The next day's terrorist attacks diverted his attention. Although the Pentagon took some initiative, including paying I.B.M. $250 million to help streamline business processes, it wasn't until 2005 that the Defense Department launched another major financial reform, and that one was just as problematic as its predecessors. Since 9/11, weaknesses in Pentagon financial systems have become more glaring as defense spending has climbed to record highs, with a request for $481.4 billion pending for 2008. In addition, the White House pushed through emergency defense appropriations—supplemental funds that don't undergo the usual congressional review—totaling $287.2 billion in 2006 and 2007.

The Indianapolis center and other back offices are supposed to comply with a congressional mandate to track how much of each year's emergency appropriations are spent on the Bush administration's declared global war on terrorism. But a former senior official from the Indianapolis center, who requested anonymity, says that its outmoded systems can't be tweaked to produce such data. Instead, it's done offline by workers combing through computer data and pulling out what they think should be attributed to the war on terrorism. Their guesswork, the source says, is probably way off.

The dysfunction stems in part from the traditional independence of the military branches. Over several decades, they have cobbled together separate processes for identical functions, resulting in the uncontrolled growth of more than 4,000 accounting, financial, and inventory systems. Their names form an acronym soup: CAPS, Stanfins, IAPS, Somards, Samms, Mocas, HQARS, Stars. The department's primary system for handling weapons contracts and payments dates from 1958; a costly attempt to replace it was abandoned in 2002 as a failure. The Army's notoriously inaccurate main accounting system was created in 1966.

In 1990, Congress enacted legislation requiring all federal agencies to pass independent audits. Every year, the Defense inspector general dispatched dozens of auditors to the military's financial and accounting centers. Every year, they reported back that the job couldn't be done. Defense Department records were in such disarray and were so lacking in documentation that any attempt would be futile. In 2000, the inspector general told Congress that his auditors stopped counting after finding $2.3 trillion in unsupported entries made to force financial data to agree.

In 2002, Congress relented. Until the Pentagon can get its records in order, no comprehensive audit is required. Instead, the department writes each year to the inspector general certifying that "material amounts" in its financial reports can't be substantiated.

That it can't be audited "goes to the heart of the department's credibility," says Dov Zakheim, who was Defense Department chief financial officer and comptroller under Rumsfeld. "Nobody would trust even a half-million-dollar enterprise if its books weren't clean."

The Pentagon has repeatedly assured Congress that it is working toward an audit. Yet the projected date continues to slip further away. In 1995, Pentagon officials testified that it could be audited by 2000. In 2006, an audit wasn't envisioned until 2016.

Without an audit, anecdotal evidence suggests, contractor fraud is likely to go undetected for years. Two South Carolina sisters who supplied small parts to the military bilked it of more than $20 million by charging wildly inflated shipping costs for low-priced items, like $998,798 for shipping two 19-cent washers to an Army base in Texas. The scheme lasted six years before they were caught in 2006.