FAF President Urges Veto of CT Accounting Bill

June 25, 2007 (PLANSPONSOR.com) - The president and chief executive of the Financial Accounting Foundation (FAF) is urging Connecticut Governor Jodi Rell to veto a new accounting bill that gives the state comptroller the legal authority to set generally accepted accounting principles for the state's financial reports.

SmartPros reports the legislation would allow the state comptroller to bypass local and state government rules mandated by the Governmental Accounting Standards Board (GASB). According to the news report, FAF President Robert J. DeSantis wrote that the legislation “threatens the integrity and objectivity of the independent standard-setting process and is a step backwards for public trust, government accountability, financial transparency and the state’s investors.”

DeSantis also warned that deviation from GASB standards would lead to higher borrowing costs for the state. The FAF is the non-profit parent of the GASB.

SmartPros said reports show Connecticut Comptroller Nancy Wyman has pushed for legislation to change the state’s accounting system to help finance a $1 billion debt, and says the legislation is necessary to establish greater transparency in the budgeting process. The new accounting bill has passed in the state’s house and senate and is awaiting the governor’s signature.

Last month the Texas House unanimously approved legislation that rejects the application of the GASB’s nationwide accounting rule on the long-term costs of benefits to retired government workers (See Texas House Unanimously Rebuffs GASB Standard ).