Ka Wai Ola - Office of Hawaiian Affairs, Volume 34, Number 6, 1 June 2017 — The Balance Sheet Story... What does a balance sheet contain? Liabilities vs Assets [ARTICLE+ILLUSTRATION]

The Balance Sheet Story... What does a balance sheet contain? Liabilities vs Assets

The federal government's audit reveals a halanee sheet of $18 trillion in the red. I want to share 'audit' info as the Vice Chair of OHA's Audit Committee tasked with writing an "RFQ." What does OHA's halanee sheet reveal and ean its receipts cover its expenses in the long run? "The federal government reported liabilities of $21.5 trillion as of September 30, 2015. This was $686 hillion greater than the amount reported as of Septem-

ber 30, 2014," says Gene Dodaro, comptroller general of the United States. He continued, warning that "absent policy changes, the federal government continues to face an unsustainable long-term fiscal path." Does this sound familiar? Does it sound like accounting firm SPIRE's report on OHA? Why am I writing about the federal government's halanee sheet audit? Because it will help OHA's audit committee study the flaws and errors of a halanee sheet gone "WACKY". . . "CRAZY!" ... and we ean help correct these 'mistakes' in the future. Mr. Dodaro's letter from the auditors pointed out numerous "material weaknesses" and "deficiencies in internal controls!" This resulted in the auditors issuing a "disclaimers of opinion" on their FY 2015 hnaneial statements. According to Generally Accepted Auditing Standards (GASS), auditors make such disclaimers when they are unahle to issue an opinion on the audited entity's overall hnaneial condition. The GAO auditors also warn that 'the federal is not able to demonstrate the reliability of significant portions of the accompanying accrual-based hnaneial statements, principally resulting from limitations related to certain material weaknesses in the internal controls... As a result of these limitations, whieh I feel the selected audit team will probably find, I wish to caution that the amounts that are found/reported in the hnaneial statements and related notes may not be reliable.

Yes, we really do need an audit using the Generally Accepted Auditing Standards rules. The federal government was "unahle to pass the GAO audit because of their inability to account for and reconcile certain transactions, an ineffective process for preparing consolidated hnaneial statements and significant uncertainties." However, federal officials are currently working on a "remediation" plan to make their next hnaneial reports more accurate, the GAO reports. This corrective aehon plan starts with develop-

ing a remediation plan that will take the next three (3) years to address the "material weaknesses in the internal controls." When Robert Dacey, GAO's Chief Accountant, was asked whether the federal government was technically "insolvent" because its liabilities were seven (7) times larger than its assets, he answered, "I wouldn't use the word 'technical insolvency' because the federal government still has the ability to TAX!" So now I eome to the REAL REASON why I am writing this article. . . I feel OHA must advocate in the upcoming 2018 Legislative Session. . . for the following Bill To Raise the C AP of $ 15 million revenue from our ceded lands, and give our beneficiaries their rightful 20% of ceded land revenue. Expenses are definitely increasing daily... Our beneficiaries NEED HELP! Chief Accountant Darcey agreed with the Comptroller General Dodaro that the CURRENT FINANCIAL CONDITION is UNSUSTAINABLE OVER THE LONG RUN. Source: www.cnsnews.com/news/ araticle/gao-audit-federal-governments-balance-sheet. I am trying to illustrate the fact that . . . over the long-term, receipts are not enough to cover expenses. Our Audit Committee looks forward to issuing an RFQ soon! A hui hou and Malama Pono, Trustee Leina'ala ■

Leina'ala Ahu lsa, Ph.D.

TrustEE, At-largE