I 
112TH CONGRESS 
2D SESSION 
H. R. 6528 
To reduce by 5 percent the discretionary budget authority of any Federal 
agency for a fiscal year if the financial statement of the agency for 
the previous fiscal year does not receive an unqualified audit opinion 
by an external independent auditor, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 21, 2012 
Ms. LEE of California (for herself, Mr. STARK, Ms. CLARKE of New York, 
and Ms. SCHAKOWSKY) introduced the following bill; which was referred 
to the Committee on Oversight and Government Reform, and in addition 
to the Committee on Armed Services, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To reduce by 5 percent the discretionary budget authority 
of any Federal agency for a fiscal year if the financial 
statement of the agency for the previous fiscal year does 
not receive an unqualified audit opinion by an external 
independent auditor, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Audit the Pentagon 
Act of 2012’’. 
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SEC. 2. PURPOSES. 
The purposes of this Act are as follows: 
(1) To strengthen American national security 
by ensuring that— 
(A) military planning, operations, weapons 
development, and a long-term national security 
strategy are connected to sound financial con-
trols; and 
(B) defense dollars are spent efficiently. 
(2) To instill a culture of accountability at the 
Department of Defense that supports the vast ma-
jority of dedicated members of the Armed Forces 
and civilians who want to ensure proper accounting 
and prevent waste, fraud, and abuse. 
SEC. 3. FINDINGS. 
Congress finds the following: 
(1) The 2011 Financial Report of the United 
States Government found that 32 of 35 major Fed-
eral agencies received clean audit opinions. Two 
more, the Department of Homeland Security and 
the Department of State, received ‘‘qualified’’ audit 
opinions but are making progress. Only the Depart-
ment of Defense had a ‘‘disclaimer’’ because it 
lacked any auditable reporting or accounting avail-
able for independent review. 
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(2) The financial management of the Depart-
ment of Defense has been on the ‘‘High-Risk’’ list 
of the Government Accountability Office (GAO). The 
GAO found that the Department is not consistently 
able to ‘‘control costs; ensure basic accountability; 
anticipate future costs and claims on the budget; 
measure performance; maintain funds control; and 
prevent and detect fraud, waste, and abuse’’. 
(3) At a September 2010 hearing of the Senate, 
the Government Accountability Office stated that 
past expenditures by the Department of Defense of 
$5,800,000,000 to improve financial information, 
and billions of dollars more of anticipated expendi-
tures on new information technology systems for 
that purpose, may not suffice to achieve full audit 
readiness of the financial statement of the Depart-
ment. At that hearing, the Government Account-
ability Office could not predict when the Department 
would achieve full audit readiness of such state-
ments. 
(4) Section 9 of article 1 of the Constitution of 
the United States requires all agencies of the Fed-
eral Government, including the Department of De-
fense, to publish ‘‘a regular statement and account 
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of the receipts and expenditures of all public 
money’’. 
(5) Section 303(d) of the Chief Financial Offi-
cers Act of 1990 (Public Law 101–576) required 
that financial statements be prepared and independ-
ently audited for the Department of the Army by 
March 31, 1992, and for the Department of the Air 
Force by March 31, 1993. Neither the Department 
of the Army nor the Department of the Air Force 
has complied. 
(6) Section 3515 of title 31, United States 
Code, requires the agencies of the Federal Govern-
ment, including the Department of Defense, to 
present auditable financial statements beginning not 
later than March 1, 1997. The Department has not 
complied with this law. 
(7) The Federal Financial Management Im-
provement Act of 1996 (31 U.S.C. 3512 note) re-
quires financial systems acquired by the Federal 
Government, including the Department of Defense, 
to be able to provide information to leaders to man-
age and control the cost of government. The Depart-
ment has not complied with this law. 
(8) The National Defense Authorization Act for 
Fiscal Year 2002 (Public Law 107–107) requires 
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