Tyco's and Enron's shareholders learned a simple investing rule the hard way. Before buying a single share, a smart investor should always look at the company's financial records. A clean audit is the most basic sign that a company can be trusted with shareholders' hard-earned money.

As the nation's shareholders, it should send shivers down taxpayers' spines to know that most federal government agencies are in such poor financial shape that 80% of them cannot pass an audit.

The fiscal mismanagement at government bureaucracies with larger budgets than most private companies goes beyond mere human incompetence or error. The habitual audit failures at Department of Defense (DoD), Department of Agriculture, the Justice Department, and other agencies resulted from fundamental deficiencies in these agencies' accounting methods.

A recent General Accounting Office (GAO) report found that 19 out of 24 agencies are not complying with federal financial laws, including consolidating disparate and duplicative financial management systems, maintaining accurate and timely financial records, and fixing fiscal discrepancies. Federal bureaucrats don't know how much government assets are worth and most transactions are still not being accounted for appropriately. How can we expect the government to save any of our money when they can't even properly account for it?

With billions more dollars going to fund the War on Terrorism and the rebuilding of Iraq, many Americans might assume that the administration is making it a high priority that the Pentagon pass an audit. But, the administration seems content to throw good money after bad and ignore the issue.

DOD is by far the most fiscally mismanaged agency. The GAO has said that overhauling the Pentagon's financial management will be a major challenge “that goes far beyond financial accounting to the very fiber of the department's business operations and management culture.” In fact, no major part of DOD has ever passed an audit and the Pentagon readily admits that flawed business systems and practices are common within the agency. They claim it would take decades to get all of the agency books in order.

Even the nation's own bookkeepers at the Department of Treasury need to improve their financial reporting systems. Terrible record keeping has made it impossible for the U.S. government to produce a reliable financial statement for the last three years. The GAO cited that the agency lacks reliable cost accounting information for various tax collection and enforcement activities.

Then there's the IRS, which doesn't have the necessary data to target their efforts to collect billions in unpaid taxes. This failure directly results in massive federal revenue losses and the average taxpayer bears this burden by picking up the tax scofflaws' share.

Financially irresponsible agencies assert that they are taking steps to move towards fiscal accountability but this is just the same story, different year. It has taken them over five years just to get started. Their excuses might be plausible if other agencies, such as the Social Security Administration (SSA), hadn't received clean opinions from the GAO for several years running. The SSA passed its last audit with flying colors, as it has done every year, properly accounting for about one trillion dollars in SSA trust funds and a separate congressionally allocated budget of more than $400 billion.

There is no excuse for flagrant disregard for the importance of financial reports. Plain and simple, it reveals a fundamental contempt for American taxpayers. Just as shareholders of large corporations have a legal right to review financial data, taxpayers deserve to know how their money is being spent. With the fiscal pressures of record deficits, these agencies are not doing enough up clean up their financial mess. It's incumbent upon Congress and the administration to start getting our nation's fiscal ship in shape.