Government accounting principles

From Ballotpedia
Jump to: navigation, search
Policypedia
Policypedia Budget Policy-logo.jpg

Budget Policy
State budgets in the U.S.
Glossary of state budget terms
Government accounting principles
See also
Government accounting principles is the system for tracking government budgets. Each state has a different set of principles, but there are some general standards that overlap in many of the states.

Transparency checklist

Truth 3.png

Comprehensive N
600px-Red x.png
Balanced budget Y
600px-Yes check.png
Timeliness Y
600px-Yes check.png
Usability Y
600px-Yes check.png

Truth in Accounting has created an accountability checklist to see how honest the budget reports in each state are. Budgets are analyzed on four counts:

  • Comprehensive: Financial reports need to include more than the annual budget summary. Additional documents that could be included:
  • Note materials produced during the formation of the budget.
  • Post clean audits on the government website
  • Compare actual fiscal numbers vs. estimated ones
  • Timeliness: Many amendments are in place that allow budgets to be pushed back. Truth in Accounting and Sunshine Review believe that governments should meet deadlines the same as shareholders expect businesses to produce on time. In this manner we expect governments to:
  • Publish the budget forecast two weeks before it is voted on.
  • Provide a complete year-end financial report within 45 days at the end of each fiscal year.
  • Balanced budget:
  • Implement a balanced budget
  • Include all costs incurred by the government, including future liabilities
  • Usability:
  • Publish a searchable report online for the current budget and those for past five years
  • Use organized and consistent methods of financial reporting

Governmental Accounting Standards Board

The Governmental Accounting Standards Board (GASB) establishes and improves standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports.[1]

However, the GASB is not a federal agency. The federal government does not fund GASB, nor are its standards federal laws or rules. The GASB does not have enforcement authority to require governments to comply with its standards. However, compliance with the GASB’s standards is enforced through the audit process, when auditors render opinions on the fairness of presentations in conformity with GAAP, and through the laws of individual states, many of which require local governments to prepare GAAP basis financial statements.[2]

Plain-language

The GASB is committed to communicating in plain-language with its constituents about its standards and standards-setting activities. Articles and publications are available to download on their website for free or to purchase at minimal cost.[3]

The plain-language documents are broken down into the following categories:

  • GASB Due Process Documents
  • GASB Standards and Projects
  • GASB Due Process Activities
  • The GASB User Guide Series
  • GASB Fact Sheets

Timeliness

Timely production and release of financial information is one of the cardinal requirements of an effective system of financial reporting and control. Each state CAFR provides information that is essential to future financial decisions. For this information to be useful it must be understandable, reliable and relevant. To be relevant this information must be available on a timely basis.[4]

Balanced budget

The GASB believes that laws requiring balanced budgets prevent the current generation of citizens from shifting the burden of paying for current-year services to future-year taxpayers – namely, our children and grandchildren. The GASB deems this concept, known as “inter-period equity,” to be a significant part of accountability and fundamental to public administration. Inter-period equity is a significant part of accountability because it reduces incumbent’s ability to promise voters future benefits without having an impact on budget calculations.[4]

External links

References