Department of Defense: Actions Needed to Reduce Accounting Adjustments, Report to the Chairwoman, Subcommittee on Military Personnel, Committee on Armed Services, House of Representatives [open pdf - 2MB]
From the GAO [Government Accountability Office] Highlights: "DOD remains the only major federal agency that has been unable to obtain a financial statement audit opinion. One of the contributing factors is DOD's large volume of nonroutine accounting adjustments, which are used for recording corrections or adjustments in an accounting system. This report examines accounting adjustments and their effect on the reliability of DOD's financial information, the extent to which DOD has established and implemented policies and procedures for recording accounting adjustments, and the extent to which DOD has taken actions to reduce adjustments recorded at the consolidated level. [...] GAO is making eight recommendations to DOD, which include updating and implementing policies and procedures on recording accounting adjustments and identifying steps to reduce the need for recording adjustments across the department. DOD agreed with all eight recommendations and cited actions to address them."
Government Accountability Office: http://www.gao.gov/