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Monday, March 06, 2006

GAO Cites Material Weaknesses

"Several material weaknesses kept the federal government from maintaining effective internal controls over financial reporting. Also, deficit still a concern.

Officials at the U.S. Government Accountability Office (GAO) said that for the ninth straight year it is unable to provide an opinion as to whether the consolidated financial statements of the U.S. government are fairly stated and conform with generally accepted accounting principles (GAAP). The GAO cites material weaknesses in internal controls and selected accounting and financial reporting practices as the reason for the qualified opinion.

In a March 1 report on fiscal year 2005 government financial statements, the agency cited three major impediments to rendering an opinion on the financial statements: serious financial management problems at the Department of Defense; the federal government's inability to adequately account for, and reconcile, intragovernmental activity and balances among federal agencies; and the federal government's ineffective process for preparing the consolidated financial statements."

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