Recent criticism of the Government Accountability Office (GAO), as reported by Politico and the Washington Post, underscores lawmakers’ frustration with its failure to address federal financial inefficiencies. They’re right to demand accountability, but Congress shares the blame—they fund the GAO and oversee the quasi-governmental board, FASAB that shapes federal accounting standards.
Established on July 1, 1921, under the Budget and Accounting Act, the GAO (originally the General Accounting Office) was created to assist Congress in overseeing federal spending. Renamed in 2004, it now evaluates broader government performance.
Yet, for 26 years, the GAO has flagged “material weaknesses” in federal financial statements, admitting they’re unreliable. The Department of Defense, with an $800 billion budget, can’t produce verifiable books. Fraud and improper payments siphon off $521–$750 billion annually, dwarfing the federal education budget. Truth in Accounting’s analysis reveals the government’s true debt, including unfunded Social Security and Medicare liabilities, exceeds $100 trillion.
This fiscal mess is compounded by the quasi-governmental body, the Federal Accounting Standards Advisory Board FASAB, which was formed through an agreement among GAO, Treasury, and OMB. FASAB plays an important role in public sector financial reporting, but some have wondered whether the original agreement among GAO, OMB, and Treasury to create and manage FASAB was ever clearly grounded in formal constitutional or statutory authority. Under the terms of that agreement, OMB Director Russell Vought and Treasury Secretary Scott Bessent retain the ability to review and revise FASAB’s structure and operations.
Though little known to the public, this board wields substantial influence over how governments report their finances. Their standards often allow long-term obligations—such as Social Security and Medicare promises—to be maintained off the federal balance sheet. This makes it difficult for taxpayers and policymakers to fully understand the scope of government debt and fiscal risk.
Taxpayers deserve better. If a public company reported such opaque finances, it would face SEC scrutiny and shareholder outrage. Yet, the federal government uses accounting practices that would bankrupt any business. The GAO, with a 2025 budget of $975.8 million and over 3,000 employees, uncovers major issues—like $162 billion in improper Pentagon payments—but has no enforcement authority. As a watchdog, its role is limited to revealing problems rather than driving change.
Congress can act now. First, it should reform federal financial reporting to recognize Social Security and Medicare liabilities as liabilities. Second, it should review the structure of FASAB to assess whether the interests of taxpayers—their largest stakeholders—are adequately represented and whether these boards operate in line with recent Supreme Court rulings on regulatory authority.
Lawmakers often criticize the GAO while overlooking their responsibility in funding and overseeing it—along with the quasi-governmental board, FASAB. This isn’t a partisan issue; every taxpayer pays the price for financial opacity. With nearly $100 trillion in hidden debt and complex fiscal rules, Congress has a duty to demand transparency and accountability. The current federal accounting framework fails to reflect the full fiscal picture—but with bold Congressional oversight and reform, Americans can finally get the truth they deserve.