U.S.

Audit: Nearly $6B Unaccounted For At U.S. State Dept.

Due to mismanagement of government contracts, the audit says the U.S. Department of State is fostering a climate conducive to fraud.

Audit: Nearly $6B Unaccounted For At U.S. State Dept.
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A recent audit of the U.S. State Department has revealed serious financial management problems resulting in almost $6 billion unaccounted for by the administration.

Inspector Steve Linick's March 20 audit warns of "significant financial risk and a lack of internal control” and “contract file management deficiencies" in the Department.

While the billions are not literally missing, poor contract management and unofficial filings have resulted in $6 billion paid out to government contracts are not technically valid with the government.

The Fiscal Times reports the agency tasked with keeping track of these multi-billion dollar transactions, the Defense Contract Auditing Agency, is in complete disarray.

Linick’s memo says this disarray “creates conditions conducive to fraud, as corrupt individuals may attempt to conceal evidence of illicit behavior” by leaving contracts incomplete.

According to The Washington Post, Linick declassified March's memo after an initial report in January was largely ignored by the State Department. And Fox News says the Department's woes have been an issue for several years, "not a new or isolated problem."

It's just the latest issue in the relationship between the government and private contractors. A recent investigation into U.S. contracts in Iraq showed that auditors coudn't find 33 of 115 contracts totalling about $2.1 billion. (Via The Fiscal Times)

At a press conference Friday, State Department spokeswoman Marie Harf said the findings were inaccurate and the problems largely bureaucratic.

"Reports that there is a $6 billion that can't be accounted for are grossly inaccurate... It’s not an accounting issue. I think it's more like a bureaucratic issue."

Appointed in September, Linick is the first Inspector General the State Department has had in six years.

In a response on March 28, the State Department acknowledged the audit and vowed to ensure the legitimate filing of all future contracts.