Few people know it, but the federal government has something called a “general fund,” based in the Treasury Department, that is supposed to keep track of all the money Uncle Sam spends every year.
In short, it’s a mammoth series of ledgers that serves as a record of income and outgo. And every year, the Government Accountability Office (GAO) conducts an audit of the books to make sure everything has been reported correctly (even if the bottom line is awash in red ink). Just how much money are we talking about here? Trillions upon trillions of dollars:
In fiscal year 2022, the General Fund reported $23.2 trillion of cash inflows, including debt issuances and tax collections, and $22.8 trillion of cash outflows, including debt repayments. It also reported a budget deficit of $1.4 trillion, which includes both cash and noncash activity.
The GAO has released its most recent audit report of the government’s general fund and, unsurprisingly, there are some problems:
Certain deficiencies in internal control over financial reporting resulted in scope limitations that
1. prevented GAO from expressing an opinion on the Schedules of the General Fund as of and for the fiscal year ended September 30, 2022;
2. prevented GAO from obtaining sufficient appropriate audit evidence to provide a basis for an opinion on the effectiveness of the Bureau of the Fiscal Service’s internal control over financial reporting relevant to the Schedules of the General Fund as of September 30, 2022; and
3. limited tests of compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements for fiscal year 2022.
In layman’s terms, this GAO wasn’t able to say whether government’s books were accurate. It’s not a new problem, but it’s a very serious one. Back in February, U.S. Comptroller General Gene Dodaro told Congress the continued sketchiness of Uncle Sam’s books is “especially troubling” in these uncertain times.
Dodaro also pointed the finger at specific parts of the government for making a correctable problem into a chronic deficiency:
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.
The Defense Department has the dubious distinction of having never passed an audit. Correcting that expensive failure would seem to be essential for any in Congress who say they want to reduce federal spending through the elimination of waste, fraud, abuse and such.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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Update policies then
Fix the problem
Remember when the IRS said their accounting practices couldn’t stand up to being audited? We have an out of control federal government that needs to be drastically downsized.
How do you have $23.2 trillion of cash inflows and $22.8 trillion of cash outflows, and wind up with a budget deficit of $1.4 trillion? Either it is misreported in the article or the US accountants are using voodoo. $23.2 – 22.8 = 0.4 surplus.
In fiscal year 2022, the General Fund reported $23.2 trillion of cash inflows, including debt issuances and tax collections, and $22.8 trillion of cash outflows, including debt repayments. It also reported a budget deficit of $1.4 trillion, which includes both cash and noncash activity.
Those numbers are inherently inconsistent.