wolfstreet.com / by Wolf Richter •

When the Government Accountability Office issued its audit report on the federal government’s financial statements for fiscal 2014 recently, it started out in this chilling way:

The federal government’s serious material internal control weaknesses, along with significant uncertainties, and other limitations continued to prevent the U.S. Government Accountability Office (GAO) from rendering an opinion on the federal government’s consolidated financial statements.

The report specifically blamed:

Serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable.

The federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal entities.

The federal government’s ineffective process for preparing the consolidated financial statements.