GAO Says It Cannot Issue Clean Opinion on U.S. Govt.'s Financial Statements

By:
Chris Gaetano
Published Date:
Apr 1, 2019
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The Government Accountability Office, which serves as the federal government's auditor, said that there are too many material weaknesses to issue a clean opinion on its consolidated financial statements. It cited three main problems that prevented it from doing so: 

1) Serious financial management problems at the Department of Defense made its financial statements unauditable. 

2) The federal government failed to adequately account for intragovernmental activity and balances between federal entities. 

3) The federal government has ineffective processes with regard to preparing the statements themselves. 

 Beyond these three major factors, the GAO also identified three other material weaknesses preventing it from giving a clean audit opinion: 

1) The federal government cannot determine the full extent to which improper payments occur and cannot reasonable assure that appropriate actions were taken to reduce them. 

2) The federal government is unable to adequately identify and resolve information security control deficiencies, as well as manage information security risks on an ongoing basis. 

3) The federal government has been unable to effectively implement internal controls over estimating the cost of credit programs and determine the value of loans receivable and loan guarantee liabilities. 

The GAO noted that this part of an ongoing pattern in the federal government, as it has never actually been able to issue a clean opinion. 

"We audit the financial statements in that report each year, to see whether they fairly present the government's finances. We haven't been able to issue an unmodified (clean) opinion yet," said the GAO. 

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