In a couple weeks, the U.S. government is expected to produce its annual financial report for 2015 (for the fiscal year ended September 30, 2015).
Looking ahead, here are a few things to watch for when this report is released:
- Will the GAO again deliver a disclaimer of opinion on the report, as it has every year since 1997?
- Will the Defense Department again prove to be a major reason for the GAO’s disclaimer? How much progress has the Defense Department made in improving the shortfalls in its accounting?
- What has happened to the government’s expectations for the “75-year fiscal gap,” given the omnibus spending bill that passed Congress late last year, and was signed by the President?
- What has happened to the expectations for taxes and expenses in Social Security and Medicare, in the Statements of Social Insurance? What has happened to the gap between the present value of closed-group revenue and expenses, and what might that imply about the ‘true’ government debt and deficit?
- What has happened to the government expectations for profitability in its education and student loan programs? Does the government continue to expect massive improvement in the profitability of these programs?
- Has the government made any progress in accounting for the financial consequences of treaty obligations, given that treaties are among the ‘supreme law of the land,’ according to the U.S. Constitution?
- What will the government say about its expectations for remittances of income from Federal Reserve Banks, compared to previous years? Will the report discuss the reasons why the Federal Reserve System is not consolidated with the rest of the Government’s financial results?
- Will the government again try to comfort us, when introducing its balance sheet with reported liabilities swamping assets, stating that the government possesses resources beyond the assets reported in the balance sheet, including the “Government’s sovereign powers to tax, and to set monetary policy?”
It's hard to have optimistic expectations for the coming report, in light of recent legislation and long-running reporting practices.