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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 447 Engrossed in House (EH)]

                 In the House of Representatives, U.S.,

                                                          June 9, 1998.
Whereas financial audits are an essential tool to establish accountable, 
        responsible, and credible use of taxpayer dollars;
Whereas Congress needs such information to accurately measure performance of 
        Federal agencies and distribute scarce resources;
Whereas Federal agencies should meet the same audit standards with which such 
        agencies expect State and local governments, the private sector, and 
        Federal contractors from which such agencies purchase goods and services 
        to comply;
Whereas sections 331 and 3515 of title 31, United States Code (as enacted in 
        section 405 of the Government Management Reform Act of 1994 (Public Law 
        103-356; 108 Stat. 3415)), require that Federal agencies prepare annual 
        financial statements and have them audited, and that the Secretary of 
        the Treasury prepare a consolidated financial statement for Federal 
        agencies that is audited by the Comptroller General;
Whereas the enactment of these provisions resulted in the first time ever that 
        the financial status of the entire Federal Government was subjected to 
        the same professional scrutiny to which many who interact with the 
        Federal Government are subject;
Whereas section 3521 of title 31, United States Code, requires that the audit 
        follow the Generally Accepted Government Auditing Standards, which 
        incorporate the common, private sector guidelines of the American 
        Institute of Certified Public Accountants Statements on Auditing 
        Standards;
Whereas Congress intended these audit requirements to provide greater 
        accountability in managing government finances by improving financial 
        systems, strengthening financial personnel qualifications, and 
        generating more reliable, timely information on the costs and financial 
        performance of government operations;
Whereas the data found in the financial reports was not sufficiently reliable to 
        permit the General Accounting Office to render an opinion on the 
        Government's financial statements;
Whereas only 2 of the 24 Federal agencies required to submit reports have 
        reliable financial information, effective internal controls, and 
        complied with applicable laws and regulations;
Whereas the financial statements of the Department of Defense could not be 
        relied on to provide basic information regarding the existence, 
        location, and value of much of its $635,000,000,000 in property, plant, 
        and equipment;
Whereas the Department of Defense could not account for 2 utility boats valued 
        at $174,000 each, 2 large harbor tug boats valued at $875,000 each, 1 
        floating crane valued at $468,000, 15 aircraft engines (including 2 F-18 
        engines valued at $4,000,000 each), and one Avenger Missile Launcher 
        valued at $1,000,000;
Whereas inaccurate or unreliable data, such as the findings that 220 more tanks, 
        10 fewer helicopters, 25 fewer aircraft, and 8 fewer cruise missiles 
        existed than those reported in the system of the Department of Defense, 
        harms deployment activities;
Whereas the Department of Housing and Urban Development spends $18,000,000,000 
        each year in rent and operating subsidies, with $1 of every $18 being 
        paid out unjustifiably;
Whereas financial management is so poor within Federal credit agencies that the 
        true cost of the Federal Government's loan and guarantee programs cannot 
        be reliably determined;
Whereas the Federal Aviation Administration's records regarding $5,500,000,000 
        in equipment and property are unreliable, including $198,000,000 in 
        recorded assets that no longer exist, $245,000,000 in spare parts that 
        were omitted from the financial statements, and $3,300,000,000 in works-
        in-process that could not be verified;
Whereas the Forest Service lacks a reliable system for tracking its reported 
        378,000 miles of roads;
Whereas the Medicare program identified an estimated $20,300,000,000 worth of 
        improper payments in fiscal year 1997;
Whereas the Social Security Administration has identified $1,000,000,000 in 
        overpayments for fiscal year 1997;
Whereas the Department of the Treasury recorded a net $12,000,000,000 ``plug'' 
        recorded as ``unreconciled transactions'', made up of over 
        $100,000,000,000 of unreconciled, unsupported transactions, to make its 
        books balance; and I27Whereas the disclaimers, mismanagement, and poor 
        recordkeeping in the Federal Government expose taxpayers to continued 
        waste, fraud, error, and mismanagement, and provide inadequate 
        information to Congress for budget, appropriations, and reauthorization 
        decisions: Now, therefore, be it
    Resolved, That it is the sense of the House of Representatives that--
            (1) the first-ever Governmentwide financial audit demonstrated 
        serious concerns with financial management by the majority of Federal 
        agencies;
            (2) current efforts with respect to financial management by all too 
        many Federal agencies have failed; and
            (3) therefore, Congress must impose consequences on Federal agencies 
        that fail their annual financial audits and conduct more vigorous 
        oversight to ensure that Federal agencies do not waste the tax dollars 
        of the people of the United States.
            Attest:

                                                                          Clerk.
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