From the folks at Truth in Accounting:
Pew Study Confirms Urgent Need For Truth in Accounting Act
Contact: Darlene Porteus 847-835-5200 – dporteus@truthinaccounting.org
February 18, 2010 — On February 3rd State Representative Mike Tryon (IL-64th District) introduced the Truth in Accounting Act of 2010. The proposed legislation, which was written with the help of the Institute for Truth in Accounting, calls for increased disclosure during the state budgeting process.
“We can’t allow our Governor and legislators to continue to make long term decisions with only short term information,” says Sheila Weinberg, founder and CEO of the Institute. “This bill calls for disclosure of the State’s true financial condition and requires estimates of the long term financial consequences of current budget decisions. The public needs to know the full cost of government employees’ compensation, including retirement benefits.”
Yesterday, in a study of the retirement benefits, the Pew Center on the States called for such disclosure. The study states, “Forcing policy makers to responsibly identify the cost and potential funding sources for benefit increases can help states avoid offering unfunded benefit hikes.” The Pew study also declared Illinois as the worst state when it comes to funding its retirement systems.
The Act lays out guidelines on the rules for reporting state revenues and expenses, which are in line with FACT — Full Accrual Calculations and Techniques. This accounting is similar to that used by corporation and provides a more complete financial picture, including the full cost of government services and benefits. The Act requires the State’s Comprehensive Annual Financial Report be produced within 90 days of the fiscal year end.
“For years governors and legislators have been claiming they have met the State constitution’s balance budget requirement,” said Roger Nelson, chair of the Institute and former vice chair of Ernst and Young, “Then how are we now more than $93 billion in debt? This Act would provide budget transparency and disclose the money being borrowed, the bills not being paid and the pension contributions being delayed.”
The Institute for Truth in Accounting was created by distinguished financial and public policy experts concerned with the quality of public and private organizations’ financial reporting. It is the mission of the IFTA to encourage private and public entities to produce financial reports that are comprehensive, comprehensible and transparent and to inform the public of the importance of truthful accounting.
IFTA actively seeks association with other public interest groups that recognize the need to improve financial reporting or want to better understand the financial effects of current accounting practices. The Institute is a non-profit, public interest group that does not advocate public policy beyond better, and thereby, more truthful, accounting. For more information about the Institute, visit www.truthinaccounting.org, www.truthin2010.org, www.StateBudgetWatch.org.