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GAO-14-319R 1 (2014-02-27)

handle is hein.gao/gaobaahqq0001 and id is 1 raw text is: GAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Comptroller General Washington, DC 20548 of the United States February 27, 2014 The President The President of the Senate The Speaker of the House of Representatives Financial Audit: U.S. Government's Fiscal Years 2013 and 2012 Consolidated Financial Statements This report transmits GAO's audit report on the results of our audit of the U.S. government's fiscal years 2013 and 2012 consolidated financial statements, which is incorporated in the enclosed Fiscal Year 2013 Financial Report of the United States Government prepared by the U.S. Department of the Treasury. During fiscal year 2013, the federal government's reported unified budget deficit decreased by about $409 billion to approximately $680 billion. However, the federal government continues to face an unsustainable long-term fiscal path. To operate as effectively and efficiently as possible and to make difficult decisions to address the federal government's fiscal challenges, Congress, the administration, and federal managers must have ready access to reliable and complete financial and performance information-both for individual federal entities and for the federal government as a whole. Overall, significant progress has been made since the enactment of key federal financial management reforms in the 1990s; however, our report on the U.S. government's consolidated financial statements underscores that much work remains to improve federal financial management, and these improvements are urgently needed. Our audit report on the U.S. government's consolidated financial statements begins on page 220 of the enclosed financial report. In summary, we found the following: Certain material weaknesses1 in internal control over financial reporting and other limitations on the scope of our work resulted in conditions that prevented us from expressing an opinion on the accrual-based consolidated financial statements as of and for the fiscal years ended September 30, 2013, and 2012.2 About 33 percent of the federal government's reported total assets as of September 30, 2013, and approximately 16 percent of the federal 1A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. 2The accrual-based consolidated financial statements as of and for the fiscal years ended September 30, 2013, and 2012 consist of the (1) Statements of Net Cost, (2) Statements of Operations and Changes in Net Position, (3) Reconciliations of Net Operating Cost and Unified Budget Deficit, (4) Statements of Changes in Cash Balance from Unified Budget and Other Activities, and (5) Balance Sheets, including the related notes to these financial statements. Most revenues are recorded on a modified cash basis. The 2013, 2012, 2011, 2010, and 2009 Statements of Social Insurance and the 2013 and 2012 Statements of Changes in Social Insurance Amounts, including the related notes, are also included in the consolidated financial statements. GAO-14-319R U.S. Government's 2013 and 2012 Consolidated Financial Statements Page 1

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