U.S. Government's 2013 Financial Report Reflects Continuing Financial Management and Fiscal Challenges
WASHINGTON, D.C. (February 27, 2014) -- The U.S. Government Accountability Office (GAO)
cannot render an opinion on the FY2013 consolidated financial statements of the
federal government because of continuing serious material internal control
weaknesses, significant uncertainties, and other limitations.
significant improvements occurred during the past year, such as the Department
of Homeland Security receiving its first unmodified (clean) opinion, three main
obstacles remain to a GAO opinion on the accrual-based consolidated financial
Serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable.
The federal government's inability to adequately account for and reconcile
intragovernmental activity and balances between federal entities.
The federal government's ineffective process for preparing the consolidated
financial management and accountability have improved significantly since
enactment of key federal financial reforms in the 1990's, but GAO's report on
the U.S. government's consolidated financial statements makes clear that much
still needs to be done and these improvements are urgently needed," said Gene
L. Dodaro, Comptroller General of the United States and head of the GAO. "In a
time of limited resources, sound financial and performance information is vital
both to help federal managers improve efficiency and effectiveness and to help
policy makers address our government's overarching long term fiscal problems."
almost all of the 24 Chief Financial Officers
Act agencies received unmodified or "clean" opinions on their respective
entities' fiscal year 2013 financial statements. An exception was DOD
which has consistently been unable to receive such an audit opinion on its
years of unsuccessful efforts to improve financial management within DOD, DOD's
Comptroller established the Financial Improvement and Audit Readiness
Directorate to develop, manage, and implement a strategic approach for
addressing internal control weaknesses and for achieving auditability. DOD's overall
goal is to prepare auditable department-wide financial statements by September
underway to resolve financial management challenges but strong and sustained
commitment by DOD and other federal entities, as well as continued leadership
by the Department of the Treasury and the Office of Management and Budget, are
necessary to implement needed improvements.
unable to render an opinion on the 2013 Statement of Social Insurance and the
2013 Statement of Changes in Social Insurance Amounts because of significant
uncertainties, primarily related to the achievement of projected reductions in
Medicare cost growth. The consolidated financial statements discuss these
uncertainties, which relate to reductions in Medicare payment rates for
physician services and productivity improvements for most other categories of
cited material weaknesses involving more than $100 billion in improper
payments, information security across government, and tax collection
Reliable financial and performance information is even
more critical as federal managers likely face increasingly lean budgets and
need to operate their respective entities as efficiently and effectively as
possible and as decision makers carry out the important task of addressing the
federal government's fiscal challenges. Over the long term, the imbalance
between spending and revenue that is built into current law and policy will
lead to continued growth of debt held by the public as a share of gross
domestic product (GDP).
"This situation--in which debt grows faster than
GDP--means that the current federal long term fiscal path is unsustainable,"
Dodaro praised the Inspectors General across
government, who are responsible for auditing the annual financial statements of
individual federal entities, for their commitment and professionalism.
GAO's report on the results of its audit of the U.S.
government's fiscal year 2013 consolidated financial statements, which are included
in the 2013 Financial Report of the United States Government, prepared by the
U.S. Department of the Treasury, is available on GAO's website at
For more information, contact Chuck Young, GAO Managing Director of Public Affairs, at
The Government Accountability Office, known as the investigative arm of Congress,
is an independent, nonpartisan agency that exists to support Congress in meeting its constitutional responsibilities. GAO also works to improve the performance
of the federal government and ensure its accountability to the American people.
The agency examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO provides
Congress with timely information that is objective, fact-based, nonideological,
fair, and balanced. GAO's commitment to good government is reflected in its
core values of accountability, integrity, and reliability.