Can the federal government pass an audit? The standing answer has been “no.” And part of that is because Uncle Sam can't produce financial statements that any auditor could trust.
A recent Government Accountability Office report on the government's 2022 and 2023 financial statements notes that the problem is only getting worse:
Three major impediments have continued to prevent GAO from rendering an opinion on the federal government's accrual-based consolidated financial statements: (1) serious financial management problems at the Department of Defense, (2) the federal government's inability to adequately account for intragovernmental activity and balances between federal entities, and (3) weaknesses in the federal government's process for preparing the consolidated financial statements.
In addition, the Small Business Administration and Department of Education were unable to obtain opinions on their fiscal years 2022 and 2023 financial statements because of weaknesses related to loans and loan guarantees. Efforts are under way to resolve these issues.
That the Defense Department can't get its books in order is hardly surprising. The DOD has never been able to pass an audit, despite years of promising it would do better.
But there's another, horrifying, item to consider about all these financial statements – the staggering volume of “improper payments.”
Two other continuing material weaknesses are the federal government's inability to (1) determine the full extent to which improper payments occur and reasonably assure that appropriate actions are taken to reduce them and (2) identify and resolve information system control deficiencies and manage information security risks on an ongoing basis. The fiscal year 2023 government-wide total of reported improper payment estimates was $236 billion, but it did not include estimates for certain government programs. Thirteen of the 24 agencies covered by the Chief Financial Officers Act of 1990 reported material weaknesses or significant deficiencies in information system controls. [emphasis added]
A quarter-trillion dollars goes out the door every year to people, organizations and companies that aren't supposed to get it.
That's real money, even by official Washington's standards. And there is no firm understanding of where the money is going, or how to stop it.
And worse – the amount could be even bigger than $236 billion.
Only a fiscally reckless debtor state could throw so much money into the wind. Only a political class larping its way through life, office and everything would allow such a criminal waste of increasingly scarce resources. And as for voters? They seem to care at the margins. But they ought to care much more…because they are the ones being ripped off.
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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