Federal Internal Control and Financial Management Systems Remain Weak and Obsolete

GAO discussed the condition of internal control and financial management systems in the federal government. GAO found that: (1) all of the major agencies know their major problems and vulnerabilities, but either have not taken any corrective actions or have taken ineffective actions; (2) agency self-evaluations and annual reports help strengthen internal controls and financial management systems but, based on those reports, the government does not have the internal control and accounting systems necessary to effectively operate many of its assets, and long-standing weaknesses have resulted in billions of dollars in losses and wasteful spending; (3) Congress and the Office of Management and Budget need to intensify their oversight of agencies, and agencies need to strengthen their programs and increase their annual reports' usefulness; (4) the government needs to establish a chief financial officer structure with counterpart chief financial officers in each of the major agencies and require annual preparation and audit of all agency financial statements; (5) upgrading outdated financial management systems and long-range planning would help accounting system standardization and increase use of shared services among agencies; (6) expanded coordination and sharing could minimize the government's operating costs and increase information comparability; (7) forcing agencies to prepare accurate financial statements would help get their financial management systems in order; and (8) the legislative and executive branches must work together to achieve effective and economical programs and sound financial management systems.