Audit the Pentagon Act of 2021
This bill requires defense spending reductions during any fiscal year after FY2022 where the Comptroller of the Department of Defense (DOD) fails to certify that a department, agency, or other element of DOD has achieved an unqualified opinion on its full financial statements. The amount of any reductions must be deposited in the General Fund of the Department of the Treasury and must be available for deficit reduction.
The bill excludes from any reductions accounts related to military personnel, reserve personnel, National Guard personnel, and the Defense Health Program.
The President may waive a reduction if the President certifies that a reduction would negatively affect (1) national security or members of the Armed Forces who are deployed in combat zones, or (2) the Defense Health Program account.
To ensure that the Department of Defense achieves a clean audit opinion 
          on its financial statements, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Audit the Pentagon Act of 2021''.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that--
            (1) as the overall defense budget is cut, the congressional 
        defense committees and the Department of Defense should not 
        endanger the Armed Forces by reducing wounded warrior accounts 
        or vital protection (such as body armor) for members of the 
        Armed Forces serving in harm's way;
            (2) the valuation of legacy assets by the Department of 
        Defense should be simplified without compromising essential 
        controls or generally accepted government auditing standards; 
        and
            (3) nothing in this Act should be construed to require or 
        permit the declassification of accounting details about 
        classified defense programs, and, as required by law, the 
        Department of Defense should ensure financial accountability in 
        such programs using proven practices, including using auditors 
        with security clearances.

SEC. 3. DEPARTMENT OF DEFENSE SPENDING REDUCTIONS IN THE ABSENCE OF AN 
              UNQUALIFIED AUDIT OPINION.

    (a) In General.--
            (1) Reductions.--If, during any fiscal year after fiscal 
        year 2022, the Comptroller of the Department of Defense fails 
        to certify to Congress that a department, agency, or other 
        element of the Department of Defense has achieved an 
        unqualified opinion on its full financial statements, the 
        amount available for such department, agency, or element shall 
        be reduced--
                    (A) for the fiscal year during which such 
                determination is made, by an amount equal to 0.5 
                percent; and
                    (B) for any subsequent fiscal year during which 
                such determination is made, by an amount equal to 1.0 
                percent.
            (2) Application of reductions.--For any fiscal year for 
        which a reduction is made pursuant to paragraph (1) for a 
        department, agency, or element, the amount of the reduction 
        shall be applied on a pro rata basis against each program, 
        project, and activity of such department, agency, or element 
        for that fiscal year.
            (3) Use of reduced amounts.--The amount of any reduction 
        made under paragraph (1) shall be deposited in the General Fund 
        of the Treasury and shall be available for purposes of deficit 
        reduction.
    (b) Accounts Excluded.--The following accounts are excluded from 
any reductions under subsection (a):
            (1) Military personnel, reserve personnel, and National 
        Guard personnel accounts of the Department of Defense.
            (2) The Defense Health Program account of the Department of 
        Defense.
    (c) Waiver.--The President may waive subsection (a) with respect to 
an account if the President--
            (1) certifies that the application of such subsection to 
        that account would--
                    (A) negatively affect the national security of the 
                United States or members of the Armed Forces who are 
                deployed in combat zones; or
                    (B) affect the Defense Health Program account; and
            (2) submits to the Committee on Appropriations and the 
        Committee on the Budget of the House of Representatives and the 
        Committee on Appropriations and the Committee on the Budget of 
        the Senate a report on such waiver that includes a description 
        of the specific activities that would be affected and why such 
        activities are essential to the national security of the United 
        States.
    (d) Report.--Not later than 60 days after a reduction takes effect 
under subsection (a), the Director of the Office of Management and 
Budget shall submit to Congress a report specifying each department, 
agency, or other element of the Department of Defense subject to 
reduction and the amount of the reduction.
    (e) Definitions.--In this section:
            (1) The terms ``financial statement'' and ``external 
        independent auditor'' have the meanings given those terms in 
        section 3521(e) of title 31, United States Code.
            (2) The term ``unqualified'', with respect to the audit 
        status of a financial statement, includes the characterizations 
        clean and unmodified.
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Audit the Pentagon Act of 2021
To ensure that the Department of Defense achieves a clean audit opinion on its financial statements, and for other purposes.
Audit the Pentagon Act of 2021
Rep. Lee, Barbara