New audit, same story

"2003 Financial Report of the United States Government"

The General Accounting Office's annual audit of the U.S. government once again indicated that a few problem agencies are preventing the government from receiving a clean financial bill of health.

Most notably, the Defense Department's inability to provide clean statements is a thorn in the side of financial management, according to Comptroller General David Walker.

"There are three primary reasons why the consolidated federal statements remained unauditable for fiscal year 2003," Walker wrote in the audit report, released earlier this year. "One, serious financial management problems at [DOD]; two, the federal government's inability to account for billions of dollars of transactions between federal government entities; and three, the federal government's ineffective process for preparing the consolidated financial statements."

DOD has an enterprise architecture designed to bring the department under one financial management system, and achieving financial management success is one of Defense Secretary Donald Rumsfeld's top 10 priorities. According to the current schedule, the agency is slated to receive a clean opinion in fiscal 2007, but both Walker and former Defense chief financial officer Dov Zakheim expressed their doubt earlier this year that the deadline can be met.

For fiscal 2002, the government failed the audit largely because of DOD, the Small Business Administration and the U.S. Agency for International Development (USAID), all of which failed to receive clean reviews. USAID for fiscal 2003 climbed out of the cellar and received its first unqualified — or clean — opinion.

DOD and the SBA continue to lag behind, and they were this year joined by NASA, which received a disclaimer opinion — or failing mark —for fiscal 2003.

As with last year's audit, 20 out of 23 of the Chief Financial Officers Act agencies were able to attain unqualified audit opinions on their financial statements. For the first time, the Homeland Security Department offered its financial statements for audit, even though the act does not require it to do so. DHS wasn't an agency when the act was drafted. The department offered financial statements covering the first seven months of operations, and received a qualified opinion on two of the six required statements, according to GAO statements.