IV
105TH CONGRESS
2D SESSION
H. RES. 447
Expressing the sense of the House of Representatives regarding financial
management by Federal agencies.
IN THE HOUSE OF REPRESENTATIVES
MAY 21, 1998
Mr. NEUMANN (for himself, Mr. HORN, Mr. ARMEY, Mr. FAWELL, Mr.
ROYCE, Mr. SESSIONS, Mr. BARTON of Texas, Mr. ENGLISH of Pennsyl-
vania, Mr. HAYWORTH, Mr. CALVERT, and Mr. BURTON of Indiana) sub-
mitted the following resolution; which was referred to the Committee on
Government Reform and Oversight
RESOLUTION
Expressing the sense of the House of Representatives
regarding financial management by Federal agencies.
Whereas financial audits are an essential tool to establish ac-
countable, responsible, and credible use of taxpayer dol-
lars;
Whereas Congress needs such information to accurately
measure performance of Federal agencies and distribute
scarce resources;
Whereas Federal agencies should meet the same audit stand-
ards with which such agencies expect State and local gov-
ernments, the private sector, and Federal contractors
from which such agencies purchase goods and services to
comply;
•HRES 447 IH
Whereas sections 331 and 3515 of title 31, United States
Code (as enacted in section 405 of the Government Man-
agement Reform Act of 1994 (Public Law 103–356; 108
Stat. 3415)), require that Federal agencies prepare an-
nual 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 Fed-
eral 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, re-
quires that the audit follow the Generally Accepted Gov-
ernment Auditing Standards, which incorporate the com-
mon, private sector guidelines of the American Institute
of Certified Public Accountants Statements on Auditing
Standards;
Whereas Congress intended these audit requirements to pro-
vide greater accountability in managing government fi-
nances by improving financial systems, strengthening fi-
nancial personnel qualifications, and generating more re-
liable, timely information on the costs and financial per-
formance of government operations;
Whereas the data found in the financial reports was not suf-
ficiently reliable to permit the General Accounting Office
to render an opinion on the Government’s financial state-
ments;
Whereas only 2 of the 24 Federal agencies required to submit
reports have reliable financial information, effective inter-
•HRES 447 IH
nal controls, and complied with applicable laws and regu-
lations;
Whereas the financial statements of the Department of De-
fense 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 en-
gines valued at $4,000,000 each), and one Avenger Mis-
sile Launcher valued at $1,000,000;
Whereas inaccurate or unreliable data, such as the findings
that 220 more tanks, 10 fewer helicopters, 25 fewer air-
craft, and 8 fewer cruise missiles existed than those re-
ported in the system of the Department of Defense,
harms deployment activities;
Whereas the Department of Housing and Urban Develop-
ment spends $18,000,000,000 each year in rent and op-
erating 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 Govern-
ment’s loan and guarantee programs cannot be reliably
determined;
Whereas the Federal Aviation Administration’s records re-
garding $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
•HRES 447 IH
$3,300,000,000 in works-in-process that could not be
verified;
Whereas the Forest Service lacks a reliable system for track-
ing 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 trans-
actions’’, 
made 
up 
of 
over 
$100,000,000,000 
of
unreconciled, unsupported transactions, to make its
books balance; and
Whereas the dominance of rampant disclaimers, mismanage-
ment, and poor recordkeeping in the Federal Government
exposes taxpayers to continued waste, fraud, error, and
mismanagement, and provides inadequate information to
Congress for budget, appropriations, and reauthorization
decisions: Now, therefore, be it
Resolved, That it is the sense of the House of Rep-
resentatives that—
(1) the first-ever Governmentwide financial
audit demonstrated gross mismanagement by Fed-
eral agencies;
(2) current reform and reinvention efforts with
respect to financial management by Federal agencies
have failed; and
•HRES 447 IH
(3) therefore, Congress must impose con-
sequences 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.
Æ