S.Amdt. 1914

SA 1914. Mr. SANDERS submitted an amendment intended to be proposed
to amendment SA 1463 proposed by Mr. McCain to the bill H.R. 1735, to
authorize appropriations for fiscal year 2016 for military activities
of the Department of Defense, for military construction, and for
defense activities of the Department of Energy, to prescribe military
personnel strengths for such fiscal year, and for other purposes; which
was ordered to lie on the table; as follows:

[[Page S3946]]

After section 1002, insert the following:

SEC. 1002A. AUDIT READINESS OF THE FINANCIAL STATEMENTS OF
THE DEPARTMENT OF DEFENSE.

(a) Findings.--Congress makes the following findings:
(1) Article 1, Section 9 of the Constitution of the United
States requires of the agencies of the Federal Government,
including the Department of Defense, that ``a regular
Statement and Account of the Receipts and Expenditures of all
public Money shall be published from time to time''.
(2) Congress passed a series of laws in the 1990s,
beginning with the Chief Financial Officers Act of 1990, to
require that all Government agencies and departments obtain
opinions on their financial statements.
(3) On September 10, 2001, former Secretary of Defense
Donald Rumsfeld, stated that ``[a]ccording to some estimates,
we cannot track $2,300,000,000 in transactions. We cannot
share information from floor to floor in this building
because it's stored on dozens of technological systems that
are inaccessible or incompatible''.
(4) The National Defense Authorization Act for Fiscal Year
2010 codified a statutory requirement that the Department of
Defense financial statements be validated as ready for audit
not later than September 30, 2017.
(5) On April 21, 2015, the Deputy Chief Management Officer
of the Department of Defense testified before the Committee
on Armed Services of the Senate that ``I have long been
skeptical of the ability of the Department to achieve the
statutory timeline for producing auditable financial
statements''.
(6) In September 2010, the Government Accountability Office
stated that past expenditures by the Department of Defense of
$5,800,000,000 to improve financial information, and billions
of dollars more of anticipated expenditures on new
information technology systems for that purpose, may not
suffice to achieve full audit readiness of the financial
statement of the Department.
(7) During his confirmation hearing in 2015, Secretary of
Defense Ashton Carter submitted testimony stating that ``[i]t
is time that DoD finally lives up to its moral and legal
obligation to be accountable to those who pay its bills. I
intend to do everything we can--including holding people to
account--to get this done''.
(8) The financial management practices of the Department of
Defense have been on the ``High Risk'' list of the Government
Accountability Office since 1995. As a result of poor
financial management, the Department is unable to ``control
costs; ensure basic accountability; anticipate future costs
and claims on the budget; measure performance; maintain funds
control; and prevent and detect fraud, waste, and abuse''.
(b) Financial Audit Fund.--The Secretary of Defense shall
establish a fund to be known as the ``Financial Audit Fund''
(in this section referred to as the ``Fund'') for the purpose
of supporting initiatives, programs, and activities that will
assist the organizations, components, and elements of the
Department of Defense in--
(1) improving the audit readiness of the financial
statements of such organizations, components, and elements;
(2) obtaining unmodified audit opinions of the financial
statements of such organizations, components, and elements;
and
(3) maintaining unmodified audit opinions of the financial
statements of such organizations, components, and elements.
(c) Elements.--Amounts in the Fund shall include the
following:
(1) Amounts appropriated to the Fund.
(2) Amounts transferred to the Fund under subsection (e).
(3) Any other amounts authorized for transfer or deposit
into the Fund by law.
(d) Availability.--
(1) In general.--Amounts in the Fund shall be available for
initiatives, programs, and activities described in subsection
(b) that are approved by the Secretary to support and
maintain the audit readiness of the financial statement of
the organizations, components, and elements of the Department
of Defense.
(2) Transfer.--Amounts in the Fund may be transferred to
any other account of the Department in order to fund
initiatives, programs, and activities described in paragraph
(1). Any amounts transferred from the Fund to an account
shall be merged with amounts in the account to which
transferred and shall be available subject to the same terms
and conditions as amounts in such account, except that
amounts so transferred shall remain available until expended.
The authority to transfer amounts under this paragraph is in
addition to any other authority of the Secretary to transfer
amounts by law.
(3) Priority.--In approving initiatives, programs, and
activities to be funded with amounts in the Fund, the
Secretary shall accord a priority to initiatives, programs,
and activities that are designed to maintain unmodified audit
opinions of financial statement of organizations, components,
and elements of the Department that have previously obtained
unmodified audit opinions of their financial statements.
(e) Failure To Achieve Audit Readiness.--
(1) Reduction in amount available.--Subject to paragraph
(2), if during any fiscal year after fiscal year 2017 the
Secretary determines that an organization, component, or
element of the Department has not achieved audit readiness of
its financial statements for the calender year ending during
such fiscal year--
(A) the amount available to such organization, component,
or element for the fiscal year in which such determination is
made shall be equal to--
(i) the amount otherwise authorized to be appropriated for
such organization, component, or element for the fiscal year,
minus
(ii) an amount equal to 0.5 percent of the amount described
in clause (i); and
(B) the Secretary shall deposit in the Fund pursuant to
subsection (b)(2) all amounts unavailable to organizations,
components, and elements of the Department in the fiscal year
pursuant to determinations made under subparagraph (A).
(2) Inapplicability to amounts for military personnel.--Any
reduction applicable to an organization, component, or
element of the Department under paragraph (1) for a fiscal
year shall not apply to amounts, if any, available to such
organization, component, or element for the fiscal year for
military personnel.
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