same time, we need to make sure that they have time to get the 
design right and that the money will be there.
    If we did that, would you guys agree that there could be 
potentially substantial savings? That is a ``yes'' or ``no.'' 
And if you disagree, say so, because we have got to find a way 
to fix this.
    Mr. Tenaglia. I think a lot of our systems that are 
software driven and the iterative development of software-
driven systems require us to field some minimal capability and 
upgrade that as we go. I think that----
    Mr. Palmer. That is part of the problem you had with the F-
35, particularly with the helmet. But what I am trying to get 
to is a way to address these issues, because we are at a point 
right now where we need--and with all due respect to my 
colleagues here, I am more interested in paying for soldiers 
and weapons than I am accountants. But at the same time, you 
are responsible for making sure that every dollar that we 
appropriate for the defense of this country goes for the 
defense of this country.
    And as I have reminded my colleagues, we are either going 
to pay for this in dollars or we will pay for it in blood. That 
is the responsibility that rests on your shoulders.
    Mr. Chairman, I yield back.
    Mr. Grothman. Thank you.
    Mr. Frost.
    Mr. Frost. Thank you, Mr. Chairman.
    So, audits are one of our best tools in ensuring oversight 
and accountability. They give us a chance to look at the 
financial records and accounting documents and ultimately 
ensure that assets and liabilities are tracked over time. That 
is as long as we are achieving an unmodified or clean audit.
    Mr. Mansfield, very simple question. When did the 
Department of Defense go through its first full scope 
consolidated financial statement audit?
    Mr. Mansfield. 2018.
    Mr. Frost. 2018.
    Mr. Mansfield, did the DoD achieve a clean audit in 2019?
    Mr. Mansfield. No.
    Mr. Frost. What about in 2020?
    Mr. Mansfield. No.
    Mr. Frost. What about in 2021?
    Mr. Mansfield. No.
    Mr. Frost. 2022?
    Mr. Mansfield. No.
    Mr. Frost. Year after year, we hope that the DoD will 
attain a clean audit, and year after year the DoD fails. The 
DoD is the only major Federal agency with this level of 
consistent failure as it relates to an audit.
    Mr. Khan, in an attempt to meet the essential standards of 
accountability, some components of the DoD introduced reforms, 
including correcting around $5.2 billion in cost assessments 
and innovations, like the deployment of hundreds of bots 
aligned to financial management processes.
    Why have these measures all failed to get DoD to have a 
clean audit?
    Mr. Khan. The issues at DoD are much more pervasive. Some 
of what you mentioned--I mean, there is other bright spots. It 
is helping that DoD is embracing technology and using some of 
the robotic process automation. It is freeing up the resources 
to be able to do more analytical work. But the problems are 
very pervasive across DoD, and that is why it is taking them 
time.
    Mr. Frost. DoD antiquated and mismatching financial 
management systems are a cause for concern. It is part of the 
reason that they have been on the GAO's High-Risk List since 
1995.
    Yes or no, has GAO ever outlined what DoD could do to get 
them off the list?
    Mr. Khan. Yes, we have.
    Mr. Frost. Go ahead.
    Mr. Khan. It is in the High-Risk List. We have five removal 
criteria, and we have been very specific as to what DoD needs 
to do to come off the list.
    Mr. Frost. And there has been many agencies have been on 
this list, have been taken off, followed your recommendations. 
Usually when GAO gives recommendations, how long does it 
usually take for agencies to implement them and get off the 
list?
    Mr. Khan. The one parallel I can draw is DHS, which is a 
much smaller agency. It took them 10 years from inception to 
getting a clean audit opinion.
    Having said that, they continue to be on the High-Risk List 
because of some issues they are having with technology.
    Mr. Frost. Failing an audit does not necessarily indicate 
that funds are being misused or lost funds. In fact, people can 
achieve a clean audit and still be misusing funds. However, I 
refuse to accept the status quo that DoD just cannot get a 
clean audit.
    Mr. Mansfield, when does DoD estimate that you will be able 
to pass a clean audit?
    Oh, if you could turn on your mic, I think.
    Mr. Mansfield. So, the DoD has estimated that they are 
looking at 2028.
    Mr. Frost. 2028?
    Mr. Mansfield. Yes, sir.
    Mr. Frost. Mr. Khan, does GAO agree with that estimate? And 
what does GAO see as the roadblocks to achieving that timeline?
    Mr. Khan. They need to have better plans. We do not have a 
timeline projected for DoD essentially because the audits are 
still continuing, the scope of the audits is still expanding. 
So, the complexity and difficulty of the remediation activity 
is still unknown.
    Mr. Frost. And I agree with what my colleague just said 
before me. Look, I am not just here to rail on DoD about this. 
We know that it is an issue. We want solutions.
    So, from any of you, what can Congress do to help DoD get 
off of the next GAO High Risk List? I do not think 2028 list is 
acceptable. What can we do to make sure that DoD gets off the 
High-Risk List for the next GAO list that will come up?
    Mr. Khan. The main issue is capacity, doing modernization 
of their system and to have their work force trained. They 
are--understanding the financial management function and so 
that they also understand how to use the new financial systems, 
the automated systems. That is critical. Then they need to have 
better action plans which are detailed. That is one of the 
areas where DoD has slipped. They have not adequately defined 
the action plans, so the dates come and go, and they got 
extended.
    Then, finally, they need to have a better monitoring 
mechanism to be able to monitor where their deficiencies are 
and to be able to address those risks before they become a 
crisis.
    Mr. Frost. Thank you.
    Congress is poised to give the Department of Defense $844.3 
billion for this year's NDAA. How can Congress continue to 
justify, given these increases, when you cannot even pass a 
clean audit? It is not fair. It is not fair to the American 
people. In fact, I do not believe Congress can justify it, and 
so I hope this gets fixed.
    Thank you. I yield back.
    Mr. Burlison. [Presiding.] I now recognize Mrs. Mace for 5 
minutes.
    Mrs. Mace. Thank you, Mr. Chair.
    And I have several questions I want to get to, so I would 
just ask that you answer them quickly. If you filibuster, I 
will interrupt you.
    This morning we have already heard DoD has been on GAO's 
High-Risk List since 1995. Mr. Khan, I dropped out of high 
school in 1995, a very long time ago. Are there any other 
Federal agencies which have consistently failed to meet basic 
accounting standards since I dropped out of high school? 
``Yes'' or ``no.''
    Mr. Khan. No.
    Mrs. Mace. All right. Mr. Mansfield, DoD has never had a 
clean audit. Yet last month a DoD spokesperson claimed its on 
track for a clean audit by 2027. I always hear--if I had a 
dollar for every time I heard, ``Hey, we are on track, we are 
going to get you this or get you that.'' So, why should the 
Congress believe the department now will meet this goal when it 
has never done so in its history? What has changed?
    Mr. Mansfield. I cannot speak on behalf of the DoD itself. 
We provide oversight of them, so I would say we are going to 
continue from the Office of Inspector General's perspective to 
validate and be transparent in our conclusions on that in terms 
of how----
    Mrs. Mace. So, no answer. All right. Got it.
    OK. Mr. Tenaglia, the retirement of legacy systems is part 
of what you are saying needs to be modernized. And yet the DoD 
uses a 25-year-old Defense Travel System to book billions and 
billions of dollars in travel expenses every year. This legacy 
system wastes hundreds of millions of dollars annually due to 
inefficiency and overpayments. Though on track to modernize the 
system, which would be a good thing per your comments earlier, 
but in May the department outright canceled a $374 million 
contract to replace a system with a more modern version.
    Who is responsible for that decision?
    Mr. Tenaglia. I believe that is under the purview of the 
Office of the Under Secretary for Personnel and Readiness.
    Mrs. Mace. OK. Do you believe if you are in charge of 
wasting $374 million on a contract that you should keep your 
job? ``Yes'' or ``no.''
    Mr. Tenaglia. I would not characterize that as wasteful.
    Mrs. Mace. So, you do not have an answer. Got it. All 
right.
    The Defense Travel System has incurred over $965 million in 
improper payments from Fiscal Year 2016 to 2018. Exactly how 
large will that number get if the system remains in use?
    Mr. Tenaglia. I do not have the answer for that.
    Mrs. Mace. You do not have any answers today. OK.
    So, if you are responsible for losing $965 million, which 
is almost $1 billion in improper payments, should the person 
responsible for those losses keep their job? ``Yes'' or ``no.''
    Mr. Tenaglia. I do not know that that would be----
    Mrs. Mace. You do not have an answer. OK.
    So, what is the plan going forward? Do you plan to stay 
with the Defense Travel System for another 25 years? Do they 
plan to start from scratch? And how much more money is going to 
be wasted?
    Mr. Tenaglia. I would defer to the Office of Personnel.
    Mrs. Mace. So, no answer.
    So, nobody has any answers. That is the thing. When we have 
these hearings, you guys come to our Committee. We have 
specific questions. We want specific answers. We are wasting 
billions of dollars every single year. And no one, no one that 
comes before these Committees ever have any answers. They have 
no solutions.
    So, like, what are you guys doing? I do not understand. 
And, quite frankly, I have been up here for 2.5 years. I have 
been very jaded in a very short period of time. I do not know 
if there is incompetency or ignorance, like I really do not. 
And I do not understand why any of that is OK. It is not OK.
    In the business sector, if you lose $1 billion, you lose 
your job, or you have an audit. You have to pass an audit to 
get--as we have heard today to get financing, to get lending, 
to get the bank to do business with you. And yet you just have 
a free check, a free pass--all of these agencies have a free 
pass from us. We are going to give another free pass. DoD is 
going to get another free pass today with no one being held 
accountable, no one being held responsible, and no one taking 
responsibility. No one is in charge.
    Like, I just do not understand the incompetency with any of 
this. I just--I do not get it. I am not impressed. We are just 
going to basically shrug our shoulders and just sit here with 
our hands crossed that we are just going to continue waste 
billions of dollars. No one is in charge. No one is 
responsible. No one is ever going to be held accountable, and 
everybody gets to keep their job. And it is wrong, and it is 
bullshit.
    I hope you guys are better prepared for our next hearing on 
this because my questions are going to be even more specific, 
and I am going to want answers.
    Thank you, Mr. Chairman. And I yield back.
    Mr. Burlison. The Chair now recognizes Mr. Goldman from New 
York for 5 minutes.
    Mr. Goldman. Thank you very much, Mr. Chairman. And I thank 
our witnesses for coming in today.
    I want to focus a little bit on Ukraine and the money that 
the U.S. Congress has appropriated to support our democratic 
ally against an illegal, unwarranted, and global altering war 
of aggression by an authoritarian dictator, Vladimir Putin.
    There--and I want to focus a little bit on the oversight, 
especially with you, Mr. Mansfield, because I think on both 
sides of the aisle, we very much want to ensure that there is 
strong oversight and accountability to ensure that the money 
that Congress has authorized and appropriated in support of 
Ukraine is used as it is intended to be used. And I would note 
that Inspector General Storch testified earlier this year to 
the Armed Services Committee that the situation in Ukraine is 
fluid and calls for continuous agile oversight.
    Mr. Mansfield, can you describe the OIG efforts to execute 
that agile oversight?
    Mr. Mansfield. Yes. Thank you for the question.
    First, I would say that we have partnered with the 
oversight community writ large. So, between the State 
Department, the Agency for International Involvement, and the 
Department of Defense Office of Inspectors General, we have 
formed a working group where we collectively come together to 
talk about what meaningful oversight should be occurring within 
Ukraine related to the funding being provided in support for 
the DoD Office of Inspector General.
    To date we have issued four reports and seven advisories 
related to anything from tracking of the funds appropriated or 
supplemental funds to the department's processes and State 
Department's processes for tracking and monitoring, end use 
monitoring of military funds that have been provided.
    We have 18 ongoing projects related to anything from 
training of Ukrainian forces to execution of the funds provided 
under the supplemental appropriations, and we have another 
three projects right now planned, but there is more in the 
works as well.
    Mr. Goldman. And has Ukraine generally been cooperative 
with DoD's efforts to do the tracking and oversight that you 
just described?
    Mr. Mansfield. So, from our perspective at the OIG, we have 
gotten cooperation from the Department of Defense in terms of 
our oversight of their efforts to oversight the Ukraine's use 
of the equipment that is provided. So, we have not had any 
difficulties there yet.
    Mr. Goldman. I appreciate that. And I thank the department 
broadly for having such robust oversight. I think it is often 
mischaracterized and it is important for you to recite all of 
those efforts as you just did in terms of oversight.
    We are dealing right now, as one of my colleagues on the 
other side--or Mr. Frost mentioned, about-- we are dealing with 
the NDAA and appropriations in support for the department. And 
one of the things that has become a very hot button issue, 
sadly, is support for Ukraine. Many of my colleagues on the 
other side of the aisle seem to fundamentally misunderstand the 
purpose of our support to Ukraine. Ukraine is a democracy. 
Russia is an authoritarian regime that is trying to conquer and 
overtake a democracy. And when we talk about America first, we 
are talking about America's national security. And if my 
colleagues do not realize that the support of a robust 
democracy and end robust democracies broadly around the world 
do not relate to our national security, then they fundamentally 
misunderstand global engagement and foreign policy and what 
makes us safe here at home.
    I was very disturbed to see that the Chairman of this 
Committee, not the Subcommittee but the Committee, went on 
television last week, I believe, to say that President Biden is 
scared of conducting oversight of what is going on in Ukraine. 
And I appreciate you outlining all of the extensive efforts 
that the department is doing to provide that oversight.
    And I would just urge the department to continue to do that 
oversight, and I would urge my colleagues on the other side of 
the aisle not to defend and take the side of a dictator in 
Vladimir Putin trying to overtake and dominate and conquer a 
democratic nation that needs our support. And it has sadly 
become somewhat of an odd political football, but the notion 
that we would not support a democracy at war around--anywhere 
in the globe is completely counterintuitive and 
counterproductive to our own national security.
    So, I thank you all for being here, and I yield back.
    Mr. Burlison. Thank you.
    The Chair now recognizes Mr. Donalds from Florida for 5 
minutes.
    Mr. Donalds. Thank you, Mr. Chairman.
    Allow me to actually respond to my colleague on the other 
side of the aisle. The issue with Ukraine is not that Members 
on my side of the aisle do not want to support a democracy in 
Ukraine. That is not the issue. The issue is, is that while 
spending upwards of $114 billion in said conflict with, 
frankly, no end in sight, because the President has not led in 
any of this effort, mind you. He was drug into this conflict 
because of his own dereliction of duty when Russia was amassing 
troops on the Ukrainian border for 6 months, and President 
Biden did nothing. He dithered. He ignored. And only when Putin 
actually went in, his first comment to Volodymyr Zelenskyy was: 
``I will send the G5 for you, hop on the plane, and let us go 
home.'' That is what he told Volodymyr Zelenskyy. And it was 
only until the Ukrainian president and, frankly, people around 
the world said we should stand for Ukraine, then Joe Biden did 
an about-face. So, that is No. 1.
    No. 2, the issue a lot of Americans are having right now is 
that we have spent $114 billion on the Ukrainian conflict to 
defend Ukraine, which, by the way, I do think we should do, but 
at the same time, we have recklessly disregarded our own 
southern border and our own national security, which is 
affecting many states, many counties, many localities who are 
now not just on the southern border but basically at every city 
in the country.
    Do not believe me? Go ask Eric Adams, the Mayor of New 
York, who is now very concerned about the fact that we have 
more migrants in the city of New York than they have space for 
because of President Biden's reckless policy on the southern 
border.
    So, what I would urge my colleague on the other side of the 
aisle is please do not do this in a vacuum. Please understand 
that you have Members who want to be supportive of Ukraine, but 
they are very concerned and now at this point apoplectic that 
we have spent $115 billion on Ukraine but we cannot secure our 
southern border. That is why Members on my side of the aisle 
are furious, frankly, with Joe Biden and those who want to use 
Ukraine as a leverage point.
    Mr. Goldman. Will the gentleman yield to----
    Mr. Donalds. I am not yielding. You had your time. I let 
you talk. I was going to interrupt you, but I did not want to. 
I am not yielding.
    Now, point No. 3--and this is very, very clear--with 
respect to Ukraine sovereignty, I am very familiar with the 
Budapest agreement. I think every Member of the Chamber is now 
familiar with this agreement. We signed on to protect their 
sovereignty if Ukraine returned their nuclear ballistic 
missiles back to Russia. That was the 1994 agreement. We signed 
on to that as the United States of America. I believe that we 
should uphold that agreement. I do. But when you see Russian 
troops amassing on the border of the same country, we have an 
agreement to protect and you do nothing, your inaction as the 
Commander in Chief cost the United States taxpayer $115 
billion. That is why Members on this side of the aisle are 
frustrated with Joe Biden and his lack of action.
    Now back to the Department of Defense, because that is what 
I am really here to do, but I had to set the record straight. 
Here is the issue----
    Mr. Goldman. Can I just ask a question quickly?
    Mr. Donalds. No, because you are not recognized.
    Now, back to the Department of Defense. Here is the issue 
we are having. We want to spend money to defend this Nation and 
to make sure that our men and women have every piece of 
equipment necessary to do so. We want to make sure they have 
all the bullets, all the tanks, all the ships, all the 
equipment necessary.
    But the frustration we are having in Congress you are 
seeing, which I am going to tell you right now is growing, is 
the complete disregard for fiscal sanity at the Department of 
Defense. We cannot continue to just fund contracts in ad 
infinitum with no idea of how we are going to actually acquire 
the material we are paying for, getting them the material that 
we have maintained in an orderly and timely fashion, and that 
the men and women who are on the frontlines, not the brass, not 
the people over at the Pentagon, the men and women who are on 
the frontline are getting what they need in a timely fashion. I 
do not think you would have many issues from Congress to be 
able to fund that.
    But--and I think, Mr. Khan, you spoke to this before in 
your comments as I was watching the hearing before I came in--
the issue is that DoD cannot even find a way to just go through 
the audit process and come through with minimal findings, which 
is something that publicly traded companies have to do, and it 
is something that the current SEC would demand they do, forget 
the other agencies for that matter.
    So, that is the issue we are having at the Department of 
Defense.
    I want to fund our military. I want us to be a lean, mean 
fighting machine. That is what I want. But as a Member on the 
Republican side of the aisle, I have got serious concerns about 
funding the agency if the bloat and the waste continues. 
Procurement reform is critical.
    Last quick question, and I believe I am going to send it to 
you, Mr. Mansfield. I understand that we spend a ton of money 
on diesel fuel, but don't you believe that finishing the 
Project Pele and actually getting it up and running and doing 
it consistently, won't that be to the betterment of the 
Department of Defense? And I will close off that.
    Mr. Mansfield. Sir, I will take that one for the record.
    Mr. Burlison. All right. The Chair now recognizes Mr. Lynch 
for 5 minutes.
    Mr. Lynch. Thank you very much, Mr. Chairman.
    I do want to say there is a little bit of revisionist 
history here about the circumstances under which Russia did 
invade Ukraine. I hope my colleagues recall that it was the 
U.S. Intelligence Service and the White House that consistently 
warned President Zelenskyy that Russia was going to invade. It 
was Zelenskyy who came back and said: ``We do not think they 
are going to do this.''
    Those are the facts. Those are the facts. I understand 
you--if you want to score political points, I understand that, 
but you cannot rewrite history. And if you go back and read the 
intelligence reports, read what Zelenskyy was insisting, it was 
the U.S. Intelligence Service, and we collectively in this 
Congress, in classified settings, we applauded the work of the 
U.S. Intelligence Service under the Biden Administration for 
correctly calling that invasion and rallying, rallying Europe 
behind Ukraine, standing behind them. Separate and apart from 
any other criticism you might have of the Administration, they 
got that right. They got that right.
    Let me talk briefly about--and ask briefly about a matter 
at hand.
    So, DoD has been frequently criticized because of the 
failure of its audits from various quarters. One of the factors 
that affects our ability to really--look, our readiness 
militarily is going to be affected by our fiscal readiness as 
well. Right? We have got to be able to plan. We have got to be 
able, to the degree possible, correctly estimate costs on 
weapon systems and deployments. All of that requires a good 
financial team within DoD. And I am concerned.
    The Government Accountability Office reported last year 
that they were worried about DoD's ability to attract the 
necessary personnel with the right skill sets to put our fiscal 
house in order. And I am just wondering what Is going on right 
now, from your perspective, to meet that challenge that GAO has 
identified.
    Mr. Mansfield. So, I prefer to defer to the Department of 
Defense on their hiring practices in terms of their own 
personnel. We at the DoD OIG have been pretty successful in 
hiring highly qualified individuals who provide oversight of 
the Department of Defense, to include financial management 
professionals. So, I defer to DoD.
    Mr. Tenaglia. So, within the financial management 
community, I am not able to speak about that. But within the 
acquisition community, we have a significant number of people 
that perform multiple functions, whether they are procurement, 
engineering, systems engineering, logistics. But the work force 
challenge of making sure we are able to attract and recruit the 
right people to do what we need them to do, that is right now 
one of our leaders' top priorities.
    Mr. Lynch. Let me just--you know, it sounds like everything 
is fine, do not worry. But this is--I am reading, from the GAO 
report, that DoD lacks a strategic approach for work force 
planning for the collective set of staff that support financial 
management systems. And that is their analysis after their 
investigation. And, you know, you are saying things are good 
and we are going to keep on doing what we are doing. So, there 
seems to be a divergence of opinion there.
    Did the GAO hit on anything, or they are just----
    Mr. Tenaglia. Sir, I would prefer to have the Comptroller 
provide you the response for the financial management 
community. I can speak to the acquisition community.
    Mr. Lynch. Mr. Khan?
    Mr. Kahn. The major issue that was identified in that 
report was a skill gap analysis for DoD to be looking to the 
future to develop the work force of the future, for a few 
reason. Their processes are changing in part because of the 
audit. New technology is coming in line, so you have to retrain 
the people to be able to understand the new process and the 
technology. So, without doing a skill gap analysis, which is 
what they currently have and where they need to be, it is going 
to be difficult to develop the requirements, the skills that 
the people need to have for the future needs.
    Mr. Lynch. All right. My time has expired. Mr. Chairman, I 
yield back. Thank you.
    Mr. Burlison. Thank you.
    The Chair now recognizes Mr. LaTurner for 5 minutes.
    Mr. LaTurner. Thank you, Mr. Chairman. Thank you all for 
being here today.
    As our adversaries continue to increase their aggression, 
it is more important than ever that Congress ensures our brave 
servicemen and--women have the resources they need to keep 
themselves and our Nation safe. China is slowly but surely 
probing the sovereign boundaries of Taiwan, and their malign 
naval activity in the Pacific is well recorded. Iran seeks to 
become a nuclear power in the near future, which would only 
further destabilize one of the most tumultuous regions in the 
world. And President Biden's weakness on the world stage 
following the botched withdrawal from Afghanistan has empowered 
our enemies across the globe.
    I would argue that strengthening our military readiness and 
supporting our allies abroad is one of most important duties we 
have this Congress. At the same time, the American people find 
themselves drowning in $32 trillion of debt.
    Kansans, like many Americans across our country, are very 
concerned with the Pentagon's lax accounting practices. The DoD 
is no stranger to sloppy bookkeeping. They failed five 
consecutive audits, and cannot even tell you how many 
contractors the Department employs. As just a few examples of 
this complete lack of accountability, the DoD could not account 
for more than 61 percent of its assets in the most recent 
audit.
    The United States Air Force spent $549 million on 20 cargo 
planes for the Afghan Security Forces, and then was forced to 
suspend the program and sell the planes for scrap for just over 
$40,000 because they were deemed unreliable and unsafe.
    Just last month, the agency overestimated the value of 
weapons sent to Ukraine by $6.2 billion. And when the Pentagon 
has been provided opportunities for improvement, they often 
fail to take advantage and allow this mismanagement to 
continue.
    Of the over 3,300 recommendations made to the Department in 
2021 to improve their financial management, they failed close 
to 2,800. No business or organization in America operates this 
way. This current standard of fiscal accountability is 
completely unacceptable, and the American taxpayers deserve 
better.
    With the countless threats facing our country today, it is 
vital that the United States continue funding our defense 
capability. However, Congress' authority over the power of the 
purse is a tremendous responsibility, and we owe it to our 
constituents to exercise that power judiciously.
    Mr. Khan, how does the lack of financial auditability at 
the Pentagon impact its ability to effectively allocate 
resources, manage budgets, and make informed financial 
decisions?
    Mr. Kahn. It impacts it greatly. Without having adequate 
controls, you would not have the reliable information with 
which to make the decisions as to where to allocate the money 
and to reprioritize funding, if that need arises.
    Mr. LaTurner. This is for each of you. What are the 
consequences, both financial and reputational, of DoD's failure 
to pass audits?
    Mr. Tenaglia. Sir, I think the operational concern is one 
of logistics and understanding where our assets are so that we 
can have, for example, spare parts, needing to know where they 
are at any one time in order to operate in that environment.
    Mr. LaTurner. What about reputationally?
    Mr. Tenaglia. Well, I think we would all prefer to have the 
ability to say we have a clean audit.
    Mr. LaTurner. I hope it is more than just a preference. 
Trust in government is at an all-time low in this country, and 
it is because people across the country, our constituents, do 
not feel like they can trust government to do what they say 
they are going to do.
    I hope you care about DoD's reputation, and I hope you want 
to improve it. I hope that you want the American people to have 
trust in it. Tell me that is the case.
    Mr. Tenaglia. Absolutely, yes.
    Mr. LaTurner. Go ahead, Mr. Mansfield.
    Mr. Mansfield. Well, you took my answer. I was going to say 
it erodes the trust of the American public in the Department's 
ability to be fiscally responsible, to be good stewards of 
taxpayer dollars. That is, I think, the biggest risk in terms 
of reputation for the Department.
    Operationally, as we have talked about financial, the 
dollar value is one piece of that. But as we are going through 
and doing testings of systems and records, we also look at 
condition. And so that is where you really start to get into 
some of the operational side of the house.
    When you have--when you do not know where equipment is or 
you do not know what condition it is in, it is difficult to 
budget from what you need to purchase going forward in terms of 
spare parts or equipment. If you do not know what condition it 
is, you do not--you cannot budget for repair to bring stuff up 
to standards, so it is operationally available and ready. And 
so, it is fundamentally an operational issue in addition to a 
fiscal issue.
    Mr. LaTurner. Quickly, my time is about up.
    Mr. Kahn. DoD's inability to get an opinion prevents GAO 
from auditing the government-wide financial statements. Because 
of that, government-wide, the U.S. Government cannot get an 
opinion.
    Mr. LaTurner. We have to fix this problem, gentlemen. 
Members of Congress are incredibly frustrated, and it is 
because our constituents are incredibly frustrated. We have got 
to fund our military in a way that allows us to meet the 
challenges of today. And we should expect, and DoD should 
deliver, sound accounting practices to make certain that when 
we send our taxpayers hard-earned money, that it is being well 
spent defending this Nation.
    I yield back.
    Mr. Grothman. [Presiding.] Thank you.
    Ms. Porter?
    Ms. Porter. In Washington, the same game is played year 
after year. The President requests a massive defense budget, 
lawmakers do not want to be seen as soft on national security, 
and defense lobbyists exploit that. Congress then falls into 
line and passes an expensive defense package. And then we do 
the same thing again the next year. That is the game that 
lawmakers and lobbyists play with our tax dollars.
    Today, we are going to play a new game. Welcome to Jeopar-
DoD, where our witnesses will uncover Waste, Missing 
Guardrails, and the Enablers who make our defense budget 
balloon. Witnesses, you will pick a category and a point 
amount. I will read you a prompt. And just like in regular 
Jeopardy, you will give the answer in the form of a question. 
For example, if I read, the Congresswoman hosting Jeopar-DoD, 
you will say, ``Who is Katie Porter?''
    Let us get started. Mr. Tenaglia.
    Mr. Tenaglia. I will take Enablers for $100, please.
    Ms. Porter. Enablers for 100. A President who called how 
much we spent on defense crazy, but let defense spending grow 
by over $100 billion in one term.
    Mr. Tenaglia. I do not know the answer to that question.
    Ms. Porter. Really? You do not know who called the defense 
budget crazy? Who is Donald Trump?
    Mr. Mansfield?
    Mr. Mansfield. Enablers for 200.
    Ms. Porter. Enablers for 20O. A Member of Senate leadership 
who recently said funding the Pentagon at $886 billion would 
mean defense is radically underfunded.
    Mr. Mansfield. I do not know the answer.
    Ms. Porter. Who is Mitch McConnell?
    Mr. Khan, really, you can easily be the winner here.
    Mr. Kahn. I will take Waste for 300.
    Ms. Porter. Great choice. Waste for 300. Ineffective DoD 
assets that cost about $600 million to build and are now being 
decommissioned before the end of their useful life.
    Mr. Kahn. I am drawing a blank there. Sorry.
    Ms. Porter. What are littoral combat ships? You are 
familiar with this program.
    Mr. Tenaglia?
    Mr. Tenaglia. Enablers for 300.
    Ms. Porter. Pardon me?
    Mr. Tenaglia. Enablers for 300.
    Ms. Porter. Enablers for 300. Individuals who get rich 
while pushing to overspend our tax dollars.
    Mr. Tenaglia. I do not know.
    Ms. Porter. Who are defense lobbyists?
    Mr. Mansfield?
    Mr. Mansfield. Waste for 200.
    Ms. Porter. Waste for 200. I am really counting on you 
here, Mr. Mansfield. A program that is $183 billion over budget 
and 10 years behind schedule.
    Mr. Mansfield. What is the Joint Strike Fighter program?
    Ms. Porter. What is the what?
    Mr. Mansfield. Is it the Joint Strike Fighter program?
    Ms. Porter. That is correct. What is the F-35 program. 
Correct.
    Mr. Khan?
    Mr. Kahn. Missing Guardrails for 200.
    Ms. Porter. Missing Guardrails for 200. The institution 
that has authorized more defense spending than the President 
requested for the current fiscal year. Who has authorized more 
defense spending than the President requested for this current 
2023 fiscal year?
    Mr. Kahn. I would say it is the Armed Services Committee.
    Ms. Porter. We will give you that. Who is Congress?
    Mr. Tenaglia, I would really love to see you get one right 
here. I am rooting for you.
    Mr. Tenaglia. Missing Guardrails for 100.
    Ms. Porter. Missing Guardrails for 100. This one I think 
you are going to know. A review that every agency has passed 
except the DoD.
    Mr. Tenaglia. What is an audit?
    Ms. Porter. What is an audit? Correct.
    Mr. Mansfield?
    Mr. Mansfield. Missing Guardrails for 300.
    Ms. Porter. Missing Guardrails for 300. This is a really 
good one. The percentage of DoD's assets that it cannot account 
for.
    Mr. Mansfield. Sixty-one percent.
    Ms. Porter. Sixty-one percent.
    Mr. Mansfield. What is 61 percent?
    Ms. Porter. Huh?
    Mr. Mansfield. What is 61 percent?
    Ms. Porter. What is 61 percent? So, I read the question 
wrong. The percentage of DoD assets that it can account for is 
39 percent.
    You are right. Cannot account for 61 percent, can account 
for 39.
    All right, Mr. Khan.
    Mr. Kahn. Is that double jeopardy? 100.
    Ms. Porter. Yes, this is it. Waste for 100. DoD assets that 
have been lost, damaged, or destroyed to the tune of millions 
of dollars based on a May GAO report.
    What are spare aircraft parts?
    We are out of time for Jeopar-DoD, and the winner here 
today should be the American people, because no matter who 
uncovers the most waste, the important thing is that we provide 
long-overdue oversight to the taxpayers.
    Look, politicians and lobbyists play the same spending game 
year after year, and that is not getting us to a responsible 
defense budget. Nobody is going to win----
    Mr. Grothman. Mr. Fallon?
    Ms. Porter [continuing]. Until we start playing a new game.
    I yield back.
    Mr. Fallon. Thank you, Mr. Chairman.
    Gee, I think we all know who is running for the U.S. 
Senate.
    So, I want to thank you, Mr. Chairman. I want to thank the 
witnesses today as well. We are not going to play Jeopardy or 
any other childish games because I do not care about viral 
clicks. What I care about is some answers because soldiers are 
dying. I want to bring to the attention DoD financial 
mismanagement that is directly leading to injuries and death of 
our servicemembers.
    The Army has a Humvee program that retrofits Humvees to 
prevent them from rolling over, and it is going to save the 
taxpayers about $8 billion. And more importantly, it is going 
to save lives. We have got about 47,000, a little north of 
that, Humvees in the fleet. We have been using them since 1983. 
They are a workhorse. And the Army is going to continue to use 
them until 2050.
    There has been 900 rollover accidents. We have lost 150 
servicemembers. We all agree that one is too many, 150 is 
incredibly egregious. Seven hundred members have been injured 
as well in noncombat accidents. That is a very important point 
to point out here.
    So, if the issue is not bad enough alone, there is delays 
in the awarding of the contract. Congress has made it very 
clear that we want to spend hundreds of millions of dollars to 
mitigate this issue because we want to save lives and, again, 
we are going to save lots of money. But sadly, we have lost 
another servicemember with a preventable Humvee rollover, and 
his name was Specialist Jayson Haven, and he was 20 years old. 
What makes me angry is his vehicle was originally scheduled to 
be retrofitted in February, but because of delays, it never 
happened. I cannot help but think that if the Army had done its 
due diligence and ignored contractor politics and moved forward 
with a sense of urgency that Congress has clearly directed for 
3 years, that Specialist Haven might be alive today.
    So, let us call this for what it is. It is contractor 
politics, and it is special interests inside the Pentagon that 
is delaying the retrofit program because it is not lucrative 
for certain interests outside of the Pentagon. The incumbent 
contractor with only--with the only proven kit to solve this 
issue has passed every hurdle that the contracting office and 
the competitors could have thought to throw at them. So, this 
decision is costing the Army billions of dollars and is a 
perfect example of financial mismanagement.
    So, Secretary of the Army Wormuth, I just talked to her 
yesterday. She has assured me under oath and in private again 
that she is committed to getting this work done expeditiously. 
I really thank her for that. But unfortunately, down a few 
levels, something--the ball Is being dropped here. So, the 
commitments that we--we have to do something for our men and 
women.
    And, Mr. Tenaglia, are you tracking this issue with the 
Humvee retrofit program?
    Mr. Tenaglia. I was not aware of that detail, but I will 
commit to getting with the Army to get you answers, and----
    Mr. Fallon. Thank you. Because again, we are losing 
soldiers' lives, and this is preventable, you know. None of 
this work is happening because the supplier is not under 
contract.
    So, Red River Army Depot does a lot of this work, and they 
can get the work done, but they cannot hire the people that 
they need until they are under contract, till they have a 
contract for this. And then the Army says now that they do not 
expect that the award will occur until the fourth quarter of 
this year.
    Do you have an acceptable reason as to why this 
appropriated money is not being spent in a timely manner? 
Really, invested.
    Mr. Tenaglia. No, sir, I do not have----
    Mr. Fallon. OK. So, Mr. Khan, costing the taxpayers an 
additional $8 billion while jeopardizing the lives of our 
soldiers sounds like an issue that GAO might be interested in. 
So, has the GAO reviewed this recent delay in the Army's Humvee 
retrofit program?
    Mr. Kahn. No. GAO has not reviewed that program.
    Mr. Fallon. Will you and Comptroller Dodaro commit to a 
formal review of the issues related to the Army's Humvee 
retrofit program?
    Mr. Kahn. I will get in touch with that team who does work 
on the weapons systems, and they will work with your office to 
see how we can meet your needs.
    Mr. Fallon. Thank you. And we will be more than happy to 
provide you with a formal written request, if needed.
    So, I want to thank the witnesses again. And just while I 
have a minute left, I want to just discuss--maybe talk about 
truth for a minute and candor and not politics. So, I will be 
real frank.
    This Congress on the Hill, 2 years ago got it right in 
regard to Ukraine. It was very clear that the Russians were 
going to invade. And Congress, both Democrats and Republicans, 
got it right. The White House did not. The White House did not 
lead. Congress led.
    I signed on to a letter that was sent out in 2021 in 
December to the White House urging more lethal aid to be sent 
to act as a deterrent because, yes, war is expensive. You know 
what is even more expensive? Losing a war. And we, Congress, 
both Republican and Democrats, bipartisan, led on that issue. 
The White House failed.
    Because if the White House got it right, I would say they 
got it right. They got it wrong, but we got it right. Congress 
led. And the facts are the facts. And now we will never know if 
that deterrence could have been--could have worked because the 
White House dragged their feet for 6 weeks until that second 
lethal aid package was sent.
    So, I yield back. Thank you, Mr. Chairman.
    Mr. Grothman. [Presiding.] Thank you.
    There he is, Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    And let me take direct issue with the gentleman who just 
spoke. The Biden Administration is one of the only 
administrations ever to deliberately leak intelligence to let 
people know the invasion was pending. And by the way, an 
invasion that initially the Ukrainians felt was not going to 
happen. It was the Biden Administration that called out the 
fact that it was about to happen and leaked intelligence we had 
about Russia to ensure that Russia could not use pretext that 
the Ukrainians, in fact, had provoked the invasion.
    I also want to take issue with him in diminishing and 
ridiculing my colleague from California on her Jeopardy 
example. We have been droning on in the entire 15 years I have 
been in Congress about the lack of an audit for the Pentagon, 
and zero progress has been made. We have talked about waste, 
fraud, and abuse for generations with respect to Pentagon 
spending, and zero progress has been made. And in one 5-minute 
questioning, my colleague, Ms. Porter from California, showed 
the American people, in clear and understandable terms, numbers 
and systems that are at risk or at fault, and it is their tax 
dollars, and it is our national security.
    So, I praise Ms. Porter for what she just did. I thank her, 
and I think she probably did more to penetrate American public 
consciousness than 15 years of hearings on the subject.
    Mr. Khan, do I understand that DoD has 326 financial 
management systems according to the DoD itself?
    Mr. Kahn. That is correct. I think the list has gone up 
to--closer to 400.
    Mr. Connolly. Four hundred financial management systems. Is 
that correct?
    Mr. Kahn. Correct.
    Mr. Connolly. What could go wrong with that?
    Mr. Kahn. Everything. Primarily, they do not communicate 
with each other. They do not have controls, so the information 
does not pass from one system to another system reliably. 
Consequently, the information which is aggregated at the top 
level is unreliable. You cannot make decisions on that 
information.
    Mr. Connolly. So how does the President, the Joint Chiefs 
of Staff, or the Secretary of Defense manage financially within 
the budget Congress gives them if they have got over 400 
systems, they do not talk to each other, they do not cooperate, 
and do not give a complete picture of what is happening at, 
say, a 30,000-foot level?
    Mr. Kahn. Primarily, through budget. How much budget is 
available and how much is spent. But it does not provide them 
if the money is being spent on the right assets, the right 
services, and are they receiving the right services and right 
goods for the amount paid.
    Mr. Connolly. So, what do you think should happen with 
these 400 separate systems of financial management?
    Mr. Kahn. As GAO has recommended, they need to be 
modernized. But they----
    Mr. Connolly. Well, modernized. But shouldn't they be 
consolidated?
    Mr. Kahn. Yes.
    Mr. Connolly. Like, a lot of them eliminated?
    Mr. Kahn. Right.
    Mr. Connolly. And is that possible? Is that doable?
    Mr. Kahn. It is doable, but it has to be planned.
    Mr. Connolly. Do other Federal agencies have 400 financial 
management systems?
    Mr. Kahn. No, they do not.
    Mr. Connolly. They do not. So, it is doable?
    Mr. Kahn. Correct.
    Mr. Connolly. We even have examples we could point to?
    Mr. Kahn. Yes.
    Mr. Connolly. And has the Pentagon used best practices with 
other Federal agencies to start to make some progress on this?
    Mr. Kahn. It is trying to do that.
    Mr. Connolly. Legacy systems. One of my favorite topics on 
this Committee has always been IT modernization because I 
believe it is fundamental to the enterprise, to the mission, 
and to the execution of the mission.
    Now, DoD has decommissioned, I understand, 18 legacy audit-
related systems in Fiscal Year 2022. Is that correct?
    Mr. Kahn. That sounds about right.
    Mr. Connolly. How many more do we got to go?
    Mr. Kahn. Hundreds more.
    Mr. Connolly. Hundreds. And how are they doing in 
developing and executing a plan to do that?
    Mr. Kahn. It is somewhat slow. They need to have better 
plans as to how they are going to go from where they are right 
now to what the target state is, where they need to get there.
    Mr. Connolly. Are there cyber risks from outside malign 
actors with the legacy systems?
    Mr. Kahn. Yes. Yes, there is.
    Mr. Connolly. So, this directly affects the security of our 
missions, of our intelligence, of our defense planning, on our 
new weapons systems development?
    Mr. Kahn. It does.
    Mr. Connolly. It does. So, it is a pretty grave matter.
    Mr. Kahn. Very much so.
    Mr. Connolly. I think we are going to want to know a lot 
more about that as we proceed.
    My time is up, but I really thank you.
    Mr. Grothman. Mr. Timmons.
    Mr. Timmons. Thank you, Mr. Chairman. And thank you to the 
witnesses for joining us to discuss the lack of financial 
accountability that is all too prevalent within the DoD.
    As we all know, the Pentagon had its first ever independent 
audit in 2017, but failed that audit. And it has also failed 
every audit subsequently. Unsurprisingly, in November 22, DoD 
announced that it failed its most recent audit, unable to 
account for more than half of its assets. It is extremely 
concerning that our largest Federal agency cannot properly 
identify up to half its assets. And today, I want to focus on 
some smaller issues that are contributing to that.
    In the GAO report released on May 23, on the accountability 
of spare parts, GAO found that 1 million parts have been, 
quote, ``lost'' since 2018. The report said DoD and contractors 
cannot agree on how spare parts should be categorized. This 
lack of agreement affects how DoD processes lost parts. For 
example, about a half million lost parts worth $85 million, DoD 
was only able to review the circumstances surrounding two 
percent of identified losses since 2018.
    Mr. Khan, this question is for you. Can you provide 
additional context for the Committee? What is your definition 
of a, quote/unquote, ``lost'' part?
    Mr. Kahn. When the parts do not match what is in the record 
and what is in the record do not match the part which is in the 
warehouse.
    Mr. Timmons. And do auditors currently have the ability to 
identify and differentiate which parts are actually lost and 
those which are simply excess inventory?
    Mr. Kahn. No.
    Mr. Timmons. Is that a problem?
    Mr. Kahn. That is a huge problem.
    Mr. Timmons. So, would it be much better to have--to 
differentiate these categories?
    Mr. Kahn. Yes.
    Mr. Timmons. How do we do that?
    Mr. Kahn. By inventorying them correctly, by tagging them, 
by having the right information in the records as to which part 
is obsolete and which part is still serviceable.
    Mr. Timmons. What needs to be done to accomplish that?
    Mr. Kahn. Better records, better policy and procedures. So, 
somebody follows through with their guidance to make sure that 
information is in the records.
    Mr. Timmons. Is it harder--I know that Mr. Connolly was 
discussing the 400 different systems. Is that part of the 
problem? If there were fewer, if it was more streamlined, would 
it be able to accomplish that?
    Mr. Kahn. That is part of the problem. In this case, a lot 
of these spare parts are managed by contractors, so there needs 
to be proper guidance for the DoD personnel to require the 
contractors to provide that information.
    Mr. Timmons. OK. Thank you.
    Mr. Mansfield, speaking specifically on the F-35 program, 
what percentage of parts have been lost in the last 5 years?
    Mr. Mansfield. I do not have a specific number on that.
    Mr. Timmons. OK. It seems that the rate is fairly low, 
given the information that I am looking at. How--so you do not 
know the answer to that.
    What is the overall goal for the Defense Department as it 
relates to lost parts?
    Mr. Mansfield. So, I cannot speak for the Department's 
overall goal, only because we provide oversight over the 
Department. But what I could say their goal should be is there 
should be no lost parts, right. One hundred percent inventory 
accuracy in terms of parts.
    Mr. Timmons. I think that that is a great goal, but I mean, 
I think zero percent is probably not attainable. But I mean, I 
would say somewhere low single digits is a good objective.
    What methods do you think could be implemented to lower 
lost part percentages?
    Mr. Mansfield. So, specifically for the Joint Strike 
Fighter, because those are government assets, they are 
controlled by a contractor. The fundamental thing, there is 
three things that go into it. One is contract requirements, 
very clear contract requirements and deliverables that have 
measurable outcomes and goals within that. And then you also 
have to have, the second part of this is a very solid oversight 
plan from the government, a way of checking and checks and 
balances on the contractor. And the third is the wherewithal 
within the contracting community to actually hold the 
contractors accountable for not meeting contract requirements 
and providing the information that is required to maintain 
accountability and fiscal responsibility for those parts.
    Mr. Timmons. Sure. Thank you for that.
    We have got a long day ahead of us working on the NDAA. I 
am glad that we are having this hearing to discuss concerns 
with what is our largest Federal agency, so we can continue to 
do better.
    And, Mr. Chairman, I yield back. Thank you.
    Mr. Grothman. Thank you.
    Mr. Moskowitz?
    Mr. Moskowitz. Thank you, Mr. Chairman.
    I would like to yield some of my time to Representative 
Goldman.
    Mr. Goldman. Thank you. I thank the distinguished gentleman 
from Florida for yielding a little time.
    I want to briefly address another one of my distinguished 
colleagues from Florida's earlier remarks in mostly saying that 
there was a 6-month buildup of Russian troops on the border and 
somehow President Biden did nothing to deter Russia from 
invading Ukraine. I find it odd to hear a Republican supporter 
of Donald Trump complain that we did not do more earlier to 
deter Russia.
    We all remember, in 2019, Donald Trump withheld all of the 
military and security assistance Congress appropriated to 
Ukraine in order to benefit his reelection campaign. And, in 
fact, on the contrary, Joe Biden, as President, did share 
intelligence to rally around our European allies to support 
Ukraine in a meaningful way that actually offset the need for 
us to provide as much financial assistance.
    But I am glad to hear that Mr. Donalds supports Ukraine in 
its war against Russia. And I hope that he can convince his 
colleagues, including some on this committee, not to strip all 
funding for Ukraine in the NDAA.
    I thank my colleague for yielding. And I yield back.
    Mr. Moskowitz. Thank you.
    So, we are talking about the NDAA, while this hearing is 
going on, supporting our defense, supporting our country, 
keeping our military superiority over China. It passed 58 to 1 
in committee, bipartisan, how it has always been and how it 
should be. Except now, it is held hostage. It is held hostage 
over the culture war, right. It is not about defense. It is not 
about protecting the American people. No, it is about abortion 
or defending the Confederacy, based on amendments that my 
colleagues have filed. Or it is about books again. We are back 
to books. Or it is about stopping mitigation to climate change. 
Anyone right now who is currently experiencing record flooding 
or record heat, they are not worried about defending the 
country. No, they are worried about stopping mitigation and 
climate change.
    The Senate is going to kick all this back to us. They are 
going to wipe all this culture war nonsense out. And so, this 
is just theater. It is not about defending the country. They 
are holding up 250 nominees, in the Senate, to our military. My 
colleagues across the aisle are doing that. We cannot appoint 
the head of the Marine Corps because of the culture wars. Has 
not happened since 1910.
    In October, when we are going to see the Chairman of the 
Joint Chiefs of Staff probably retire, nope, we will not be 
able to appoint that person either, based on this nonsense if 
it continues.
    But they are focused on the audit of the Pentagon. Can you 
imagine if someone audited this Committee? Oh, wait, I have 
that audit of this Committee. Actually, it is in form of an 
indictment. That is the audit of this Committee. It is an 
indictment by the Department of Justice, because this Committee 
is focusing on working with foreign agents, right. You want to 
talk about national security? That is why you guys are here. It 
is about national security.
    But the main Committee is working with an indicted Chinese 
agent who does business with the Iranian regime and is an 
illegal arms dealer to Libya. All of this in order to own 
Hunter Biden. That is how far they have stooped. It reads like 
a 007 movie, this indictment, except they are working with the 
villain.
    You know, that is why I have sent a letter to the China 
Select Committee, the chairman of that committee, to open up 
into an investigation into what is happening in Oversight, 
because I am deeply worried about whether the CCP has 
manipulated the information that has been provided to this 
Committee through their foreign agent that they are working 
with and the information that they are then providing to the 
American people.
    It is also why I have sent a letter to the Chairman of 
Foreign Affairs and the Chairman of Homeland Security, because 
I need to know and the American people need to know, they have 
a right to know, whether the indicted foreign agent, the 
illegal arms salesman who is working within the Iranian regime, 
who is a supporter of terrorism around the world--that is who 
they are working with--we need to know whether they have 
jeopardized homeland security in their search to help Donald 
Trump in his reelection.
    I yield back.
    Mr. Grothman. Mr. Burchett?
    Mr. Burchett. Yes, sir. Sorry, Mr. Chairman, I am usually a 
little more prepared. I apologize.
    Mr. Mansfield, the Presidential budget for Fiscal Year 2024 
requested $910.8 billion for defense-related activities. Does 
that sound right to you?
    Mr. Mansfield. Yes.
    Mr. Burchett. How much of that $910.8 billion is mandatory 
and how much is discretionary spending?
    Mr. Mansfield. I believe the vast majority is 
discretionary.
    Mr. Burchett. I cannot hear what you are saying.
    Mr. Mansfield. It is discretionary, sir.
    Mr. Burchett. Say again.
    Mr. Mansfield. I said I believe the vast majority of that 
would be discretionary.
    Mr. Burchett. Vast majority, OK.
    When was the last time the Department of Defense passed a 
clean audit?
    Mr. Mansfield. It never has.
    Mr. Burchett. Never has. And what issue does the Department 
face in tracking the money that was spent?
    Mr. Mansfield. It is a magnitude of issues. You know, it 
is--as we speak about--or I spoke about in my prepared 
statement, there is a series of material weaknesses, anything 
from information technology systems to be able to track its 
balances that are with the Treasury. It is inventory over 
property and equipment. It is ability to actually capture the 
total universe of financial----
    Mr. Burchett. OK, OK. I appreciate all that, but don't you 
think it is time? I mean, you have never had it--if it never 
has come out right, that you all would fix that problem?
    Mr. Mansfield. I would agree it is time for the DoD to fix 
that problem. Our role as the Inspector General is to oversight 
the DoD's process. So, we actually issue the opinion that finds 
that the DoD cannot report its financial information 
accurately.
    Mr. Burchett. How does the process work in the Department 
of Defense? The auditing process, how does it work?
    Mr. Mansfield. Well, in terms of the audit or the 
compilation of the financial statements, because----
    Mr. Burchett. Just the audit, the audit, sir.
    Mr. Mansfield. So, we have--within the DoD Office of 
Inspector General, we look at the consolidated financial 
statements, and then we oversee a series of independent public 
accounting firms that look at individual entities within the 
DoD that have their own financial statements that roll up into 
the agency-wide. And so, at the entity level, there is testing 
going on by IPAs substantive to----
    Mr. Burchett. So, it just goes from one bureaucrat to 
another bureaucrat to--it just goes up the chain.
    OK. Let me ask you, how many people work in this maze? How 
many people work to audit the Pentagon?
    Mr. Mansfield. Right now, my organization, the DoD Office 
of Inspector General, has about 180 people dedicated to it. And 
then within the independent public accounting firms, it is 
right around 1,400 staff.
    Mr. Burchett. Now, does the Pentagon do any of this work 
in-house? Do they do their own auditing at all or any of that, 
or do they just----
    Mr. Burchett. They contract with a few IPAs and oversees 
those IPAs. We do the vast majority.
    Mr. Burchett. Did you say overseas?
    Mr. Mansfield. They oversee them.
    Mr. Burchett. Oversee them. OK. I am sorry.
    Mr. Mansfield. I am sorry. I apologize. Yep.
    Mr. Burchett. You had me really nervous thinking I was 
going to change my questions.
    How much do you all spend to do--on the auditing process?
    Mr. Mansfield. So, in Fiscal Year 2023, it looks like we 
are around $186--the DoD is around $186 million. But if you 
look at the contracts they have, which are multiyear contracts, 
the total potential amount obligated there is around $485 
million or so.
    Mr. Burchett. Do you think they will ever pass a clean 
audit?
    Mr. Mansfield. I think there is room there for that to 
occur. I think it just requires consistent attention.
    Mr. Burchett. I think at some point this Congress is going 
to have to get some guts and remember what we said, that we are 
the country's checkbook--or this Congress' checkbook, and we 
have to start cutting money if they do not. I mean, that is 
what you do in the business community, that is what you do in 
small government. You--and when I was county mayor, I will tell 
you this, if it--if they did not come back clean and they could 
not give me the proper answer, I was going to fire somebody's 
butt overnight, overnight. Tennessee is a right-to-work state, 
and they were gone. I just--this group, all you do is hire more 
people. I just do not follow what is going on.
    Mr. Khan--did I say that name correctly?
    Mr. Kahn. Yes.
    Mr. Burchett. Mr. Khan?
    Mr. Khan. Yes, sir.
    Mr. Burchett. In your opinion, what programs within the 
Department are most prone to waste, fraud, and abuse?
    Mr. Kahn. Based on the work, it is primarily the weapons 
systems. I mean, that is where their cost overruns time delays.
    Mr. Burchett. Do they do this so they can say, well, we are 
putting more into it, or it just--I mean, you know, they try to 
wrap it in the patriotism of this great country, and I just 
worry about that.
    Mr. Kahn. I cannot answer that question.
    Mr. Burchett. Do what?
    Mr. Kahn. I do not know the answer to that question.
    Mr. Burchett. All right. How does the Department of 
Defense's financial management compare to other Federal 
agencies?
    Mr. Kahn. It is lacking compared to other Federal agency.
    Mr. Burchett. And that is saying something, because Federal 
agencies are pitiful. So, go ahead. I am sorry.
    Mr. Kahn. Well, I was going to say it is the only one which 
has not received audit opinion since it became the law in 1990, 
so it is really far behind other Federal agencies.
    Mr. Burchett. I prepared legislation. I will be filing it, 
Mr. Chairman, to penalize government departments that do not 
follow through or do not--or who have audit findings in the 
future. I would hope, maybe this Congress would get some guts 
and our party would get some guts and follow through with some 
of our promises that we have made.
    Thank you, Mr. Chairman. I appreciate all you guys being 
here. I know you probably woke up this morning and thought, 
wow, this is going to be just like it is on television, and 
obviously it is not, because we have terrible snacks back 
there. I just want you to know that, so--exactly, no snacks, 
exactly.
    Thank you.
    Mr. Grothman. OK. Thank you.
    Ms. Greene?
    Ms. Greene. Thank you, Mr. Chairman.
    As Congress is debating and considering voting on the next 
National Defense Authorization Act that will cost the American 
people $866 billion, I think this is a very important hearing 
today. And I thank you all for being here.
    I own a construction company. And my company is audited 
every single year. That is part of being able to do the jobs 
that we do. We have to account for everything that our business 
owns, all of our liabilities, all the way down to counting 
hammers and nails.
    So, this was very alarming information to me as I found out 
that the Pentagon had failed its first ever independent 
financial audit in 2017. But more importantly, that the 
Department of Defense has failed every single audit since then. 
And I am sure that alarms you as well.
    In November 2022, the Department of Defense announced that 
it failed its most recent audit, unable to account for more 
than half of its assets. That is mind-boggling, especially for 
Americans that pay for all of this. After 1,600 auditors sifted 
through the Department of Defense's 3.5 trillion in assets and 
3.7 trillion in liabilities, officials found that the DoD could 
not account for more than 61 percent of its assets is so 
alarming.
    What Is particularly concerning to me, in our NDAA, there 
is $300 million more dollars in the NDAA to go to Ukraine. 
Congress has already spent $113 billion for the Ukraine war.
    So, on June 20th, 2023, when a Department of Defense 
spokesperson said that the DoD had been overestimating the 
value of U.S. assistance to Ukraine by nearly $6.2 billion over 
the Fiscal Year 2022 and 2023, that is really concerning. The 
spokesperson noted that military services used replacement 
costs rather than net book value in many cases. And this sum 
would subsequently go back into the pot of money allocated for 
the Presidential Drawdown Authority, PDA, for Ukraine.
    So, I want to talk about accounting practices today. And I 
am going to ask both of you, Mr. Tenaglia--I apologize if I 
mispronounced that--and Mr. Mansfield. Basically, my estimation 
of what this means in simple terms for anyone watching this 
hearing is that, at first, using the accounting practice, 
basically putting the net worth and the value of this equipment 
originally given to Ukraine, it was kind of like pricing it 
like a new car. And then changing its value by pricing it like 
a used car and that is how $6.2 billion showed up. But yet, the 
American people have to resupply the military at a new car 
value, right. So, that is a loss to the American people in the 
amount of money they are spending.
    Would you agree with me? And I will go with each of you.
    Mr. Tenaglia. I am told by the Comptroller's staff that the 
accounting error that they identified through an internal 
review was--informed the Congress of that, as you referred, 
does not have any fraud, waste, or abuse implications, and that 
accounting error has been rectified.
    Ms. Greene. And how was that rectified? It is a loss to the 
American people. Or it is actually just giving you--is it a 
loss to the American people or is it giving Ukraine another 
$6.2 billion, using accounting terms?
    Mr. Tenaglia. I do not believe it is another $6 billion. I 
believe it is a re-estimation of the value of that equipment.
    Ms. Greene. Well, who is going to be paying for the $6.2 
billion when we replace the military equipment for our 
military, for the defense of our country, not Ukraine, who some 
seem to think it is the 51st state, but actually the Defense of 
the United States of America? Who is going to be filling in 
that $6.2 billion?
    Mr. Tenaglia. Again, I do not believe it is a matter of 
filling in the $6.2 billion, but we can get--the Department 
will get you an answer to describe the impact of that error.
    Ms. Greene. There is an impact for sure and it is always 
made up in terms, but the American people pay for it.
    Mr. Mansfield, could you answer my question?
    Mr. Mansfield. Yes. First, I would say I appreciate your 
analogy. I think it is a good way of describing the situation, 
as I understand it. In terms of who pays for the equipment that 
has gone to Ukraine ultimately, that is the U.S. taxpayer.
    Ms. Greene. Right. And then, obviously, if they have to 
replace the $6.2 billion of equipment at a new car price, 
versus what the change in accounting has been to a used car 
price, then it is the American people that pay the price again.
    Thank you so much for clarifying.
    I yield back, Mr. Chairman.
    Mr. Grothman. Thank you.
    Mrs. Boebert?
    Mrs. Boebert. Thank you, Mr. Chairman.
    Mr. Tenaglia, can you please give me an example within the 
past year when your office has provided oversight on 
contractors who are overcharging for their services and 
equipment?
    Mr. Tenaglia. Yes. The role of our office is to help 
contracting officers throughout the Department with the 
policies that we issue. And so, one example would be the 
reviews we conduct advising contracting officers about 
individual negotiations. Each of those negotiations involve 
contractors submitting proposals. Some of those proposals may 
indicate overvalue, and some of that is subject to negotiation. 
The Congress has provided us some safeguards for sole-source 
contracts so that we have----
    Mrs. Boebert. So, you are providing regular oversight.
    Mr. Tenaglia. Yes.
    Mrs. Boebert. Just a few years ago, it was determined--and 
I apologize if this has been brought up already today--but it 
was determined that contractors were charging the United States 
Air Force $1,280 for a cup of coffee. Or----
    Mr. Tenaglia. I am not familiar with that particular 
example.
    Mrs. Boebert. So--but is there oversight being conducted to 
ensure that we are not paying $1,280 for a cup of coffee?
    Mr. Tenaglia. The oversight that my office conducts 
primarily relates to the largest transactions, anything that is 
valued over a billion dollars for negotiation.
    Mrs. Boebert. So, something like that could be overlooked. 
There is not an in-depth office--there is not an in-depth 
search in your office for small dollar items that cost----
    Mr. Tenaglia. We do have some safeguards in place.
    Mrs. Boebert. OK.
    Mr. Tenaglia. For example, with the government purchase 
card program, we have the ability to identify fraud, waste, and 
abuse. But throughout the Department, we have a number of 
different buying activities, and each one of those have 
leadership and warranted contracting officers who are empowered 
to make sure that they are getting at the best deal for the 
taxpayer.
    Mrs. Boebert. So, Mr.--what steps are you taking to ensure 
that companies that the DoD is contracting with are providing 
their best warfighting capabilities at a reasonable cost to the 
taxpayer so, you know, we do not have a $1,200 cup of coffee? 
So, what are you doing to ensure that does not happen?
    Mr. Tenaglia. The best thing that we can do is promote 
competition, and competition gets us the best pricing possible. 
But in many cases, we have fielded weapons systems for which we 
have negotiations with sole-source contractors, and we have 
safeguards to make sure we are paying the fair price.
    Mrs. Boebert. So, is it your determination that there is no 
fraud, waste, and abuse by contractors in the DoD in terms of 
materials and capabilities received?
    Mr. Tenaglia. Where there is fraud, waste, and abuse, we 
have mechanisms, such as the Defense Contract Management Agency 
has an organization responsible for rooting out that. The DoD 
IG has a whistleblower program. And so, we have the means to 
identify fraud, waste, and abuse.
    Mrs. Boebert. Do any of your whistleblowers ever get 
indicted?
    Mr. Tenaglia. I am not aware of that.
    Mr. Mansfield. I would hope the whistleblowers themselves 
would not get indicted, but the individuals they are blowing 
the whistle on. I apologize.
    Mrs. Boebert. I see--no, but----
    Mr. Mansfield. Thank you.
    Mrs. Boebert. Thank you, Mr. Mansfield.
    So, have you determined that any of the sole source of 
manufacturers of the systems that we are providing to Ukraine 
are making exorbitant profits via price gouging? And if so, 
what percentage of profit are they making? And if you have 
looked into this Ukrainian spending.
    Mr. Tenaglia. So, a significant amount of the Ukrainian 
security assistance has been executed using a technique we call 
undefinitized contract action. And so, we have deferred the 
negotiation of the price for that, and so we do not yet know 
what the definitized price or profitability will be. But we 
have no information that will indicate any price gouging.
    Mrs. Boebert. Well, I sure hope that you get that 
information. I would like that to be given to me personally. 
Because in 2015, the Pentagon ordered a review, and Army 
negotiators discovered one company and its subcontractor 
company were grossly overcharging the Pentagon and U.S. allies 
by hundreds of millions of dollars for the Patriot's PAC-3 
missiles. Pentagon analysis found the total profits approached 
40 percent. The standard, as you know, is anywhere from 12 to 
15 percent. And this is only one of the examples that I know 
about.
    How many other examples of this corrupt practice will come 
to light as we continue to send Ukraine more weapons at the 
taxpayers' expense? Our servicemembers are lacking the 
resources they need in exchange for the CEO of a defense 
contractor's new private jet.
    So, China has clearly--it has paced--it is a pacing threat. 
Would you agree with that?
    Mr. Tenaglia. Yes.
    Mrs. Boebert. Yes. Under Secretary Colin Kahl, he said that 
the top priority for the Department is getting China right. 
Secretary of Defense Austin has described China as America's 
pacing threat. It means that China is the only country that can 
pose a systematic challenge to the United States in the sense 
of challenging us economically, technologically, politically, 
and militarily.
    Now, my time has expired. If I may, do you just consider 
the current contracting process limited to the small number of 
prime contractors sufficient to meet the rapid technological 
requirements that the threat picture poses by our adversaries?
    Mr. Tenaglia. So, the defense industrial base we have is 
producing weapons systems that our warfighters are using. If we 
have more competition, that would be better.
    Mrs. Boebert. Thank you. I appreciate you all for being 
here.
    Mr. Chairman, I yield.
    Mr. Grothman. Thank you very much.
    Well, that--I want to thank our panelists for being here 
today. Nice long hearing. I will have a few more words to add 
in a second, but we will start out going to Ranking Member 
Mfume for closing remarks.
    Mr. Mfume. Thank you very much, Mr. Chairman.
    I want to thank the witnesses for their time today, for 
their testimony as well. And I want to thank Members of this 
body for helping to drill down on this very important, very, 
very important issue.
    As Members of this body, we are obligated to keep careful 
watch over the use of taxpayers' dollars, that goes without 
saying. And that responsibility must be carefully balanced 
again and again with ensuring the security of our Nation.
    As we have heard, the General Accounting Office has 
identified many, many instances over the years where the 
Department of Defense's components had inaccurate inventories 
on their books, like the Black Hawk helicopter debacle, which 
left 39 Black Hawk helicopters unrecorded in the Army's 
property system. That sort of military equipment costs millions 
of dollars each year, depending on the model. And that is only 
one example of many.
    When you consider the fact that the moneys lost, without a 
doubt, could fund school lunch programs across this country, 
SNAP benefits, assistance to our seniors who are in desperate 
need of housing assistance, student loan support, Medicaid and 
Medicare, it is almost unbelievable that the testimony and the 
facts before us today point to such an atrocity. And I do not 
know a better word for it.
    The most striking thing, Mr. Chairman, that I took away 
from this goes back to the comments from the gentlewoman from 
North Carolina when she gave us a definition of systems, and 
then said, of the almost 400 systems at DoD, how many of those 
worked as intended. And Mr. Khan in his statement said, none of 
them.
    So, if none of the systems are working, none of them--and 
this is GAO's assessment--we are in a big pickle here, in a 
situation that I think requires immediate and drastic actions. 
It is--I just--I find that so unbelievable. None of the systems 
work as intended.
    So, I do not know. I, you know, I generally have been 
supportive of NDAA, but I do not know how I am going to vote in 
support of something like this. This is absolutely ridiculous. 
It is. And I know I do not want to be here next year and hear 
the same thing all over again.
    So, I just would implore, as best I can, the Department of 
Defense, from the top down, to address this and do it 
immediately, to make it a priority, and to do it before we are 
back here again in 12 months. It is shameful. I do not know how 
any other word could be used when you consider the amount of 
dollars that are being lost that could be going to help people, 
that are continually lost, and the fact that the DoD has been 
on this high-risk list going back to the 1990's?
    Maybe it is just me, I do not know, but I just--I am 
astounded, I am insulted, and I am very perplexed about how it 
goes on. And many of our colleagues who are not here today, I 
certainly hope that I get a chance to talk to on the Floor 
before these votes come up because this is ridiculous. We just 
cannot keep doing the same thing.
    So, I implore the leadership of DoD to address these 
deficiencies as outlined by GAO immediately.
    I want to thank the witnesses here. Actually, you have been 
here taking knives and the arrows of other people who should 
have been here. I hope that they will understand that they have 
an obligation to come to this Committee when requested by the 
Chair.
    I yield back.
    Mr. Grothman. Thank you.
    Mr. Garcia?
    Mr. Garcia. Thank you, Mr. Chairman. And thank you to our 
witnesses again.
    You know, at least as we have heard throughout the hearing, 
I just want to recap a few things. Obviously, the Department of 
Defense has a statutory and financial responsibility to the 
military but, of course, the taxpayers and the American people 
to achieving a clean audit to ensure greater transparency and 
better support for our military.
    DoD's long-standing issues to reach an audit expand 
multiple administrations, and so we know that, and it has been 
made very clear today as well. Congress needs to hold DoD 
accountable to achieve a clean audit. That has been also very 
clear today. And DoD needs to streamline and modernize its 
legacy data bases to ensure that systems are working together 
and in harmony. And we know that achieving a clean financial 
statement also does not indicate that DoD is free of fraud, 
waste, or abuse, or even mismanagement.
    Now, I want to note that we should be very concerned that 
many of our House colleagues in the Majority are also attacking 
vital support and resources to Ukraine as has happened in 
today's hearing. I want to be clear that the Federal Government 
is conducting robust oversight over the support in Ukraine. 
More than 120 auditors from 20 different oversight agencies, 
and including 15 Offices of Inspectors General, have completed 
four reports, with 18 currently in progress as some of you have 
stated earlier today.
    Moreover, the Ukraine Oversight Interagency Working Group 
has sent seven different management advisories to improve its 
collective oversight and ensure accountability of all of these 
critical funds.
    So, to say that the U.S. is sending Ukraine a blank check 
is dangerous, reckless, and, quite frankly, counter to our own 
national security.
    Now, I do welcome bipartisan efforts to helping DoD achieve 
a clean audit, but House Republicans cannot exploit a decades' 
long inability to achieve a clean audit to endanger our 
national security and allow a tyrant like Putin to invade a 
sovereign democracy.
    I also just want to make two more notes. One is I want to 
remind everyone that the Majority called this hearing and knew 
that the DoD Comptroller would be--even though would be the 
most appropriate witness for the agency and for the substance 
of this hearing, because they could not find the right date and 
that Mr. McCord could not avail himself on this date, they 
moved forward with oftentimes questions today that could not be 
answered because, really, that is the job of the DoD 
Comptroller.
    So, in the future we should certainly work, I think, better 
with witnesses so that we have our true subject matter experts 
answering these questions.
    And, finally, Mr. Chairman, I just ask for unanimous 
consent to enter also a fact sheet into the record. There has 
been some discussion about some of the mischaracterization 
around DoD's accounting of Ukraine. DoD did share with both the 
Majority and the Minority of this Committee ahead of this 
hearing that once DoD discovered these miscalculations, they 
notified Congress and reissued guidance clarifying how to value 
this equipment. So, we do have that fact sheet that was 
submitted, and so I just want to enter that record into the 
record without any objection, please.
    Thank you.
    Mr. Grothman. OK. Well, thank you. First of all, to 
clarify, it was not just the Comptroller that could not make 
it. It was the two people immediately under him. So, you would 
figure for a congressional hearing focusing on your inability 
to pass an audit, one of the three would have been available, 
but apparently not.
    As far as the hearing overall is concerned, to me the most 
important part of the Federal Government is the Department of 
Defense. Right? The freedom of the whole free world depends on 
it, and it is kind of disappointing that it would--you know, it 
would be disappointing if the Department of Interior failed an 
audit, but the Department of Defense.
    It shows--I think Ms. Foxx said we have a cultural problem. 
It is a cultural problem. It is an arrogance problem. They 
think because they are the Department of Defense, they do not 
play the rules by everybody else. We do not care if we are 
wasting money. We do not care if we misplace stuff.
    We will just say that we have a threat from China or a 
threat from Russia, and Congress has no alternative but to give 
us the money we are asking for, or we produce weapons in a lot 
of people's different districts or give a lot of campaign 
contributions, or whatever. And as the result, we just have to 
keep writing the checks, and that is not true.
    A lot of these hearings, I guess, would be had by the Armed 
Services Committee. I do not know how many they have had all on 
this line. This is not the first hearing we have had focusing 
on the idea that we are spending money on the Department of 
Defense we do not have to. I did not ask Kevin to be on the 
Armed Services Committee, but if this Committee has got to have 
more hearings to delve into where all of this money is going--
and the odd thing is they are important things that we should 
be building that we cannot build. OK? But apparently, we cannot 
build it because we are just going to be sloppy on what we are 
spending.
    So, you can carry it back to people. And if you are around 
the Comptroller, you can tell him too that, you know, this is 
not the last hearing that this Committee is going to be holding 
focusing on waste or unnecessary spending of the Department of 
Defense.
    And it is very important on--it kind of frustrates me. My 
colleagues here feel that if we are able to spend a little more 
money on defense, we can spend more money on something else. 
Actually, if you can spend a little less money on defense, we 
should not be operating such a big budget deficit is what we 
should be doing.
    But, in any event, I appreciate you for coming over here 
today. I do not want to hold more hearings on this topic, but I 
do not have a choice but to hold more hearings on this topic, 
because, you know, we are going to have the Appropriations Bill 
come around. We are going to have the Senate.
    They are going to pass their version of events, and then we 
are going to be on to next year as well. And you just cannot 
trust the Department of Defense to give you a straight story as 
to why we are spending so much money, whether there is any 
waste out there, or, quite frankly, whether we are procuring 
the right weapons as well, or whether we are doing a good job 
with our personnel. And I have got one amendment in this bill.
    But, in any event, I appreciate you coming over here. I did 
not run for Congress to monitor the Department of Defense, but 
I guess I am going to have to do that.
    So, again, thanks for coming over here, and I hope you 
enjoyed our humble Subcommittees.
    I know we have got to--with that and without objection, all 
Members will have 5 legislative days within which to submit 
materials and to submit additional written questions for the 
witnesses which will be forwarded to the witnesses for their 
response.
    If there is no further business, without objection, the 
Joint Subcommittee hearing stands adjourned.
    [Whereupon, at 1:05 p.m., the Subcommittees were 
adjourned.]

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