A Congressional watchdog says it is again unable to determine if the federal government’s financial statements are reliable.
The federal government reported net costs of $7.4 trillion in fiscal year 2024, but it couldn’t fully account for its spending. The U.S. Government Accountability Office, which is Congress’s research arm, said that the federal government must address “serious deficiencies” in federal financial management and correct course on its “unsustainable” long-term fiscal path.
U.S. Comptroller General Gene Dodaro, head of the GAO, said many of the challenges are a result of financial management problems within the U.S. Department of Defense. The Pentagon previously said it will be able to accurately account for its spending by 2027.
“The federal government has again come up short in managing its finances and achieving a clean audit due to challenges in adequately supporting its costs, revenues, assets and liabilities,” Dodaro said in a statement. “These serious financial management weaknesses and unsustainable long term fiscal path further underscore the need for urgent attention, accountability, and transparency.”
The report noted three major problem areas: “serious financial management problems” at the Department of Defense; the federal government’s inability to adequately account for intragovernmental activity and balances between federal entities, and “weaknesses in the federal government’s process for preparing the consolidated financial statements.”
Dodaro said the federal government has made progress, but still has work to do.
“To ensure our readiness as a nation to confront both domestic and international challenges, it’s imperative for Congress and the executive branch to come together and craft a plan for long-term fiscal sustainability,” he said.
Congress has run a deficit every year since 2001. In the past 50 years, the federal government has ended with a fiscal year-end budget surplus four times, most recently in 2001.
President-elect Donald Trump has promised to cut “hundreds of billions” in federal spending in 2025 through the reconciliation process. Trump’s hand-picked leaders for the newly created Department of Government Efficiency have also promised to cut spending. DOGE co-leader and Tesla boss Elon Musk initially suggested DOGE could cut $2 trillion in spending. Musk more recently said the group will aim for $2 trillion, but likely come up with half that amount.
