The Pentagon's oversight agency is withdrawing the clean audit report the Marine Corps received in late 2013, citing newly uncovered facts that caused investigators to question the completeness of information received from the service Corps.
The Marine Corps became the first of all the military services to pass a Defense Department Inspector General audit on Dec. 20, 2013, drawing praise from then-Defense Secretary Chuck Hagel. The audit, which covered 2012, resulted in an "unqualified favorable" report at the time.
But now the status of that audit is very much in question.
In a memo to Marine Corps Commandant Gen. Joseph Dunford, comptrollers for the Navy and Defense Departments, Defense Finance and Accounting Service Director Teresa McKay and the Naval Inspector General, DoD IG officials said the office's audit opinion was no longer authoritative.
"Our original unmodified opinion is not reliable," wrote Deputy Inspector General for Auditing Daniel Blair. "Once additional information has been gathered and analyzed, the FY 2012 audit opinion will be revised accordingly and reissued."
At issue are U.S. Treasury suspense accounts that temporarily hold transactions so they do not reflect against a valid appropriation, according to the memo. While auditors originally were not aware of Marine Corps transactions that would affect the outcome of the audit, "recently obtained evidence" revealed there were Marine transactions in these suspense accounts, Blair wrote.
Because IG investigators could not quantify the number of Marine Corps transactions in the expense accounts, they were unable to determine whether they were relevant to the audit outcome, he said.
Asked about the new DoD IG memo, a Marine Corps spokesman said he did not immediately have a comment, but would look into the matter.
This revelation jeopardizes what had been hailed as a great accomplishment budget accomplishment for the Marine Corps and a hopeful sign for the Defense Department, which has committed to being audit-ready by 2017.
Navy Secretary Ray Mabus touted the Corps' clean audit in a March 17 hearing before the House Armed Services Committee.
"As a former state auditor, I don't take anything more seriously," Mabus said, adding that the Corps was nearly complete with its audit for Fiscal 2013. "Navy has its first statement of budgetary account audit under contract right now, and moving forward."
DoD IG spokeswoman Bridget Serchak acknowledged receipt of Marine Corps Times questions about the new audit revelation, and said officials would provide response as soon as possible.