In an effort to encourage more governments to release certain financial and operating information more frequently than annually, the National Association of State Auditors, Comptrollers, and Treasurers plans to develop and issue a paper later this year that describes what some states are already doing in this area.
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"There is a lot of information that is being provided now that folks don't even know about. And so we will illuminate that" in the paper, Relmond Van Daniker, NASACT's executive director, told reporters after a two-day meeting the association held here last week with market participants. "Then, secondly, we will begin to zero in on some items that perhaps are common ... that can be suggested as a template for others to emulate as perhaps best practices."
NASACT plans to draft the paper and then send it out in July to those who attended the meeting for comments, Van Daniker said. The final paper probably will be issued in October, he said.
Obviously, NASACT can only recommend voluntary steps for governments to take to improve their disclosure of secondary-market information, he stressed.
NASACT held the two-day meeting to try to get market participants to agree on certain critical pieces of financial and operating information to investors and the rating agencies more frequently than annually, perhaps quarterly or even monthly. About 40 representatives of such groups attended the meeting, sources said.
But there was no consensus at the meeting. Instead, there was some discussion about the need to avoid a "one size fits all" approach, Van Daniker and other sources said.
"We did talk about that, but I don't believe that at this point in time we have any consensus on that," Van Daniker said. "The folks in the room thought that interim information was of value to them and to the folks in the market. The question is which pieces of information and how do we present it?"
NASACT's efforts come as the Municipal Securities Rulemaking Board recently talked to the Governmental Accounting Standards Board about its annual financial reporting requirement.
Tom Allen, GASB's chairman, said at the Government Finance Officers Association annual conference last Tuesday in New York City that when MSRB officials met with some of the board's members to discuss GASB's recently proposed derivatives guidance, they asked if GASB could require more timely financial reporting.
Asked about the meeting, Christopher Taylor, the board's executive director, said the MSRB has no regulatory authority over issuers and would never push such an idea.
"I think what we said to them was that, if you look at all of the National Federation of Municipal Analysts' recommended disclosure practices for certain sectors of the market , it's something GASB may want to discuss down the road," Taylor said. "But we did not discuss what they could do."
Allen said he told the MSRB officials that he couldn't envision GASB changing the annual financial reporting requirement, but that some state and local governments were voluntarily disclosing information more frequently than annually.
Van Daniker pointed to two controllers, who were at the meeting and on a telephone conference call with reporters, whose states have taken such action.
William Raftery, the state controller in Wisconsin, said his state puts updates about its cash-flow projections, both revenues and expenditures, on its Web site every month. Raftery stressed that the information is not audited and is not intended to comply with the Securities and Exchange Commission's Rule 15c-2-12 on disclosure, but that the state began issuing it two years ago because it was of interest to the financial community.
John J. Radford, the state controller in Oregon, said his state posts updated economic forecasts and the implications of those forecasts on the state's budget on its Web site every quarter.
"I don't know if anything we come up with would be as exhaustive as what Wisconsin or Oregon is doing," Van Daniker told reporters. "But we would like to come up with some information bits that might be suggested as kind of best practices."
