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.


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.

  1. Comptroller General

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

    An audit is an investigation conducted by the Internal Revenue ...
  3. Statutory Audit

    A legally required review of the accuracy of a company's or government's ...
  4. Audit Risk

    The risk that an auditor will not discover errors or intentional ...
  5. Auditing Evidence

    Auditing evidence is information collected to review a company's ...
  6. Internal Revenue Service - IRS

    The IRS is the United States government agency that is responsible ...
Related Articles
  1. Investing

    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. Taxes

    Your Chance of a Tax Audit Is the Lowest in Years

    The risk of a tax audit, for you or your company, is the lowest in years, but that doesn’t mean you should skirt the law or stop keeping records.
  3. Taxes

    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.
  4. Personal Finance

    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.
  5. Taxes

    Surviving The IRS Audit

    Keeping thorough records and knowing the penalties make this experience easier than you'd expect.
  6. Investing

    A Look At National Debt And Government Bonds

    Learn the functions of the U.S. Treasury, and find out how and why it issues debt.
  7. Insights

    A Look At Accounting Careers

    More than just crunching numbers, this career blends detective work with trouble shooting.
  8. Managing Wealth

    Make $1 Million? Expect an Audit

    If you make $1 million or more, the IRS has its eyes on you. Here's what you can do about it.
  9. Small Business

    Risks Associated With Government Contracts

    Government contracts can be rewarding, but they also come with a variety of risks.
  10. Retirement

    Millennials: Retire With $1,000,000 – Here's How

    It is possible for Millennials to retire with $1,000,000, if they take the right steps and make the necessary sacrifices now.
  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. 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 >>
  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. 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 >>
  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 >>
Hot Definitions
  1. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  2. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  3. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  5. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  6. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
Trading Center