Enzi: Federal Financial Mismanagement Contributes to Broken Budget Process
WASHINGTON D.C. – During a hearing today focused on the unreliability of federal financial data, Senator Mike Enzi (R-WY), Chairman of the Senate Budget Committee, said that the federal government’s financial mismanagement contributes to the broken budget process.
“The Congressional budget process is fundamentally broken, which has contributed to spiraling levels of overspending and debt,” said Chairman Enzi. “But it’s important to understand that the broken budget process is just one part of a broader cycle of federal financial mismanagement. The government-wide financial statements that GAO audits should tell us what came in to the government’s coffers and what went out; what the government owns, and what it owes; and if its operations are financially sustainable. But GAO’s recent audit calls into question the reliability of this underlying financial data.”
Historically, the Secretary of the Treasury, in coordination with the Director of the Office of Management and Budget (OMB), annually prepares the consolidated financial statements of the U.S. Government, for Congress and the Administration to provide a comprehensive overview of the cost of the federal government’s operations, the sources used to finance them, and the implications of long-term obligations and commitments. The GAO audit of these statements is performed to inform decision-makers and accurately present the financial condition of the federal government.
Enzi noted that when GAO transmitted the results of its recent audit of the U.S. Government’s consolidated financial statements for fiscal years 2014-2015, it stated that -- for the 19th consecutive year -- it could not render an opinion on the financial statements, due to three major impediments: the continued inauditability of the Department of Defense; the Government’s inability to account for and reconcile intragovernmental activity and balances between federal entities; and the Government’s ineffective process for preparing the consolidated financial statements.
“If a publicly-owned company on the stock market was unable to be audited because of the poor conditions of its records, investors would run away from it. But we can’t run away from a government in which we are all stakeholders. This is an enterprise in which we – and our children -- are all invested,”Chairman Enzi said. “It would be disastrous for a publicly-owned company to be unable to prove to auditors that it had a handle on how much inventory was held in its own warehouses, what condition its property is in, or the extent to which it is on the hook for potential liabilities. These are exactly the sort of weaknesses GAO found in the federal government’s books and the situation has implications for Congress, because it means we may not have the most reliable data when we embark on the budgeting stage of the financial management cycle.”
# # #
Next Article Previous Article