IT problems at the root of government's audit woes

Members of Congress and the General Accounting Office today said shortcomings in agencies' information technology systems—- including everything from security to poorly integrated systems—- were one of the reasons agencies cannot generate accurate financial statements.

"Widespread computer-control weaknesses are placing enormous amounts of federal assets at risk of fraud and misuse," Gene L. Dodaro, assistant comptroller general at GAO, told the House Subcommittee on Government Management, Information and Technology. "The majority of federal agencies' financial management systems are not designed to meet current accounting standards and systems requirements and cannot provide reliable financial information for managing government operations and holding managers accountable."Dodaro's remarks came a day after GAO released an audit report on a consolidated federal financial statement. The report is being heralded as the largest audit in history, but GAO officials said it could not create an accurate statement because agencies do not keep careful records on their spending. Federal agencies spend an estimated $1.9 trillion a year.

Poor financial management at agencies has resulted in such problems as the loss of two $875,000 tug boats and a million dollar missile launcher by the Defense Department, according to the audit.

Edward DeSeve, acting deputy director for management at the Office of Management and Budget, agreed that agencies need to improve their collection and control of financial information. "It takes time," he said. "And frankly, financial systems have a low priority within many organizations."