Governmental Accounting Standards Board Plans to Re-Examine State and Local Government Financial Reporting Framework.
On September 8, 2015, the Governmental Accounting Standards Board (“GASB”) added a review of the standardized financial reporting framework for state and local governments to its technical agenda. GASB indicated specific items of focus for the review would be considering whether (a) state and local governments should be required to provide more detail about funds dedicated to debt service in their financial reports and (b) changes could be made to encourage governments to release financial reports with more promptness. Currently, state and local governments as a whole lag significantly behind the private sector in the preparation and release of financial reports on a timely basis, which can result in the release of “stale” information to bondholders.
The focus on debt service funds stems from the observation that many governments do not classify debt service funds as “major” funds and thus information contained in financial statements on such funds may be significantly more limited than that provided on a government’s other major funds. However, change is not expected to come quickly. Any recommendations are planned to be issued in an initial “preview” document, which GASB expects to release before the end of 2016. Any revisions would not take effect until 2020 or 2021 at earliest.
Credit: Garrett Churchill