michael cohen. in a surprise move, mr. cohen is in a new york courtroom at this hour pleading guilty. ap reporting that mr. cohen made the appearance this morning at about 9:00 a.m. eastern. he admitted to making false statements in 2017 about a plan to build a trump tower in moscow. more on this as we get it. today brock long testifies on a disaster response before the house oversight and government reform committee. we'll have live coverage of that at 10:00 a.m. eastern here on c-span3. >> each week in the segment of the washington journal, we like to take a look how your money is at work in a different federal program. this week we're joined by todd

harrison. there was an audit that the d.o.d. technically failed but the pentagon said they expected to fail this audit. why? >> well, this is something that the d.o.d. has been working on for more than a decade now, try to get ready for an audit and believe it or not, this is actually progress that they failed the audit because that means they got through the process of doing the audit in order to find all of the deficiencies. as expected i think i was on the show in march talking about readiness and how they will almost certainly fail the audit, so now they have a list of corrective actions they need to take. they will go back, clean up their accounting processes, clean up inventories of equipment, things like that, and have a go at it again next year. >> before we get to the results, as i understand it, all other federal agencies are subject to audits. why has it taken so long for the pentagon to conduct theirs? >> because the pentagon is a

massive organization within the federal government. $716 billion a year flows through the pentagon. that's more than any other government agency. it employs more people than any other part of government. it has more property around the world. it has more than a trillion dollars of real property, real assets in buildings and land around the world. it was not built on the accounting systems within d.o.d. were not built to meet auditing standards, so they've had to go back and try to retrofit with, you know, modern day accounting systems that can provide the traceability you need to pass an audit. >> how did they do this? how many people were needed to conduct an audit and how many or moreries and sites they visit to do this? >> it's hundreds of people. we don't have the full list of where they went to visit and everything. it's standard audit. you don't check every single line item, you spot check, but

it cost over $900 million to do the audit and work on the corrective activities during fiscal year 2018. over $900 million and that's going to continue in 2019 and 2020 and going forward. we're going to be spending short of a billion dollars a year trying to get the d.o.d. up to the standards where it can pass an audit. >> as we go through this auditing process of the department of defense, inviting your phone calls. todd harrison with us until the top of the hour, the end of our program today. democrats call 202-748-8001, republicans 202-748-8002. military we would like to hear from you, 202-748-8003. as folks are calling in, the good, bad, and ugly. what was the good? >> the good they made it far enough through the process they could actually complete an audit. that is the biggest win out of

this for the pentagon. the bad is there are a number of, you know, items they found. we don't have all of the details yet, where they need to take corrective action. there's still a lot of work that needs to be done and, you know, there are, you know, pockets within d.o.d. -- i believe the national reconnaissance office which is highly classified, what they do, so we don't know anything about the details, but apparently they're able to pass a clean audit. >> can we find ways to save money? you mentioned this cost $900 million to do. did we reap any rewards from spending that money in terms of money saved down the road? >> there are pockets where they've said we found, you know, that -- you know, like the defense logistics agency, the way that they were accounting for certain costs, they were overestimating what things were going to cost and when they did the audit they realized they could lower internal cost estimates so they don't have to charge as much overhead to

agencies. you're not -- an audit, the purpose is not to generate cost savings. the purpose of an audit is accountability. no one should expect that the audit itself is going to save a lot of money. >> when we say they failed this audit, what is failure and what does it take to get to passing? >> failure is if you just do not meet the, you know, general accounting standards for passing an audit, you're not able to show traceability all the way from when money is appropriated by congress to when it is spent down at the lowest level and be able to track how the money was spent over time at the most detailed level. if you can't do that you're not going to be able to pass an audit. >> how long did this take? >> for this audit they spent the year working on it. >> is the next one going to take that long as well? >> i believe it will. >> the next one coming amid a new budgeting season for the department of defense. a story from the "wall street journal," budget pressures thrive the debate on military

strategy. president trump has proposed 5% cuts for agency budgets. this came as the d.o.d. was preparing its budget for next year. as i understand it, $733 billion was the estimated budget the d.o.d. before that cut. if they were including that cut they would have to find $33 billion worth of savings. how does the pentagon do that and will they do that? >> so it remains to be seen, and all we're talking about is what the trump administration will request for the budget for 2020. is it going to be 733 like the pentagon was originally told or are they going to have to cut that back to 700. congress will decide this. to cut $33 billion out of that budget request for 2020, you're not going to do that just by finding savings. you're going to have to reduce the size of the force or cut back on training, cut back on maintenance, or cut back on weapons procurements. >> what's likely to be the one, if they have to go to that $700

billion number, which one of those do they go to? >> i think they spread it across some of all of these but the cuts will disproportionately fall on modernization programs, weapons procurements. >> which ones in particular? >> i imagine within that they will spread it out a lot and spread the pain around and just buy fewer of this fighter jet, fewer of these ground vehicles, maybe delay the start of some new programs or stretch out their schedules, so i imagine they sprinkle it across a lot of areas. this administration has, you know, made it a priority to rebuild readiness. i don't think they want to cut back on training. part of readiness is maintenance of equipment. i think that they're going to not do that much to cut back on maintenance if they can avoid it. the administration has proposed growing the size of the military, so i don't think they're going to actually cut back on the size of the force. that really leaves modernization programs to take the brunt of

the reduction. that said, this is far from a done deal. it's not clear that's what the administration itself will come out and request, much less what congress will appropriate. >> todd harrison with us until 10:00 this morning. he's the director of the defense budget analysis at the center for strategic and international studies, a guest of this program in times past, to talk about this issue. today he's talking about the pentagon failing that audit. john on the line for retired military for louisiana. republican. go ahead. >> caller: good morning, mr. harrison, i was a tactical flying squadron commander at barksdale in the late '80s and we had about 155 people in our unit and we had an audit one time and the audit was about travel. 155 people in the military, the air crew members travel a lot. they've said okay, here's how much money was spent and we want you to account for it and the

paperwork is monumental. we fill out a form travel voucher and when it comes back that reconciles it. there's no requirement for anybody to keep these things. we didn't keep them in our squadron. they're kept at some god forsaken vault probably somewhere in washington, d.c. yet i was supposed to come up with the answer where did all of this money go? i just happened to be one of those people that keeps those things and i brought out this stack of things and handed them to this audit and after about two days he came back and says, we can't do this. now this is the auditor, the individual sent to do the audit on a very small, 100, 150, a slice of the squadron, me, realized in three days what he was trying do was impossible. i cannot imagine how they could apply these auditing techniques -- it was an

enlightening thing for me because i didn't understand what an auditor did in the first place, it was mind boggling and how they can be do that and no wonder they flunked it. my god, i cannot imagine they even would start with it. i would be interested to take a poll of every one of those auditors and ask them the same question. the auditor told me, he says, we just can't do this -- >> thanks for sharing your story. >> i mean i think that highlights the difficulty of auditing like the pentagon. now, you know, modern systems that, you know, businesses use, for example, you keep a lot of these records electronically and that's easier to sort through them and find what you're looking for to trace spending. keep in mind that these basic auditing standards like being able to go down and verify where all the travel money was spent and was it spent appropriately, that's what businesses do all the time. that's what we expect of major corporations so they can pass

audits like this. other parts of the federal government pass audits like this. d.o.d. should be able to pass an audit. >> to that point, on twitter, the pentagon has no genuine intent to account for its money. graft is an integral part of the system and an audit lets them spend more money. did this audit find fraud abuse in the system. >> i'm not aware of any fraud the audit uncovered. that's not to say there's not. there are scandals that come out from time to time. fraud, waste and abuse. that is a crime. that is, you know, investigated and it is prosecuted to the full extent of the law. there are plenty of scandals you can show like the scandal within the navy -- >> remind viewers what that was. >> a scandal where there was a contractor known as fat leonard who was basically bribing senior officials in the navy to steer business to his company. that was found and people have gone to jail, including fat

leonard himself and a lot of people have been fired from the military because of it. now, those kind of investigations will continue. it is possible that an audit at some point will find something like that and that becomes a criminal case. really the purpose of the audit is that traceability to make sure money is being spent how it's supposed to be spent. >> who headed up this audit? who was in charge of this? was this the joint chiefs? >> no. i believe this was headed by the d.o.d. chief management officer and that position is changing out so i'm not sure who the head is right now. >> to michigan, mark an independent, good morning. >> caller: yes, sir. i was hoping the government would take whatever the amount of money the government gives, divide that by five, whatever that base pay is, you plus 10%, plus you got a cost of living

increase or whatever the account is, the rest of the institutions would divide the -- there would be four of them, they would divide, they would get one-fifth more than what they normally get, and they would rotate this attitude then they could maybe work with a budget to at least set a budget tone towards how much money they're trying not to spend or save. >> mark, just so i'm clear on your math, so you want to move some of the pentagon's budgeted money to non-military spending, the other agencies? is that correct? >> caller: no. the concept is you have five institutions. you divide that -- divide five into how much money the system is offering the people, the institutions. you divide that by five. you get a number. you have one of the institutions set back, they get base pay, plus 10%.

the rest of the institutions would divide the rest of the story, whatever is leftover, get that much more than what they would have normally gotten. >> i think i got your point. >> so if you look at the d.o.d. budget today, the way it breaks down is about a third of it is used for military compensation, related costs, about a third of it is used for operations and maintenance, so that's for training and the upkeep of our equipment, things like that, and another third of it is used for weapons, for research and development and procurement of weapon systems and other support systems that go with that. that's kind of a basic breakdown of the it. in terms of dividing it among the military services, there are five services today, but the coast guard does not fall under d.o.d. for the budget. it falls under the department of homeland security. the budget is not evenly divided among the army, navy, air force and marine corps, not close to it. the navy gets a little bit more,

the army when you include war funding in recent years, the army has gotten much more than the other services because of the importance in iraq and afc have fallen on the army. the marine corps part of the navy budget but part of it specifically for marine corps activities, and then the air force, interesting thing about the air force budget a large portion of the air force budget is classified pass through funding. it doesn't stay in the air force. it goes to other classified activities and agencies. >> let's talk about another force, your latest briefing for csic is about the cost of the space force. what are the estimates on the space force? >> i went and looked at a bottom up estimate if you create a space force, what's it going to involve. the vast majority of the funding for a space force would be transferred out of accounts that are already existing today in the services budgets.

most would come from the air force, since the air force does most of the space activities today, about 85% of the funding year to year, and so you would move all of that into a new budget, so that's neutral. it doesn't add overall to the budget. then you do have to add a new headquarters, staff on top of that for a new service, and create a new secretariat staff for a secretary of the space force. my system were depending on how large you scope this space force, the additional cost is going to be from $300 million to about $550 million per year. interestingly that's less than the cost of the audit. >> if you want to read more, how much will the space cost is the csis briefing, at csis.org. todd harrison with that briefing on their website. jay is waiting on the phone, independents, kentucky, on the line for retired military. go ahead. >> caller: hi. i'm a retired united states coast guard. you alluded to the fact that we

are under the department of homeland security, but in regards to the spending of money for budgets, we operate similar to d.o.d. i know when i was in -- toward the end of fiscal years, units were pretty good about spending their money and having accountability for, but there was a mentality that you had to spend everything you got or you wouldn't get additional money next year or the same amount of funding next year and we would see what we call fallout and that was money from higher commands dispersed to lower commands that more or less just needed to be spent. they didn't care what it was spent on, it just needed to be spent so they didn't any