Tuesday, July 13, 2004 | 11:07 a.m.
As the nation continues to focus on corporate accountability in an effort to stamp out fraud, the government should be leading the way.
David Walker, U.S. Comptroller General and head of the General Accouting Office, made that pitch Monday at gathering of the Association of Certified Fraud Examiners in Las Vegas.
He followed up that pitch, however, with some bad news.
Walker indicated that the current federal debt is about $7 trillion. But when added to the total amount of unfunded pledges the government has made to programs including Social Security and Medicare, the amount needed to satisfy those commitments is much higher.
"It's not $7 trillion," he said. "It's at least $42 trillion ... That's how much money we would have to have today invested at current treasury rates to serve the demands over the next 75 years."
That calculates to about $350,000 for every full-time worker in the United States. Those workers, however, have an average wage of between $25,000 and $35,000.
He blamed the dreary fiscal picture on long-standing political practices of pushing through programs with true budgetary impacts that are backloaded in order to make them more palatable at the time of debate.
"These are shocking numbers," he said. "When people play games with tax cuts and spending programs ... that is imprudent and grossly misleading ... We should expect much more from public servants."
The policy can't continue, Walker said, calling on organizations such as the fraud examiners to make public the discrepancies.
"The status quo is unacceptable and unsustainable," he said.
Despite the shortcomings of the federal budget, Walker said that government agencies must be a part of the solution when it comes to fraud prevention.
"The government should attempt to lead by example," he said. "We should be as good or better than anyone else we audit."
Walker also called on those setting accountability standards to look ahead. That will be key in keeping standards and practices in pace with current trends in financing and accounting.
"It allows for more timely and informed judgments before we reach a crisis position," he said, adding that foresight could have helped stemmed the tide seen with the collapse of WorldCom, Enron and others.
Ultimately, Walker said that no one group will succeed in controlling fraud alone.
"It's really going to take a combined effort between (federal) government agencies, the private sector and state and local entities to keep fraud and abuse ... as low as possible," Walker said.
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