Government Accountability Office (GAO)

Key takeaways

• The GAO is an independent, nonpartisan legislative agency that audits and evaluates federal government spending and operations.
• It provides objective information, reports, and recommendations to Congress to improve efficiency, accountability, and fiscal management.
• The GAO issues audit standards (the “Yellow Book”) and performs audits, program reviews, investigations, and legal analyses across the federal government.
• The comptroller general leads the GAO and serves a 15-year term after presidential appointment based on congressional recommendations.
• The GAO can review Federal Reserve programs and emergency lending, but it does not oversee individual Fed meeting deliberations or monetary policy decisions.

What the GAO does

The Government Accountability Office serves as Congress’s watchdog over federal spending and operations. Its primary activities include:
* Conducting financial and performance audits of federal agencies and programs to ensure funds are used properly and objectives are met.
* Reviewing government programs and policies to assess effectiveness, efficiency, and alignment with intended goals.
* Investigating allegations of waste, fraud, abuse, or illegal activity and issuing legal determinations relevant to federal operations.
* Developing auditing and accounting standards used across government audits (commonly known as the Yellow Book).

Typical GAO work areas include defense spending, social programs, regulatory implementation, public health funding, and emergency appropriations.

Organizational structure and leadership

• The GAO is an independent legislative agency that reports to Congress.
• The comptroller general heads the GAO and serves a 15-year term. The president appoints the comptroller general from a list of candidates provided through a bipartisan congressional process.
• Staff expertise is multidisciplinary—accountants, auditors, economists, scientists, IT specialists, and other professionals—allowing the GAO to evaluate complex program areas.

Standards: the Yellow Book

The GAO issues the Generally Accepted Government Auditing Standards (GAGAS), commonly called the Yellow Book. These standards:
* Provide a framework for audit quality and ethical conduct.
* Guide financial and performance audits conducted across federal, state, and local governments.
* Help ensure audit consistency, reliability, and usefulness to policymakers and the public.

Authority and limits (including the Federal Reserve)

• The GAO has broad authority to review federal agencies and programs, including certain Federal Reserve activities.
• It may audit Fed emergency lending programs and other financial-support measures enacted during crises.
• It cannot review confidential Fed deliberations, individual meetings, or core monetary policy decisions.

Brief history and evolution

• Created by the Budget and Accounting Act of 1921 (originally the General Accounting Office) to centralize audit and accounting responsibilities and to support the presidential budget process.
• Expanded responsibilities over time as federal programs grew—particularly during the New Deal era and after World War II—shifting from payment verification to comprehensive program audits and performance reviews.
• Roles broadened in the 1970s to cover consumer protection, environmental, and social welfare issues.
• The agency name changed to the Government Accountability Office in 2004 to reflect a broader focus on accountability and performance.
• GAO continues to audit major federal spending initiatives, including large emergency appropriations such as pandemic relief programs.

Impact and use

Congress, federal agencies, and the public rely on GAO reports to:
* Identify opportunities to reduce waste and improve program performance.
* Inform legislation, oversight hearings, and policy decisions.
* Establish best practices and standards for government auditing and financial management.

Conclusion

The GAO plays a central role in ensuring federal accountability by auditing government finances, evaluating program performance, issuing standards, and advising Congress. Its work helps improve the stewardship of taxpayer dollars and supports informed legislative oversight.