GAO finds Fiscal Service debt schedules fairly presented

The Government Accountability Office said the Bureau of the Fiscal Service’s schedules of federal debt for fiscal years 2026 and 2025 were fairly presented in all material respects. The agency also said Fiscal Service maintained effective internal control over financial reporting relevant to the schedules as of September 30, 2026. Its tests found no instances of reportable noncompliance for fiscal year 2026.

Over the past 10 years, from fiscal year 2016 through fiscal year 2026, total federal debt managed by Fiscal Service increased by about 105 percent, from $19.6 trillion to $40.2 trillion. The agency said debt managed by Fiscal Service consists of debt held by the public and intragovernmental debt holdings.

During fiscal year 2026, total federal debt increased by about $2.5 trillion. About $2.1 trillion of the increase was debt held by the public, meaning investors outside the federal government. The agency said debt held by the public increased mainly because the federal government continued to spend more than it collected in revenue. That spending resulted in annual budget deficits that required financing through borrowing. The budget deficit for fiscal year 2026 was about $2.0 trillion, compared with about $1.8 trillion for fiscal year 2025.

Interest expense on debt held by the public nearly tripled over the last 5 fiscal years, from about $392 billion in fiscal year 2021 to about $1.1 trillion in fiscal year 2026. The agency attributed the increase to growing debt and higher interest rates.

On October 1, 2026, debt subject to the debt limit surpassed $40 trillion and continued to approach the current $41.1 trillion limit. The agency said Treasury would need to implement extraordinary measures to prevent the U.S. government from defaulting on its obligations until Congress acted to increase or otherwise modify the debt limit.

The agency said the federal government’s fiscal outlook was unsustainable. The Congressional Budget Office projected that fiscal policy under current law would result in average annual budget deficits of more than $2.4 trillion over the next 10 years. The Government Accountability Office said it audits Fiscal Service’s schedules annually because of the significance of federal debt to the government-wide financial statements. Its audit tests compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements.