SEPTEMBER 17, 2007
Although their combined annual budgets amount to hundreds of billions of dollars, most federal government agencies consistently flunk annual audits required by a decades-old law, leaving them vulnerable to serious fraud and waste not to mention abuse.
Congress passed a law (Federal Financial Management Improvement Act) in 1996 to ensure that federal financial management systems provide accurate, reliable and timely information on their finances, but most of the taxpayer-funded agencies fail to do it.
This includes some of the U.S. governmentâ??s biggest and most important agencies, including the massive Department of Homeland Security with an annual budget of $35 billion and 180,000 employees. Created after the 2001 terrorist attacks to patrol the nationâ??s borders and guard it against terrorism, the agency has failed practically every one of its annual audits.
The Department of Defense, with an annual budget of $460 billion, has never even come close to passing any of its audits. The agencyâ??s budget consists of at least 20% of all federal spending yet there is no official accountability, even though it is required by law.
The National Aeronautics and Space Administration (NASA), the U.S. Coast Guard and Federal Emergency Management Agency (FEMA) are among the other big government agencies that have been singled out for serious errors in their complicated accounting practices.
A national media outletâ??s thorough review exposed the governmentâ??s alarming accounting practices, which have cost U.S. taxpayers millions of dollars. The chief accountant for the Congressional investigative arm called Government Accountability Office said the financial affairs at the Pentagon and Homeland Security Department are a â??pretty consistent mess.â?
The media outlet that exposed the fiasco points out that failing an audit in any other venue could have dire consequences such as a companyâ??s stock plummeting and the deterioration of bond and credit ratings for state and local governments. Federal agencies, however, get guaranteed funding from the U.S. Treasury even if they repeatedly violate the law.
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