Ohio Auditor David Yost

CHICAGO - Asking local governments to disclose their retiree health care liability would exaggerate the amount of debt of Ohio municipalities, Ohio State Auditor David Yost told the Government Accounting Standards Board.

Because Ohio does not require its local governments to pay for other post-employment benefits, Yost argued that including the debt on a balance sheet would give the wrong impression.

GASB said in May it wants state and local governments to disclose their net or total liabilities for OPEBs on the face of their financial statements. The disclosure would not be binding if eventually adopted, but would be necessary for a clean audit opinion, according to the board. The board held public hearings on the draft guidance from Sept. 10 through Sept. 12. Yost testified in Chicago Sept. 11.

"Recording this liability will result in misleading financial statements," said Yost's written testimony to the board. "When the public looks at local government financial statements, with this other post-employment benefit now recorded as a liability, they may see what appears to be a government in the red, when the reality is something altogether different. This will prove to be a difficult issue for local government finance officers to explain to their legislative authorities and, ultimately, taxpayers."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.