Addendum to Missing Money—June 2021: An Additional $94 Trillion in DOD Accounting Adjustments Reported in Bloomberg.
By Mark Skidmore
As described in previous reports and updates (Skidmore and Fitts, 2017), accounting adjustments are typically a small fraction of authorized spending, not many multiples of spending. Prior to this Bloomberg article, Skidmore and Fitts (2017) compiled government reports indicating that government had accumulated $21 trillion in unsupported journal voucher adjustments over the 1998-2015 period. The $21 trillion figure was so large at the time, bigger than the United States economy, that it resonated with the public. As a result, the “missing money” issue received considerable attention from both the alternative and legacy medias.
The $94.7 trillion figure dwarfs the $21 trillion, and yet to our knowledge no other news outlets picked up the story, and in fact we did not learn about the Bloomberg piece until January of 2021, thanks to Rob Kirby who brought the article to our attention. How is it that $21 trillion could make waves in the media and yet $94.7 trillion in account adjustments went largely unnoticed?
Focusing on fiscal year 2019, $35 trillion in accounting adjustments is 47 times the $738 billion in authorized DOD funding in that year, and 1.6 times U.S. GDP of $21.4 trillion. The enormity of the accounting adjustment defies any rational explanation. There are challenges in assessing the nature of the accounting adjustments because Capaccio (Bloomberg’s writer) does not make a distinction between “supported” and “unsupported” accounting adjustments, where unsupported adjustments have insufficient supporting documentation.
The article offers the following explanations for the accounting adjustments.