Decisions about project plans, agendas and priorities at the Governmental Accounting Standards Board will now be made by a majority vote of the organization’s board, not solely by the board chair.
The change in GASB’s decision-making procedures was announced Tuesday by the Financial Accounting Foundation, the nonprofit organization that oversees, administers and funds for GASB, which sets generally accepted accounting principles (GAAP) for state and local governments.
Not all municipal issuers follow GAAP, but 38 states require some or all of their political subdivisions to prepare financial reports in accordance with GASB standards, according to last year’s municipal market report from the Securities and Exchange Commission.
The standards are not binding, but auditors generally will not give governments clean audit opinions unless they comply with them.
In its report, the SEC requests legislative authority to require certain issuers to follow GASB’s standards, a move the SEC said would make it easier to compare the financials of municipal issuers and their munis.
FAF said the change, which also applies to the Financial Accounting Standards Board, the group that sets standards for non-governmental entities, came at the request of GASB chairman Robert Attmore and FASB chairman Leslie Seidman. From now on, all agenda decisions will not be voted on by the boards in public meetings.
“The trustees and the board chairs believe that submitting agenda decisions for vote in a public setting brings greater transparency to the standard-setting process,” FAF president and chief executive officer Teresa Polley said in the release. “It will provide stakeholders with greater insight into the considerations that go into agenda decisions, including stakeholder feedback, the urgency of certain issuers and the availability of board resources.”