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GAO Marks 90th Birthday

July 1, 2011

It was born in the Harding administration, and now it’s celebrating its 90th year: the bureau formerly known as the General Accounting Office.

To mark the anniversary, the GAO has posted a video on its Web site that reviews its history, including how some of its initial employees were young women entering the workforce for the first time, who were hired to audit government vouchers for payments and purchases. Harding signed into law the Budget and Accounting Act in 1921 so the government could keep better track of its spending after it accumulated a massive debt from World War I. The law also required the President for the first time to produce an annual budget. After World War II, the GAO began performing more comprehensive financial audits of other agencies and their activities.

The video includes interviews with the current Comptroller General, Gene Dodaro, and his predecessors David Walker and Charles Bowsher, who were both former Arthur Andersen partners. There is a bit of irony in that, since Andersen would later implode in the wake of accounting scandals at its clients Enron and WorldCom, but then so did the Harding administration after the Teapot Dome scandal.

Walker changed the name of the GAO to the Government Accountability Office in 2004 and the following year began warning people about the dangers he was seeing in the ballooning federal budget deficit. The agency has increasingly been involved in tracking government agencies and programs, but nowadays only about 15 percent of its employees have financial backgrounds. Dodaro is the first career civil servant to lead the agency, notwithstanding the efforts of the AICPA a year or two ago to pass a law requiring the Comptroller General to always be a CPA. The first Comptroller General was a lawyer.

The agency is keeping close tabs on its fellow agencies and their programs, including the IRS. And its work may eventually help rein in the growing budget deficit, assuming Democrats and Republicans can ever agree on what to do about it.

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