GAO told the Senate financial management subcommittee recently that for the 11th consecutive year it was unable to certify the reliability of the government’s consolidated financial statements because of internal control weaknesses.
In testimony on its audit of the CFS for fiscal year 2007, GAO said that sustained improvements in financial management overall are needed to improve accountability and address serious, long-term fiscal challenges.
The main impediments to certifying the CFS were serious financial management problems at the DoD, the inability to adequately account for and reconcile intra-governmental activity and balances between agencies, and ineffective process for preparing the consolidated financial statements.
It also said financial management system problems continue to hinder federal agency accountability.
However, it noted that significant progress has been made in improving federal financial management, and said audit results for many federal agencies have improved and federal financial system requirements have been developed.
Still, GAO said structural deficits due to rising health care costs and demographic trends have the government on an unsustainable fiscal path that requires a multi-pronged approach, and called for a reexamination of the federal financial reporting model.
