DDAAC Formation, Motivation, and Goals

From Truth in Accounting, February 6, 2018

Truth in Accounting has established the “Defense Department Accounting Advisory Council” (DDAAC) in order to advance our mission of educating and empowering citizens with understandable, reliable and transparent government financial information.

Our federal government spends hundreds of billions of dollars each year on defense and related national security programs.  The FY 2018 Defense Department (DoD) budget alone amounts to over half of the federal government’s discretionary budget, and this budget significantly understates total defense-related spending. Unfortunately, citizens don’t have a good understanding of what they are getting in return for what they are spending, particularly because it is very hard to know how much “defense” costs. The internal DoD decision-assisting utility of its financial information is also in question.   

In its current format, our federal government has issued the Financial Report of the U.S. Government every year since the late 1990s.  And the GAO (Government Accountability Office) has issued a disclaimer of opinion on the financial statements each year, citing material weaknesses in DoD accounting as a central concern leading to those disclaimers. More directly, the DoD Office of Inspector General has issued a disclaimer on the DoD’s own financial statements.

We welcome the experience and expertise of our new Advisory Council members, and look forward to their contributions to policy statements and updates designed to help citizens stay current on DoD accounting and financial reporting issues.  We aim to catalyze DoD transparency, accuracy, timeliness and compliance with GAAP and federal fiscal law. In turn, we will also critically examine GAAP and federal fiscal law as related to national security financial reporting.

Our Advisory Council members include:

Jack Armstrong.  Mr. Armstrong’s three decades of experience in DoD financial management included service as audit program manager in the DoD Office of Inspector General.

Larry Feltes.  Mr. Feltes is a retired Air Force Lieutenant Colonel and private sector executive. He served 24 years in comptrollership positions from the squadron level to the Pentagon. He currently presents workshops and mentors entrepreneurs with SCORE (Service Core of Retired Executives).

William Hartung.  Mr. Hartung is the director of the Arms and Security Project at the Center of International Policy. He previously served as director of the Arms and Security Initiative at the New America Foundation.

Tom McKinney.  Mr. McKinney is a retired certified internal auditor for the U.S. Army Audit Agency.

Michael Ostrolenk. Mr. Ostrolenk is National Director of the Liberty Coalition, a coalition of groups working to protect civil liberties, privacy and promote government transparency.  He is on the Steering Committee for OpenTheGovernment.org.  He is a policy advisor to the Pentagon Budget Campaign.

In our first year, our goals include:

• Maintain small organization agility,

• Prepare accurate, timely and influential policy statements,

• Educate citizens and legislators about DoD budgeting and accounting,

• Establish and build relationships with academia, policy research institutes, and the media.

An immediate area of focus will be the DoD’s new department-wide audit. This effort will reportedly include thousands of auditors at a cost approaching $1 billion in FY 2018. The effort is designed to remediate some of the more fundamental flaws underlying DoD’s accounting and financial reporting issues.

We will try to monitor the progress and evaluate the effectiveness of this audit initiative. If the DoD is truly prioritizing its accounting and financial reporting for the American public, one might expect this initiative to play an important role in the nation’s overall national security strategy. However, in the unclassified version of the new National Security Strategy (released in December 2017), the words “accounting,” “audit,” “comptroller” and “GAO” do not appear.

We will be developing a special section on Truth in Accounting’s website that will include our educational materials and policy statements. You can get to the homepage for that section here.