The Pentagon failed its seventh consecutive audit on November 15, 2024, unable to fully account for its massive $824 billion budget. Of the Department of Defense’s (DoD) 28 reporting entities subjected to standalone audits, nine received unmodified audit opinions, one received a qualified opinion, 15 received disclaimers due to insufficient information, and three opinions are still pending. This marks the seventh failure since the audits began in 2017, as mandated by the National Defense Authorization Act.

The audit’s result—a disclaimer of opinion—means that auditors could not form a definitive conclusion about the financial statements due to incomplete data. Despite this, the Pentagon remains optimistic, with officials expressing confidence that they can achieve a clean audit by the 2028 deadline. Michael McCord, the Under Secretary of Defense (Comptroller) and Chief Financial Officer, stated that the agency has “turned a corner” in understanding the breadth of its financial challenges.

“Momentum is on our side,” McCord said, adding that the Pentagon remains committed to financial reform and transparency. He noted that “significant work remains,” but described this year’s results as progress, pointing to improvements across several entities.

The audit process involved independent public accountants and the DoD Office of Inspector General closely examining financial statements. The Pentagon’s goal is to eventually achieve an unmodified audit opinion, the highest standard of financial compliance. In this year’s audit, approximately half of the reviewed entities achieved clean or partial opinions.

McCord addressed the results during a briefing, pushing back on characterizations of the audit as a complete failure. “If someone had a report card that is half good and half not good, I don’t know that you call the student or the report card a failure,” he said.

Since 2017, the Pentagon has faced repeated criticism over its inability to track assets, liabilities, and expenditures effectively. McCord emphasized that the audit remains a catalyst for reform, helping the agency move toward greater financial integrity and improved support for military personnel. With four years remaining until the 2028 deadline, the Pentagon continues to address deficiencies to meet federal accountability standards.