TIME FOR SOME TRANSPARENCY, UNCLE SAM

The U.S. government is currently operating with a great deal of debt. This is common knowledge. Not so common knowledge is the exact dollar amount of this debt. This is about to change, though.

Under a new standard issued by the Federal Accounting Standards Advisory Board (FASAB), the federal government will soon be required to issue annual reports on its fiscal sustainability.

Representative James Cooper, a member of the FASAB task force that researched the standard, speaks on the implications of this requirement. “Including a statement of fiscal sustainability into the financial report is a step in the right direction. I'm proud of the members of FASAB for coming to consensus on this. If we're ever going to get a handle on our $56 trillion fiscal gap, we need to be more honest about how we account for it. I hope they can take the next step and begin treating our social insurance promises to Social Security and Medicare as liabilities in our national balance sheet - our accrued debt."

According to the Institute for Truth in Accounting, the federal government is currently under-reporting the national debt by as much as $60 trillion. No business would be allowed to misrepresent its liabilities this badly – why should our government? The newly required report should provide a reconciliation of the two figures. The report will also present required supplementary information that will detail income and expenses, deficits or surpluses, and Treasury debt held by the public as a share of gross domestic product (GDP).

While the report will be somewhat technical, it should still provide information that is understandable and meaningful to the general public. More transparency in government will promote accountability and provide valuable information to citizens about how and where their money is being spent. Hopefully, the end result will be a more fiscally responsible government.

--LeAnn Carlson is the Audit Manager for Cook & Associates, a full service public accounting firm operating from offices in San Marcos and San Antonio, TX.