PHILADELPHIA - The Governmental Standards Accounting Board will not delay implementation of its new financial reporting model for state and local governments, David R. Bean, GASB's director of research told finance officers meeting here on Monday.
"People have shown it can be done," Bean told those attending the Government Finance Officers Association's 95th annual conference.
"People from very small governments and very large governments have implemented it," he said.
Bean said the new financial reporting model -- GASB Statement 34 -- has already been put in place early by more than 40 governments in 15 states.
These states, he said, are: California, Florida, Georgia, Illinois, Louisiana, Massachusetts, Michigan, Montana, New Jersey, New Mexico, New York, Ohio, Oklahoma, Virginia, and Wisconsin.
GASB has given these issuers special recognition. "These are the people who have really gone above and beyond the call of duty," he said.
GFOA members whose governments are still struggling with how to implement the new model should contact people in these states and talk with them about their experiences, Bean said.
GASB has no authority to require the new model to be used, but state and local governments will have to adopt it in order to get a clean accounting opinion on their financial statements from auditors.
GASB has posted a large amount of guidance on the new model on its Web site (www.gasb.org). This includes a Statement 34 Implementation Guide, which includes answers to almost 300 questions as well as training seminar materials and publications written by state and local governments.
The new model, which is expected to dramatically change the way state and local governments collect and report financial information, was adopted by GASB on June 10, 1999 after about 10 years of development. It is to be implemented on a three-year phased in basis, beginning this year.
Large governments -- those with more than $100 million of revenues -- will have to adopt the new model for fiscal years beginning after June 15 of this year. Medium-size governments -- those with $10 million to $100 million in revenues -- must adopt it for fiscal years beginning after June 15, 2002. And small governments, those with less than $10 million in revenues, have another year.
The new model was hugely controversial when first proposed, partly because of its provisions on infrastructure, which call for governments to take into account the state of their infrastructure in their financial reporting.
Just two years ago, the GFOA had threatened to withdraw funding from GASB if it approved the new model. Now the controversy appears to have settled down, and most governments seem to be adopting the new model.
One of the biggest changes under the new model calls for governments to issue two government-wide financial statements. One will be a statement of net assets that show all assets and liabilities. Governments, for the first time, will not only have to examine their infrastructure to determine their assets, they will also have to include all outstanding debt on the liability side.
The other statement will focus on activities and will describe governmental services, their costs, and the extent to which those costs are covered by self-generating program revenues or taxes.
In addition, governments will have to include a management, discussion, and analysis section at the beginning of their financial reports that compares the current year to the prior, describes their overall financial picture, and reports any trends.
