[Congressional Record Volume 141, Number 132 (Tuesday, August 8, 1995)]
[Senate]
[Pages S11812-S11813]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 ACCOUNTING STANDARDIZATION ACT OF 1995

  Mr. BROWN. Mr. President, it may shock many Senators to realize that 
the largest single enterprise in the history of the world does not have 
a uniform accounting system. Perhaps that is not on the top of your 
list to worry about today, but let me tell you why it is important.
  The U.S. Government has a $2 trillion cash flow. It has 900 million 
checks issued each year. It has a payroll and benefits system for 5 
million employees. It has over 1,962 separate budget accounts. It has 
though, incredibly, 

[[Page S 11813]]
Mr. President, 253 separate financial management systems. We do not 
have standardized accounts, we do not have a standardized management 
financial system, and what we have wreaked is chaos in terms of 
accounting for the taxpayers' money.
  We do have the GAO authorized under the law to set up accounting 
standards, but in the past both the Treasury and the Office of 
Management and Budget have openly disagreed with GAO. The consequences 
are, even though the GAO has come up with financial accounting 
standards, they have been ignored. Agencies regularly ignore those 
standards and, as a result, the Federal Government is literally 
operating without generally accepted accounting standards, and the 
results show it.
  According to GAO's report in 1995, the Department of Defense 
financial management systems, practices and procedures continue to be 
hampered by significant weaknesses. Here is what Secretary Perry said:

       Our financial management system is a mess. It is costing us 
     money we desperately need.

  Over $400 million in adjustments were made to correct errors in the 
defense reporting data for fiscal years 1991 to 1993 and the resulting 
statements still were not reliable. Vendors were literally paid $29 
billion that could not be matched with supporting documents to 
determine if the payments were properly made.
 We cannot even find out if they properly made the reports. An 
estimated $3 million in fraud payments made to a former Navy supply 
officer for over 100 false invoice claims, and approximately $8 million 
in Army payroll payments were made to unauthorized persons, including 6 
soldiers who never existed and 76 deserters.

  The park system--National Park Service financial system is in chaos. 
The Park Service has listed that a $150 vacuum cleaner as worth more 
than $800,000 on its books, a $350 dishwasher as worth $700,000, but a 
fire truck valued at $133,000 was carried on the books for only a 
penny.
  The IRS keeps its records in a way that would not be acceptable for 
any of the people it audits. Literally, the GAO reports that although 
it collects 98 percent of the Government revenues, it has not kept its 
books and records with the same degree of accuracy it expects of its 
taxpayers. For the last 2 years, GAO has been unable to express an 
opinion on the IRS financial statements due to ``serious accounting and 
internal audit problems.'' Unreliable data is estimated on $71 billion 
of valid accounts receivable, over $90 billion of transactions that 
have not been posted to taxpayer accounts and the inventory of tax debt 
has increased from $87 to $156 billion.
  Mr. President, I could go on. There are hundreds of examples of 
outrageous failures in the system. What is the solution? The bill I 
have introduced today would establish generally accepted accounting 
practices for the Federal Government. It codifies generally accepted 
accounting standards for the Federal Government as set up by the 
Federal Accounting Standards Advisory Board, and approved by the GAO, 
Treasury, and OMB. It will also codify the standard general ledger.
  Mr. President, what this will do is give us one standardized 
accounting system where the statements will be meaningful, accurate, 
and we cannot only save taxpayers money, but it will give Congress a 
better understanding of what the money is going for. Let me give one 
example. When we sought to identify the over $100 billion in overhead 
expenses this Government spends, we were literally unable to get an 
accurate accounting on what we spend on overhead, partly because there 
is not a standard set of accounts. This tool will not only save the 
taxpayers money, but it will make Congress far more able to maximize 
the dollars that the taxpayers send us.
  I yield the floor.
  Mr. BURNS. Mr. President, I know you have been alternating between 
both sides of the aisle on our opening statements as far as welfare is 
concerned. I notice my friend from Hawaii is on the floor. I would 
gladly yield to him, or I can go ahead and make my statement. He has 
indicated for me to proceed. I appreciate my friend from Hawaii.
  I want to associate myself with the words of my good friend from 
Colorado in introducing the bill to standardize the accounting system 
in this Government. When you are on the Appropriations Committee you 
really understand that we cannot get any kind of accounting to make 
some decisions. So I appreciate that.

                          ____________________