Management Report: Improvements Needed in Controls over the Preparation of the U.S. Consolidated Financial Statements
Highlights
The Department of the Treasury (Treasury), in coordination with the Office of Management and Budget (OMB), is primarily responsible for preparing the financial report of the U.S. government, which contains the consolidated financial statements of the U.S. government (CFS). Since GAO's first audit of the fiscal year 1997 CFS, certain material weaknesses in internal control and other limitations on the scope of GAO's work have prevented GAO from expressing an opinion on the CFS, exclusive of the Statement of Social Insurance (SOSI). Also, GAO was unable to express an opinion on the 2010 SOSI because of significant uncertainties primarily related to the achievement of projected reductions in Medicare cost growth reflected in the 2010 SOSI. As part of the fiscal year 2010 CFS audit, GAO identified material weaknesses and other control deficiencies in the processes used to prepare the CFS. The purpose of this report is to (1) provide details on new financial statement preparation control deficiencies GAO identified during its audit of the fiscal year 2010 CFS, (2) recommend improvements, and (3) provide the status of corrective actions taken to address GAO's recommendations in this area that remained open at the end of the fiscal year 2009 audit.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Treasury | To help assure that Federal Employee and Veteran Benefits Payable (FEVBP) amounts are properly reported in the CFS, the Secretary of the Treasury should direct the Fiscal Assistant Secretary to (1) enhance the applicable standard operating procedures to include required steps for assuring conformity with Statement of Federal Financial Accounting Standards No. 33 and the consistency of amounts between the statement of net cost and the FEVBP note disclosure, and (2) implement and document such steps. |
We found that Treasury has taken several actions to address this recommendation. To provide recommendations that are better aligned with the current status of remaining deficiencies related to this area, we have (1) closed this recommendation based on Treasury's significant progress in improving procedures for ensuring consistency between the FEVBP amounts reported in the statement of net cost and the FEVBP note as required by SFFAS No. 33 and (2) included a new recommendation for corrective actions for the remaining deficiencies in the FY 2011 CFS management report [GAO-12-529] under the section "Review of Federal Entities' Financial Information for Inclusion in the CFS".
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| Office of Management and Budget | To help assure the accuracy of the appendixes to the Financial Report prepared by OMB, the Director of OMB should direct the Controller of OMB to enhance its procedures for preparing the appendixes to include required steps to (1) assure the accuracy and consistency of the accompanying information presented in the appendixes to the Financial Report related to the federal government's financial management, and (2) maintain documentation supporting such information. |
OMB stated that during fiscal year 2011, OMB reported this information on the newly released Performance.gov website. Since this information was being reported through another mechanism, OMB addressed the recommendation by no longer including this information in the Other Accompanying Information section of the Financial Report.
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