Remember the government that gave us Sarbanes-Oxley? And the government which is policing the entire US for any drop of accounting fraud, just looking to toss CEOs in jail? We hear all kinds of rumors about that government's accounting mess, but that government, of course, is never subjected to its own rules. From the Comptroller General of the United States, upon the audit of the US government (page 34):

Our report on the U.S. government's consolidated financial statements for the fiscal years 2004 and 2003 is enclosed. As in the seven previous fiscial years, certain material weaknesses in internal control and in selected accounting and financial reporting practices resulted in conditions that continued to prevent us from being able to provide Congress and the American citizens an opinion as to whether the consolidated financial statements of the U.S. government are fairly stated in conformity with U.S. generally accepted accounting principles.

A disclaimer. Zillions in unfunded commitments, agencies consistently restating their financial statements, and material weaknesses for the past nine years. But I thought the SEC was coming down hard on these kinds of things? Tsk, tsk.

I remember Section 302 of the Corporate Disclosure Rules reading "if a company must restate its financial statements due to material noncompliance, misconduct, or with any financial reporting requirement," the CEOs and CFOs may surely face great penalties. The GAO study found serious financial management problems at DOD; the federal government's inability to fully account for and reconcile transactions between federal government entities; and an "ineffective process" for preparing the consolidated financial statements.

Is anyone in government facing monetary penalties or going to prison?