The Pentagon failed its seventh consecutive audit on Friday, unable to fully account for its $824 billion budget. Despite the outcome, officials expressed optimism, asserting that the Department of Defense (DoD) is making strides in understanding and addressing its financial management challenges.

The latest audit, conducted by independent public accountants and the DoD Office of Inspector General, resulted in a “disclaimer of opinion,” meaning auditors lacked sufficient information to form a definitive assessment of the agency’s accounts.

Of the DoD’s 28 reporting entities subjected to standalone audits, nine received unmodified opinions, indicating full compliance; one received a qualified opinion, indicating minor discrepancies; 15 received disclaimers; and three opinions are still pending, according to a Pentagon statement.

Michael McCord, Under Secretary of Defense (Comptroller) and Chief Financial Officer, acknowledged the challenges but remained optimistic, noting that the department “has turned a corner” in its financial reform efforts. “Momentum is on our side, and throughout the Department there is strong commitment—and belief in our ability—to achieve an unmodified audit opinion,” McCord said.

The goal of achieving a clean audit by 2028 is mandated by the National Defense Authorization Act.

McCord insisted that the audit result wasn’t a failure, noting that nearly half of the Pentagon’s reporting entities received positive opinions. “If someone had a report card that is half good and half not good, I don’t know that you call the student or the report card a failure,” he stunningly told reporters at a briefing.

“Significant work remains and challenges lie ahead, but our annual audit continues to be a catalyst for Department-wide financial management reform, resulting in greater financial integrity, transparency, and better-supported warfighters,” he added.

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