Audits, fines return $2.5 billion to DOD

The Defense Department inspector general released its semiannual report to Congress on June 11, reporting it had returned $2.5 billion to the government through audits, civil settlements and criminal prosecutions from October 2012 to March 2013.

The money gained by the government — through “funds put to better use,” the recovery of government property, criminal penalties, etc. — was significantly less than the $3.3 billion returned over the previous six months, but more than triple the amount returned in the entire year prior to that.

The largest single chunk of the $2.5 billion returned — $933 million — was from money reassigned after audits. For instance, in Afghanistan, an investigation found DOD was about to spend $200 on spare airplane parts that wouldn’t work with a particular aircraft. The order was canceled.

The report was the second straight DOD IG report to include “achieved monetary benefits” from audits in its “total return” tally, accounting for some of the sharp increase in money returned over the last two reports. Previously, the reports had listed only “recommendations” based on audits. And recommendations aren’t counted as money returned to the government.


But the money gained in litigation, both civil and criminal, has also shot up in the past two reports. The just-released report detailed $899 million returned from civil judgements and settlements and another $717 million from criminal fines. Almost $7 million of those criminal fines came from the investigation of Warren Parker, owner of Silver Star Construction. Parker had falsely claimed he was a service-disabled veteran to help secure numerous DOD contracts after the American Recovery and Reinvestment Act of 2009, more commonly known as the stimulus package. Parker was ordered to forfeit $6.8 million and sentenced to 87 months in prison.

The roughly $1.6 billion returned from criminal investigations between October and March was not even half the amount returned — $3.3 billion — from criminal investigations over the six prior months. But that 12-month total, essentially $5 billion, is more than six times the amount collected — $730 million — in the previous 12 months (reports here and here).

According to the report, between April and September (the end of the 2013 fiscal year), the inspector general will continue auditing DOD contracts, assessing the money being spent to train the Afghan National Army, auditing the current process for securing DOD networks from cyberattacks and attempting to weed out health care fraud.

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