Financial mismanagement has been an endemic problem in the nation’s capital for decades, and some of its worst aspects are being exposed as a result of the multi-trillion-dollar response to the COVID-19 pandemic.  On February 16, 2023, the Government Accountability Office (GAO) released an audit of the government’s financial statements for fiscal years 2021 and 2022, which identified significant problems in how the government handles the taxpayers’ money. U.S. Comptroller General Gene Dodaro said, “this year’s audit report emphasizes the need for the government to address these serious financial management weaknesses and for Congress to develop a plan to put the government on a path toward long-term fiscal sustainability.” 

The report lays bare the major issues that continue to plague the government’s finances and demonstrates the need for proper oversight and accountability.  The report should serve as a wakeup call to government officials, and they should commit to implementing policies that will reduce or prevent financial mismanagement.      

The GAO was unable to issue an opinion on the reliability of the government’s fiscal statements due to “inadequate accounting for transactions between government agencies, and weaknesses in the process for preparing the statements. In addition, the Small Business Administration had continuing financial management deficiencies in their pandemic relief programs, the Department of Education could not adequately support the costs of its loan programs, and improper payments totaling $247 billion were reported across several federal agencies and programs.”  The comptroller general said, “This is especially troubling given the significant domestic and international challenges facing our government, which place a premium on the need for accountability and transparency.”  

The inability to issue an opinion is also due to the failure of the Department of Defense (DOD) to have a clean audit.  It is the only federal agency that has failed to do so since audits were first required by the Chief Financial Officers Act of 1990, and Pentagon officials said they do not expect it will be done until 2027, which is 10 years after the first audit was conducted.  Citizens Against Government Waste’s Critical Waste Issues for the 118th Congress lays out several of the issues facing the Pentagon, including weapons systems acquisition and business systems modernization, both of which have been on the GAO’s High-Risk List since the 1990s.  The DOD is the government’s largest discretionary expenditure, and it has a difficult and critical Constitutional mission to protect national security.  Congress should hold Pentagon officials accountable and insist on improvements in financial management. 

The GAO’s comment about inability to “account for intragovernmental activity and balances between federal entities” demonstrates a serious failure of internal controls.  If a private corporation lacked such controls and proper accounting practices, their shareholders and board of directors would revolt and fire those in charge. 

Taxpayers have a right to know how their money is being spent and Congress has a duty to conduct oversight of the executive branch.  The lack of elementary accounting and basic information means Congress is making decisions based on faulty data.  Instead of fixing existing programs, Congress just creates new programs to solve problems, since in most cases they don’t know (and sometimes don’t care) whether the current programs are effective.  As CAGW President Tom Schatz said during his appearance on “The Record with Greta Van Susteren,” “accountability requires good accounting.” Fraudulent and improper payments in COVID-19 relief programs continue to be a significant problem, and full scope of which is not yet known. The GAO report found that “the fiscal year 2022 government-wide total of reported estimated improper payments was $247 billion, but it did not include estimates for some key government programs.”  Two programs that were not included in that estimate are the unemployment insurance (UI) and supplemental nutrition assistance program. 

The UI program was an easy target for criminals who used the enhanced benefits and lack of oversight including “self-certification” to make fraudulent claims and bring in a quick buck.  A February 8, 2023, GAO report provided an estimate of at least $60 billion for UI fraud, but Department of Labor Inspector General Larry Turner estimates it will be at least $191 billion, and outside experts believe it could be as much as $400 billion, or one-half of the $800 billion in total UI payments.

The House Ways and Means Committee and Oversight and Accountability Committee both took the first step in finding out how much money was stolen by holding hearings on COVID fraud.  The new House leadership has made accountability and transparency a priority for all committees in the 118th Congress.

 The GAO’s inability to provide an opinion in its government-wide audit makes clear that financial oversight and reform are needed now more than ever.  Congress should uphold its duty to hold executive agencies accountable and insist on transparency on how taxpayer dollars are being spent.  Thorough oversight combined with commonsense reforms can significantly reduce the amount of taxpayer dollars that are being mismanaged and wasted.