The History of GAO - GAO's Start
GAO got its start in 1921. That year, the Budget and Accounting Act transferred auditing responsibilities, accounting, and claims functions from the Treasury Department to a new agency. GAO was created because federal financial management was in disarray after World War I. Wartime spending had driven up the national debt, and Congress saw that it needed more information and better control over expenditures. The act made GAO independent of the executive branch and gave it a broad mandate to investigate how federal dollars are spent. The act also required the President to prepare an annual budget for the federal government. Later legislation clarified or expanded GAO's role, but the Budget and Accounting Act continues to serve as the basis for its operations.