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. Internal Audit

    The examination, monitoring and analysis of activities related ...
Related Articles
  1. Personal Finance

    How The IRS Works: Functions & Audits

    Even the most enlightened citizen curses taxes, possibly while simultaneously acknowledging that they're the price of a civilized society.
  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

    A Day In The Life Of An Auditor

    If you like the idea of examining and attesting to a company's financial performance for a living, a career in auditing might be right for you.
  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. Trading

    Are $1 Coins A Better Option Than $1 Bills?

    We look at how much the government could save if it took $1 bills out of circulation.
  6. Personal Finance

    IT Security Auditing

    Find out about this promising career that can match IT with business studies.
  7. Markets

    What are Government Securities?

    Government securities are debt instruments that governments issue to raise capital.
  8. 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.
  9. Markets

    Financial Regulators: Who They Are And What They Do

    Find out how these government agencies govern the financial markets.
  10. Markets

    What The U.S. Needs To Do To Avoid Austerity Measures

    Here's a look at some of the methods the federal government is using to help economic recovery in the U.S.
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. Can the IRS audit you after a refund?

    Learn how the U.S. Internal Revenue Service (IRS) can conduct a tax audit even after a taxpayer was issued a tax refund in ... Read Answer >>
  4. Is the Social Security administration part of the executive branch?

    Learn about various classifications of the Social Security Administration over the years and how it is an independent agency ... Read Answer >>
  5. Who sets fiscal policy, the president or congress?

    Discover how fiscal policy is set in the United States, including how all three branches of government can affect a given ... Read Answer >>
  6. How does government regulation impact the metals and mining sector?

    Learn how permit processes and regulations impact new mining projects. Discover how government bureaucracy and litigation ... Read Answer >>
Hot Definitions
  1. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  2. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  3. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  4. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  5. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  6. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
Trading Center