Magazine article Nation's Cities Weekly

An Introduction to the Governmental Accounting Standards Board

Magazine article Nation's Cities Weekly

An Introduction to the Governmental Accounting Standards Board

Article excerpt

As the National League of Cities' sole representative to the Governmental Accounting Standards Advisory Council (GASAC), I am often asked what that is and who is the Governmental Accounting Standards Board (GASB).

I would like to present the following information so that you may have a better understanding of what the GASB is and does and how I may be of assistance to you in representing your municipality's interests at the GASAC quarterly meetings.

What is GASB?

The Governmental Accounting Standards Board (GASB) is the private, nonpartisan, nonprofit organization that works to create and improve the rules U.S. state and local governments follow when accounting for their finances and reporting them to the public.

GASB was founded under the auspices of the Financial Accounting Foundation (FAF), which appoints the GASB, raises its funds and oversees its activities. The FAF performs the same functions for GASB's counterpart for companies and not-for-profit organizations, the Financial Accounting Standards Board.

The FAF is not involved in the standards-setting activities of either board.

GASB was created in 1984 to succeed the National Council on Governmental Accounting by agreement among the following organizations: FAF; American Institute of Certified Public Accountants (AICPA); Council of State Governments; Government Finance Officers Association; International City/County Management Association; National Association of Counties; National Association of State Auditors, Comptrollers and Treasurers; National Conference of State Legislatures; National League of Cities; National Governors Association; and U.S. Conference of Mayors.

Although GASB does not have the power to enforce compliance with the standards it promulgates, the authority for its standards is recognized under the Code of Professional Conduct of the AICPA. When auditors review a government's annual financial report, they are checking that it conforms to the GASB's standards. Also, legislation in many states requires compliance with GASB standards, and governments usually are expected to prepare financial statements in accordance with those standards when they issue bonds or notes or otherwise borrow from public credit markets.

Who Is GASB?

GASB is composed of a full-time chair and six part-time members drawn from various parts of GASB's constituency--state and local government finance officers and auditors, the accounting profession, academia and persons who use financial statement information. The board members draw from their backgrounds; however. they do not serve as representatives of particular consistencies.

GASB has a professional staff drawn from similar constituencies as the board. The staff works directly with the board and its task forces, conducts research, analyzes oral and written comments received from the public and drafts documents for consideration by the board.

What Is GASB Trying to Accomplish?

The mission of GASB is to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors and users of those financial reports.

These standards are essential tO the efficient and effective functioning of our democratic system of government in that they improve governments' ability to demonstrate their stewardship to the public and improve the information available to the public for holding governments accountable. …

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