GAO Identifies Deficiencies in Fiscal Service's Financial Controls

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The Government Accountability Office (GAO) has identified deficiencies in the Bureau of the Fiscal Service’s internal controls over financial reporting for the General Fund of the U.S. government. In its audit of the fiscal year 2024 schedules, GAO found gaps in information system security documentation and insufficient support for certain cash transactions. While these deficiencies were not classified as material weaknesses or significant deficiencies, GAO emphasized the need for corrective action to ensure the accuracy and reliability of financial reporting.

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The General Fund, managed by the Fiscal Service, accounts for federal government cash activity and finances daily and long-term operations. As part of its review, GAO examined Fiscal Service policies, interviewed personnel, and tested controls to evaluate their effectiveness. The audit also followed up on 11 previously issued recommendations, of which only two had been fully addressed. GAO noted that 82% of its prior recommendations remain unresolved, underscoring persistent challenges in financial management oversight.

In addition to the GAO audit, Treasury’s Office of Inspector General engaged an independent public accounting firm to audit the department’s consolidated financial statements for fiscal years 2023 and 2024. This parallel review found that Treasury had closed four information system control deficiencies related to the General Fund schedules, but six deficiencies remained open as of September 30, 2024. These findings highlight ongoing weaknesses in financial reporting and internal controls at the federal level.

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GAO recommended that the Bureau of the Fiscal Service fully implement its policies for information system security documentation and coordinate with the Federal Reserve Banks to improve documentation procedures for transactions initiated by the banks. These steps aim to strengthen oversight and ensure proper recognition of transactions in the General Fund schedules. GAO will continue to monitor the status of these recommendations and update its findings as Fiscal Service addresses these concerns.

Article by multiple RFHC contributors, based upon information from the Government Accountability Office

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