Dold, Quigley Introduce the Truth in Government Accounting Act

From the office of Rep. Robert Dold (Ill., 10th District)…

Introduce Bill to Encourage More Responsible Budgeting Practices and Increase Transparency in the Federal Government

WASHINGTON, DC – U.S. Congressmen Robert J. Dold (IL-10) and Mike Quigley (IL-5) are introducing a bill this week that would require the federal government to prepare and publish online periodic financial statements that are independently audited and that accurately reflect the federal government’s true financial condition. This bill would increase the government’s accountability to the taxpayer and encourage more responsible spending and budgeting while increasing transparency by utilizing a centralized website for the public to view the financial statements. This legislation also requires zero-based budgeting, which would use current spending levels – and not hypothetical or projected spending levels – as the baseline to determine whether proposed legislation actually increases or decreases government spending.

“To protect shareholders, the federal government requires every publicly-traded company to file quarterly and annual financial statements that accurately reflect the company’s financial condition, and American taxpayers shouldn’t be treated any differently,” said Rep. Dold. “To fully understand the nation’s true liabilities, expenditures, and fiscal health, the American people must have easy access to quarterly financial statements that are both accurate and transparent. I am pleased to introduce this bipartisan legislation with Rep. Quigley, who has been a champion for government accountability. It is time for federal officials to fully, clearly, and regularly disclose how the government actually spends money, how much money is actually spent, and what outstanding obligations actually exist.”

“We cannot effectively address our nation’s economic issues or develop responsible budgets if American taxpayers do not have an accurate and clear understanding of how the government utilizes their hard-earned dollars,” said Rep. Quigley. “It has been a pleasure to work with Rep. Dold to create bipartisan legislation that protects taxpayers by increasing transparency and reforming the federal government’s accounting and reporting process. Further, I believe this legislation is a prime example of what we can achieve when both sides are willing to work together to find common ground and create smart policy. “

The Truth in Government Accounting Act would require that the federal government prepare and publish quarterly GAAP financial statements that are independently audited and accurately reflect the federal government’s true financial condition. This bill would require the federal government to implement a centralized website where the financial statements would be posted and also require zero-baseline budgeting.

Background Information:

GAAP Financial Statements

  • This legislation will require each federal agency to prepare and make public three quarterly and one annual consolidated financial statement using accrual-basis GAAP accounting standards.
  • These financial statements will include all future certain liabilities and contingent liabilities that can be reasonably estimated, such as long-term unfunded liabilities required under current law.
  • These financial statements must be made public in website format in an easily searchable form similar to recovery.gov.

Financial Statement Audits

  • Each year, the Comptroller General (GAO) must audit the prepared financial statements of each department.

Office of Management and Budget Preparation

  • The OMB Director must prepare all budgets submitted to the President according to both accrual-basis and cash-basis GAAP accounting standards.
  • Using cash-basis accounting, income and expenses are recognized only when cash is received or paid out.
  • Using accrual-basis accounting, income and expenses are recognized when economic rights are transferred, even though cash will be transferred at a later time.
  • Zero-Based Budgeting

    • This bill will require the CBO to use current-year spending as the baseline for estimating future mandatory and discretionary changes.
    • To determine whether proposed legislation would increase or decrease federal spending, the proposed legislation will be measured against current-year spending – and not against previously-anticipated and hypothetical future-year spending.

    http://dold.house.gov/

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