Forbes: US Government Missing Trillions of Dollars
"For fiscal year 2015 the Army failed to provide adequate support for $6.5 trillion in journal voucher adjustments. Given that the entire Army budget in fiscal year 2015 was $120 billion, unsupported adjustments were 54 times the level of spending authorized by Congress. "
~~ From Forbes magazine article posted Dec. 8, 2017
Forbes magazine on December 8th became the first major media to blow the lid off of $21 trillion that have gone missing from the US treasury. The entire article is copied below. To give an idea of how much money that is, if you divide the entire US population of around 325 million into $21 trillion, the amount missing is equivalent to $65,000 for every man, woman, and child in the United States.
CBS News in 2002 was the first to report on the much smaller amount of $2.3 trillion missing from the Pentagon, as acknowledged by then Secretary of Defense Donald Rumsfeld in a report on the Dept. of Defense website. Rumsfeld's report was later strangely removed from the website, but is still available on the Internet archive.
No other media picked up on this mind-blowing news. What should have been a top headline-grabbing story of highest concern to all Americans was simply dropped. Since then, a few major media have published isolated articles on missing trillions, as summarized on this revealing webpage, yet again, these stories were not given the top headlines they deserved. They thus attracted little notice and were dropped, so the public remained uniformed of this concerning news.
Catherine Austin Fitts, a courageous former Assistant Secretary of HUD (Housing and Urban Development) under George H. W. Bush, couldn't believe this vitally important story was being ignored by the media. An incredibly sharp economist who once served as managing director of the Wall Street investment bank Dillon, Read & Co, Fitts researched further and has been releasing reports over the years on the many trillions missing on her highly informative and inspiring website solari.com. The media has conspicuously avoided her detailed work on this.
Michigan State professor of economics Mark Skidmore discovered the excellent work of Fitts several years ago. He couldn't believe Fitts claim that $6.5 trillion were missing from the US government. Thinking she had mistakenly written trillions instead of billions, he and his graduate students sifted through thousands of US government reports and were astounded to find not only that Fitts was right, but that the amount was even greater that Fitts had thought.
Skidmore eventually worked together with economics professor Laurence Kotlikoff of Boston University, a regular Forbes magazine contributor, to compose the below article blowing the lid off this huge cover-up of $21 trillion gone missing from government coffers. Note that once certain government officials saw Skidmore exposing this, they removed many of the incriminating documents from their websites. But he wisely had downloaded all of the documents and has reposted the incriminating documents on the website of Fitts on this webpage.
You can help to inform the public of this huge cover-up by spreading this news to all of your friends and colleagues. It's time for us to join in demanding full transparency on how our tax dollars are used and to expose the major corruption taking place. See the "What you can do" section below the article for more ways you can make a difference. Thanks for caring. Together, we can build a brighter future for us and our children.
Note: Watch Prof. Skidmore discussing this astounding news in this interview.
I am co-authoring this column with Mark Skidmore, a Professor of Economics at Michigan State University.
“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.” ~ Article I, Section 9, Clause 7, The US Constitution
On July 26, 2016, the Office of the Inspector General (OIG) issued a report “Army General Fund Adjustments Not Adequately Documented or Supported”. The report indicates that for fiscal year 2015 the Army failed to provide adequate support for $6.5 trillion in journal voucher adjustments.
According to the GAO's Comptroller General, "Journal vouchers are summary-level accounting adjustments made when balances between systems cannot be reconciled. Often these journal vouchers are unsupported, meaning they lack supporting documentation to justify the adjustment or are not tied to specific accounting transactions…. For an auditor, journal vouchers are a red flag for transactions not being captured, reported, or summarized correctly."
(Note, after Mark Skidmore began inquiring about OIG-reported unsubstantiated adjustments, the OIG's webpage, which documented, albeit in a highly incomplete manner, these unsupported "accounting adjustments," was mysteriously taken down. Fortunately, Mark copied the July 2016 report and all other relevant OIG-reports in advance and reposted them here. Mark has repeatedly tried to contact Lorin Venable, Assistant Inspector General at the Office of the Inspector General. He has emailed, phoned, and used LinkedIn to ask Ms. Venable about OIG's disclosure of unsubstantiated adjustments, but she has not responded.)
Given that the entire Army budget in fiscal year 2015 was $120 billion, unsupported adjustments were 54 times the level of spending authorized by Congress. The July 2016 report indicates that unsupported adjustments are the result of the Defense Department's "failure to correct system deficiencies." The result, according to the report, is that data used to prepare the year-end financial statements were unreliable and lacked an adequate audit trail.
The report indicates that just 170 transactions accounted for $2.1 trillion in year-end unsupported adjustments. No information is given about these 170 transactions. In addition many thousands of transactions with unsubstantiated adjustments were, according to the report, removed by the Army. There is no explanation concerning why they were removed nor their magnitude.
The July 2016 report states, "In addition, DFAS (Defense Finance and Accounting Service) Indianapolis personnel did not document or support why DDRS (The Defense Department Reporting System) removed at least 16,513 of 1.3 million feeder file records during the Third Quarter."
An appendix to the July 2016 report shows $2 trillion in changes to the Army General Fund balance sheet due to unsupported adjustments. On the asset side, there is $794 billion increase in the Army's Fund Balance with the U.S. Treasury. There is also an increase of $929 billion in the Army's Accounts Payable.
This information raises additional major questions. First, what is the source of the additional $794 billion in the Army's Fund Balance? This adjustment represents more than six times appropriated spending. Second, do these transfers represent a flow of funds to the Army beyond those authorized by Congress? Third, were these funds authorized and if so when and by whom? Fourth, what is the source of these funds? Finally, the $929 billion in Accounts Payable appears to represent an amount owed for items or services purchased on credit. What entities have received or will receive payment?
The July 2016 report is not the only such report of unsubstantiated adjustments. Mark Skidmore and Catherine Austin Fitts, former Assistant Secretary of Housing and Urban Development, conducted a search of government websites and found similar reports dating back to 1998. While the documents are incomplete, original government sources indicate $21 trillion in unsupported adjustments have been reported for the Department of Defense and the Department of Housing and Urban Development for the years 1998-2015.
While government budgets can be complex, our government, like any business, can track receipts and payments and share this information in ways that can be understood by the public. The ongoing occurrence and gargantuan nature of unsupported, i.e., undocumented, U.S. federal government expenditures as well as sources of funding for these expenditures should be a great concern to all tax payers.
Taken together these reports point to a failure to comply with basic Constitutional and legislative requirements for spending and disclosure. We urge the House and Senate Budget Committee to initiate immediate investigations of unaccounted federal expenditures as well as the source of their payment.
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