$25 Billion Lost between the Sofa Cushions?

...the federal government cannot account for $25 billion it spent in 2003. That’s billion with a “b.” Federal auditors know that $25 billion was spent by someone, somewhere, on something, but don’t know who spent it, where it was spent or on what it was spent. That amount is more than the total federal taxes paid by all of the residents in each of 28 states. It’s enough to fund the entire Department of Justice budget. (From How Your Government Wastes Your Money by Brian Riedl)

Porkopolis is contacting Mr. Riedl to get the specifics behind his assertion on this outlandish amount of waste.

Update: Mr. Riedl was kind enough to respond to the request for more information. Here is his response:

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The federal government calls this spending "unreconciled transactions." See U.S. Department of the Treasury, 2003 Financial Report of the United StatesGovernment, p. 126 (which is p. 131 of the .pdf file) , at http://fms.treas.gov/fr/03frusg.html

Here's the actual text from the report:

Note 16. Unreconciled Transactions Affecting the Change in Net Position

The reconciliation of the Change in Net Position requires that the difference between ending and beginning net position equals the excess of revenues over net cost, plus or minus prior period adjustments.

The unreconciled transactions needed to bring the change in net position into balance amounted to a net value of $24.5 billion and $17.1 billion for the years ended September 30, 2003, and 2002, respectively.

The three primary factors affecting this out-of-balance situation are:

• Improper recording of intragovernmental transactions by agencies.
• Transactions affecting balance sheet assets and liabilities not identified properly by agencies as prior period adjustments.
• Timing differences and errors in reporting transactions.

The Federal financial community considers the identification and accurate reporting of these unreconciled transactions a priority. (ed.: Emphasis added)