Government Accountability Office - GAO

DEFINITION of 'Government Accountability Office - GAO'

The Government Accountability Office (GAO) is an agency of the U.S. government that monitors and audits government spending and operations. The GAO tracks how the legislative and executive branches of the government use taxpayer dollars, and then reports the findings directly to Congress. The Comptroller General serves as head of the GAO.

BREAKING DOWN 'Government Accountability Office - GAO'

The GAO serves as a financial watchdog over government spending. It monitors the operating results, financial positions and accounting systems used by the various governmental agencies. The GAO also conducts routine audits on all branches of government.

The Government Accountability Office (GAO) is an independent and non-partisan government agency that reports to the U.S. Congress.

Function and Management

The GAO conducts audits of federal government agencies to ensure that funds are spent efficiently and as intended. The agency reviews government programs and policies to determine if they are achieving their intended goals, and investigates allegations of illegal activity within the government. The GAO also issues legal determinations on proposed rules regarding other government agencies.

The GAO has broad authority to review the Federal Reserve's function and operations, and it conducted reviews of the emergency lending programs that were enacted following the 2008 financial markets collapse. It does not have the authority to review individual meetings and monetary policy decisions made by the Fed.

The Comptroller General is appointed by the President from a bipartisan list of Congressional recommendations. Gene L. Dodaro was appointed to the position in 2010; his 15-year term will expire in 2025.

Background

The GAO was established in 1921, taking over budget, accounting and auditing responsibilities from the U.S. Treasury Department. Government spending and debt had risen sharply during World War I, which ended in 1918, and both review and control were needed. The Budget and Accounting Act, which established the GAO, also required the President to prepare an annual budget for the federal government.

Government programs and expenditures expanded sharply in the 1930s during President Roosevelt's New Deal to combat the Great Depression. The GAO's role, which originally focused on ensuring payments were made properly, grew in importance. By 1945, at the end of World War II, government spending had again soared, and the GAO began auditing government agencies to ensure they worked as intended.

By the 1970's, the GAO's work had expanded to include reviews of agency work on consumer protection, the environment and social welfare. Agency employees, who had originally been only accountants, began to include scientists, health care professionals and computer scientists. The GAO also conducts audits and reviews of the Pentagon, including U.S. military spending on both personnel and weapons systems.

RELATED TERMS
  1. Comptroller General

    A high-ranking accounting position in the U.S. government. Appointed ...
  2. Statutory Audit

    A legally required review of the accuracy of a company's or government's ...
  3. Field Audit

    An audit is an investigation conducted by the Internal Revenue ...
  4. Auditing Evidence

    The information collected for review of a company's financial ...
  5. Association Of Government Accountants

    An association of accountants that work for the U.S. Government ...
  6. Business To Government - B To G

    Professional affairs conducted between companies and regional, ...
Related Articles
  1. Markets

    Audit the Fed: Is Trump Right? (JPM)

    Find out why Donald Trump has a point when he claims it is vitally important to audit the Federal Reserve, the central banking authority in the United States.
  2. Personal Finance

    How Does An IRS Audit Work?

    It doesn't automatically mean an IRS agent will be ringing your doorbell. Here are the different types of IRS audits and how to handle them.
  3. Investing

    What's an Audit?

    An audit is an objective examination of accounting records that makes sure the records are a fair and accurate representation of the transactions they claim to represent.
  4. Financial Advisor

    Advisors: Warn Clients About These Audit Triggers

    There are several factors that may increase the risk of an audit, especially with high-net-worth clients.
  5. Markets

    What are Government Securities?

    Government securities are debt instruments that governments issue to raise capital.
  6. Financial Advisor

    SEC Audit? No Problem (If You're Prepared)

    Audits are unwanted and unpleasant, but by getting your proverbial ducks in a row ahead of time you can ease and simplify the process.
  7. Markets

    Austerity: When The Government Tightens Its Belt

    When a government tightens its belt in tough economic times the entire nation feels the squeeze.
  8. Personal Finance

    America's Missing $15 Billion in Corporate Taxes

    The “Starve the IRS” strategy cuts the supply of corporate auditors. Result: Big-money tax cheats go free and ordinary taxpayers pay every penny they owe.
  9. Retirement

    Is the Middle Class Giving Up on Retirement?

    Americans aren't completely giving up on retirement, but many haven’t put away enough to take off at the traditional age of 65 (or Social Security's 66).
  10. Managing Wealth

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
RELATED FAQS
  1. How is the Federal Reserve audited?

    Learn how the Federal Reserve gets audited. Due to gridlock, the Federal Reserve has been forced to take on the role of stimulating ... Read Answer >>
  2. Can state and local governments in the US run fiscal deficits?

    Discover why most state and local governments do not – or cannot – run fiscal deficits in the same manner as the U.S. federal ... Read Answer >>
  3. What is an IRS letter audit / audit by correspondence?

    Learn about IRS letter audits, how tax returns are selected for audits and the common outcomes in the letter audits conducted ... Read Answer >>
  4. What should I do to prepare for an IRS audit?

    Find out how to prepare for an IRS audit, what kinds of audits you might face and what kinds of habits you should develop ... Read Answer >>
  5. Is the Social Security administration a government corporation?

    Learn the difference between a government agency and a government corporation, and how the Social Security Administration ... Read Answer >>
  6. What do I do if I think an accountant is in violation of the Generally Accepted Accounting ...

    Learn where to report financial accounting fraud if you suspect an accountant is in violation of the generally accepted accounting ... Read Answer >>
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center