In the spirit of promoting clear and accurate fiscal information, Truth in Accounting has once again assessed the transparency of state governments’ financial reporting. While state budgets receive most of the public and media’s attention, their outcomes are detailed in each government's Annual Comprehensive Financial Report (ACFR), which is audited annually by certified public accountants. Our transparency score is based on key criteria outlining best practices, offering government officials and citizens a roadmap to enhance fiscal transparency and accountability.

The recent analysis by the Committee for a Responsible Federal Budget regarding the 2025 Medicare Trustees’ Report highlights the looming challenges with Medicare and Social Security, but it only scratches the surface of the deeper fiscal issues our country faces. To understand the full financial reality, we must go beyond trust fund “solvency” and examine the actual commitments the federal government has made—and continues to make—without fully accounting for them.

Recent criticism of the Government Accountability Office (GAO), as reported by Politico and the Washington Post, underscores lawmakers’ frustration with its failure to address federal financial inefficiencies. They’re right to demand accountability, but Congress shares the blame—they fund the GAO and oversee the quasi-governmental board, FASAB that shapes federal accounting standards. 

In light of Moody’s recent downgrade of the U.S. credit rating—joining S&P and Fitch in stripping the federal government of its AAA status —Truth in Accounting reiterates its longstanding concerns about the nation's fiscal health. For the seventh consecutive year, our Financial State of the Union report has assigned the federal government an “F” grade, reflecting a deep-seated financial burden. 

The Peter G. Peterson Foundation’s Solutions Initiative 2024 deserves recognition for elevating the national conversation around fiscal sustainability. Bringing together diverse think tanks showcases a spectrum of ideas for tackling deficits and reducing debt. Yet despite its breadth, the Initiative fails to address a foundational issue: the truth about our government’s financial condition.

In 2013, the Securities and Exchange Commission (SEC) charged the State of Illinois with securities fraud for misleading municipal bond investors about its pension funding obligations. The SEC’s investigation found that Illinois, between 2005 and 2009, misrepresented the risks associated with its pension funding schedule when offering more than $2.2 billion in municipal bonds. The state failed to disclose that its statutory plan significantly underfunded pension obligations, thereby increasing financial risks. In 2013, Illinois agreed to a cease-and-desist order to resolve SEC charges under Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933. (link to the SEC Cease-and-Desist Order)

This disconnect is precisely why Truth in Accounting's work is so essential—and why education reform is a crucial part of the long game. If we want financial transparency in government, we need to teach future accountants, journalists, and citizens how the system actually works.

Despite the critical role state, local, and federal governments play in managing trillions of taxpayer dollars, most accounting students graduate without ever learning how public finances are actually reported.

Behind every economic policy—from infrastructure to healthcare, from tax cuts to social programs—is a budget. And behind every budget is an assumption about what money exists to spend. But what if those numbers aren’t telling the truth?

For decades, state and local governments have masked massive debts through accounting tricks and budget gimmicks, claiming balanced budgets while racking up unfunded pension and healthcare liabilities in the hundreds of billions.

This isn’t just an accounting problem—it’s a policy problem.

Despite laws requiring balanced budgets, state and local governments have long concealed the true costs of government through misleading budgeting and accounting practices. This lack of transparency has led to a dangerous cycle: when crises like the COVID-19 pandemic or the 2008 housing collapse occur, the federal government is compelled to bail out state and local governments with billions of taxpayer dollars. 

What’s really going on with America’s finances? In this powerful new video, Truth in Accounting board member and former co-CEO of Progressive Insurance, Chuck Chokel, breaks down the latest Financial Report of the U.S. Government in plain language—no accounting degree required.

According to the most recent audited Financial Report of the U.S. Government, our nation’s true debt has climbed to $158.6 trillion, burdening each federal taxpayer with $974,000.

In a world where six-figure salaries are the norm for nonprofit CEOs, Sheila Weinberg stands apart. As the founder and CEO of Truth in Accounting, she has dedicated decades to exposing the government's flawed accounting and financial reporting rules, all without taking a dime in salary.

Compare that to many nonprofit executives who command hefty paychecks. In 2022 alone, the CEO of the American Red Cross earned over $700,000, and the head of the United Way pulled in nearly $2 million. 

The primary purpose of our Citizen-Heroes event and ongoing efforts is to make clear to the general public that the actual financial obligations of the US Federal government are far greater than is generally understood, primarily because the US Federal government has worked hard via FASAB to hide the actual financial obligations of the U.S. Federal Government.