Financial Statements (

From the Congressional Glossary – Including Legislative and Budget Terms

Financial Statements

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A document that describes an entity’s financial activity and status for a specified period. Under federal law and applicable accounting standards, the financial statements for a federal agency usually include a balance sheet, statement of net cost, statement of changes in net position, statement of budgetary resources, and statement of financing.

Three long-standing major impediments continued to prevent GAO from expressing an opinion on the federal government’s accrual-based consolidated financial statements: (1) serious financial management problems at the Department of Defense (DOD) that have prevented DOD’s financial statements from being audited, (2) federal entities’ inability to adequately account for and reconcile intragovernmental activity and balances, and (3) the federal government’s ineffective process for preparing the consolidated financial statements. GAO also reported material weaknesses involving billions of dollars in improper payments, information security, and tax collection activities. Also, GAO was prevented from expressing opinions on the 2011 and 2010 Statements of Social Insurance and the 2011 Statement of Changes in Social Insurance Amounts because of significant uncertainties primarily related to the achievement of projected reductions in Medicare cost growth reflected in the statements.

The Federal Government Faces Continuing Financial Management and Long-Term Fiscal Challenges,” GAO Report, GAO-12-444T, Mar 1, 2012




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