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Because of the significance of the federal debt held by the public to the consolidated financial statements of the U.S. government, which GAO is required to audit, GAO audits the Bureau of the Public Debt's (BPD) Schedules of Federal Debt annually. This is done to determine whether, in all material respects, (1)the schedules prepared are reliable, (2) BPD management maintained effective internal control relevant to the Schedule of Federal Debt, and (3) BPD complies with selected provisions of significant laws related to the Schedule of Federal Debt. Federal debt managed by BPD consists of Treasury securities held by the public and by certain federal government accounts (intragovernmental debt holdings). The level of debt held by the public reflects how much of the nation's wealth has been absorbed by the federal government to finance prior federal spending in excess of total federal revenues. Intragovernmental debt holdings represent balances of Treasury securities held by federal government accounts, primarily federal trust funds such as Social Security, that typically have an obligation to invest their excess annual receipts over disbursements in federal securities.

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