And you still believe their deficit and debt numbers?
The GAO has concluded that the Federal government’s accounting and record-keeping is grossly inadequate. It is so inadequate that the GAO can not assert that they comply with generally accepted accounting principles. In English, this means they can not assert that the financial statements are free from material misstatements. The potential for grossly under funded (or unfunded) liabilities exists:
“Proper accounting and financial reporting practices are essential in the public sector,” Comptroller General David M. Walker wrote in a Dec. 14 cover letter to his agency’s audit report on consolidated financial statements for fiscal 2003 and 2004. “The U.S. government is the largest, most diverse, most complex, and arguably the most important entity on earth today. . . . Sound decisions on the current results and future direction of vital federal programs and policies are made more difficult without timely, reliable and useful financial and performance information.”
And then there’s this:
“We believe . . . that we owe the taxpayers no less than a private company would to its investors in being able to account for their money,” Springer said in an interview Friday. “We believe that’s a sign that we’re managing their money properly, if we can account for it and do that in a timely way.”
Governmental accountability would be great. However, the GAO is a governmental entity and, even if it could opine on valid financial data, may not act independently. As for some of the detail:
In their review, GAO auditors found that incomplete documentation and “weaknesses” in financial systems, record-keeping and financial reporting hurt the government’s ability to provide reliable information on assets, liabilities and costs. The greatest challenges are continuing “serious financial management problems” at the Defense Department, auditors reported. The government could not show that property and equipment inventory reports at Defense were correct, nor could it fully account for transactions between agencies.
[snip]
Springer also said financial statements have been completed in a more timely fashion. The 2004 consolidated report was released on Dec. 15, less than three months after the close of the fiscal year on Sept. 30. The 2003 report, in contrast, did not come out until the following February, and the 2002 report was not released until March.
Yawn. Some publicly traded companies, who have independent auditors staffed almost year round, release their report the day their fiscal year ends. In other words, the government’s financial statements are largely useless information that are not presented in a timely manner.
