Truth in Accounting has been working diligently to change governmental accounting standards for the better. Current accounting standards allow state and local governments to claim they have “balanced” their budgets while sliding further into debt.
All too often, governments' official financial statements don’t reflect reality because they follow “cash-based” accounting principles. With cash-based accounting, financial reports show expenses only when money is paid, not when debt or future expenses are incurred. By only reporting cash spending and not accumulated debt, the financial reports paint a much rosier – but far from accurate – picture of government finances.
This delusional and nontransparent approach to government accounting has had dire real-world consequences for cities, states, and their citizens. When it comes time to pay the previously hidden debt, elected officials suddenly need to hike taxes, slash services, or both. People suffer.
In May of 2021, the Governmental Accounting Standards Board (GASB), which sets the accounting standards for state and local governments, hosted several public hearings on this issue.
Truth in Accounting mobilized thought leaders, elected officials, and everyday citizens to testify against GASB's proposals for continuing the status quo and to advocate for full accrual accounting. Full accrual accounting shows expenses as they are incurred, especially when a government makes promises to pay in the future. Watch those testimonies below.
The video contains 15 different testimonies. You can view the individual contributions here: 0:00 Sheila Weinberg, Founder & CEO Truth in Accounting
34:45 Bill Bergman, Truth in Accounting Director of Research
1:17:21 Joe Kent, Vice President of the Grassroots Institute of Hawaii
1:48:38 Richard Skiba, Retired Preparer of Government Financial Statements
2:13:21 Paul B. Kazarian, Founder & CEO of Japonica Partners
2:42:30 Ed Bachrach, Retired CEO of Bachrach Clothing, Founder & President of the Center for Pension Integrity in Chicago
3:09:08 Barrett Peterson, Retired CPA
3:39:02 David Walker, Former Comptroller General of the U.S. Treasury
4:09:09 Jeanne Ives, Former Illinois State Representative and Candidate for Governor
4:41:02 Grover Norquist, President & CEO of Americans for Tax Reform
5:08:02 Bob Fioretti, Former Member of Chicago City Council and Mayoral Candidate
5:35:30 Mary Pat Campbell, Actuary, and Substack Writer
6:05:02 Leslie Munger, Former Comptroller of Illinois
6:33:35 Sharon Lassar, Director, School of Accountancy at the University of Denver
7:01:09 Andy Shaw, CEO and President of the Better Government Association
The GASB made its final decision in Summer 2022 with no movement in the right direction. The need for change is far from over. Truth in Accounting will continue to champion and work for the accounting standards that will protect the American citizens and the government in which we all invest. Because a bankrupt government serves no one!