Report: Pentagon buried audit that exposed $125 billion in bureaucratic waste

After a 2015 internal study requested by Pentagon leaders suggested that $125 billion was spent on administrative waste in its business operations, the report was quickly hidden over concerns Congress might use the information to cut the defense budget, The Washington Post reports.

Through interviews and confidential memos, the Post discovered that the point of the study was to make the Pentagon's back-office bureaucracy more efficient, and the money saved would then be reinvested in combat power. The Defense Business Board, looking at personnel and cost data, found that the Pentagon was spending $134 billion of its $580 billion budget on overhead and operations like human resources, accounting, and property management. More than 1 million people work in business operations, nearly as many as the 1.3 million active-duty troops. The report recommended early retirements and attrition, making better use of information technology, and cutting back on expensive contractors in order to save $125 billion over five years, the Post says. It did not suggest any layoffs of civil servants or reductions in military personnel.

This report didn't go over well with some Pentagon leaders, who had no idea how much money was being spent on these operations and worried that by showcasing administrative waste, Congress and the White House might slash their budget, the Post says. A summary report had been made public, but was removed from the Pentagon's website, and they placed secrecy restrictions on the data. "They're all complaining that they don't have any money," Bobby Stein, who served as chairman of the Defense Business Board, told the Post. "We proposed a way to save a ton of money." He called the data "indisputable," and said it was a "travesty" for the Pentagon to keep the results hidden. "We're going to be in peril because we're spending dollars like it doesn't matter."

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Deputy Defense Secretary Robert O. Work, the second-highest-ranking official at the Pentagon, told the Post he didn't dispute the findings about the size and scope of the Pentagon's bureaucracy, but said the $125 billion savings proposal was "unrealistic" and the board did not understand how difficult it would be to cut so many federal civil service jobs. Read more about the report, how it was developed, and Defense Secretary Ash Carter's reaction to it at The Washington Post.