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The U.S. Defense Department has failed its fifth-ever audit, unable to account for more than half of its assets, but the effort is being viewed as a “teachable moment,” The Hill reports, citing its chief financial officer.

After 1,600 auditors combed through DOD’s $3.5 trillion in assets and $3.7 trillion in liabilities, officials found that the department couldn’t account for about 61 percent of its assets, Pentagon Comptroller Mike McCord told reporters on Tuesday.

McCord said the department has made progress toward a “clean” audit in the past year, but later added “we failed to get an ‘A.’”

“I would not say that we flunked. The process is important for us to do, and it is making us get better. It is not making us get better as fast as we want,” he said.

This year’s outcome was not unexpected.

Federal law since the early 1990s requires mandatory audits for all government agencies, and since fiscal year 2013 all but the DOD have been able to satisfy that requirement.

The sheer size and scope of the department — which makes up for more than half of the U.S. discretionary spending and has assets that range from personnel and supplies to bases and weapons — makes it difficult to audit. 

In December 2017, defense officials set out to scrutinize DOD’s books, the first comprehensive audit of the agency in its history. That effort failed the next year, and the four that followed. 

McCord, who served as Pentagon comptroller from 2009 to 2017 and again since June 2021, said the most recent audit required 220 in-person site visits and 750 virtual site visits by Pentagon officials and independent public accounting firm personnel.