This post is a little rough.  I’ll revisit it in a day or so, wanted to get the links up. It’s pretty much self-serve although I have a few paragraphs of what it’s about.

I actually found where the government admits that it doesn’t REALLY intend its financial statements of cumulative net worth ,etc.** for everyone, just internal control, analysts and citizen intermediaries like the news media.

Then in the next breath it also says, it wants every American citizen to know, which must be why they are sinking their (not properly reconciled and monitored) funds into things like federal clearinghouses on marriage, fatherhood, domestic violence, to promote abstinence and expand welfare participation through the child support system, etc. . . . . and not into distributing and publicizing the fact that these (embarrassing, to the USA) reports exist.

And why this a condition of graduating from high school isn’t being able to get on a computer and find the CFR of one’s own high school district (probably a “Unified” school district), and a diagram of local government which is usually in the front of every CAFR.

(**which the GAO disclaims uttering any opinion on anyhow, because there are too many problems with the underlying reports from, oh, ca. 35 federal agencies…)

Get used to words like “billions,” “trillions” and “material weaknesses” etc.

USA CAFR 2011, and why the GAO disclaims to Issue an Opinion on it…

Here’s the website for some answers:

http://www.fms.treas.gov/fr/index.html  The CAFR can be seen there, but read the guide first.

  (they mean CAFR here….)

Guide to Understanding the Annual Financial Report of the United States Government 

~ ~ C.~ ~

United States Government Accountability Office’s statements about the Executive Branch of the United States Government (including 35 federal entities)

 I want us to see what an auditor’s report has to say on the highest unit of government in the USA, as of 2011, I guess:

…….An audit of financial statements and a corporation (or government) is one thing; the financial statements themselves, another.  Just for the record, this is the AUDIT.

The Office of Management and Budget (OMB) and the Department of the Treasury (Treasury) have identified 35 federal entities23 that are significant to the U.S. government’s consolidated financial statements, consisting of the 24 CFO Act agencies, several other federal executive branch agencies, and some government corporations (35 significant entities). Our work was performed in coordination and cooperation with the inspectors general and independent public accountants for these 35 significant entities to achieve our respective audit objectives. Our audit approach regarding the accrual- based consolidated financial statements focused on determining the current status of the material weaknesses that contributed to our disclaimer of opinion on the accrual-based consolidated financial statements and the other material weaknesses affecting internal control that we had reported in our report on the consolidated financial statements for fiscal year 2010.24

We also separately audited the financial statements of certain federal entities and federal agency components including the following:

• We audited and expressed an unqualified opinion on the Internal Revenue Service’s (IRS) fiscal years 2011 and 2010 financial statements.25 In fiscal years 2011 and 2010, IRS collected about $2.4 trillion and $2.3 trillion, respectively, in tax payments and paid about $416 billion and $467 billion, respectively, in refunds to taxpayers. For fiscal year 2011, we continued to report material weaknesses that resulted in ineffective internal control over financial reporting. In addition, we continued to find a significant deficiency in IRS’s internal control over tax refund disbursements, which resulted in the payment of erroneous tax refunds to taxpayers. Our tests of IRS’s compliance in fiscal year 2011 with selected provisions of laws and regulations disclosed one area of noncompliance. We also found that IRS’s financial management systems did not substantially comply with the requirements of FFMIA.

We considered the Department of Defense’s (DOD) assertion in the DOD Agency Financial Report for Fiscal Year 2011 regarding its noncompliant financial systems and lack of reasonable assurance that internal controls over financial reporting were effective. In addition, in the DOD Inspector General’s fiscal year 2011 report on internal control over financial reporting, the Inspector General cited material weaknesses in several areas including (1) property, plant, and equipment; (2) inventory and operating material and supplies; (3) environmental liabilities; (4) intragovernmental eliminations; and (5) material amounts of unsupported accounting entries needed to prepare DOD’s annual consolidated financial statements.

“At $275 Billion, Medicaid was by far the largest part of federal grants to states.  however, even when Medicaid is removed, HHS is still the largest disburser of grants to states” (well, HHS also handles welfare, duh!……)

http://www.gao.gov/assets/650/648792.pdf

What GAO Found

Federal outlays for grants to state and local governments totaled more than $606 billion in fiscal year 2011. Over the last three decades, these grants have consistently been a significant component of federal spending, but the focus of this spending has changed over time. For example, during this period the proportion of federal outlays to state and local governments dedicated to Medicaid grants more than tripled, rising from 2.4 percent of total federal government outlays in 1980 to 7.6 percent in 2011. The increase in federal outlays for Medicaid and other health-related grant programs was offset by an approximately equivalent decrease in grants to state and local governments targeted for other areas such as transportation, education, and regional development.

GAO’s prior work and the work of others have also shown that the number of federal grant programs directed to state and local governments has generally increased over the last three decades. However, definitively determining the number of such grant programs presents difficulties. The lack of consensus on a methodology for how to define and count grant programs and data limitations in the Catalog of Federal Domestic Assistance further complicates this effort.

GAO and federal inspectors general (IG) have previously reported on a variety of management challenges involving federal grants to state and local governments, many of which can be grouped into the following five topic areas:

• Challenges related to effectively measuring grant performance: A lack of appropriate performance measures and accurate data can limit agencies’ ability to effectively measure grant program performance. This can affect the ability of federal agencies to ensure that grant funds are effectively spent.

• Uncoordinated grant program creation: Numerous federal grant programs have been created over time without coordinated purposes or scope. This can result in grants management challenges such as unnecessary duplication across grant programs and unnecessary overlap in funding.

• Need for better collaboration: A lack of collaboration among grant program participants can impede effective grant implementation in areas such as knowledge sharing and defining clear leadership roles.

• Internal control weaknesses: When internal controls in grants management and oversight are weak, federal grant-making agencies face challenges in achieving program goals and assuring the proper and effective use of federal funds. Effective controls can help to avoid improper grant payments.

• Lack of agency or recipient capacity: Capacity reflects the organizational, financial, and human capital resources available for the implementation of grant programs. A lack of capacity can adversely impact an agency’s or recipient’s ability to manage and implement grant programs.