Guest post by Robert Leaver.
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By any reasonable measure, what I am going to explain totally undermines our government's financial integrity with its citizens and the other nations of the world.
Article I, Section 9, Clause 7, of the US Constitution reads “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
In 1990, GHW Bush elaborated the Constitution when he signed Public Law No: 101-576 into effect. The law contains a revision to Government Auditing Standards. It states that "Officials and employees who manage these programs must render a full account of their activities to the public. While not always specified by law, this accountability concept is inherent in the governing processes of this nation."
The “full account” included full financial disclosure. As of 1990, all government agencies are required to submit annual, audited financial statements.
The Federal Register indicates there are over 430 departments, agencies, and sub-agencies in the federal government.”(Aug 26, 2015). All of those agencies except the DOD and occasionally HUD submits annual audits. Since being explicitly required to do so in 1990, 27 years ago, the DOD has NEVER submitted audited financial statements.
In May of 2018, it was discovered that there existed $21 trillion in “undocumentable adjustments” in DOD financial records for the years 1998 through 2015.
Early this year, under President Trump, the Pentagon announced that it was conducting its first ever independent audit. Mind you, a full audit for 2018 would not provide any explanations about where the $21 trillion went.
Several months after beginning this year’s annual audit, the Trump Administration accepted new recommendations from the Federal Accounting Standards Board: (https://fas.org/sgp/news/
The recommendations say: “This Statement permits modifications that do not affect net results of operations or net position. In addition, this Statement allows a component reporting entity to be excluded from one reporting entity and consolidated into another reporting entity, and the effect of the modification may change the net results of operations and/or net position.”
This means that both corporations and government agencies can now either redact corporate, DOD, or overall government financial information, or cook their books. In addition, the NSA Director may waive SEC reporting requirements for private corporations.
From this statement, it seems that only a few people with high level security clearances have the authority to determine what is a national security issue. However, these same people will now have the authority to restate budgets to hide activity. No one but those few people will ever know that expenditures on activity A are hidden in activity Q, a completely different area of government.
An independent audit has zero value if authorities are allowed to move expenditures around with no transparency. Nor can it be used to conduct evaluations of the any portion of the federal budget? This new Trump policy is in defiance of all previous financial reporting laws, as well as our Constitutional requirements for reporting on government spending to the citizens of the United States?
The brilliant and much esteemed financial advisor, Catherine Austin Fitts has this to say: “Many of our problems are related to how the federal government and the banks and private corporations that run its operations can access trillions in secret outside of the Appropriations Clause of Article I of the US Constitution and the US financial management laws. This nearly infinite amount of money finances whatever the people who can access the money want. Forget democracy! Forget the republic! The policies are set by the people who control the operations, assets and technology that secret money finances. Notice that Congress consistently votes against the wishes of the American people and their constituents! Their votes are following the money."
I challenge you to send this post to an MBA, CPA, or corporate treasurer. Ask what he/she thinks. Folks, the game is over. Time to start a new game.