What is the Government Accountability Office (GAO)?

The 'Government Accountability Office (GAO) is an agency under the legislative branch of the U.S. government that monitors and audits the United States Congress spending and operations. It keeps track of the taxpayers dollars that are used by the legislature and the executive branches. It monitors the operating results, financial positions, and accounting systems that are used by different agencies of the government. It provides this information and results directly to the US Congress.

Back to: ACCOUNTING, TAX, & REPORTING

What is the Role of the Government Accountability Office?

The GAO is an independent and non-partisan agency that conducts routine audits on all government branches to monitor their spending. It is headed by the Comptroller General who is appointed by the president from a bipartisan list of congressional recommendations. He/she serves a 15-year term and the present comptroller general, Gene L. Dodaro, was appointed in 2010.

Function and Management

The role of GAO is to ensure that the funds are allocated properly and there is no misappropriation of funds. The GAO carries out audits and reviews of the Pentagon, which includes expenses in personnel and weapons for the U.S. military. It also reviews programs and policies to ensure that the established goals are aligned with their original objectives and they are fulfilled. The GAO also reviews allegations of any illegal activity within the government agencies. The Federal Reserve's function and operations can also be reviewed by the GAO. Post the 2008 financial market collapse, it even conducts a review of emergency lending programs. However, it cannot review individual meetings and decisions made by Federal Reserve Governors regarding the monetary policy. The GAO has some other duties as well which include the setup of standards for government audits. This is referred to as the Generally Accepted Government Auditing Standards (GAGAS). It also gives reports like Federal Budget and Education reports.

Background of the GAO

The government spending and debt increased sharply during the World War I. This led to a requirement of a formal system that was able to review, monitor and control the expenditures by government. This led to the setting up of the General Accounting Office (GAO) by the Budget and Accounting Act of 1921. This office took up the responsibilities of budget, accounting, and auditing from the U.S. Treasury Department. This act also ensured that the president was required to create an annual budget for the federal government. After passing the GAO Human Capital Reform Act, the name of this office was changed to the Government Accountability Office in 2004. In 1930s, because of the President Roosevelt's New Deal social policies in response to the Great Depression, there was an expansion in government policies and expenditures. The role of GAO increased from what it was initially focused on, ensuring proper payments. By the end of World War II in 1945, the spending increased once again and the GAO expanded its role into auditing of government agencies to ensure that they were operating as per their defined objectives. The GAO work expanded by the 1970s to include the agency work review in the areas of consumer protection, environment, and social welfare. Initially, the GAO personnel only had accountants, however, it soon expanded to involve scientists, health care professionals, and computer scientists. After passing of the GAO Human Capital Reform Act, the name of the General Accounting Office was changed to the Government Accountability Office in 2004.