We must not confuse dissent with disloyalty. Edward R. Murrow
National Accountant Whistleblower Coalition (NAWBC) 12/12/2011
This country’s financial and national security is dependent upon the federal, state, and local government’s ability to provide an accurate accounting of its assets, liabilities, and revenue. The importance of accurate public sector financial statements was emphasized, indirectly, in 2002 when the corporate Chief Executive Officers (CEO) of Enron, Tyco, and Worldcom were caught over-stating some of their balance sheet totals in order to promote the sale of their stock. Also implicated in this cover-up was an American Institute of Certified Public Accountant (AICPA) firm, Arthur Anderson, for its two conflicts of interest in providing both consulting and auditing services to the same corporation. Since Arthur Anderson received more revenue from their consulting offices than their auditing offices, it was more beneficial for them to support their rosy consulting office scenarios than to address a corporation’s auditing deficiencies. The adverse impact of both these CEO and AICPA cover-ups on the market economy was immediate because, now, stockholders rightfully questioned the true value of all corporate stocks. Recall that the federal government, Republicans and Democrats, acted as one and held these CEO’s accountable to the full extent of the law. George W. Bush signed the Sarbanes Oxley Act of 2002 (SOX) into law on July 30, 2002 to provide real and meaningful penalties for corporate executive(s) found guilty of failing to comply with all facets of this legislation. This legislation forced all corporations to comply with the AICPA’s generally accepted accounting principles (GAAP) and a single set of accounting standard, rules, and regulations.
While the term GAAP may sound like a lot of accounting gibberish, it, in fact, compares on a one-for-one basis with mathematical and algebraic formulas that many professionals use and apply on a daily basis in carrying out the most technical and unique aspects of their professions. As an example, scientists are required to understand and apply a number of formulas that are unique to their very technical profession, the most famous of which is Einstein’s theory of relativity and his e = mc² formula. Electricians and electrical engineers must understand, use, and apply the basic electrical formula for voltage, defined as voltage = current x resistance. Likewise, every aspect of a corporation’s operation requires compliance with the AICPA’s GAAP-based corporate accounting formula ( assets = liabilities + stockholders equity) and supporting rules and regulations. This single GAAP-based corporate accounting formula dictates the debit and credit (asset, liability, and stockholder equity) general ledger accounts (GLA’s) that must be used in recording each and every corporate accounting transaction with a journal entry (and debits / credits to those GLA’s). Then, those journal entries and debit / credit GLA’s are summarized in a trial balance and the corporate financial statements are generated from that trial balance. Violate those SOX and AICPA, GAAP-based corporate rules and regulations and those corporate financial statements will never balance and / or the asset, liability, revenue, expense, and/or stock value totals reported on those financial statements may include over/under-valued amounts, as occurred with Enron, Tyco, and WorldCom. This government-mandated (SOX) corporate AICPA GAAP-based formula and supporting rules and regulations ensure the accuracy of this country’s corporate financial statements. Together, these “checks and balances” sustain our market economy and are one of the cornerstones that ensure this country’s financial and national security.
Now, contrast these same federally-mandated accurate corporate financial statements with 24 years of federal government cover-ups concerning its use of manually manipulated spreadsheet totals to prepare its own financial statements. Realize that the American taxpayers have unwittingly wasted untold billions of their money procuring non GAAP-based public sector financial software that has never (and will never) generate accurate federal financial statements. On March 3, 2011, Huffington Post’s Bianca Bosker reported that Bill Gates also confirmed the existence of accounting-related problems within state governments when he spoke out against “worsening state budget deficits caused by accounting tricks that would make Enron’s former executives blush.” The public sector’s inability to provide an accurate accounting of taxpayer dollars, like the above corporate market economy example, now poses serious “internal threats” to this country’s financial and national security.
The connection between the federal, state, and (even) local government’s inability to provide an accurate accounting of our tax dollars is but one example of why “Occupy Wall Street” protests are occurring today. Consider that politicians abdicated their most basic fiduciary responsibility to the American people when they gave the AICPA carte blanche authority to oversee two deficient non GAAP-based public sector accounting standards. Those two AICPA non GAAP-based public sector standards include a federal and a state and local accounting standard; the federal standard is overseen by political appointees within the Federal Accounting Standards and Advisory Board (FASAB) while the state and local standard is overseen by political appointees within the Government Accounting Standards Board (GASB). These FASAB and GASB “political appointee” entities were a necessary first step in giving credibility to the failed AICPA non GAAP-based standards that (today): (1) enrich both the government’s financial management contractors (AICPA firms, financial software companies, and management consulting firms) and their political sponsors (Democrat and Republican), and (2) prevent an accurate accounting of our tax dollars, at any government level, federal, state, or local.
Regarding the federal government, politicians allowed AICPA firms to oversee three (and not just two) conflicting interests involving consulting, auditing, and implementation of those deficient non GAAP-based accounting standards within all federal departments, bureaus, and agencies. Even worse, during the Ronald Reagan, George H.W. Bush, and George W. Bush administrations, the government’s internal financial management infrastructures were intentionally weakened solely to cover-up the true cost of their failed deregulation, outsourcing, and war-related agendas. These weakened government infrastructures occurred as a result of a few very powerful Republican’s successful efforts to eliminate the Office of Personnel Management (OPM) four-year accounting degree requirement for federal accountants and Office of Inspector General (OIG) auditors. Then, these professionals were systematically replaced with former accounting clerks who were given carte blanche authority to violate the constitution, Congress’ legislation, commit perjury, openly conspire to hide that perjury, and to do whatever was necessary to implement those failed Republican ideologies. Despite the good intentions of the Clinton and Obama administrations, their political appointees still ignored the warnings of the few remaining professional accountants and auditors and those professionals continued to be retaliated against and systematically eliminated for questioning these fatally-flawed non GAAP-based practices.
The resultant federal financial management spending machine of today is a prime example of the utter failure and sheer hypocrisy of Ronald Reagan’s (and the Republican’s) “government that governs least, governs best” ideology. Consider that today, after a 24 year, multibillion dollar “outsourcing” failure, the Republican’s handpicked AICPA firms and former career service GS-6 accounting clerks, now six-figure salaried accountant and OIG auditor managers, work as one to cover-up all reported accounting and financial software deficiencies. But, why wouldn’t they? AICPA firms are in a unique position of auditing the very deficient, non GAAP-based financial systems that they (and other contractors) create and that taxpayers unwittingly pay to reinvent, over and over again. The former accounting clerks are not about to question the government’s technical accounting and financial systems with their high school and G.E.D credentials and jeopardize their six-figure salaries and management positions. Then, to cover up (again) these wanton crimes against the American taxpayer, the Government Accountability Office (GAO), and its current and former Comptroller General’s of the U.S., Gene Dodaro and David Walker, have given 13 years of patently false written Congressional testimony. Their joint testimony consistently states that “the federal government has made significant progress in improving financial management activities and practices.” How is that possible when the federal government has used manually manipulated Excel spreadsheet totals to prepare all federal financial statements over all those years?
A more responsible approach beats these Republicans at their own game! Cut the federal financial management bureaucracy by 50% based upon logic as opposed to the failed and self-serving politics of the past. Restructure the federal financial management bureaucracy by upgrading all accountant, information technology (IT), and OIG auditor positions on a par with the private sector. Then, the American people and the “Occupy Wall Street” protesters can pressure congress to pass a government version of the Sarbanes Oxley Act to support those federal financial management professionals rather than to systematically eliminate them, as in the past. There are no technical accounting and financial system-related issues preventing federal, state, and local governments from designing, testing, and implementing their own GAAP-based public sector processes; the only roadblocks are the politically-induced problems created by corrupt politicians. The NAWBC website, Restructuring Government tab (to the left) includes suggestions for generating accurate and GAAP-based public sector (federal, state, and local government) financial statements solely with government accountant and IT professionals.
The NAWBC Documentation section includes key internal emails and letters to top and midlevel managers, Congress, Gene Dodaro and David Walker, published articles, and other documentation that support all of the above allegations. If you have no time to read the extensive documentation in that section, please, at least, read the following five documents.
Documents 1, 2, and 3 appear in NAWBC, Documentation Section under the following bulleted dates and descriptions: (1) a December 15, 2008 certified letter to the current and former Comptroller Generals of the U.S., Gene Dodaro and David Walker, questioning the accuracy of their combined eleven years of written congressional testimony, (2) a February 6, 2009 letter from GAO’s Chief Accountant, Robert Dacey, acknowledges that GAO has disclaimed an opinion of the U.S. government’s financial statements from 1997 thru 2008 due to material internal weaknesses. Mr. Dacey also stated that congress’ accountability legislation, the government’s cadre of highly qualified financial management professionals, and the FASAB / AICPA relationship are the basis for a sound and credible government-wide financial management improvement effort, and (3) my March 9, 2009 response to GAO’s Chief Accountant letter pointed out that: (a) the sole responsibility for the federal government’s material internal weaknesses lies with the Central Agencies and AICAP firms (financial software companies and management consulting firms) who oversaw these processes and then covered-up their own deficiencies, (b) there is no cadre of federal financial management professionals, only overpaid former GS-6 accounting clerks who are now GS-13, 14, and 15 accountant and OIG auditor managers, (c) Congress’s financial management accountability legislation is meaningless with no real whistleblower protection legislation, and (d) the FASAB and AICPA troubling relationship is a key reason why the federal government has no ability to generate accurate federal financial statements.
Document 4 appears in the NAWBC website, Documentation Section under the bullet that is titled “Office of Personnel Management (OPM) accountant position standard” that includes an advertisement for an EPA midlevel supervisory accountant position (with no 4 year accounting degree requirement) that was used to allow virtually anyone to fill these (once) professional accountant positions. The net result is that, today, EPA’s CFO (alone) employs approximately 400 people, the majority of which include GS-7 thru GS-15 personnel with no accounting degrees; the private sector could never run an accounting operation with this level of non-accountants and neither can the federal government. Now, multiply the number of non accountants within EPA (perhaps 390) times every federal department, bureau, and agency accounting office and you can quickly figure out (a) the gross waste of this federal financial management operation, (b) how the Republicans were able to transfer all inherent federal financial management functions to their financial management contractors, and (c) why the Republicans are so adamant about decreasing the bloated federal bureaucracy that they created.
Document 5 appears in the NAWBC website, Documentation Section, under the highlighted item that is titled Larry Fisher autobiography. This autobiography includes a brief narrative that details how, as far back as the early 1980’s, the Veterans Administration used forced adjustments to balance their financial statements since no one understood the government’s written accounting policies. Then, in October 1987, the Central Agencies’ (GAO, OMB, and Treasury) political appointee’s released the AICPA / American Management System’s untested, non GAAP-based financial software to all federal departments, bureaus, and agencies. The Environmental Protection Agency (EPA) procured that software in 1989. Then, over the past thirteen years, I consistently warned the Director, RTP, NC Finance Center that he certified the accuracy of EPA’s property financial statements against my strong objections, as EPA’s RTP, NC accountant; the issue was not just EPA’s inaccurate financial statements but the serious government-wide accounting and financial system deficiencies that his certifications hid since all government accounting offices used the same deficient non GAAP-based financial software. When he consistently ignored my warnings, I copied all managers up the EPA CFO chain-of-command including the CFO at that time, Lyons Gray (with a degree in political science) under the George W. Bush administration. Those continued efforts resulted in a 4 day LWOP suspension (December 11 thru December 14, 2006) over bogus allegations involving another employee’s fear for her life that were orchestrated by the Director, RTP Finance Center in an attempt to fire me. In order to protect myself, I spent the next year dealing with Office of Special Counsel (OSC) and Merit Systems Protection Board (MSPB) lawyers. On July 5, 2007, the MSPB required the Director, RTP Finance Center to provide a true, accurate, and signed statement, under penalty of perjury, concerning the circumstances involving my 4 day suspension. Despite the threat of perjury, the Director, RTP Finance Center lied under oath regarding all key facts concerning my suspension. On August 23, 2007, EPA’s Office of General Counsel (OGC) required that I attend a deposition where I affirmed the key points contained in this NAWBC website regarding (1) the Central Agencies’ release of untested financial software, (2) the Director, RTP Finance Center’s routine certification of inaccurate financial statements and (now) documentation showing that he lied under oath. Based upon the new information that the EPA OGC lawyer obtained from my deposition, instead of questioning the discrepancies between our testimonies, she, like the EPA CFO, simply covered-up both the EPA and government-wide accounting and system deficiency problem along with the (new) perjury issue.
Then, in September 2010, this EPA cover-up grew to include an additional EPA office, the Freedom of Information Office (FIO), when my request to have this August 23, 2007 deposition classified as a Freedom of Information Act (FOIA) document was denied. Instead, on September 10, 2010, EPA’s OGC classified that documentation as confidential business information (CBI). After President Obama’s election, I expanded those internal emails concerning EPA’s certification of inaccurate financial statements to also include EPA’s OIG as well as the EPA Administrator, Lisa P. Jackson, the new CFO, Barbara Bennett, and other top and midlevel managers. Despite this effort, nothing was done (again) and I was subjected to even more threats and reprisals with (now) the full cooperation of EPA’s CFO, OIG, FIO, and OGC offices. On June 2, 2010, the Director, RTP Finance Center removed me from my 5 hour a month (and only) responsibility of manually manipulating Excel spreadsheet totals to prepare EPA’s property financial statements. I was then given a GS-4 accounting clerk, data entry position. I retired from the federal government on January 2, 2011 as a GS-14 accounting clerk with a real fear of this government and its unwarranted claims and status as a democracy.
Look at the above thirty years worth of weakened government financial management infrastructures and realize that this problem is symptomatic of many (if not all) government infrastructures. The Obama administration has a unique opportunity to cut the federal bureaucracy and its annual operating costs by 50% (minimum) by communicating with the government’s whistleblowers, instead of eliminating them as has occurred during the last 5 administrations, Republican and Democrat. As noted earlier, the above summary level information is supported by more internal emails, letters, and other documentation that appears in the Documentation Section. If there are any questions or comments concerning any of the above allegations and supporting documentation in this NAWBC website, you can contact me, Larry Fisher, via my email address, lfisher1046@gmail.com.