[zdragnar]

> It's strange to me that an audit would say that there's somewhere between $23 and $41 billion missing.

Audits have degrees of certainty; an opinion may be unqualified, meaning the records are spotless, qualified, meaning there are issues but the records are trustworthy, and adversarial, meaning the records are inaccurate and do not represent the actual financial status.

If the records are questionable, it will usually take much more investigation than a standard audit to track down every money unit and produce a clean accounting of the money. Hence, it is possible to identify that records are wrong, but knowing exactly whether the money is still present but unaccounted for versus the money is actually gone from the organizations control without a record of the transaction isn't yet determined.

The DOD itself hasn't passed an audit ever. Money comes and goes without accounting meeting financial standards. That does not strictly mean that the money has been embezzled, only that the DOD and World Bank are unable to demonstrate that it hasn't been.

[Eddy_Viscosity2]

> Money comes and goes without accounting meeting financial standards. That does not strictly mean that the money has been embezzled, only that the DOD and World Bank are unable to demonstrate that it hasn't been.

Can you think of a better place to embezzle? Its risk-free without any accounting standards. 100% that embezzling is taking place and at a large scale.

[qingcharles]

It's hard to identify. I audited a Sheriff's account once because there was constant chatter that the funds were being misused. Out of an entire year I could only find one line item that was questionable (it was still a police item, but it should have come from a different fund).

What isn't clear is this: if say the Sheriff buys 100 riot shields from Company X, does his cousin own Company X and there is a kickback or a favor? I couldn't answer those questions because they would require a whole new level of investigation.

[lesuorac]

Pay the sheriff in crypto then ;)

If there's an outflow from Company X back to Brother back to Sheriff then there's some clear kickbacks!

[wkrsz]

unless the kickback takes form of cash or favors

[lesuorac]

Cash is for criminal activity so if the CEO is withdrawing large amounts of it then clearly he's committing some crime.

[wkrsz]

They'll figure something out, some ideas:

1. The cash doesn't have to be withdrawn all at once, it can happen over the course of months 2. The cash can come from earlier cash transactions, not withdrawal 3. Payment can be indirect: CEO donates to a non-profit that hires sheriffs family 4. Instead of kickback the CEO can repay the sheriff with another favor at future time

I hope we're not planning to outlaw cash and implement total invigilation of every transaction just to make corruption slightly more inconvenient.

[zdragnar]

Given that the DOD is the largest employer in the USA at nearly a million people, there's almost certainly some small amount going on at a minimum.

[gwerbret]

Walmart alone employs 1.6 million people: https://corporate.walmart.com/about/location-facts

[zdragnar]

The 770,000 number for the DOD is just the civilian employee count. It becomes the "largest" when you also include the 2.1 million active service members of the military. I definitely could have worded that better.

[MichaelZuo]

How do you know it’s risk-free?

I’ve heard the budget battles between the Navy and Air Force can get particularly severe.

[Eddy_Viscosity2]

> How do you know it’s risk-free?

Because you can't convict someone for embezzlement if you can't prove it. And you can't prove it if there are no records. This is the purpose of proper financial record-keeping standards - to know where the money is and where it came from and where it goes.

[MichaelZuo]

Why can’t one faction in the pentagon do something, other than trying to get a conviction, that still induces risks on another faction?

[Eddy_Viscosity2]

Like what?

I'm not sure what that could be, but a general answer would be that neither faction wants too much scrutiny. They would therefore have mutual self-interest in maintaining a system where they can keep crappy records (or none) while still keeping mountains of money.

[MichaelZuo]

Influencing relative promotion prospects?

[Dalewyn]

>Money comes and goes without accounting meeting financial standards. That does not strictly mean that the money has been embezzled

Coincidentally, the Liberal Democrat Party in Japan just lost their majority (and subsequently very likely the government) today due to widespread embezzlement and tax evasion.

Always argue for absolute transparency of public monies, there is no justifiable reason public monies have to be kept secret.