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Pentagon Fails 8th Straight Audit After F-35 Accounting Lapse Triggers Material Misstatement

Leaders pledge an accelerated fix toward a 2028 clean opinion, with a newly confirmed comptroller setting milestones.

A general view of the Pentagon in Washington, D.C., U.S., October 15, 2025. REUTERS/Kevin Lamarque

Overview

  • Auditors identified 26 material weaknesses and two significant deficiencies in the Defense Department’s FY2025 financial reporting.
  • The omission of F-35 Joint Strike Fighter Global Spares Pool assets caused a material misstatement on the agency-wide statements.
  • Officials said one material weakness was closed and another consolidated in FY2025 but warned that remediation must accelerate.
  • The department reaffirmed a 2028 target for an unmodified audit opinion and plans a revised FY2026 strategy to speed corrective actions.
  • The Senate confirmed Michael Powers as comptroller on the day of the audit release, positioning him to define milestones and drive system consolidation.