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GAO-16-357R 1 (2016-02-25)

handle is hein.gao/gaobaajqp0001 and id is 1 raw text is: GAOU.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Comptroller General Washington, DC 20548 of the United States February 25, 2016 The President The President of the Senate The Speaker of the House of Representatives Financial Audit: U.S. Government's Fiscal Years 2015 and 2014 Consolidated Financial Statements This report transmits the results of GAO's audit of the U.S. government's fiscal years 2015 and 2014 consolidated financial statements. GAO's audit report is incorporated in the enclosed Fiscal Year 2015 Financial Report of the United States Government prepared by the U.S. Department of the Treasury (Treasury). The federal government reported a unified budget deficit of approximately $439 billion for fiscal year 2015, a decrease of about $45 billion from fiscal year 2014. 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. 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 239 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, 2015, and 2014.2 About 34 percent of the federal government's reported total assets as of September 30, 2015, and approximately 19 percent of the federal government's reported net cost for fiscal year 2015 relate to three Chief Financial Officers (CFO) Act agencies-the Department of Defense (DOD), the Department of Housing and Urban Development, and the U.S. Department of Agriculture-that received disclaimers of opinion on their fiscal year 2015 financial statements. 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, 2015, and 2014, 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. GAO-16-357R U.S. Government's 2015 and 2014 Consolidated Financial Statements Page 1

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