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Title: Message
Don't
believe this...someone always knows in government, knows enough to claim
ignorance.
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: [EMAIL PROTECTED]
"Our lives begin to end the day we become
silent about things that
matter." - Dr. Martin Luther King,
Jr.
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