The Feds 'Fail' Their Statement—Again

Submitted by rkoreto on Thu, 12/29/2011 - 15:13

In a Dec. 23 release, the U.S Government Accountability Office announced that it couldn't render an opinion on the federal government's 2011 consolidated financial statements. The GAO cited "widespread material internal control weaknesses, significant uncertainties, and other limitations."

As in 2010, the GAO said the main obstacles to offering an opinion on the accrual-based consolidated financial statements were:

1. Serious financial management problems at the Department of Defense (DOD) 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.

3. The federal government's ineffective process for preparing the consolidated financial statements.
 
While the vast majority of the 24 CFO Act agencies received unqualified opinions, the release said, the departments of Defense and Homeland Security "have consistently been unable to receive such audit opinions. Efforts are underway at both agencies to address this situation."
 
The CFO Act of 1990 "mandates that agency CFOs are to develop and maintain agency financial management systems that comply with applicable accounting principles, standards, and requirements."
 
The comptroller general, who heads the GAO, has established the Financial Improvement and Audit Readiness Directorate "to develop, manage, and implement a strategic approach for addressing weaknesses and for achieving auditability." Homeland Security was able to attain a qualified audit opinion on its fiscal year 2011 balance sheet and statement of custodial activity for the first time since 2003, said the release. Comptroller General Gene Dodaro  called this a "significant achievement."
 
Both the full release and the report itself are available on the GAO's website.

 

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