GAO reviewed 22 major budget accounts at 10 agencies--representing more than 75 percent of fiscal year 1999 expeditures--and found that 14 of those accounts were reliable enough to warrant a clean or unqualified audit opinion on fiscal year 1999 financial statements.
GAO's work focused on agencies' Statements of Budgetary Resources (SBRs). Beginning in fiscal 1998, agencies were required to prepare SBRs as one of their primary financial statements.
Each SBR provides information about agencies' budget resources, obligations, and expenditures. The statement is an important component in making the government accountable for the collection and use of taxpayers' money, GAO officials say. The SBR can be used to ensure that an agency's budget data match up with the information reported in the President's budget. The information can then be used to make decisions about future funding for the agency.
"These agencies did not have significant differences between amounts in the SBR and the President's budget, or if differences existed, they were explained in the financial statements as required by accounting standards, and did not indicate that amounts in the President's budget were significantly misstated," said the report, "Framework for Assessing the Reliability of Budget Execution Data Is Not Yet Fully Implemented" (GAO-01-43).
According to GAO's review, the following agencies and their programs successfully implemented the federal accounting framework to produce reliable budget data:
- Agriculture: Special Supplemental Nutrition Program for Women, Infants, and Children; Child Nutrition Programs
- Health and Human Services: Payments to Health Care Trust Funds; Federal Supplementary Medical Insurance Trust Fund; Federal Hospital Insurance Trust Fund; Grants to States for Medicaid
- Housing and Urban Development: Federal Housing Administration
- Labor: Unemployment Trust Fund
- Office of Personnel Management: Civil Service Retirement and Disability Fund
- Transportation: Federal Transit Authority Grants; FAA Operations
- Treasury Department: Interest Expense on the Public Debt Outstanding
- Veterans Affairs: Medical Care; Compensation, Pension, and Burial Benefits
Programs that showed significant differences between amounts in the SBR and the President's budget included the Social Security Administration's Federal Old Age and Survivors Trust Fund; the Agriculture Department's Food Stamp Program and its Commodity Credit Corporation Fund; and the Transportation Department's Federal Aid Highways program.
Agency officials, including officials from the Office of Management and Budget, agreed with GAO's findings.
GAO emphasized in a previous report (AIMD-00-307), which reviewed agencies' compliance with the 1996 Federal Financial Management Improvement Act (FFMIA), that clean financial audits are not an end to themselves, noting that most agencies' overall financial statements were still unacceptable.
Of the 24 agencies covered under the Chief Financial Officers Act, only the Energy Department, NASA and the National Science Foundation complied with the financial requirements of FFMIA for fiscal year 1999, according to GAO.