Posted on 05/29/2002 6:08:02 PM PDT by olliemb
BILLIONS LOST BY FEDS
By JOHN CRUDELE --------------------------------------------------------------------------------
May 28, 2002 -- WASHINGTON complains about deceptive corporate accounting. But the government last year misplaced an incredible $17.3 billion because of shoddy bookkeeping, or worse. Let me put that into numbers so you can fully appreciate the amount. It's $17,300,000,000 - the price of a few dozen urban renewal projects, a nice size fleet of warships or about half the tax cut that everyone made such a fuss about last summer.
Disappeared. Gone. Nowhere to be found.
In fact, the government's accounting was so atrocious that the General Accounting Office - another Washington agency - refused to give an opinion about the honesty of the government's books.
Did someone steal all that money? The government doesn't know. Was it simply misplaced? Dunno. Misspent? Your guess is as good as anyone's.
There's a certain bit of irony, of course, that Congress is raking companies like Enron, Arthur Andersen and others over the hot coals for falsified books when D.C.'s own records are pathetically inadequate.
As I mentioned in this column a couple weeks ago, the government made an incredible admission a little while back in something called the 2001 Financial Report of the United States Government.
In that report, Treasury Secretary Paul O'Neill revealed that when the government uses the same accounting method that corporations are required to use, the federal deficit in 2001 was $515 billion. Last fall the government said the budget actually had a surplus of $127 billion.
Ah, yes, the good old days!
The huge deficit is mainly, the government says, the result of health benefits to military retirees. That's a cost the government conveniently forgot to include in its old accounting method, which had more to do with winning votes than providing a true financial picture of the country.
And that $515 billion deficit doesn't include all costs, especially Social Security. But we'll leave that alone because I don't want to depress anyone - especially myself.
I also said in that earlier column that the information on the deficit wasn't easy to find. O'Neill's letter was buried on the Treasury Department's Web site and the press release put out by the agency didn't mention the $515 billion until paragraph 5.
(Treasury says all the press in Washington got a copy of the report and that it was adequately disclosed. It also said an undersecretary of Treasury had reported the numbers to a congressional subcommittee.)
Well, I sent my scavengers back into that Financial Report of the U.S. for another look and that's when we discovered the unaccounted for $17.4 billion.
Follow me on this and I'll lead you to the still missing treasure.
Go to www.USTreas.gov, click on Treasury Bureau on the left, then click on "financial management services."
If you've made it this far click on "Financial Report of the U.S. Government" for 2001 and download it.
Now find page 49. Look at the line that says "Unreconciled transactions affecting the change in net position." The figure in the 2001 column next to that is $17.3 billion.
What that means is that when the accountants tried to balanced the government's books they came up $17.4 billion short. Note 16 on Page 110 sort of explains.
That footnote says that the accountants had to pencil in $17.4 billion that didn't exist (or was missing) in order to achieve a balanced government ledger.
The footnote adds that the mistake could simply be bad government record keeping or "improper recording of intragovernmental transactions by agencies."
Poor record keeping! Isn't that a gem.
I spoke with some of the folks at the General Accounting Office who audited the government's report. They were puzzled by the discrepancy and wouldn't sign off on the government's accounting because of that and other things.
"The left and the right side didn't equate," said one GAO auditor. When such a thing happens in the private sector, people go to jail. And a company's stock would fall by about 99 percent if its auditor didn't trust the books - just ask the felons-to-be down at Enron.
It is good that Washington must now adopt a corporate-like method of accounting for where it spends taxpayers' money.
But it would be even better if there were some recourse to the sort of sloppiness, arrogance or criminality that allows the government to come up $17.4 billion short of balancing its books.
At the very least, maybe some corporate exec - as he's being hauled off to jail for accounting fraud - will hold aloft page 49 of the government's financial statement and footnote 16 and demand equal treatment.
* Please send e-mail to: jcrudele@nypost.com
YES! I am shocked! SHOCKED! that a government which extorts $2 trillion at gunpoint each year cannot account for $17.3 billion! Why, if this continues, people will begin to question why we even pay taxes to government! I mean, it's like they're not even ACCOUNTABLE to us!
Yea, for when we cannot trust people whose only talent is getting elected to spend our money to buy votes, the very foundations of the earth shall shake.
Mene, mene. Tekel Upharsin!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.