Uncle Sam can't pass an audit

  • 22 May 2019
  • NormanL

The Government Accountability Office has released its audit of the federal government's general fund. What is the watchdog agency's verdict?

Certain significant deficiencies in internal control over financial reporting and other limitations on the scope of GAO's work resulted in conditions that prevented GAO from expressing an opinion on the Schedules of the General Fund as of and for the fiscal year ended September 30, 2018. Such scope limitations also prevented GAO from obtaining sufficient appropriate audit evidence to provide a basis for an opinion on the effectiveness of the Bureau of the Fiscal Service's (Fiscal Service) internal control over financial reporting relevant to the Schedules of the General Fund as of September 30, 2018. In addition, such scope limitations limited tests of compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements for fiscal year 2018.

In other words, the books are such a mess, the GAO was unable to say whether Uncle Sam's finances were good, bad, or otherwise.

But what, exactly, is this general fund you may ask?

The General Fund is the reporting entity responsible for accounting for the cash activity of the U.S. government. In fiscal year 2018, the General Fund reported $14.2 trillion of cash inflows, including debt issuances and taxes collected, and $14.0 trillion of cash outflows, including debt repayments and Social Security and health care benefit payments. It also reported $21.6 trillion of federal debt securities held and managed by the Department of the Treasury as of September 30, 2018.

So it's the central hub for all government financial transactions -- trillions of dollars worth each year.

It strikes us that having this fund working effectively and efficiently so it could pass an audit ought to be a top priority. One that taxpayers should demand. You can read the entire report here.