Download Understanding the Primary Components of the Annual Financial Report of the United States Covernment Book in PDF, ePub and Kindle
The U.S. government is the largest, most diverse, most complex, and arguably the most important entity on earth today. Useful, timely, and reliable financial and performance information is needed to make sound decisions on the current results and future direction of vital federal programs and policies. The Department of the Treasury (Treasury), in coordination with the Office of Management and Budget, annually prepares the Financial Report of the United States Government, hereafter referred to as the Consolidated Financial Report (CFR). The CFR is a general-purpose report of accountability intended internally for members of Congress, federal executives and federal program managers, and externally primarily for citizens and citizen intermediaries who are interested in and have a reasonable understanding of federal government activities and are willing to study the information with reasonable diligence. Citizen intermediaries include members of the news media, analysts, and others who analyze and interpret, for the general public, the more complex and detailed information in the CFR. The goal of the CFR, and the subject of this guide, is to make available to every American a comprehensive overview of the federal government's finances. As described in the CFR, significant issues regarding the reliability and presentation of the federal government's financial information still need to be addressed. For example, several long-standing material weaknesses and other scope limitations have prevented GAO from being able to express any opinion on the federal government's consolidated financial statements, except for the Statement of Social Insurance. GAO expressed an unqualified opinion on the fiscal year 2008 and 2007 Statements of Social Insurance. Also, additional transparency is needed in connection with intragovernmental debt and the large and growing intergenerational burden associated with the federal government's projected growth in costs and debt. At the same time, in its current form, the CFR offers certain valuable insights into the overall financial operations, condition, and financial outlook of the federal government. GAO prepared this guide to the CFR to help those who seek to gain a baseline understanding of the significant information provided in the primary components that make up the CFR, especially the financial statements. This guide explains the purpose of each CFR component and provides illustrative financial information using actual fiscal year 2008 and 2007 data to focus readers on the kinds of significant information found in the various parts of the CFR. Because the illustrative financial information contained in this guide minimizes detail in order to highlight significant line items, it does not show or explain all of the items included in the federal government's actual CFR. This guide is not intended to help people who are interested in understanding the components of the financial statements of individual federal agencies as their form or content may vary from that of the CFR. Because this guide uses illustrative examples from the fiscal year 2008 CFR, significant financial transactions related to recent government actions to address the economic crisis that occurred in fiscal year 2009, such as the American Recovery and Reinvestment Act, are not included in this guide.
