Managing for Results: Strengthening Financial and Budgetary Reporting

GAO discussed the government's financial information as it relates to the budget process and decisionmaking. GAO noted that: (1) the government needs reliable financial information in order to determine its financial condition; (2) the budget should provide sufficient information to help decisionmakers allocate scarce resources, make fiscal policy, and communicate budget priorities and program performance; (3) financial statements and reports should ensure basic accountability for budgetary resources and address the full costs of achieving program results, the value of government property and debt, and the government's ability to meet future commitments and detect and correct problems in financial systems and controls; (4) although the government's financial accounting information has improved, many weaknesses remain; (5) recent laws require the government to prepare annual governmentwide financial statements, but accounting system weaknesses will make these reports unreliable; (6) the development of government financial accounting standards will provide a sound foundation for the budget allocation process, but the successful implementation of these standards will depend on agencies changing the way they do their financial management reporting; (7) accrual-based reporting gives a truer picture of certain program costs and provides appropriate signals on emerging problems; (8) Congress needs to harmonize the account structures used for the budget and financial statements; (9) there are several budget approaches that would prompt Congress to consider the long-term financial outlook; and (10) the government needs to provide the public with an