Skip to main content

GAO Finds Ongoing Serious Weaknesses in U.S. Government’s Financial Statements

WASHINGTON (February 16, 2023) – The Government Accountability Office (GAO) is again unable to provide an opinion on the reliability of the federal government’s consolidated financial statements. “This is especially troubling given the significant domestic and international challenges facing our government, which place a premium on the need for accountability and transparency,” said Gene L. Dodaro, U.S. Comptroller General and the head of the GAO. The difficulty in providing an opinion is due to long-standing financial management problems at the Department of Defense, inadequate accounting for transactions between government agencies, and weaknesses in the process for preparing the statements. In addition, the Small Business Administration had continuing financial management deficiencies in their pandemic relief programs, the Department of Education could not adequately support the costs of its loan programs, and improper payments totaling $247 billion were reported across several federal agencies and programs.

“It’s essential that the federal government has complete and accurate financial information, both across the government and within each agency, to operate as effectively and efficiently as possible,” the Comptroller General said. “While the federal government has made significant strides in improving its financial management, this year’s audit report emphasizes the need for the government to address these serious financial management weaknesses and for Congress to develop a plan to put the government on a path toward long-term fiscal sustainability.”   

This year’s report describes the unprecedented actions the federal government has taken in response to the COVID-19 pandemic to protect public health and reduce economic impacts on individuals and businesses. These efforts are reflected in the net cost, assets, liabilities, and budget deficit reported in the government’s consolidated financial statements for fiscal years 2022 and 2021. The federal government’s COVID-19 related cumulative appropriations totaled $4.5 trillion and budget expenditures totaled $4.0 trillion, as of September 30, 2022. GAO recently reported on widespread fraud, improper payments, and accountability deficiencies in COVID-19 relief programs.

The Financial Report of the U.S. Government, which includes the consolidated financial statements, provides a comprehensive view of government finances.

The 2022 financial report, along with simulations by the Congressional Budget Office and GAO, indicates long-term projections show that debt held by the public is growing faster than the gross domestic product (GDP), which means that current policy is unsustainable. Since 2017, GAO has stated that Congress should develop a plan to put the government on a path toward long-term fiscal sustainability with well-designed fiscal rules and targets that can help manage debt by controlling factors such as spending and revenue. Further, GAO suggests that Congress consider alternative approaches to the current debt limit as part of any long-term fiscal plan.

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 2022 Financial Report of the United States Government, which is prepared by Treasury in coordination with the Office of Management and Budget.

 

#####

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.

 

Next Release:

GAO Issues and Seeks Comments on Draft Updates to "Yellow Book," the Preeminent Standards for Government Auditing

WASHINGTON, DC (January 30, 2023)—Today, the U.S. Government Accountability Office (GAO) issued an exposure draft with proposed updates to Generally Accepted Government Auditing Standards (GAGAS), also known as the Yellow Book. GAO invites public comments on the proposed changes, which reflect developments in accounting and auditing professions.