As we all remember, W couldn’t find his veto pen during his first four years. Plus Tom Ridge, the first Homeland Security Secretary, was a complete dud — a Rino political hack.
I had opportunity to meet Mr. Ridge while he was working for the administration at a luncheon with business leaders. I was underwhelmed. However, I was very favorably impressed by Secretary of the Treasury Paul O’Neill who was ousted after two years. He was from a non-financial business that actually made things (Alcoa) and believed in old fashioned ideas such as balancing the budget, eliminating real waste, and a strong dollar. Unfortunately he was in an administration that didn’t walk the talk.
O’Neill told a very good story during lunch. About the middle of his first month he asked to the closing financial statements for the previous month. Corporate CEO’s and CFO’s review the balanced books about the 15th of every month. He was told there would be no financial reconciliation statements, that it took the federal government 15 to 18 months to close the books. The statements he would receive in a few days would be for the 30 day period 18 months prior.
O’Neill told how Alcoa could reconcile and close its books in 12 days. He became determined to fix the process at Treasury so the President of the US and the Secretary of the Treasury could review an accurate accounting of receipts and expenditures monthly within 15 days of prior month end. Needless to say, Bush ousted him before he accomplished his goal.
One can only imagine how timely account reconciliation is in the current administration or at the Federal Reserve. After all, when you are rounding off to trillions of dollars, does it really matter?
In the meantime, our Congress passed the Sarbanes Oxley act which requires the CEO’s and CFO’s of public corporations to sign statements filed with the SEC verifying the monthly financial documents are accurate to the penny. The penalty for mistakes is years in federal prison as well as millions in civil fines.
Perhaps we should approach fiscal accountability with the President and Congress by making the President, Secretary of the Treasury, Speaker of the House, and leaders of both parties in the House and Senate sign Sarbanes Oxley type forms guaranteeing the accuracy of the federal government’s financial statements each month.