GAO again gives thumbs-down to federal financial statement
Watchdog agency cites problems with Defense financial management among reasons it can’t render an unqualified opinion.
In what has become an annual event, the Government Accountability Office said Tuesday it could not issue an opinion on the federal government's 2010 consolidated financial statement "because of widespread material internal control weaknesses, significant uncertainties and other limitations."
Gene Dodaro, acting controller general and President Obama's nominee to head GAO, said there were three main reasons the agency once again could not give its unqualified approval to federal financial statements:
- "Serious financial management problems" at the Defense Department.
- Government's inability to account for and reconcile balances between agencies.
- An overall "ineffective process" for preparing financial statements.
Dodaro also cited "material weaknesses" in federal financial practices involving more than $125 billion in improper payments in fiscal 2010, information security practices across government and tax collection activities.
This marks the 14th consecutive year that GAO has been unable to provide an opinion on the government's overall financial statement.
"Even though significant progress has been made since the enactment of key financial management reforms in the 1990s, our report on the U.S. government's consolidated financial statement illustrates that much work remains to be done to improve federal financial management," said Dodaro.
Last year, GAO was at least able to render an unqualified opinion on the government's fiscal 2009 Statement of Social Insurance, which covers the Social Security, Medicare and Railroad Retirement Board programs. But for fiscal 2010, the agency said it could not offer such an endorsement due to "significant uncertainties, primarily related to the achievement of projected reductions in Medicare cost growth."
Overall, 19 of 24 federal agencies got clean opinions from GAO on their 2010 financial statements. Among those that didn't were the Defense, Homeland Security and Labor departments. Last year, 20 agencies got unqualified opinions.