Every year the Treasury Department assembles a single set of financial statements for the whole United States government, and every year the Government Accountability Office audits how that assembly was done. This year's report on the assembly process was issued on September 15, addressed to the Secretary of the Treasury.
It finds three things. The first is the one worth reading twice.
A trillion and a half, with no description attached
Governments get sued. The financial statements have to disclose what those suits might cost, and Treasury did put a number on it. What it did not do was say what the cases were.
During our fiscal year 2025 CFS audit, we found that Treasury did not properly report legal contingencies in the draft CFS note disclosure. Specifically, while Treasury disclosed an estimate of the possible loss contingencies, including that the upper end of the reasonably possible estimated range of loss was $1.5 trillion as of September 30, 2025, it did not disclose the nature of the contingencies.
Then the composition:
Of this amount, $1.4 trillion related to two Environmental Protection Agency legal contingency cases of $700 billion each.
Two cases. Seven hundred billion dollars apiece. More than nine tenths of the government's entire disclosed upper-bound legal exposure, sitting in two matters that the draft statements did not describe.
GAO's diagnosis is procedural rather than accusatory: Treasury's standard operating procedure "does not include specific steps for determining the information to disclose regarding the nature of the contingencies in order for the note to be presented in accordance with U.S. GAAP." And the outcome: "Without adequate procedures to properly report legal contingencies, Treasury cannot reasonably assure that it prepares the CFS in accordance with U.S. GAAP."
Treasury fixed it before publication. The report says so plainly: "Treasury corrected the note disclosure to include the nature of the contingencies in the final fiscal year 2025 CFS." The finding is about the control, not the published statements.
Three errors in the notes
The second deficiency is that the draft notes "did not consistently prepare accurate and complete note disclosures," with "incorrect amounts, information incorrectly carried forward from the previous year's report, and incomplete information." GAO gives examples:
- Note 4, Loans Receivable "did not explain the $52.7 billion increase in the loans receivable balance of 'all other programs' from fiscal year 2024."
- Note 8, Investments did not disclose that the Department of Commerce "received a 5-year warrant to purchase up to 240.5 million shares of Intel common stock exercisable under certain conditions at $20.00 per share," nor that the warrant was not recorded as of September 30, 2025.
- Note 20, Commitments "erroneously included $14.9 billion as the increase in obligations. However, according to supporting documentation, the amount was $47.8 billion."
Treasury has, by GAO's count, "more than 40 SOPs for preparing the CFS." The finding is that they "were not adequate."
Treasury corrected these errors too before the final statements were published.
Sixty-two roles, two checkboxes
The third finding is about who can get into the machine. Planning Analytics is the system used to build the consolidated statements, and access to it is recertified once a year by managers. GAO found the reports those managers were given
only identified whether each user had a USER role or an ADMIN role, but they did not include the specific roles granted to each user. Fiscal Service has created 62 specific roles that it can grant to users in Planning Analytics based on job responsibilities.
A manager asked to confirm that someone's access is appropriate was shown two categories where sixty-two exist. GAO cites FISMA and NIST Special Publication 800-53 — least privilege and separation of duties — as the standards not met.
The thing that has never changed
The report's own framing of the background:
Since our first audit of the CFS, for fiscal year 1997, certain material weaknesses in internal control over financial reporting and other limitations on the scope of our work have resulted in conditions that prevented us from expressing an opinion on the federal government's accrual-based consolidated financial statements.
The government's consolidated books have never been given a clean audit opinion. The three material weaknesses this report names are the government's inability to account for intragovernmental activity between federal entities; to assure the consolidated statements are consistent with the underlying audited entities' statements, properly balanced and in accordance with U.S. GAAP; and to assure that two specific reconciliation statements are complete and properly supported.
The recommendations, and one sentence about why a fix stalled
GAO makes three new recommendations, all to the Fiscal Assistant Secretary, each of the form "improve and implement procedures" for one of the three findings. Treasury concurred with all three.
On the older ones: nine recommendations were open when the prior audit finished, three were resolved and closed this cycle, and "six recommendations remained open as of March 11, 2026."
One of those six has a status entry worth quoting, because it is the only place in the report where a control failure has a stated cause outside Treasury:
State communicated to us that due to a reallocation of funds and budget cuts, it pulled the staff resources that were working on these process improvements through fiscal year 2025. Treasury will reengage with State in fiscal year 2026.
What the report does not say
- No deadline. No date is attached to any recommendation. GAO's only forward commitment is its own: it "will continue to monitor Treasury's progress."
- No cost. No estimate of dollars at risk, misstated or lost. The only cost figure in the document is GAO's publication pricing on the back cover.
- No consequence. No penalty, no referral, no enforcement. The stated effect is risk: the deficiencies "increase the risk that material amounts and disclosures may not be presented in the CFS in accordance with U.S. GAAP."
- No finding that the published statements are wrong. Both substantive errors were corrected before the final version. This is a report about the process.
- No dollar figure for the intragovernmental gap. The oldest and largest of the material weaknesses is discussed qualitatively — "intragovernmental differences remain, and further improvements are needed" — with no amount attached.