Pentagon's Bloated, Opaque and Undisciplined Budget Undermines our National Security

Our investigators exposed systemic problems with contracting, grantmaking and tracking expenses

The Pentagon has an annual budget approaching a trillion dollars ($824.5 billion in 2024). While the United States boasts the strongest military in the world, not every dollar of Pentagon spending goes towards furthering national security, and examples of waste, fraud, and abuse abound. In fact, the agency has never passed an annual financial audit. At the same time, interest payments on our national debt ($1.02 trillion annually) now exceed our annual defense budget.

Defense Secretary Pete Hegseth announced in March that the department had cancelled over $580 million worth of contracts and program spending related to Diversity, Equity, and Inclusion (DEI) and decarbonization initiatives. Hegseth followed up in May with $5.1 billion in additional contract cuts for “ancillary things like consulting and other nonessential services,” along with more DEI-related work.

As the administration and Congress consider additional defense spending, and as Americans debate the proper use of the military, auditors must carefully review DOD grants and contracts to assure the American people that their tax dollars are being spent wisely.

Our investigators identified 20 problem areas within DOD that deserve further review and point to broader, systemic problems in Pentagon spending, auditing, and policy that are ripe for reform:

1) The “Department of Everything” culture

For decades, administrations from both political parties have diverted DOD from what Secretary of Defense Pete Hegseth defines as its core “lethality mission.” In 2012, U.S. Senator Tom Coburn published a report entitled the “Department of Everything” that documented how DOD’s mission task list included not only defending the nation but running grocery stores, teaching kindergarten, brewing beer, building windmills and making beef jerky. This culture takes new forms with each administration. For instance, even if the president technically has the constitutional authority to deploy the national guard to support local police departments and immigration enforcement efforts, these activities exist in the outer penumbra of the DOD’s “lethality mission.” The mission of DOD is to deter China, not crime.

2) Overclassification

In 1997, the Moynihan Commission Report on Protecting and Reducing Government Secrecy declared that “secrecy is the ultimate mode of regulation … for the citizen does not even know that he or she is being regulated.” The DOD’s failure to produce auditable books due, in part, to overclassification is a permanent hidden tax increase on American families that is used to subsidize the agency’s largesse and toleration of fraud, which weakens our national security.

DOD reported $2.4 billion in confirmed fraud in fiscal year 2024, which, according to a May 2025 Government Accountability Office report, “reflects only a small fraction of DOD’s potential fraud exposure.” GAO found systemic issues with fraud reporting, including incomplete data that could not be analyzed. GAO recommended the agency implement data analytics activities and share data between military branches to catch more instances of fraudulent payments. The report states that while estimating savings benefits from such reforms is difficult to estimate, “if DOD prevented even one percent of the value of the confirmed fraud DOD previously reported, DOD could save one hundred million dollars or more over ten years.”

3) End-of-year spending sprees

A use-it-or-lose-it mindset means agencies go on spending sprees in September, at the end of the fiscal year. This is because agency heads worry that spending less than their budget allows will cause Congress to give them less money the following year. In September 2024, DOD spent $79.1 billion on contracts and grants, including $33.1 billion in the last five working days of the fiscal year. September spending included $6.1 million for raw lobster tail, $16.5 million for ribeye steak, $211.7 million on new furniture, $1.2 million on instruments, and $24.4 million on books, pamphlets, and newspapers.

For context, the $79 billion DOD spent in just one month is more than the annual defense of every country on earth except for four – USA, China, Russia and India. The $33 billion we spent in the last five days of the last fiscal year is more than the $28 billion Israel spent on defense for all of 2023.

4) “Wish list” budgeting

The Pentagon is legally required to ask for more money than the president requests, which previous Pentagon Comptrollers have said contributes to waste. The Chief of Staff of each military branch must put together an unfunded priority list, or “wish list,” for items not included in the president's budget. In 2025, the wish list was worth $30.8 billion.

5) Zero-Star Congressional Spending Generals

The Pentagon budget included at least $22.7 billion in “Congressional Increases” in 2024. “Congressional Increases” is just another term for earmarks, but in this case congressmembers don’t have to put their name on their requests or certify that there is no conflict of interest. The public report only includes increases of $20 million or less. We conducted a Freedom of Information Act request for the others and were told that no records exist.

6) Questionable travel expenses

Four million transactions worth $1.2 billion were not reviewed for waste and fraud because the officials in charge of reviewing the payments didn’t have access to the payment system. Officials also didn’t check “at least 11,000 transactions totaling over $500,000 made at casino ATMs, a mobile applications store, or bars and nightclubs during holidays or some sporting events.”

7) Epidemic overcharges

The Pentagon is overcharged on “almost everything” it buys from outside companies – including most of the $23.5 billion of weapons sent to Ukraine since February 2022, former chief contract negotiator Shy Assad told CBS News in May 2023. Overspending doesn't stop at big-ticket items though. Here’s just one example: the Air Force overpaid by $992,856 for 12 kinds of spare parts, including soap dispensers marked up by 7,943%.

8) COVID-19 settlements

Hundreds of millions of dollars are expected to be paid out to compensate military service members that were discharged for refusing to take the COVID vaccine. About 8,000-8,400 servicemembers refused to take the vaccine and were forced out of the military in 2021. President Trump ordered reinstatement to be made available to those servicemembers at their former rank, with full back pay, benefits, bonus payments, or other compensation. The exact figure for repayment is not yet known, but it never would have had to have been repaid if soldiers were not compelled to take the vaccine.

9) Misusing COVID funds

That’s not the end of COVID waste in the military. The Pentagon had a $1 billion fund meant to build a stockpile of medical supplies, but instead was “mostly funneled to defense contractors,” according to The Washington Post, and “used to make things such as jet engine parts, body armor and dress uniforms.” An additional $53.2 million in COVID funds was spent on unrelated items like paint, Wi-Fi, and gym equipment.

10) Golfing around the globe

While COVID money shouldn’t be used on gym equipment, it makes sense for the military to have equipment for soldiers to exercise. More controversial are the 144 golf courses worldwide owned by the DOD. It recently cost $200 million to renovate just five of them. Although the domestic courses are supposed to be funded with membership fees and other voluntary contributions, the agency has used loopholes in the past to get taxpayer dollars to fund golf course maintenance. The courses abroad have access to federal funding directly.

11) Far-left pedagogy

The Pentagon’s K-12 school system, called the Department of Defense Education Activity (DoDEA), has a budget of $2.3 billion to educate about 67,000 military dependents located near military bases worldwide. In 2022, disturbing video footage of a DoDEA teacher conference emerged, where teachers bragged about hiding “gender” transitions from parents and discussed different ways to inject conversations about race and “privilege” into classroom discussions.

While President Trump’s executive orders on Diversity, Equity, and Inclusion and biological reality have forbidden DEI and gender ideology at DoDEA and other agencies, Open the Books identified millions of dollars going to DoDEA contractors trafficking in DEI.

12) No one is minding the “grant” store

While pedagogy is a major problem at DoDEA, so too are cost controls. An Inspector General report from 2021 found systemic issues with how DoDEA monitors its grants, including a finding that DoDEA did not monitor whether or not most (100 out of 139) grantees met interim goals. As a result, the report estimates DoDEA wasted up to $49.9 million from FY 2016-2020 on grantees that did not meet grant terms.

13) Collaboration with China

Hundreds of millions of taxpayer dollars have “contributed to China’s technological advancements and military modernization,” according to an audit from the House Select Committee on the Chinese Communist Party. One professor who received at least $7.8 million from the U.S. to research metallic hydrogen later accepted a job at the Chinese Academy of Science. He presented his research to the Chinese Academy of Engineering Physics, which designs nuclear warheads for the Chinese government. Overall, 9,000 Pentagon research projects co-authored with people affiliated with the Chinese government have been identified.

14) Forgotten IOUs

The DOD provides logistics support, supplies, and services to various international partners on a reimbursable basis. A recent DOD Inspector General report outlines how, over the past ten years, the agency provided $268.1 million in services and supplies without the necessary assurance that it would be reimbursed. The report notes that costs to international partners are not always appropriately tracked or billed.

15) Missing or abandoned equipment

The United States left over $7 billion in equipment behind during the withdrawal from Afghanistan in 2021, including 78 aircraft, 40,000 vehicles, and 300,000 weapons. While the DOD was pilloried in the press for leaving its valuable weaponry behind, more recent reports show another $1 billion worth of weapons are not being properly tracked in Ukraine.

The audit found that $1 billion of the $1.7 billion – or 59% -- of weapons provided to Ukraine as of June 2023 are “delinquent,” meaning they can’t be accounted for in inventory reports. These weapons are supposed to be tracked under a new “enhanced end-use monitoring” system. Maybe the weapons are being used properly; maybe they have been stolen. No one can be completely sure.

16) Uncontrolled contract spending

Not only does DOD have problems tracking weapons, but yet another report indicates Army contracting personnel did not manage $4.2 billion worth of cost-reimbursable contracts reviewed by the Inspector General’s office in accordance with DOD policies. These contracts are particularly ripe for abuse because contract terms, specifications, and prices are not agreed upon before the contractor undertakes the work; rather they are just reimbursed later. Eighteen of 24 contracts reviewed by the Inspector General continued to be reimbursed after the deadline for a proposal to definitize the costs had passed.

17) Mounting repair bills

A GAO report from March 2025 found the DOD had $271 billion of deferred maintenance costs, essentially the value of repairs to aging buildings. DOD accounts for three quarters of all deferred maintenance across federal agencies. Some military barracks are at risk of sewage overflow and have fire safety systems that do not function, according to the GAO. The GAO made recommendations that include working with the General Services Agency in order to dispose of underutilized spaces to discharge deferred maintenance costs.

18) Lost business for American companies?

The United States government purchases an average of $5.2 billion of military supplies from foreign countries each year, but the Pentagon and Department of Commerce “haven't fully determined whether the agreements help or hurt U.S. industry,” according to a new report from the Government Accountability Office.

DOD has Reciprocal Defense Procurement Agreements with 28 countries. The agreements supersede the Buy American Act, which requires federal agencies to buy most supplies from U.S. manufacturers. Since 2018, the DOD “has skipped important due diligence steps for entering into and renewing” its 28 agreements, according to the GAO. Without this due diligence, it is unclear if American industry could have benefitted more from these contracts instead.

19) AI funds without a purpose

As of last year, the DOD did not know how it would use artificial intelligence in its daily operations, despite receiving $1.8 billion for that purpose in the FY 2024 budget.

According to a report from the U.S. Government Accountability Office, the DOD ”couldn’t fully identify” exactly how it planned to use AI at the time of the report or into the future. There was no way for the DOD to know which human positions can or will be replaced with AI or to estimate how much additional funding would needed. This confusion raises questions for how funds allocated to DOD AI spending will be used going forward.

20) F-35 fighter jets

The military is projected to pay over $2 trillion to weapons manufacturer Lockheed Martin for its F-35 fighter jets, the most expensive weapons program in history. F-35s were originally intended to be cheap and efficient to fit with decreasing military budgets after the Cold War. But the fighter jets are only able to perform tasks 55% of the time – not 90% as intended.

CONCLUSION

These examples go well beyond individual instance of wasteful spending decisions: They demonstrate systemic bloat at the Pentagon that requires significant improvements to processes and performance. As we continue debating ways in which we may further extend our military might, and expand the role of the military, it’s critical the Pentagon finally takes necessary steps to get current costs under control.