STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES 36

March 28, 2019

The President

The President of the Senate

The Speaker of the House of Representatives

To operate as effectively and efficiently as possible, 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 for fiscal years 2018 and 2017 underscores that much 

work remains to improve federal financial management and that the federal government continues to 

face an unsustainable long-term fiscal path.

Our audit report on the U.S. government’s consolidated financial statements is enclosed. In summary, 

we found the following: 

x Certain material weaknesses1 in internal control over financial reporting and other limitations 

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, 2018, and 

2017.2 About 31 percent of the federal government’s reported total assets as of September 30, 

2018, and approximately 17 percent of the federal government’s reported net cost for fiscal year 

2018 relate to significant federal entities that received disclaimers of opinion3 on their fiscal year 

2018 financial statements or whose fiscal year 2018 financial information was unaudited.4

x Significant uncertainties (discussed in Note 22 to the consolidated financial statements), primarily 

related to the achievement of projected reductions in Medicare cost growth, prevented us from 

1A material weakness is a deficiency, or 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, 2018, and 2017, 

consist of the (1) Statements of Net Cost, (2) Statements of Operations and Changes in Net Position, (3) Reconciliations of 

Net Operating Cost and Budget Deficit, (4) Statements of Changes in Cash Balance from 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. 

3A disclaimer of opinion arises when the auditor is unable to obtain sufficient appropriate audit evidence to provide a basis for 

an audit opinion and accordingly does not express an opinion on the financial statements.

4The Department of Defense, the Department of Housing and Urban Development, and the Railroad Retirement Board each 

received a disclaimer of opinion on their respective fiscal year 2018 financial statements. Also, for fiscal year 2018, the 

financial information for Security Assistance Accounts was unaudited.
37 STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES

expressing an opinion on the sustainability financial statements,5 which consist of the 2018 and 

2017 Statements of Long-Term Fiscal Projections;6 the 2018, 2017, 2016, 2015, and 2014 

Statements of Social Insurance;7 and the 2018 and 2017 Statements of Changes in Social 

Insurance Amounts. About $37.7 trillion, or 70 percent, of the reported total present value of future 

expenditures in excess of future revenue presented in the 2018 Statement of Social Insurance 

relates to Medicare programs reported in the Department of Health and Human Services’ 2018 

Statement of Social Insurance, which received a disclaimer of opinion. A material weakness in 

internal control also prevented us from expressing an opinion on the 2018 and 2017 Statements of 

Long-Term Fiscal Projections. 

x Material weaknesses resulted in ineffective internal control over financial reporting for fiscal year 

2018.

x Material weaknesses and other scope limitations, discussed above, limited tests of compliance with 

selected provisions of applicable laws, regulations, contracts, and grant agreements for fiscal year 

2018.

Overall, significant progress has been made in improving federal financial management since key 

federal financial management reforms were enacted in the 1990s. Twenty-two of the 24 Chief Financial 

Officers Act of 1990 (CFO Act) agencies received unmodified (“clean”) opinions on their respective 

entities’ fiscal year 2018 financial statements, up from six CFO Act agencies that received clean audit 

opinions for fiscal year 1996.8 In addition, accounting and financial reporting standards have continued 

to evolve to provide greater transparency and accountability over the federal government’s operations, 

financial condition, and fiscal outlook. 

While the U.S. government's consolidated financial statements provide a high-level summary of the 

financial position, financial condition, and operating results for the federal government as a whole, the 

annual preparation and audit of individual federal entity financial statements continue to be critical, 

among other things, to

x provide individual federal entity accountability to Congress and citizens, including 

(1) independent assurance, shortly after the end of the fiscal year, of the reliability of reported 

financial information and (2) association of program costs with related program performance and 

results;

5The sustainability financial statements are based on projections of future receipts and spending, while the accrual-based 

consolidated financial statements are based on historical information, including the federal government’s assets, liabilities,

revenue, and net cost.

6The 2018 and 2017 Statements of Long-Term Fiscal Projections present, for all the activities of the federal government, the 

present value of projected receipts and non-interest spending under current policy without change, the relationship of these 

amounts to projected gross domestic product (GDP), and changes in the present value of projected receipts and non-interest 

spending from the prior year. These statements also present the fiscal gap, which is the combination of non-interest spending 

reductions and receipts increases necessary to hold debt held by the public as a share of GDP at the end of the projection 

period to its value at the beginning of the period. The valuation date for the Statements of Long-Term Fiscal Projections is 

September 30. 

7Statements of Social Insurance are presented for the current year and each of the 4 preceding years as required by U.S. 

generally accepted accounting principles. For the Statements of Social Insurance, the valuation date is 

January 1 for the Social Security and Medicare programs, October 1 for the Railroad Retirement program (January 1 for 2014 

and 2015), and September 30 for the Black Lung program.

8The 22 agencies include the Department of Health and Human Services, which received an unmodified (“clean”) opinion on 

all statements except the Statements of Social Insurance and the Statements of Changes in Social Insurance Amounts.
STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES 38

x facilitate reliable, useful, and timely financial management information at the individual federal entity 

and program levels for effective management decision-making;

x assess the reliability and effectiveness of systems and related internal controls, including identifying 

control deficiencies that could lead to fraud, waste, and abuse; and

x deliver early warnings of emerging financial management issues.

Further, annual audits along with congressional and executive oversight provide significant incentives 

for individual federal entities to maintain reliable financial management information and effective 

systems and controls.

The preparation and audit of individual federal entities’ financial statements have also identified 

numerous deficiencies, leading to corrective actions to strengthen federal entities’ internal controls, 

processes, and systems. For instance, the U.S. Department of Agriculture took corrective actions to 

address deficiencies identified during its audits that enabled it to obtain an unmodified audit opinion on 

its full set of financial statements after 2 years of only receiving an opinion on its balance sheet. Also, 

management of the Department of Housing and Urban Development (HUD) has developed plans to 

address the multiple material weaknesses identified by HUD’s Office of Inspector General. 

However, since the federal government began preparing consolidated financial statements over 20 

years ago, three major impediments have continued to prevent us from rendering an opinion on the 

federal government’s accrual-based consolidated financial statements over this period: (1) serious 

financial management problems at the Department of Defense (DOD) that have prevented its financial 

statements from being auditable, (2) the federal government’s inability to adequately account for 

intragovernmental activity and balances between federal entities, and (3) the federal government’s 

ineffective process for preparing the consolidated financial statements. 

DOD’s financial management continues to face long-standing issues. Following years of unsuccessful 

financial improvement efforts at DOD and consistently being unable to receive an audit opinion on its 

financial statements, in 2005, the DOD Comptroller established the Financial Improvement and Audit 

Readiness Directorate to develop, manage, and implement a strategic approach for addressing internal 

control weaknesses and for achieving auditability, and to integrate those efforts with other improvement 

activities, such as the department’s business systems modernization efforts.

DOD’s strategy for achieving a clean opinion on its financial statements and improving overall financial 

management has shifted from preparing for audit readiness to undergoing financial statement audits 

and remediating audit findings. In a positive development, DOD underwent an audit of its entity-wide 

fiscal year 2018 financial statements, which resulted in a disclaimer of opinion issued by the DOD 

Office of Inspector General (OIG). The disclaimer of opinion was partially based on the disclaimers of 

opinion for multiple DOD components, including the Army, Navy, Air Force, U.S. Marine Corps, 

Defense Health Program, Defense Logistics Agency, U.S. Transportation Command, and U.S. Special 

Operations Command. The DOD OIG also reported 20 material weaknesses in internal control over 

financial reporting, contributing to its disclaimer of opinion.

DOD has stated that undergoing financial statement audits is valuable for a number of reasons, such as 

audit remediation efforts, improvements in its operations and readiness, and in the reliability of financial 

management information used in decision-making. For example, the Army created an application for 

storing and analyzing its financial data for audit, which also provided Army management with 

information used to determine funding priorities. Also, the Navy enhanced internal controls over its 

obligation management process, which resulted in identifying funds available for important activities, 
39 STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES

such as over $4 million for ship repair costs. In several instances, auditors found inaccurate inventory 

records that could affect readiness. For example, auditors found that certain Blackhawk helicopter parts 

included in inventory records were in fact unavailable or unusable. 

DOD has acknowledged that achieving a clean audit opinion will take time. However, it stated that over 

the next several years, the resolution of audit findings will serve as an objective measure of progress 

toward that goal. DOD will need to develop and effectively monitor corrective action plans to 

appropriately address audit findings in a timely manner. DOD recently developed a centralized 

database to track the audit findings, recommendations, and related corrective action plans.

Various efforts are also under way to address the other two major impediments to an audit of the 

consolidated financial statements. For example, during fiscal year 2018, the Department of the 

Treasury (Treasury) continued to actively work with significant federal entities9 to resolve differences in 

intragovernmental activity and balances between federal entities through its quarterly scorecard 

process.10 This process highlights differences needing the entities’ attention, identifies differences that 

need to be resolved through a formal dispute resolution process,11 and reinforces the entities’ 

responsibilities to resolve intragovernmental differences. Treasury also made significant progress in 

developing and implementing procedures to improve the accounting for and reporting of General Fund 

of the U.S. Government (General Fund) transactions and balances,12 and working to resolve significant 

differences between the General Fund and federal entity trading partners. 

In recent years, Treasury’s corrective actions have included improving systems used for compiling the 

consolidated financial statements, enhancing guidance for collecting data from component entities, and 

implementing procedures to address certain internal control deficiencies detailed in our previously 

issued management report.13 Treasury also continued to develop its process for preparing the 

Reconciliation Statements14 by documenting its rationale for the reconciling items currently presented 

on the Reconciliation Statements. In addition to continued leadership by Treasury and the Office of 

Management and Budget (OMB), federal entities’ strong and sustained commitment is critical to fully 

address these issues. 

9The Office of Management and Budget and Treasury have identified 40 federal entities that are significant to the U.S. 

government’s fiscal year 2018 consolidated financial statements, including the 24 CFO Act agencies. See app. A of the Fiscal 

Year 2018 Financial Report of the United States Government for a list of the 40 entities.

10For each quarter, Treasury produces a scorecard for each significant entity, as well as any other component entity reporting 

significant intragovernmental balances or differences, that reports various aspects of the entity’s intragovernmental differences 

with its trading partners, including the composition of the differences by trading partner and category. Pursuant to Treasury

guidance, entities are expected to resolve, with their respective trading partners, the differences identified in their scorecards.

11When an entity and its respective trading partner cannot resolve an intragovernmental difference, Treasury guidance directs 

the entity to request that Treasury resolve the dispute. Treasury will review the dispute and issue a decision on how to resolve 

the difference, which the entities must follow.

12The General Fund is a component of Treasury’s central accounting function. It is a stand-alone reporting entity that 

comprises the activities fundamental to funding the federal government (e.g., issued budget authority, cash activity, and debt

financing activities). 

13GAO, Management Report: Continued Improvements Needed in Controls over the Processes Used to Prepare the U.S. 

Consolidated Financial Statements, GAO-18-540 (Washington, D.C.: July 16, 2018). 

14The Reconciliations of Net Operating Cost and Budget Deficit and Statements of Changes in Cash Balance from Budget and 

Other Activities (Reconciliation Statements) reconcile (1) the accrual-based net operating cost to the primarily cash-based 

budget deficit and (2) the budget deficit to changes in cash balances.
STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES 40

The material weaknesses underlying these three major impediments have continued to (1) hamper the 

federal government’s ability to reliably report a significant portion of its assets, liabilities, costs, and 

other related information; (2) affect the federal government’s ability to reliably measure the full cost, as 

well as the financial and nonfinancial performance, of certain programs and activities; (3) impair the 

federal government’s ability to adequately safeguard significant assets and properly record various 

transactions; and (4) hinder the federal government from having reliable, useful, and timely financial 

information to operate effectively and efficiently. Over the years, we have made a number of 

recommendations to OMB, Treasury, and DOD to address these issues.15 These entities have taken or 

plan to take actions to address these recommendations.

In addition to the material weaknesses referred to above, we identified three other material 

weaknesses. These are the federal government’s inability to (1) determine the full extent to which 

improper payments occur and reasonably assure that appropriate actions are taken to reduce them, (2) 

identify and resolve information security control deficiencies and manage information security risks on 

an ongoing basis, and (3) effectively implement internal controls over estimating the cost of credit 

programs and determining the value of loans receivable and loan guarantee liabilities. Our audit report 

presents additional details concerning these material weaknesses and their effect on the accrual-based 

consolidated financial statements and managing federal government operations. Until the problems 

outlined in our audit report are adequately addressed, they will continue to have adverse implications 

for the federal government and the American people.

Resolving the problems outlined in our audit report is of utmost importance given the federal 

government’s reported fiscal path. The 2018 Statement of Long-Term Fiscal Projections and related 

information in Note 23 and in the unaudited Required Supplementary Information section of the Fiscal 

Year 2018 Financial Report of the United States Government (2018 Financial Report) show that absent 

policy changes, the federal government continues to face an unsustainable long-term fiscal path. GAO 

and the Congressional Budget Office (CBO) also prepare long-term federal fiscal simulations, using 

different sets of assumptions, which continue to show federal debt held by the public rising as a share 

of gross domestic product (GDP) in the long term.16 This situation—in which debt grows faster than 

GDP—means the current federal fiscal path is unsustainable. 

GAO, CBO, and the 2018 Financial Report all project that debt held by the public as a share of GDP 

will surpass its historical high (106 percent in 1946) within the next 13 to 20 years. Health care 

spending is a key driver of spending in the long-term projections. Eventually, however, spending on net 

interest (primarily interest on debt held by the public) is projected to grow such that over the long term it 

surpasses Social Security and becomes the largest category of spending in both the 2018 Financial 

Report and GAO’s simulations.17 Reliable and complete financial information for federal entities will be 

needed for making policy changes that effectively address the unsustainable long-term fiscal path. 

15See GAO-18-540. In addition, see GAO, DOD Financial Management, accessed March 20, 2019, 

https://www.gao.gov/highrisk/dod_financial_management/why_did_study. Further, other auditors have made 

recommendations to DOD for improving its financial management.

16For more information on GAO’s simulations, see GAO, America’s Fiscal Future: Fiscal Forecast, accessed on March 20, 

2019, https://www.gao.gov/americas_fiscal_future?t=fiscal_forecast. For more information on CBO’s simulations, see 

Congressional Budget Office, The 2018 Long-Term Budget Outlook (Washington, D.C.: June 26, 2018). 

17CBO’s projections in its 2018 long-term budget outlook report also show net interest growing as a percentage of total 

spending. However, since CBO’s 2018 extended baseline projections only go out to 2048, the cost of net interest does not 

quite overtake other categories in the projection period.
41 STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES

GAO plans to issue its annual report on the fiscal health of the federal government in the coming 

weeks.18

In taking action to change the federal government’s long-term fiscal path, it will be important for 

Congress to consider alternative approaches for managing the level of debt. As currently structured, the 

debt limit—a legal limit on the total amount of federal debt that can be outstanding at one time19—does 

not restrict Congress’s ability to enact spending and revenue legislation that affects the level of federal 

debt, nor does it otherwise constrain fiscal policy. Rather, the debt limit is an after-the-fact measure; the 

spending and tax laws that result in debt have already been enacted. The debt limit restricts Treasury’s 

authority to borrow to finance the decisions already enacted by Congress and the President.

One cannot overstate the importance of preserving the confidence that investors have that debt backed 

by the full faith and credit of the United States will be honored. Failure to increase (or suspend) the debt 

limit in a timely manner could have serious negative consequences for the Treasury market and 

increase borrowing costs. The Bipartisan Budget Act of 2018 temporarily suspended the debt limit from 

February 9, 2018, through March 1, 2019.20 On Monday, March 4, 2019, Treasury began to take 

extraordinary actions to continue funding government activities. It will continue taking these actions until 

the debt limit is raised or suspended.21 With these extraordinary actions in place, CBO estimates that 

Treasury will have sufficient cash to make its usual payments until late into fiscal year 2019. 

As we have previously reported, delays in raising the debt limit can create uncertainty in the Treasury 

market.22 To avoid such uncertainty and the disruption to the Treasury market that it creates, as well as 

to help inform the fiscal policy debate in a timely way, we have suggested that Congress should 

consider ways to better link decisions about the debt limit with decisions about spending and revenue at 

the time those decisions are made.23 We identified three potential approaches for Congress to consider 

regarding delegating borrowing authority:

x Option 1: Link action on the debt limit to the budget resolution.

x Option 2: Provide the administration with the authority to propose a change in the debt limit that 

would take effect absent enactment of a joint resolution of disapproval within a specified time frame.

x Option 3: Delegate broad authority to the administration to borrow as necessary to fund enacted 

laws. 

18GAO, The Nation’s Fiscal Health: Action Is Needed to Address the Federal Government’s Fiscal Future, GAO-18-299SP 

(Washington, D.C.: June 21, 2018). 

19The debt limit is codified at 31 U.S.C. § 3101(b), as amended, and applies to federal debt issued pursuant to the authority of

31 U.S.C. chapter 31. A very small amount of total federal debt is not subject to the debt limit. This amount primarily comprises 

unamortized discounts on Treasury bills and Zero Coupon Treasury bonds; debt securities issued by agencies other than 

Treasury, such as the Tennessee Valley Authority; and debt securities issued by the Federal Financing Bank.

20Section 30301 of Division C of the Bipartisan Budget Act of 2018, Pub. L. No. 115-123, div. C, tit. III, § 30301, 132 Stat. 64, 

132 (Feb. 9, 2018), temporarily suspended the debt limit.

21Extraordinary actions are actions that Treasury takes as it nears the debt limit to avoid exceeding that limit. These actions 

are not part of Treasury’s normal cash and debt management operations.

22GAO, Debt Limit: Analysis of 2011-2012 Actions Taken and Effect of Delayed Increase on Borrowing Costs, GAO-12-701 

(Washington, D.C.: July 23, 2012), and Debt Limit: Delays Create Debt Management Challenges and Increase Uncertainty in 

the Treasury Market, GAO-11-203 (Washington, D.C.: Feb. 22, 2011). 

23GAO, Debt Limit: Market Response to Recent Impasses Underscores Need to Consider Alternative Approaches, GAO-15-

476 (Washington, D.C.: July 9, 2015). 
STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES 42

All of these options maintain congressional control and oversight over federal borrowing.

Further, there are financial and other risks that could affect the federal government’s financial position 

and condition and its financial management in the future. Financial risk factors that could affect the 

federal government’s financial condition in the future include the following:

x The Pension Benefit Guaranty Corporation’s (PBGC) financial future is uncertain because of longterm challenges related to its funding and governance structure. PBGC’s liabilities exceeded its 

assets by about $51 billion as of the end of fiscal year 2018—an increase of about $16 billion from 

the end of fiscal year 2013. PBGC estimated that its exposure to potential further losses for 

underfunded plans in both the single and multiemployer programs was nearly $185 billion.24

x Federal support of the housing finance market remains significant even though the market has 

largely recovered since the 2007 to 2009 financial crisis. In 2008, the federal government placed 

the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage 

Corporation (Freddie Mac) under conservatorship and entered into preferred stock purchase 

agreements with these government-sponsored enterprises (GSE) to help ensure their financial 

stability. These agreements could affect the federal government’s financial condition. At the end of 

fiscal year 2018, the federal government reported about $113 billion of investments in the GSEs, 

which is net of about $91 billion in valuation losses. The GSEs paid Treasury cash dividends of $9.9 

billion and $25.3 billion during fiscal years 2018 and 2017, respectively. The reported maximum 

remaining contractual commitment to the GSEs, if needed, is $254.1 billion. The ultimate role of the 

GSEs could affect the federal government’s financial position and the financial condition of federal 

entities, including the Federal Housing Administration (FHA), which in the past expanded its lending 

role in distressed housing and mortgage markets. Specifically, as of the end of fiscal year 2018, 

FHA’s insured portfolio exceeded $1.2 trillion. The Government National Mortgage Association 

(Ginnie Mae) guarantees the performance of almost $2 trillion in securities backed by federally 

insured mortgages—of which $1.2 trillion were insured by FHA and $0.8 trillion by other federal 

entities, such as the Department of Veterans Affairs. 

We have reported on the need for Congress to consider legislation making changes to the future 

federal role in housing finance that addresses the structure of the GSEs; establishes clear, specific, 

and prioritized goals; and considers all relevant federal entities, such as FHA and Ginnie Mae.25

x The U.S. Postal Service (USPS) continues to be in poor financial condition. USPS cannot fund its 

current level of services and meet its financial obligations from its existing revenues. The fiscal year 

2018 net loss of $3.9 billion marked its 11th consecutive year of net losses—totaling $69 billion. In 

addition, USPS has missed $48.2 billion in required payments for postal retiree health and pension 

benefits through fiscal year 2018, including $42.6 billion in missed payments for retiree health 

benefits since fiscal year 2010 and $5.6 billion in missed payments for pension benefits since fiscal 

year 2014. USPS has stated that it missed these payments to minimize the risk of running out of 

24The Bipartisan Budget Act of 2018 established the Joint Select Committee on Solvency of Multiemployer Pension Plans, 

which was tasked with voting on a report that was to include any findings, conclusions, and recommendations (as well as 

proposed legislative language to carry out such recommendations) to significantly improve the solvency of multiemployer 

pension plans and PBGC by November 30, 2018. Pub. L. No. 115-123, div. C, tit. IV, subtit. A, § 30422, 132 Stat. 64, 133-37

(Feb. 9, 2018). However, even though the joint committee did not vote on a report and was statutorily set to terminate no later 

than December 31, 2018, its co-chairmen released a statement committing to working to solve the multiemployer pension 

crisis past the November 30 deadline. 

25GAO, Housing Finance: Prolonged Conservatorships of Fannie Mae and Freddie Mac Prompt Need for Reform, GAO-19-

239 (Washington, D.C.: Jan. 18, 2019).
43 STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES 

cash, citing its precarious financial condition and the need to cover current and anticipated costs 

and any contingencies.26 

 Some government insurance programs have not collected sufficient premiums or do not have 

sufficient dedicated resources to cover expected costs without borrowing from Treasury.27 For 

example, as of September 2018, the Federal Emergency Management Agency (FEMA), which 

administers the National Flood Insurance Program, owed $20.5 billion to Treasury for money 

borrowed to pay claims and other expenses. We have reported that FEMA was unlikely to collect 

enough in premiums in the future to repay this debt.28 The amount owed is net of $16 billion of debt 

that was canceled in October 2017 by the Additional Supplemental Appropriations for Disaster 

Relief Requirements Act, 2017.29 

 Also, large events, such as natural disasters, pandemics, cyberattacks, military engagements, or 

economic crises, are not considered in the Statements of Long-Term Fiscal Projections. To the 

extent that such large events occur, the actual future spending may be greater than spending in 

these projections. 

Every 2 years, GAO provides Congress with an update on its High-Risk Series, which highlights federal 

entities and program areas that are at high risk because of their vulnerabilities to fraud, waste, abuse, 

and mismanagement or are most in need of broad reform. We issued our most recently updated HighRisk Series on March 6, 2019.30 GAO’s High-Risk Series includes most of the above-noted issues, such 

as DOD financial management, ensuring the cybersecurity of the nation, the PBGC insurance 

programs, resolving the federal role in housing finance, USPS financial viability, and the National Flood 

Insurance Program.

_________________________ 

Our audit report on the U.S. government’s consolidated financial statements would not be possible 

without the commitment and professionalism of inspectors general throughout the federal government 

who are responsible for annually auditing the financial statements of individual federal entities. We also 

appreciate the cooperation and assistance of Treasury and OMB officials as well as the federal entities’ 

chief financial officers. We look forward to continuing to work with these individuals, the administration, 

and Congress to achieve the goals and objectives of federal financial management reform. 

 Our audit report begins on page 226. Our guide, Understanding the Financial Report of the United 

States Government, is intended to help those who seek to obtain a better understanding of the financial 

report and is available on GAO’s website at http://www.gao.gov. 31 

 

26GAO, High-Risk Series: Substantial Efforts Needed to Achieve Greater Progress on High-Risk Areas, GAO-19-157SP 

(Washington, D.C.: Mar. 6, 2019). 

27We have suggested an alternative way to record insurance commitments in the budget such that the federal government’s 

commitment would be more fully recognized. See GAO, Fiscal Exposures: Improving Cost Recognition in the Federal Budget, 

GAO-14-28 (Washington, D.C.: Oct. 29, 2013). 

28GAO, Flood Insurance: Comprehensive Reform Could Improve Solvency and Enhance Resilience, GAO-17-425 

(Washington, D.C.: Apr. 27, 2017). 

29Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2017, Pub. L. No. 115-72, § 308, 131 Stat. 

1224, 1228-29 (Oct. 26, 2017). 

30GAO-19-157SP. 

31GAO, Understanding the Financial Report of the United States Government, GAO-18-239SP (Washington, D.C.: February 

2018). 
STATEMENT OF THE COMPTROLLER GENERAL OF THE UNITED STATES 44

Our audit report was prepared under the direction of Robert F. Dacey, Chief Accountant; and Dawn 

Simpson, Director, Financial Management and Assurance. If you have any questions, please contact 

me on (202) 512-5500 or them on (202) 512-3406.

Gene L. Dodaro

Comptroller General

of the United States

cc: The Majority Leader of the Senate

The Minority Leader of the Senate

The Majority Leader of the House of Representatives

The Minority Leader of the House of Representatives