GAO gives advice on passing governmentwide audit
Auditors recommend ways the government can get past obstacles to a clean opinion.
The Government Accountability Office on Friday suggested steps the government could take to resolve problems that for the past seven years have prevented it from passing its annual audit.
The Treasury Department plans on implementing a new process for transferring financial information from major agencies' paperwork to the government's consolidated financial statement. The changes, scheduled to take effect for the fiscal 2004 audit cycle, will likely cut down on discrepancies between agency statements and the governmentwide forms, auditors have said.
But the new system needs several refinements, according to GAO's report (GAO-04-866). Under the current design, agencies will transfer information to Treasury through templates that have room for specific information.
After reviewing those templates, GAO concluded that the forms are "too restrictive, and that important information reported at the agency level may not be included in the consolidated financial statements because it is not specifically called for."
The system also neglects to ask agencies for information in each of the five areas covered in the consolidated statement, GAO found. For example, the process doesn't capture the information necessary to adequately reconcile agency outlays and those reported in Treasury's governmentwide statement.
"The lack of direct linkage also affects the efficiency and effectiveness of the audit of the consolidated financial statements," GAO reported. To resolve these problems, Treasury should refine the new reporting process so that agencies' audited statements directly match the governmentwide statement, the auditors recommended.
Though most major agencies now earn clean opinions on annual audits, the government has yet to pass its overall audit, in large part because of management problems at the Pentagon. But a failure to prepare consolidated statements properly and an inability to account for billions of dollars in transactions among agencies also stand in the way of a clean opinion, GAO has said.
The Office of Management and Budget generally agreed with GAO's recommendations, and officials there agreed to work with agencies and the Treasury Department to implement the suggestions. Treasury officials generally agreed with the report.