December 28, 2010

The Annual Yawn: GAO Disclaims Opinion on Uncle Sam’s Financials For the 14th Straight Year; Press Ignores

Filed under: MSM Biz/Other Ignorance,Taxes & Government — Tom @ 9:16 pm

When the legislators and good-government people who drafted the law requiring the Government Accountability Office (GAO) to audit and render an opinion on the financial statements of the federal government as a whole and the major departments within it, they must have known that early-year results would not be very pleasant. But I also suspect that they thought the shame of being exposed as having unauditable records would be lead to constructive action and improvement.

Maybe on the margins, but not on the whole, as this GAO press release addressing its report on Uncle Sam’s financial statements last week tells us:

The U.S. Government Accountability Office (GAO) cannot 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.

“Even though significant progress has been made since the enactment of key financial management reforms in the 1990s, our report on the U.S. government’s consolidated financial statement illustrates that much work remains to be done to improve federal financial management. Shortcomings in three areas again prevented us from expressing an opinion on the accrual-based financial statements,” said Gene Dodaro, Acting Comptroller General of the United States.

The main obstacles to a GAO opinion 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, and (3) the federal government’s ineffective process for preparing the consolidated financial statements.

Accounting Today notes that this is the fourteenth consecutive year that GAO has had to disclaim an opinion, obviously crossing both Democratic and Republican administrations.

The element of shame appears not to be a factor. That’s at least partly because the establishment press really doesn’t care.

A Google News search for December 20-28 on “GAO government financial statements” (not in quotes), sorted by date (necessary because unsorted results were misleading), came up with (get this) eleven items, only five of which were relevant to the overall audit of the government.

At the Associated Press’s main site, a search on “GAO government financial statements” (not in quotes) returned nothing. Searching the AP on “government accountability office” without using quotes returned nothing relevant. At the New York Times searches on the same two strings without quotes entered (“government accountability office“; GAO government financial statements) come up similarly empty of anything relevant.

If the press doesn’t care to report ongoing pathetic developments such as these, the reporting of which falls squarely into the realm of its supposed watchdog role, why should the bureaucracy? It’s pretty hard to come up with a defensible excuse when we’re talking about an entity that gobbles up 20%-25% of the nation’s annual output.

Maybe it will take the press as long as it took Rip Van Winkle to wake up. I doubt we’ll be that lucky.

Cross-posted at NewsBusters.org.

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