Uncle Sam’s financial statements are so bad the Government Accountability Office (GAO) flunked him for the 19th year in a row.
The Department of Defense, Department of Housing and Urban Development, and Department of Agriculture have books in such bad shape coupled with the country’s out of control debt and spending, that GAO “did not render an opinion on the federal government’s consolidated financial statements,” it said Monday.
Comptroller General of the United State Gene Dodaro warned danger lies ahead if policymakers don’t change the country’s unsustainable long-term fiscal path.
“Growing debt held by the public, which is now about 74 percent of the Gross Domestic Product could limit the federal government’s flexibility to address new or unforeseen challenges, such as another economic downturn or a large-scale disaster,” Dodaro said.
But GAO has flunked the federal government since it began auditing it in 1996, said Sheila Weinberg, founder and CEO of Truth in Accounting, a nonprofit organization that analyzes state and federal government books.
Weinberg told The Daily Caller News Foundation it’s “unfathomable” the government gets away with flunking audits every year.
“The federal government is the largest financial organization in the world, so you hope that it would be the leader in having its books clean and not flunking its audits,” she told TheDCNF.
GAO audited financial statements for sustainability for the first time ever, but Congress’ finance watchdog “could not render an opinion” due to “significant uncertainties about achieving projected reductions in Medicare cost growth and a material weakness in internal controls over financial reporting.”
The Defense Department is particularly troubling, GAO and Weinberg said, because it can’t track its finances or property.
“If a corporation had this, what would happen is the lending market would lose confidence in them and it would be very hard for them to borrow any money,” Weinberg said. “If it was a publicly traded company, it would probably be taken off the market.”
Growing improper payments such as Medicaid overpayments also plague the government’s finances. The federal government paid at least $136 million in improper payments for benefits in fiscal year 2015, more than the $124 million it paid in 2014 and the $105 billion it paid in 2013, according to GAO.
The government’s inability to stick to a budget, just as a family household must, erodes Americans’ faith in government, Weinberg said.
“The biggest thing is that they lose confidence in the government.”