Results of the inspection - conducted by some 1,200 auditors and examining financial accounting on a wide range of spending including on weapons systems, military personnel and property - were expected to be completed later in the day.
"We failed the audit, but we never expected to pass it," Deputy Secretary of Defense Patrick Shanahan told reporters, adding that the findings showed the need for greater discipline in financial matters within the Pentagon.
"It was an audit on a $2.7 trillion dollar organization, so the fact that we did the audit is substantial," Shanahan added.
The U.S. defense budget for the 2018 fiscal year that ended on Sept. 30 was about $700 billion. The Pentagon is a huge agency with multiple branches of the military, costly weapons systems, large personnel needs, numerous military bases of various sizes at home and abroad and troops deployed in far-flung locales.