H. Res. 447
In the House of Representatives, U.S.,
June 9, 1998.
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;
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
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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-
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-
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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
$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-
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actions’’, 
made 
up 
of 
over 
$100,000,000,000 
of
unreconciled, unsupported transactions, to make its
books balance; and I27Whereas the disclaimers, mis-
management, and poor recordkeeping in the Federal Gov-
ernment expose taxpayers to continued waste, fraud,
error, and mismanagement, and provide inadequate infor-
mation to Congress for budget, appropriations, and reau-
thorization decisions: Now, therefore, be it
Resolved, That it is the sense of the House of Represent-
atives that—
(1) the first-ever Governmentwide financial audit
demonstrated serious concerns with financial manage-
ment by the majority of Federal agencies;
(2) current efforts with respect to financial manage-
ment by all too many Federal agencies have failed; and
(3) therefore, Congress must impose consequences
on Federal agencies that fail their annual financial au-
dits and conduct more vigorous oversight to ensure that
Federal agencies do not waste the tax dollars of the peo-
ple of the United States.
Attest:
Clerk.