There has been a tussle between the Governmental Accounting Standards Board (GASB) and several other professional organizations over reporting performance measures. Service Efforts and Accomplishments (SEA) reporting helps governments report performance indicators and determine the outcomes they achieve in pursuit of their public policy objectives. At their April 6, 2007 meeting, GASB added SEA reporting to its active agenda. Several organizations, such as the Government Finance Officers Association (GFOA), and seven major state and local public interest groups² have strong objections to this move, believing SEA reporting is out of GASB's jurisdiction.

Background on GASB

GASB is a non-profit organization that was created in 1984 to establish standards for financial accounting and reporting for U.S. state and local governments. The organization is recognized as the official source of generally accepted accounting principles (GAAP) for state and local governments. While GASB has no ability to enforce compliance with GAAP, its pronouncements from its active agenda carry significant impact. Many jurisdictions are required to follow GAAP by law, and auditors provide opinions on the fairness of financial statements in conformity with GAAP. In addition, the municipal bond industry prefers governments, who prepare their financial statements on a GAAP basis.

The Role of GASB

At issue is not whether SEA reporting is beneficial, but rather the role of GASB itself and the impact of adding SEA to GASB's active agenda. For several years, GASB's SEA reporting project has been on the organization's research agenda. The research project is complete, and GASB has voted to move the project to their active agenda. The project is expected to produce suggested guidelines for voluntary reporting of performance information and to do so in a way that the public will find meaningful and understandable.

GFOA and the other seven associations (see footnote 1), however, have strong concerns about GASB putting the project on its active agenda. They feel that GASB has fulfilled the main tasks that it was created to accomplish and has expanded beyond its original scope into working on broader issues of government accountability. They indicate that while GASB may say the suggested guidelines are voluntary at this point, it does not prevent GASB from requiring them at some future date - thereby entering a policy realm that GFOA and the other associations strongly argue is the prerogative of government elected officials and management. The objecting organizations express that they are not anti-performance reporting, but they do not feel that GASB is the appropriate body to make these guidelines. They also have expressed frustration at the resources this could require if the guidelines become mandatory.

GASB feels it does have the authority to address SEA reporting, and it underscores that the project is to develop voluntary guidelines. In November 2005, the Board of Trustees of the Financial Accounting Foundation (GASB's parent organization and also the parent organization of the Financial Accounting

¹ National Governor's Association, Council of State Legislatures, the International City/County Management Association, the National Association of Counties, the National Conference of State Legislatures, the National League of Cities, and the U.S. Conference of Mayors.

Standards Board, which sets rules for private-sector accounting) ruled that GASB had the jurisdiction to include service efforts and accomplishments in its financial accounting and reporting standard setting activities for state and local government entities. GASB also emphasizes that it does not intend to require governments report to specific performance measures or achieve particular levels of performance.

It should be noted that ALGA is in support of GASB's SEA reporting project. In November 2006, ALGA sent a letter to GASB in support of advancing the project, and ALGA was represented at a roundtable meeting of interested organizations in January 2007.

Next Steps

GASB will develop the suggested guidelines through an open process. According to one GASB board member, it should be a couple of years before the SEA reporting project is complete. During that development period, this issue is likely one what will continue to generate lively discussion in a number of professional organizations.

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