HUNTSVILLE, Ala. - Although the Governmental Accounting Standards Board's Statement 34 is generally considered a dramatic departure from the way governments report finances now, two experts told Alabama finance officials yesterday that it will not be as difficult as it seems to implement.
However, speaking here at the 17th-annual meeting of the Government Finance Officers Association of Alabama, they offered group members differing views of what making the change will take.
"You don't need a new accounting system," contended Robert Smith, assistant professor in the Department of Accounting at Middle Tennessee State University.
Smith outlined what he called "Smitty's Adaptation for the New Reporting Model," stressing that current ways of preparing budgets can be adjusted to meet the requirements of GASB-34.
"It's really not as bad as it seems," he said casually.
In a program to be phased in over three years starting in 2002, state and local governments will be required to report their finances in a manner similar to the way corporations do. It will require considerably more information and different ways of producing financial statements.
Roger Rendleman, director of finance for Mobile County and a board member of the Alabama GFOA, disagreed with Smith and characterized the new rule as the "singular most important event in the last 30 years" concerning government finance reporting.
"This is a major change," Rendleman said. "I think GASB-34 is just the beginning and there will be a lot more mandated upon us."
Rendleman oversaw the installation of Mobile County's new integrated accounting computer system in August 1999. The system cost just under $1 million and has capacity enough to serve future growth. Mobile has a $130 million budget and more than 1,600 employees.
"You may need to replace your accounting system," Rendleman advised. "GASB-34 is not getting rid of anything; it's basically adding another layer of work on entity-wide financial statements."
Governments with computer systems more than 10 years old may have to replace them. Others should determine the capabilities of their computer systems to find out if they can extract information required by GASB-34, Rendleman said.
The technology to implement the new reporting system is available and finance directors should weigh the benefits and costs of modifying current systems versus buying a new one, he added.
"I am not worried about implementing GASB-34 at all," stressed Rendleman. "I'm looking forward to it."
