Defense cuts hinged to independent audits, says Panetta

Washington – In his first committee hearing appearance as Secretary of Defense, Leon Panetta told Congressmen that he will accelerate the process that will allow independent audits of his department's spending.

Slated for $450 billion in cuts that Secretary Panetta said will take the department “to the edge,” the defense budget will face an automatic $600 billion in further cuts if the “super committee” of 6 Republican and 6 Democratic members of the House and Senate cannot reach agreement on deficit reduction measures.

Key congressional leadership and President Barack Obama arrived at an agreement on the deal in August.

The Defense Department is one of only two agencies, along with Homeland Security, that have been unable to produce financial statements that can be audited independently. Congress ordered the Pentagon two years ago to produce auditable books by the year 2017.

Not good enough, according to Secretary Panetta.

"While the department's systems do tell us where we are spending taxpayer funds, we do not yet have the details and controls necessary to pass an audit," he said. "This is inexcusable and must change. In order to achieve fiscal discipline, we need to have the strongest possible financial controls in place."

He has ordered Pentagon officials to cut the time it will take to produce the transparent books in half, he told the House Armed Services Committee.