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The Reason for DOGE-Fraud, Waste, and Abuse

Bob Thompson
@BobThompson
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And I'm sure there are more reasons than listed in the title. One might be the failures by the Government Accountability Office (GAO). I'm not a certified public accountant but I do have an accounting degree and a lifetime career working in financial institutions, so I kinda know what an audit is.

Here's a headline from an article today at RedState by Ward Clark:

Busted: Fed Budget Analyst Cops to Embezzling $657K - and There Are Many More Doing the Same


I was a manager in commercial banks and later a federal government senior executive at the Treasury Department, and served as the chief disbursing officer responsible for all disbursements from the Treasury General Fund. I've had earlier posts where I described various elements and events from those days. I've done much complaining about big organizations and how increasing size generally brings negative effects on mission clarity and efficient performance: the bureaucracy takes over. We definitely see this in our private societal institutions, ranging from education to healthcare and in my specialization, the financial institutions.


This is one reason I have complained about the massive consolidations undertaken in the financial industry over the last half-century. Control is one aspect of managing an organization, and in some ways, it is the most difficult. As the company grows, so does the challenge, because the need for feedback mechanisms remains the same while the opportunities for circumventing them by perpetrating fraud and other deceptive behaviors increase. Thus audits. When banks served local communities, small businesses thrived because the relationships were local. When the business needed to borrow, the banker knew the business and, in many cases, could validate business financials without a need for CPA certification. Consolidation in the banking industry got rid of these relationships, making success in small business ventures more difficult. There's much more that could be said about this, but that's a sample.


So what about that RedState headline? We know that commercial enterprises generally require certified financial statements to do business. Even then, we see frequent business failures. When I was working at Treasury, I was aware of the existence of GAO as an entity created by Congress, and I thought they did audits of federal agencies in the manner that accounting firms did for commercial entities. Apparently not, and that is why DOGE is finding so much crap. As I have said in earlier posts, it is likely in large part a failure at the agency level because of an absence of audits, or maybe even the absence of the proper controls, to ensure financial integrity. This must happen at the agency with the budget authority for spending the taxpayer funds.


Financial transactions are not the only area where big government lacks integrity in performance. I would guess that what we have seen so far from DOGE is the tip of the iceberg. What has been revealed so far at USAID shows how abuse can be directed at policy integrity and do just the opposite of what is intended.

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Discussion (5)

  • Full Size Tabby@FullSizeTabby

    Two things stuck out to me in Brett Baier's interview of Elon Musk and the senior DOGE team executives:

    The enormous waste in government processes and organizations, and

    The lack of meaningful financial controls and auditable records. More than one DOGE executive said if government officials handed private company finances and reporting the way they did in the government, they'd be in jail.

    https://www.foxnews.com/video/6370654580112" data-legacy-link-preview="pending">https://www.foxnews.com/video/6370654580112" target="_blank" rel="noreferrer">

    foxnews.com

    Open link

  • Bob Thompson@BobThompson
    ReplyingtoFull Size Tabby

    Full Size Tabby (View Comment):

    Two things stuck out to me in Brett Baier’s interview of Elon Musk and the senior DOGE team executives:

    The enormous waste in government processes and organizations, and

    The lack of meaningful financial controls and auditable records. More than one DOGE executive said if government officials handed private company finances and reporting the way they did in the government, they’d be in jail.

    https://www.foxnews.com/video/6370654580112https://www.foxnews.com/video/6370654580112

    That's my thought exactly and as I said I thought that was something that GAO did when I worked in government but I was wrong thinking that. Commercial companies must have audits and certified financial statements to borrow from banks and banks must require this or they won't be eligible to be bailed out by our government when they fail. Those requirements are imposed by the same government we are writing about here but the government takes and spends taxpayers dollars without having any protections against fraud, waste, and abuse.

  • Sisyphus@Sisyphus

    A generation or so ago, the military stopped trying to do audits. There were ugly failures in the auditing and bad publicity. At Army HQ, it was a nod and a shrug and the topic would move on to something we might actually make progress on. I can't imagine Clinton allowing such a huge lapse in essential basic practices.

  • Old Bathos@OldBathos

    One of the lethal symptoms of Trump Derangement Syndrome is that the afflicted person is incapable of seeing anything positive.

    It is irrational to love big government/big spending while simultaneously refusing to be outraged by waste, fraud and abuse of funds that should have gone to legitimate ends. A more efficient Treasury? A more efficient IRS? How the hell can a lefty not approve of that?

    But Musk is still a villain solely because he is an ally of Orange Hitler. We know that DOGE did not end Medicare or social security benefits for a single eligible person. We know that because that person would be in the headlines and probably visited on camera by a dozen elected Democrats.

    I have lived and worked in DC and done lobbying work. I know how many people earn a really nice living shaving small slices off of big expenditures. So I am no Pollyanna but I fully admit to being stunned by the size and scope of the theft uncovered by DOGE. How is it possible that that could be a partisan issue?

  • Bob Thompson@BobThompson
    ReplyingtoOld Bathos

    Old Bathos (View Comment):

    but I fully admit to being stunned by the size and scope of the theft uncovered by DOGE. How is it possible that that could be a partisan issue?

    The answer to your question is because there are three parts or reasons for fraud, waste, and abuse: theft, incompetence, and policy preference. Uncovering fraud by the act of shielding information revealing policy preferences serving other than American interests is what brings out the observable partisanship displayed by Trump opponents. Trump supporters want to see all these causes addressed and DOGE is on that.