For the ninth consecutive year, material weaknesses in internal controls and also within selected accounting and financial reporting practices have prevented the Government Accountability Office from rendering an opinion as to whether the federal government financials are in conformity with generally accepted accounting principles.
The GAO said that three ongoing roadblocks preventing an opinion are:
- Serious financial management problems at the Department of Defense;
- The federal government's inability to adequately account for and reconcile intra-governmental activity and balances between federal agencies; and,
- The federal government's ineffective process for preparing the consolidated financial statements.
The GAO said that as of Sept. 30, 2005, the federal government did not maintain effective internal controls over financial reporting and compliance due to myriad material weaknesses. The auditor general also expressed concerns over the government's overall financial condition and long-term fiscal imbalance.While the fiscal year 2005 budget deficit was lower than 2004, it was still very high, particularly given the impending retirement of the "baby boom" generation and rising health care costs. Also, the basic costs to operate the government increased to $760 billion in fiscal year 2005 from $616 billion in fiscal year 2004 -- a 23-percent rise.
As of September end, the federal government's gross debt was about $8 trillion.
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