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The Daily

GAO Can't Render Audit Opinion on Federal Government's Financial Statement

Chris Gaetano
Published Date:
Feb 26, 2016
auditSince 1994, the federal government has been required to submit a financial report of its activities, and since 1997 the GAO has been required to audit it. Every year since then, the GAO has been unable to render an opinion on the accrual-based consolidated financial statements due to material weaknesses and scope limitations. This year's audit report was no exception, with the GAO faulting the federal government for internal control weaknesses and uncertainties that prevented it from, once again, rendering an audit opinion, according to a GAO press release
The report called out the Department of Defense in particular, saying its financial management problems rendered its statements "unauditable." It also said that the federal government as a whole could not adequately account for transactions between federal entities, and faulted the process of preparing the consolidated financial statements as ineffective. The report further accused the federal government of being unable to fully determine the extent to which improper payments occurred, failing to properly identify and resolve information security risks, and ineffectively managing its tax collection activities.  
“The federal government needs to be able to track all revenues and expenses, as well as its assets and liabilities, and that’s particularly important in a tight budget environment,” said Gene L. Dodaro, Comptroller General of the United States and head of the GAO. “Our report on the government’s consolidated financial statements underscores the fact that much more work needs to be done to ensure our policymakers receive the accurate financial information needed to make difficult short-term and long-term spending decisions.”
Though the GAO has been unable to give a clean audit opinion to the federal government as a whole, it can render opinions on individual federal agencies. The GAO report said the only three who did not receive a clean opinion this year were the Department of Defense, Department of Housing and Urban Development, and the Department of Agriculture. In commenting on a draft of this report, Treasury and OMB officials expressed their continuing commitment to addressing the problems this report outlined, said the GAO.