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NCJ Number: 66119 Add to Shopping cart Find in a Library
Title: ACCOUNTING PRINCIPLES FOR STATE AND LOCAL GOVERNMENTS IS THERE A ROLE FOR GAO (GENERAL ACCOUNTING OFFICE)?
Journal: GAO REVIEW  Volume:12  Issue:4  Dated:(FALL 1977)  Pages:42-47
Author(s): E F HEFFERON
Corporate Author: US Government Accountability Office
United States of America
Date Published: 1977
Page Count: 6
Sponsoring Agency: NCJRS Photocopy Services
Rockville, MD 20849-6000
US Government Accountability Office
Washington, DC 20548
Sale Source: NCJRS Photocopy Services
Box 6000
Rockville, MD 20849-6000
United States of America
Language: English
Country: United States of America
Annotation: A GENERAL ACCOUNTING OFFICE (GAO) OFFICIAL STATES THAT IMPROVED ACCOUNTING AND FINANCIAL REPORTING PRACTICES BY LOCAL GOVERNMENTS COULD FORESTALL FISCAL CRISES LIKE THAT EXPERIENCED BY NEW YORK CITY.
Abstract: NEW YORK CITY COULD HAVE AVOIDED ITS CRISIS IF IT HAD BEEN ACCURATELY REPORTING FINANCIAL OPERATIONS IN ACCORDANCE WITH ESTABLISHED ACCOUNTING PRINCIPLES. BECAUSE NEW YORK'S REVENUES DID NOT COVER EXPENSES, THE CITY BORROWED MONEY TO FINANCE CERTAIN OPERATING EXPENSES REDEFINED AS CAPITAL IMPROVEMENTS. THE COLLAPSE OF THIS FINANCIAL HOUSE OF CARDS WAS TRIGGERED BY ADVERSE ECONOMIC CONDITIONS IN 1975. NO SINGLE GROUP CAN BE BLAMED FOR FAILING TO DEMAND STRICT ACCOUNTABILITY FROM THE MUNICIPAL GOVERNMENT, BUT THE ROLES OF TAXPAYERS, GOVERNMENTS, AND THE ACCOUNTING PROFESSION SHOULD BE EXAMINED TO PREVENT A SIMILAR DISASTER. THE NATIONAL COUNCIL OF GOVERNMENTAL ACCOUNTING HAS ISSUED STANDARDS FOR MUNICIPAL GOVERNMENTS, GOVERNMENTAL ACCOUNTING, AUDITING, AND FINANCIAL REPORTS (GAAP), BUT THEY ARE NOT GENERALLY ACCEPTED. FEDERAL INVOLVEMENT IN LOCAL GOVERNMENTAL AFFAIRS IS A CONTROVERSIAL ISSUE, BUT WITH THE INCREASING AMOUNTS OF FEDERAL FUNDS CHANNELED TO STATE AND LOCAL PROGRAMS TAXPAYERS NEED ASSURANCES THAT MONIES ARE PROPERLY MANAGED. LOCAL GOVERNMENTS MUST THEN ACCEPT THE GAAP STANDARDS VOLUNTARILY OR BE COMPELLED TO DO SO BY TAXPAYERS, INVESTORS, OR THE FEDERAL GOVERNMENT. GAO COULD ASSUME VARIOUS ROLES TO PROMOTE GAAP, INCLUDING PARTICIPATION IN CONCERNED PROFESSIONAL ASSOCIATIONS, SUPPORT FOR LEGISLATION MANDATING OR ENCOURAGING FISCAL IMPROVEMENTS, AND ENCOURAGEMENT FOR THE CREATION OF AN INDEPENDENT BOARD TO ESTABLISH ACCOUNTING STANDARDS. (MJM)
Index Term(s): Accountability; Financial management; Local government; New York; State government; US Government Accountability Office (GAO)
To cite this abstract, use the following link:
http://www.ncjrs.gov/App/publications/abstract.aspx?ID=66119

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