Original Broadcast Date: 04/12/2026
Presented by Workday Government
The Pentagon is taking a significant new step in its long-running effort to achieve a clean audit opinion, and according to Asif Khan of the Government Accountability Office, the approach marks a notable shift in both strategy and urgency.
Speaking with Francis Rose on Fed Gov Today, Khan explains that the Pentagon’s leadership is sending a clear message: this time, the effort is serious, coordinated, and aimed squarely at meeting the congressional mandate of auditability by 2028. One of the most visible signs of that commitment is a joint memo issued by the Office of the Comptroller and the Department’s Inspector General—something Khan notes is unusual and meaningful. It reflects a unified front from leadership and signals to the entire department that achieving a clean audit is now a top priority.
At the center of this new strategy is a major structural change. Historically, the Department of Defense has conducted 28 separate audits across its components. Now, that approach is being replaced with a single, unified audit. Financial reporting will also be streamlined, with fewer standalone statements and more consolidation into department-wide reporting structures.
Khan explains that while individual components will still undergo audits internally, their results will no longer be reported separately in the overall financial statements. Instead, the focus shifts to a broader, enterprise-level view. This represents a move away from a decentralized, bottom-up approach toward a centralized, top-down model.
That top-down approach is not new in the federal government. Khan points out that civilian agencies successfully used it in the late 1990s to achieve clean audit opinions. He also notes that large and complex organizations, including the Department of Homeland Security, have followed a similar model with success. Based on that track record, the Pentagon’s new direction has a proven foundation.
However, Khan is careful to highlight the tradeoffs involved. The top-down approach focuses on validating the numbers presented in financial statements—ensuring they are accurate at a specific point in time. What it does not fully address are the underlying systems, processes, and controls that produce those numbers. These foundational elements are essential for creating a financial management system that is not only accurate, but also repeatable and sustainable over time.
That distinction is critical. Khan emphasizes that true financial management success is not just about achieving a clean audit once. It is about
To help inform the path forward, Khan points to examples within the department itself. The Marine Corps, for instance, has achieved clean audit opinions for multiple consecutive years. One of the key factors behind that success is time. Instead of operating on an annual audit cycle, the Marine Corps adopted a two-year cycle, allowing more time for testing, feedback, and corrections. This approach is now being expanded across the broader department in the form of a continuous audit process.
Under this model, the Department of Defense will remain in an ongoing audit posture until it reaches an opinion. The focus will be on top-level financial data and accounting treatments, rather than attempting to fix every issue at the component level before moving forward.
Still, challenges remain—particularly in the area of technology. Khan notes that while the department has made progress in modernizing its systems, it is not yet where it needs to be. Many of the current systems are complex, fragmented, and reliant on hundreds of feeder systems that may not be compliant. Even if top-level systems are functioning properly, unreliable input data can undermine the entire process.
Fixing these issues is both time-consuming and labor-intensive. Khan explains that cleaning up data at the back end requires significant manual effort, which is not sustainable in the long term. Automation and system modernization will be essential to improving both efficiency and reliability.
Despite these challenges, Khan sees positive momentum. He highlights the importance of leadership tone, noting that messaging from the Secretary of Defense and senior leaders is becoming stronger and more consistent. This “tone at the top” plays a crucial role in driving engagement across the department.
Ultimately, success will depend on coordination and shared commitment. Khan stresses that all parts of the department must move together—at the same pace and in the same direction. Because this is now a unified effort, delays or setbacks in one area can impact the entire department’s progress.
As the Pentagon works toward its 2028 goal, the new strategy represents both an opportunity and a test. It offers a clearer path to achieving a clean audit, but also underscores the importance of building a system that can sustain that success for years to come.