For the 11th straight year, the federal government failed its financial audit, GAO announced Monday, in a widely anticipated finding that Comptroller General David Walker used to underscore the government's troubled fiscal health.
"If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up" Walker said this afternoon in a speech at the National Press Club.
Just before his address, GAO issued a statement saying it could not express an opinion on the government's fiscal 2007 consolidated financial statements, mostly due to the Defense Department's financial management problems. In an announcement this morning, the agency also pointed to the government's failure to account for intergovernmental activity and balances between agencies and federal agencies' "ineffective process for preparing consolidated financial statements."
But Walker pointed to some positives. For the first time, his agency gave an unqualified opinion on the government's "Statement of Social Insurance," which deals with the most expensive programs, such as Social Security, Medicare, railroad retirement and black lung healthcare. Walker used his speech to reiterate the themes of his "Fiscal Wake-Up Tour," through which he has warned that rising healthcare costs and baby boomer retirements will cause an unmanageable increase in debt burdens.