GovernmentExecutive.com

Return to Article: Fewer errors key to passing future financial audits, GAO says

• 2059
  

  Even if done correctly, the information is basically useless! Gore and Congress imposed accrual accounting on the non-profit government! Government does not operate as a business nor account for activity as a business. Government has no concern about matching revenues with costs and no concern about future liabilities. They may choose to not pay these at any time - witness Argentina and Iraq.

  Managers in government do not manage actual cash, they manage obligating the government across the future. For example 3400 appropriations must obligate within a year, but they may be expensed over a 5 to 7 year period. Therefore, I may obligate a five year project today to use up the appropriation, but actual outlay will not happen until the period is completed. Managers do not care or track the five year payment process that is accounting. The manager has set authority to use over the next five years. If work is delayed, the manager can get a two year extension.

  If Congress wants to control cash outlays, they should reduce the time allowed for an obligation to be spent. 3400 should not allow 5 to 7 yrs for spending. Congress should change the rules so money must be paid out within 2yrs of the fiscal year the appropriation was authorized. Do not 2yrs from obligation because that provides incentive to delay obligation. This would provide better management than the current system. It is far better than wasting all the money and time on establishment of an accrual system.

  GAO should get off Treasury because they must establish an accrual system throughout government before they can adjust for intra-governmental transfers. This is not in the current accounting systems and is not a concept managers understand. For example, if I contract "my money" on a DoT contract, that is "my money" not DoT's and I am dealing with "my contractor" not DoT's, even though they contracted and have a reimburseable transfer of fund. However, this is an intra-governmental transfer but it is "my funds" - GAO needs to get on the individual agencies to begin this process and not on Treasury.

  This entire matter is a big wste of my tax dollars and should be stopped immediately. We are spending millions on this process and will have nothing better when finished - in fact it may be worse.

  GovExec.com reader Posted November 7, 2003 7:45 AM