If ordinary citizens kept financial records as shoddy as those of some federal agencies, they would be in big trouble with the ... federal government.
Apparently, however, the feds are better at catching tax cheats than they are at keeping their own books. A recent Associated Press review found that 10 years after Congress ordered federal agencies to have outside auditors review their books, neither the Defense Department nor the new Department of Homeland Security has met even basic accounting requirements.
The Defense Department never has passed an audit, which, because defense spending represents 20 percent of federal spending, has significant repercussions for the entire federal government. The Homeland Security Department, with a $35 billion budget this fiscal year, passed its first audit in 2003 but has failed every one since.
For a private business, failing an audit could have disastrous consequences, including bankruptcy. A public company's stock could drop or state and local governments could see their bond credit ratings sink.
But in the case of the federal government, a failed audit means that the American people can have little if any confidence in the budget figures used by either the Defense Department or the Homeland Security Department. Worse, it almost certainly means that taxpayers are losing billions to wasteful spending and fraud.
That is especially troublesome during wartime, when the government is spending about $10 billion a month in Iraq and Afghanistan. It also heightens concerns about stories that contractors in Iraq are suspected of selling weapons and other U.S. goods on the black market, that much of the money paid to contractors is unaccounted for and that even the military can't keep track of its own equipment.
It's not as if this were the case with every federal agency. The AP review of statements from the government's 15 executive departments showed that most passed their audits, although many have been cited for errors.
Homeland Security, however, has no central financial reporting system that auditors can examine. In fact, it has yet to establish a central accounting system after an effort to develop a single software system for the entire department failed.
While most Americans understandably are willing to pay what is necessary to ensure our troops are supplied, allowing money, arms and material to simply vanish into the ozone does not make the troops or the nation more secure. It simply adds unnecessarily to a growing debt.
Granted, these are unwieldy agencies with gargantuan budgets. Nonetheless, it is hypocritical of lawmakers to talk about wasteful federal spending as long as they can't ensure honest audits of federal agencies.