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Monday, January 21, 2013

GAO Cannot Audit Federal Government, Cites Department Of Defense Problems


WASHINGTON -- The Government Accountability Office said Thursday that it could not complete an audit of the federal government, pointing to serious problems with the Department of Defense.
Along with the Pentagon, the GAO cited the Department of Homeland Security as having problems so significant that it was impossible for investigators to audit it. The DHS got a qualified audit for fiscal year 2012, and is seeking an unqualified audit for 2013.
The report released by the GAO on Friday indicates serious accounting problems at two of the largest government agencies: the Pentagon and the Department of Homeland Security. The Department of Defense has a net cost of $799.1 billion to the federal budget, while the Department of Homeland Security has a net cost of $48.7 billion.
"The U.S. Government Accountability Office (GAO) cannot render an opinion on the 2012 consolidated financial statements of the federal government because of widespread material internal control weaknesses, significant uncertainties, and other limitations," the agency said. "As was the case in 2011, the main obstacles to a GAO opinion on the accrual-based consolidated financial statements were: Serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable. The federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies. The federal government’s ineffective process for preparing the consolidated financial statements."
In the report, the GAO also said that the federal government could not reconcile transfers between federal agencies and had an ineffective process for preparing financial statements.
The report lists the Department of Defense as having the third-largest cost to the federal government, at 21 percent. That value is slightly behind the costs of the Department of Health and Human Services and the Social Security Administration, which both have high costs because they run the large social insurance programs Medicare and Social Security.


- Luke Johnson, Ryan Grim, HuffingtonPost.com
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