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Tuesday, December 28, 2010

GAO Cannot Render Opinion on Government's Financial Statements

GAO Logo The Government Accountability Office has released A Citizen's Guide to the 2010 Financial Report of the U.S. Government (268 pages):

For FY 2010, the Government Accountability Office (GAO) issued a disclaimer of audit opinion on the accrual-based Governmentwide financial statements for the fourteenth consecutive year.

Accounting Today, GAO Sees Problems in Government’s Financial Management:

The U.S. Government Accountability Office said it could not render an opinion on the 2010 consolidated financial statements of the federal government, because of widespread material internal control weaknesses, significant uncertainties, and other limitations. ...

The main obstacles to a GAO opinion were: (1) serious financial management problems at the Department of Defense that made its financial statements unauditable, (2) the federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal government’s ineffective process for preparing the consolidated financial statements.

In addition, the GAO said last week it was unable to render an opinion on the 2010 Statement of Social Insurance because of significant uncertainties, primarily related to the achievement of projected reductions in Medicare cost growth. ...

“Given the federal government’s fiscal challenges, it’s imperative that Congress, the administration, and federal managers have reliable, useful, and timely financial and performance information,” [Acting Comptroller General Gene] Dodaro said. “Improved accuracy and transparency in financial reporting are urgently needed.”

(Hat Tip: InstaPundit.)

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Comments

If I conducted my household like the government conducts its household, I would be in prison for the rest of my life.

The solution, therefore, is to imprison every politician and bureaucrat who takes part in fiscal policy, budgeting, and accounting, including approval of the acts of subordinates, for the rest of their lives. Anything less only contributes to the problem.

Posted by: Bryan | Dec 29, 2010 2:54:45 PM