During a House Oversight Committee hearing on Wednesday, Rep. Kweisi Mfume (D-MD) spoke about the Department of Defense's poor audit history.
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00:00At this time, I would like to yield to the distinguished-ranked member, Mr. Nfume, for
00:09any opening statement he'd like to make, and I'm delighted that you're here, and good
00:14morning.
00:15We made a determination, as I told our witnesses yesterday, that Mr. Nfume and your side, the
00:23Democratic Party, intends to forthrightly address this issue, come up with real answers,
00:29and we're going to work together on this, the gentlemen's recognized.
00:33Thank you very much, Mr. Chairman.
00:36Thank you for your remarks also, and working together is something that we on this side
00:42of the aisle look forward to, particularly when we are able to discern, as we have been,
00:48a great deal of problems with the Department of Defense in this case.
00:53But thank you.
00:54I want to say good morning to you and to our witnesses and to everyone else who's here in
00:59the meeting room, as well as my colleagues who've taken time to be here today.
01:03All of this comes against a backdrop of seven straight failed audits by the Department of
01:11Defense, which is really hard to fathom.
01:14Some of you may be hearing this for the first time, but seven straight audits deserves an exclamation
01:20point behind it, because when we're dealing with the largest appropriation within our
01:26nation's budget, we deserve to be served correctly.
01:32Oversight of the public purse, it really is not a partisan talking point.
01:36It is indeed a constitutional promise that we make to every taxpayer and to every service member
01:44who wears the uniform.
01:46No federal agency, as I indicated, spends more on contracts than the Department of Defense.
01:53In fiscal year 2023, it obligated roughly $456 billion, well over half of all contract dollars,
02:02and the current continuing resolution boosts defense discretionary spending to $892 billion.
02:11It's kind of hard to get your arms around a number like that, but that is the case, $892 billion.
02:19When a balance sheet is obviously that large, even a 1% error drains nearly $9 billion from
02:28our troops, our readiness, and our modernization, yet the government accounting office still places
02:36DOD's business system on a fraud risk management of, as the chairman said earlier, a high-risk list,
02:45confirming that at least $10 billion in fraudulent payments have gone out since 2017, and then
02:52further warning us that the full extent is far higher than that.
02:58GAO's message is really rather blunt.
03:01Until senior leadership sustains a commitment to every defense dollar, all defense dollars remain at risk.
03:11The leadership gap should concern this committee, contracting offices across the services, and others,
03:19because although there are many that do historic or heroic, I should say, work, they need clear direction from the top.
03:26And right now, that is not where they are essentially getting it.
03:30Congress must therefore hold DOD and all of its contractors accountable when fraud erodes readiness,
03:38when it squeezes small businesses, and when it undermines the public trust.
03:43Disturbingly, the Trump administration has moved us in the wrong direction on this matter,
03:48because within days of taking office, it fired the DOD inspector general, the department's chief watchdog,
03:57and has since proposed rolling back key acquisition safeguards.
04:03You know, speed has its virtues.
04:06I don't deny that, but dismantling guardrails and silencing oversight is not efficiency.
04:14It is an engraved invitation to fraud.
04:20And so, as we look at DOD's progress today, I think that our focus ought to be threefold.
04:26Number one, drive leadership commitment through every aspect of the agency.
04:34Fraud risk management cannot be relegated to the back office.
04:38Secretary Hegseth and several secretaries who serve with him must own it, resource it,
04:43and insist on measurable results.
04:47Number two, modernize the prevention tools.
04:49GAO has found that DOD still lacks the real-time analytics needed to expose phantom vendors and collusive bidding.
05:01So, data must be able to talk to data before the money walks out of the door.
05:07I'm not suggesting that's how you fail seven straight audits,
05:11but it's certainly not the way that you pass them.
05:14Number three, enforce accountability with consequences.
05:18When fraud occurs, suspension, disbarment, and criminal action must be swift, public, and proportional.
05:28Anything less rewards the bad actors and punishes all the honest ones.
05:34Colleagues, today, every fraudulent invoice paid is a weapons system delayed,
05:41a housing unit deferred, or a veterans clinic understaffed.
05:47When we achieve and maintain the strongest military on earth,
05:52we have a clear obligation to make sure that every defense dollar works as hard as it possibly can
06:00for the men and women it is meant to serve.
06:03So, I look forward to the testimony of our witnesses.
06:07I look forward to working with Chairman Sessions and my other colleagues on both sides of the aisle here
06:11to try to find a way, how do we translate all of their insights into some sort of concrete reform,
06:18because reform is clearly, clearly needed.
06:21With genuine leadership commitment and a vigilant congressional oversight, ongoing effort,
06:26I think we can safeguard, or eventually we'll be able to safeguard, procurement,
06:31protect the taxpayer's investment, and then, of course, strengthen our national defense.
06:36Without it, we do a disservice to the American taxpayer.
06:41Without it, we do a disservice to the men and women who put on a uniform.
06:46And without it, we give up the obligation that we have to make sure that waste, fraud, abuse,
06:53breaking the law, finding ways to skirt the process, and then ultimately making a profit off the system,
07:03that will be with us forever if we do not act and act swiftly.
07:07So, I want to yield back and, again, thank the Chairman.
07:10I want to thank the members present and all those who are here out of a genuine concern
07:15to find a way to straighten out what has been a very nasty, ugly problem affecting our Department of Defense.
07:22I yield back.
07:24Mr. Infume, thank you very much, and not just for your conversation,
07:29but remembering and seeing as you look up today, we have many young students that are here,
07:35that are here for a summer to learn not just about what might be democracy and the role of Congress,
07:43but also to understand that Congress, too, has not just a role to play, but an important role to play.
07:50And it's my hope that they see that we have two people, not just Republicans and Democrats,
07:58but two people who are equally committed to the needs to make sure that their future is brighter and better also,
08:05because they, while they may be voters now, they soon will be taking our place
08:10and want to tell the story about their future.
08:13And it does reside around the national security issues of the United States military.
08:19And I want to thank you very, very much.
08:21Thank you very much.