ABSTRACT
On grounds that New York's problems extended beyond the immediate question of auditing the current accounting system, the General Accounting Office (GAO) took a broader and more prescriptive approach. The GAO approach was therefore to conduct an investigation of three related aspects of the problem—the accounting system, the short-term budget prospects, and the long-term economic problems. In April 1976, GAO staff met with representatives from Arthur Andersen and Co., the Treasury Department staff, and the state's Special Deputy Comptroller for New York City who had a mandate from the Emergency Financial Control Board to monitor New York's progress. According to state law establishing Municipal Assistance Corporation, New York was already required to adopt the accounting principles in the State Comptroller's Uniform Systems of Accounts for Municipalities to allow an audit for the fiscal year ending June 30, 1978. The New York City budget had been plagued by financial legerdemain.
