Magazine article The CPA Journal

GAO Audit Report on Federal Government Disclaims an Opinion and Lists Material Weaknesses in Internal Controls

Magazine article The CPA Journal

GAO Audit Report on Federal Government Disclaims an Opinion and Lists Material Weaknesses in Internal Controls

Article excerpt

On March 31, 1997, under the requirements of the Chief Financial Officers Act and the Government Management Reform Act, the Secretary of the Treasury submitted the first set of consolidated financial statements of the U.S. government. The statements show an excess of liabilities over assets of $5,003 billion (is that $5 trillion?). The statement labels this minus amount a "net position" and not a net deficit. Excluded from the numbers in the balance sheet is any kind of actuarial liability for Social Security benefits and certain types of fixed assets, including natural resources, stewardship land, monuments, museum collections, and library collections. The net result of those omissions is anybody's guess. The statements are prepared using accounting principles developed by the Federal Accounting Standards Advisory Board.

As also required by those statutes, the U.S. General Accounting Office performed an audit of those consolidated financial statements. The Chief Accountant, Philip Calder, signed the audit report on behalf of the GAO, which disclaimed an opinion. In that disclaimer it stated "the amounts reported in the consolidated financial statements and related notes do not provide a reliable source of information for decision-making by the government or by the public. …

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