Financial Management in the Bowsher Years - Progress Made

By Dyer, Jack L | The Government Accountants Journal, Fall 1996 | Go to article overview

Financial Management in the Bowsher Years - Progress Made


Dyer, Jack L, The Government Accountants Journal


The 15-year term of Charles A. Bowsher as Comptroller General of the United States will come to an end in early October. Few other officials, if any, have the capacity to influence government financial management in such a profound way as does the Comptroller General. With a 25-year term and the legislative mandate enjoyed by the Comptroller General, it is easy to see why this position is so influential in the government financial management community. From time to time it is appropriate to pause and reflect on what has occurred during significant periods in history. The completion of a Comptroller General's term seems to be a most appropriate time.

The purpose of this article is to highlight some of the many important initiatives that were finalized during Mr. Bowsher's term. Most of these initiatives were supported and/or shaped to an important extent by Mr. Bowsher or the General Accounting Office (GAO), which he managed, but others will be included because they occurred during he Bowsher years and should be mentioned for the sake of completeness.

In order to place the Bowsher years into historical perspective, consider the events that were occurring at or near the time Mr. Bowsher was appointed Comptroller General: President Reagan was declaring the Soviet Union the "Evil Empire" and the United States was embarking on an unprecedented "peace time" military buildup; the Cold War was raging and the Berlin Wall rested on a very solid foundation; and, Egyptian President Anwar Sadat was assassinated on October 6, 1981, the very day Mr. Bowsher was sworn into office.

State and Local Government During the Bowsher Years

The Bowsher years have been marked with clusters of government financial management reform and initiatives. The reforms of the era began first in the state and local arena. Some of the reforms were spawned by the New York City fiscal crisis of the mid-1970s. One such significant development was the issuance of an edict by Standard and Poors that it would no longer provide a rating for bonds of state and local governments unless the issuing governments prepared independently audited financial statements in accordance with generally accepted accounting principles (GAAP). This edict sent a very stem message to financial managers in municipal governments throughout America. The failure to receive a favorable bond rating meant that bonds would sell only at disastrously high interest rates, if at all. Suddenly the resistance that many states and local officials had to GAAP basis statements disappeared. Executive and legislative branch officials began demanding GAAP basis statements, often without even knowing what this meant.

In the state and local government (SLG) arena, 1984 stands out like no other in the Bowsher years. In 1984, two extremely important developments occurred that would change the SLG financial management landscape forever. The first momentous event of the year was the formation of the Governmental Accounting Standards Board (GASB) and the second was the passage of the Single Audit Act.

GASB Trials & Triumphs

The GASB experienced both trials and triumphs during the Bowsher years. On the triumph side of the ledger, the board has demonstrated its viability and commitment by issuing 30 Statements and numerous Technical Bulletins, in addition to an ambitious current agenda. The board has seen its pronouncements accorded the highest status for GAAP by the American Institute of Certified Public Accountants' (AICPA) governing council and the Auditing Standards Board. Likewise, the board has successfully negotiated a change in the chairmanship and a complete turnover in board membership.

On the negative side, the board experienced a significant trauma in the issuance and subsequent withdrawal (indefinite postponement) of its centerpiece standard, GASB Statement 11, "Measurement Focus and Basis of Accounting--Governmental Fund Operating Statements. …

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