Can you think of a better place to embezzle? Its risk-free without any accounting standards. 100% that embezzling is taking place and at a large scale.
What isn't clear is this: if say the Sheriff buys 100 riot shields from Company X, does his cousin own Company X and there is a kickback or a favor? I couldn't answer those questions because they would require a whole new level of investigation.
If there's an outflow from Company X back to Brother back to Sheriff then there's some clear kickbacks!
1. The cash doesn't have to be withdrawn all at once, it can happen over the course of months 2. The cash can come from earlier cash transactions, not withdrawal 3. Payment can be indirect: CEO donates to a non-profit that hires sheriffs family 4. Instead of kickback the CEO can repay the sheriff with another favor at future time
I hope we're not planning to outlaw cash and implement total invigilation of every transaction just to make corruption slightly more inconvenient.
I’ve heard the budget battles between the Navy and Air Force can get particularly severe.
Because you can't convict someone for embezzlement if you can't prove it. And you can't prove it if there are no records. This is the purpose of proper financial record-keeping standards - to know where the money is and where it came from and where it goes.
I'm not sure what that could be, but a general answer would be that neither faction wants too much scrutiny. They would therefore have mutual self-interest in maintaining a system where they can keep crappy records (or none) while still keeping mountains of money.