GAO: Uncle Sam's Financial Statements Unreliable For 9th Straight Year, Media Missing

December 17th, 2005 4:03 PM

On Thursday, The Government Accountability Office (GAO) issued its report on their attempted audit of the United States Government's financial statements. The GAO opened its Media Release (2-page PDF) with the following:

GAO Again Disclaims An Opinion on U.S. Government's Financial Statements For the ninth straight year, the U.S. Government Accountability Office (GAO) is unable to provide an opinion as to whether the consolidated financial statements of the U.S. government are presented fairly, in all material respects, in conformity with generally accepted accounting principles. Comptroller General of the United States David M. Walker, who heads GAO, said material deficiencies in financial reporting and other matters in Fiscal Year 2005, most notably at the Department of Defense, “have resulted in conditions that prevent us from being able to render an opinion to the Congress and the American people.”

Near the end of the release is an evaluation of the quality of our government's stewardship over our tax dollars and resources:

In its audit report, GAO concludes that the federal government did not maintain effective internal control over financial reporting and compliance. The audit report also outlines a number of material control weaknesses.

The Media Release also documents Mr. Walker's grave concerns about the government's ability to continue on its current course:

Furthermore, the federal government’s reported net operating cost, which included expenses incurred during the year, increased to $760 billion in fiscal year 2005 from $616 billion in fiscal year 2004. Second, the U.S. government’s total reported liabilities, net social insurance commitments and other fiscal exposures continue to grow and now total more than $46 trillion, representing close to four times current GDP and up from about $20 trillion or two times GDP in 2000. ...... Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.”

You would think that a report like this that documents the government's failure to do what it expects any business to do for the ninth year running, and raises alarms about long-term tax and spending trends, would have been of interest to reporters across the political spectrum. You would be wrong. Google news searches done over the past 36 hours, the last at 2:15 ET Saturday afternoon, on "GAO United States government" (without the quotes, sorted by date), revealed a grand total of three relevant listings:

  • UPDATE: GAO Faults US Financial Reporting---Business Online, UK (original source found separately: MarketWatch, which also has the story here [free registration required])
  • GAO Faults US Financial
  • GAO Faults US Financial (Spain--story has moved and could not be found)

There has been no coverage by what is normally referred to as The Mainstream Media (NY Times, Washington Post, LA Times). On the "conservative" side, as a subscriber I searched The Wall Street Journal--nothing. A month ago, when the European Union failed similarly with its financial statements and controls for the 11th straight year, European and worldwide coverage coverage was at least passable, including this howler of a headline in Australia: "11 years' chaos for EU accounts." The UK Guardian, AFP, Expatica, and others all at least gave it a mention (some links have moved or have gone behind paid subscription walls), though there was plenty of concern expressed about lack of reaction to the result. Apparently no one has a stuck a microphone in front of spendaholoic congressmen to ask them if the fact that the government can't reliably tell us what is going on with its finances bothers them. Conversely, no one has asked the fiscal hawks who want us to believe they are watching every penny for their reactions either. So what explains the reluctance to report or inquire about this consistent failure of our government at the most fundamental level? Laziness? Belief that the public doesn't care or is too dumb to comprehend the impact? The MEGO (My Eyes Glaze Over) effect any time something involving finance or numbers is brought up? Liberal reluctance to embarrass government bureaucrats or the past administration (when the current streak started)? Conservative reluctance to criticize "their" sitting president? Whatever the reason(s), this comprehensive lack of accountability, and official and media nonchalance about it, are unacceptable, and scary. Where's the outrage? How will things ever change? (Cross-posted at