GAO Financial reports arent reliable
- By Mary Mosquera
- Dec 17, 2008
The federal government still can’t provide a reliable accounting of its
finances despite individual agencies’ progress in the past year, the
Government Accountability Office said.
Major problems in agency
financial systems, accounting processes and reporting again prevented
GAO from making an unqualified opinion on the government’s annual
financial report, the auditors said in a report released Dec. 15. It
accompanied the Fiscal Year 2008 Financial Report of the U.S.
The same major weaknesses have hobbled the
government for 12 consecutive years and kept it from obtaining a clean
bill of financial health, according to GAO. Those weaknesses are
serious financial management problems at the Defense Department,
agencies’ inability to reconcile balances when they do business with
one another and an ineffective process for preparing financial
statements, GAO said.
The government also can't determine the
full extent of the improper payments it has made, identify and resolve
vulnerabilities in information security controls, or manage risk, the
auditors said. The government also needs to more effectively manage its
tax-collection activities, they added.
As a result of its
accounting problems, the government cannot reliably account for a major
portion of its assets, liabilities and costs nor can it measure the
full cost and performance of certain programs, the report states. For
example, the government could not satisfactorily determine that
property, facilities and equipment primarily held by DOD were properly
reported, said Gene Dodaro, acting comptroller general at GAO.
material weaknesses hinder the federal government from having reliable
financial information to operate in an efficient and effective manner,”
Agencies need to modernize their financial management
systems to be able to generate reliable and timely financial and
performance information throughout the year and at year's end, he added.
the Office of Management and Budget noted in its part of the annual
consolidated financial report that some agencies made significant
progress this year toward improving the reliability of their financial
OMB said it plans to clarify guidance for agencies
to help them comply with federal financial management requirements so
they will interpret the guidance more consistently and ultimately
improve management of their financial systems.
Of the 24 major
federal agencies, 20 received clean opinions. That’s one more than
reported last year and the highest total in the past six years, OMB
In addition, the number of material weaknesses
governmentwide declined by 18 percent, from 39 to 32, OMB said. It is
the fifth consecutive year that material weaknesses have declined, with
a nearly 50 percent decrease since 2001, OMB said.
Mary Mosquera is a reporter for Federal Computer Week.