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Why The Pentagon Keeps Failing Its Audit
With a budget of over three quarters of a trillion dollars, the Pentagon has found that passing a sweeping audit is a tricky proposition. Antiquated systems, huge budgets, and the sheer size of the Department of Defense have made passing the congressionally mandated audit a towering endeavor, but one that experts say is doable in time.
The Pentagon has failed another audit this year. But with $770 billion expected to be budgeted for 2022, the Department of Defense says it is working on keeping track of all this money.
“It took the Department of Homeland Security a decade to pass its audit, and it’s a fraction of the size of the Defense Department,” said Mackenzie Eaglen, a senior fellow with the American Enterprise Institute. “There is a bit out there that just because the department can’t pass the audit, it doesn’t know where it’s spending its money. And it does. But what it doesn’t do well is track it at an enterprise level.“
Since 1988 the budget has grown from over $634 billion in 2020 dollars to over $724 billion in 2020. But, the defense budget as a percentage of the total gross domestic product has actually dropped in the same period, from 5.7% to 3.5%, according to a Congressional Research Service analysis of Office of Management and Budget historical tables.
One example of an item found in the recent audit was a Navy warehouse that was not on the Navy’s property records and that housed aircraft parts worth $126 million, according to the Government Accountability Office.
“The financial system that you have in DOD right now is set up to control taxpayers’ dollars to guarantee that there is not going to be unauthorized use of it. So every dollar and cent is accounted for,” said Frederico Bartels, a senior policy analyst at the Heritage Foundation. “And there, you can see that by the ADEA violations being extremely low at DOD, there are still some but that’s part of doing business, it’s still lower than most federal agencies.“
Old systems for tracking funds, a slow bureaucracy, and the sheer size of the U.S. Defense apparatus have kept audits from passing since they began in late 2017.
The size of the budget is constantly a subject of debate, but for lawmakers to make informed decisions they need good data.
“This is the Pentagon,” said Rep. Barbara Lee, D-Calif. “They’re responsible for the security of the United States. If, in fact, their audit systems are outdated, if … they can’t do an audit and give us a picture of what they’re spending, I kind of worry about what they’re doing on the really important stuff.“
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Why The Pentagon Keeps Failing Its Audit
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Many US political leaders on both sides of the aisle have been scrambling to keep Chinese cars out of the United States. But some Chinese companies have already found a foothold in the US. One automaker, Zhejiang Geely Holding, often called simply Geely, has investments in Volvo, Polestar and British sports car maker Lotus. Volvo already owns a factory in South Carolina, which is currently underutilized, according to analysts who spoke with CNBC. All three brands also have a dealership network in the United States. Volvo’s CEO recently said he would be open to making Chinese branded cars in the Volvo factory if the company can navigate currently strict US laws. Geely leaders have expressed a desire to bring Chinese brands here. If it is able, it would be considerably ahead of much of its competition.
Produced by: Robert Ferris
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Animations: Jason Reginato, Emily Parl
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Additional Footage: Getty Images
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Which Chinese Carmaker Might Be First To Win In The U.S.
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Investors will be closely watching this year’s Berkshire Hathaway Annual Shareholders Meeting on Saturday as Greg Abel takes center stage as the company’s new leader. Abel, who took the baton from Warren Buffett in January, will host the annual gathering for the first time as CEO. The Oracle of Omaha will still be at the event but it’s Abel’s turn to shine. CNBC’s Yun Li reports on what investors are expecting from this year’s meeting and how the firm may shape up in the post-Buffett era.
Reporter: Yun Li
Produced, Shot and Edited by: Kaan Oguz
Managing Producer: Anuz Thapa
Production Support: CJ Haddad
Senior Director of Video: Lindsey Jacobson
Additional Footage: Getty Images
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Greg Abel Will Take The Stage From Warren Buffett At Berkshire Meeting
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Automakers, battery makers and suppliers directed hundreds of billions of dollars into electric vehicle investments across the U.S. in recent years, and almost half of that had been planned for the South.
But companies have now canceled EV plans and some have faced write-downs.
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Investors are bullish on the emerging crop of companies known as neoclouds, which focus on AI-dedicated computing infrastructure, even as industry insiders warn it will take longer for these ventures to become profitable than markets currently expect. CNBC’s Tobias Burns reports on the enthusiasm for neoclouds and the concerns surrounding them.
Reporter: Tobias Burns
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Why Investors Are Bullish On Neoclouds
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Tesla began rolling out xAI’s Grok AI chatbot in its cars in July 2025. It’s still in beta mode. Tesla is not the only automaker adding AI assistants to vehicles. Volvo, Rivian, Mercedes, BMW and others are all integrating AI into their cars even though the tech is still in its infancy. CNBC’s Rob Ferris takes a ride with attorney and Tesla Model Y owner Mike Nelson in New York City to see how he uses Grok and to find out how it integrates into Tesla’s Full Self-Driving (Supervised).
Reporting by Robert Ferris, Lora Kolodny
Camera and Editing by Erin Black
Senior Director of Video Jeniece Pettitt
Additional Camera Macklin Fishman, Darren Geeter
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Want to get ahead at work? Then you need to learn how to make effective small talk. In CNBC’s new online course, How To Talk To People At Work, expert instructors teach you how to use everyday conversation to gain visibility, build meaningful relationships and advance your career. Use coupon code EARLYBIRD for 20% off. Offer valid from April 20, 2026 to May 4, 2026. Terms apply. https://cnb.cx/4sGlSkh
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