US auditors tell Department of Defense to improve cost-saving estimates

25 Jul 17

The US Department of Defense must improve the reliability of its cost savings estimates, auditors have warned.

A probe by the Government Accountability Office (GAO) found the department had not identified $10bn in cost savings through to 2019 as required, and lacked a reliable cost savings estimate to support the savings it had identified.

The department had estimated it would save about $13.1bn during 2015-21.

According to the GAO, the cost savings estimate was unreliable because supporting documentation lacked detail.

An internal assessment by the department found $5.3bn of savings identified in its May 2015 report were “not auditable” because the baseline for reductions had not been established.

A March 2016 update identified additional cost savings for which detail supplied “varied”.

The GAO recommended the department should develop reliable estimates with detailed information and documentation.

It said the department “partially concurred with this recommendation but did not address how it intended to implement the recommendation.

“GAO continues to believe the recommendation is warranted.”

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