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Institute

for Truth in Accounting

Federal Government Can’t Count

Most Americans believe that the Defense Department has handled the war in Iraq poorly. The auditors of the Federal government believe that the Defense Department has also handles their financial records very poorly. “Serious financial management problems” at the Department of Defense made it impossible for auditors to render an opinion on the 2006 Federal financial statements. Sheila Weinberg, CEO of the Institute for Truth in Accounting, said that this means “the Federal government’s records are so messed up, the auditors can’t tell us how messed up the finances are.”

The Financial Report of the U.S. Government, which covered the fiscal year ended September 30, 2006, was issued last Friday, December 15. In the Government Accountability Office Report included in the financial report, the auditors emphasized the nation’s fiscal imbalance. The Federal government is in a financial hole of approximately $50 trillion, which is four times more than everything the country’s private sector produced in the fiscal year. This is up from $20 trillion in just six years ago. U.S. Comptroller General David Walker declares that “the nation’s current fiscal path is unsustainable.”

According to the auditors, the Treasury Department and other federal agencies flunked in their work to properly prepare the financial statements. For a decade now the auditors have found that the people, who are suppose to manage Federal assets, do not maintain adequate internal controls to safeguard these assets. More than half of the assets reported on the Federal balance sheet were not accounted for correctly. One out of every four dollars spent in fiscal year 2006 by the Federal government was not reported properly.

Weinberg of the Institute for Truth in Accounting stated, “Each taxpayer is required to accurately prepare their tax returns, but the Treasury Department and other Federal agencies do not maintain their financial records accurately.” She asked, “If the Federal government can not count, then should we be counting on the Federal government?”

The Institute for Truth in Accounting is working to enhance the credibility of public and private sector financial reporting by encouraging the issuance of understandable, reliable and relevant information. Founded in 2002, and based in Northbrook, Illinois, The Institute’s initial focus was on the federal government and recently expanded its efforts to Illinois’ state government. The Institute for Truth in Accounting is a nonprofit organization with no political affiliations.