Government Without Boundaries, Measurement or Control

These excerpts come from the 1999 General Accounting Office audit submitted to The President, The President of the Senate, and The Speaker of the House of Representatives. GAO yearly audits are prepared by U. S. Treasury and the Office of Management and Budget (OMB). If you thought government was clumsy and inefficient, read this and verify. If government were a business, somebody would be fired.

The intro and summary were signed by David M. Walker, Comptroller General of the United States.  Everything below comes verbatim from the March 20, 2000 report, except Mr. Walkers comment:

..The federal government’s inability to.,

It is simply repeated and emphasized. I’m still waiting for somebody somewhere to be fired.

In summary, certain significant financial systems weaknesses, problems with fundamental record keeping and financial reporting, incomplete documentation, and weak internal controls, including computer controls, continue to prevent the government from accurately reporting a significant portion of its assets, liabilities, and cost. Some of these deficiencies primarily relate to specific major agencies; others, such as intra-governmental transactions affect the entire government. These deficiencies affect the reliability of the accompanying financial statements and much of the related information in the Fiscal Year 1999 Financial Report of the United States Government, as well as the underlying financial information. They also affect the government’s ability to accurately measure the full cost and financial performance of certain programs and effectively manage related operations.

Major problems included;

The federal government’s inability to properly account for and report (1) material amounts of property, equipment, materials, supplies and (2) certain stewardship assets, primarily at the Department of Defense;

The federal government’s inability to properly estimate the cost of certain major federal credit programs and the related loans receivable and loan guarantee liabilities, primarily at the Department of Agriculture;

The federal government’s inability to estimate and reliably report material amounts of environmental and disposal liabilities and related cost, primarily at the Department of Defense;

The federal government’s inability to determine the proper amount of various reported liabilities, including postretirement health benefits for military employees and accounts payable and other liabilities for certain agencies;

The federal government’s inability to accurately report major portions of the net cost of government operations;

The federal government’s inability to ensure that all disbursements are properly recorded; and

The federal government’s inability to properly prepare the federal government’s financial statements, including balancing the statements, accounting for substantial amounts of transactions between governmental entities, properly and consistently compiling the information in the financial statements, and reconciling the results of operations to budget results.

Because of the serious deficiencies in the government’s systems, record keeping, documentation, financial reporting, and contols, readers are cautioned that amounts reported in the financial statements and related notes may not be a reliable source of information for decision-making by the government or the public.