No Opinion from GAO on the U.S. Government's Annual Financial Statements
WASHINGTON, D.C. (February 27, 2020)—The U.S. Government Accountability Office (GAO) is unable to render an opinion on the federal government’s FY 2019 consolidated financial statements due to serious material weaknesses in financial reporting. These include financial management problems at the Department of Defense (DOD), the federal government’s inability to adequately account for transactions between agencies, and shortcomings in the process for putting together the consolidated financial statements. Also, while 22 of the 24 Chief Financial Officers Act agencies received unmodified or "clean" opinions on their FY 2019 financial statements, one or more significant internal control weaknesses were identified at 11 of these 24 agencies.
“These issues undermine the federal government’s ability to accurately report financial data,” said U.S. Comptroller General and head of the GAO, Gene L. Dodaro. “Meaningful progress in improving government operations depends on having accurate financial information for every federal department and agency. This includes a clear picture of revenues and expenses, as well as assets and liabilities,” Dodaro said. “While progress continues, this year’s audit report underscores how much work remains before Congress and agency officials have access to reliable, up-to-date, and thorough numbers.”
Dodaro urged DOD and other agencies to continue to build upon their efforts to address continuing financial management weaknesses. Significant impediments at DOD and the Department of Housing and Urban Development continue to preclude those agencies from receiving clean opinions on their financial statements.
Dodaro noted that substantial progress has occurred since the enactment of the Chief Financial Officers Act of 1990. This includes improvements in internal controls and the issuance of more reliable individual agency financial statements. But GAO’s audit report again raised a red flag about the federal government’s improper payment problem, citing it as a material weakness. Such payments reached an estimated $175 billion in FY 2019. Other material weaknesses centered on government information security as well as loans receivable and loan guarantee liabilities.
More broadly, the financial report, along with simulations by the Congressional Budget Office and GAO, indicate that the federal government’s long-term fiscal path is unsustainable. In GAO’s view, Congress needs to develop a plan to address the long-term outlook, while accommodating near-term economic needs and national priorities. To help safeguard the full faith and credit of the United States, GAO has also recommended that Congress revise its approach to the debt limit so that decisions about borrowing are tied to spending and revenue decisions at the time those decisions are made.
Dodaro thanked the Inspector General community for their contributions to auditing the annual financial statements of their respective departments and agencies.
GAO's audit report on the U.S. government's consolidated financial statements is included in the 2019 Financial Report of the United States Government, which is prepared by Treasury in coordination with the Office of Management and Budget.
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