Declares that the House of Representatives: (1) agrees to consider legislation to implement accrual basis generally accepted accounting principles for U.S. government budgeting, financial reporting, and performance measures; and (2) acknowledges that the use of accrual basis accounting would provide a more accurate measure of the federal government's finances and their impact on the nation's economy.
Requests the Comptroller General to prescribe the manner in which such principles can be applied to the U.S. government in the fiscal year following the passage of legislation to implement them.
Recognizes that the use of accrual accounting standards in the federal government can assist in management improvement for federal agencies with regard to publicizing true costs, minimizing government waste, and controlling inefficient spending, especially on long-term government contracts.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 545 Introduced in House (IH)]
113th CONGRESS
2d Session
H. RES. 545
Expressing the sense of the House of Representatives that the Federal
Government should adopt and use accrual basis generally accepted
accounting principles for Government budgeting, financial reporting,
and performance evaluation purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 7, 2014
Mr. Renacci (for himself, Mr. Conaway, Mr. Sherman, and Mr. Murphy of
Florida) submitted the following resolution; which was referred to the
Committee on Oversight and Government Reform
_______________________________________________________________________
RESOLUTION
Expressing the sense of the House of Representatives that the Federal
Government should adopt and use accrual basis generally accepted
accounting principles for Government budgeting, financial reporting,
and performance evaluation purposes.
Whereas President Thomas Jefferson instructed Secretary of the Treasury Albert
Gallatin in 1802: ``If . . . there can be added a simplification of the
form of accounts in the Treasury Department, and in the organization of
its officers, so as to bring everything to a single centre, we might
hope to see the finances of the Union as clear and intelligible as a
merchant's books, so that every member of Congress, and every man of any
mind in the Union, should be able to comprehend them, to investigate
abuses, and consequently to control them.'';
Whereas, in 1949, the findings of the first Hoover Commission were endorsed by
President Harry Truman, and the Commission's recommendations were issued
to Congress in nineteen separate reports, resulting in the passage of
the Budget and Accounting Procedures Act of 1950, giving the General
Accounting Office the authority to make it a requirement that agency
accounting systems be maintained on the accrual basis in order to secure
Comptroller General approval;
Whereas, in 1955, the findings of the second Hoover Commission Report were
endorsed by President Eisenhower and reported to the United States
Congress which passed Public Law 84-863, in 1956, establishing the
following: ``As soon as practicable . . . the head of each executive
agency shall, in accordance with the principles and standards prescribed
by the Comptroller General, cause the accounts of such agency to be
maintained on an accrual basis to show the resources, liabilities, and
costs of operations of such agency with a view to facilitating the
preparation of cost-based budgets . . .'';
Whereas, in 1967, President Lyndon Johnson's Commission on Budget Concepts, a
temporary ``blue ribbon'' commission headed by the Secretary of the
Treasury David Kennedy, recommended that the accrual basis of measuring
receipts and expenditures be substituted for the cash basis at ``as
early a date as feasible.'';
Whereas, in 1969, President Richard Nixon reaffirmed the conclusions of
President Johnson's Commission on Budget Concepts to make the conversion
for the Federal Government from the cash basis to the accrual basis of
accounting;
Whereas, in 1976, before the Committee to Investigate a Balanced Federal Budget
of the Democratic Research Organization on Implementing Accrual
Accounting Within the Federal Government, Comptroller General Elmer
Staats stated the following: ``In summary, accrual accounting in the
Federal Government has been a legal requirement since 1956. Since
accrual accounting is fundamental to sound financial management it has
always been a basic tenet of our principles and standards. I believe
that current economic conditions and the extensive government use of
deficit financing have accentuated the need for the Federal Government
to provide better overall financial reports that show clearly for the
benefit of the Congress and the public the major aspects of its
financial position and operations.'';
Whereas, in 1984, the United States Treasury prepared its own prototype version
of the United States Government's annual consolidated financial
statements with a ``reconciliation schedule of accrual operation results
to the cash basis budget as of September 30, 1983 and 1982,'' but
deviated from accrual accounting by removing, from the financial
statements, the actuarially computed long-term liability for Social
Security and Medicare;
Whereas, in October 1990, a ``Memorandum of Understanding on Federal Government
Accounting Standards among the General Accounting Office, the Department
of the Treasury, and the Office of Management and Budget'' established
the current Federal Accounting Standards Advisory Board to determine
``accounting standards'' that are appropriate for the United States
Government's annual financial statements, as requested of the Director
of the Office of Management and Budget in the Chief Financial Officers
Act of 1990;
Whereas, in November 1990, President George H.W. Bush signed the Chief Financial
Officers Act of 1990, establishing a Chief Financial Officer for the
United States, within the Office of Management and Budget, for each
major United States department and agency, and requiring the annual
financial statements of the United States Government to be publicized
annually;
Whereas, in October 1992, the National Executive Committee of the Association of
Government Accountants adopted the recommendations of the organization's
Truth in Budgeting and Accounting Blue Ribbon Task Force, calling for,
among other things, ``the use of an accrual basis of accounting,
including realistic treatment of all unrecorded and contingent
liabilities'';
Whereas, in 2003, Federal Reserve Chairman Alan Greenspan, in testimony before
Congress, stated that the use of accrual-basis accounting for the
Federal Government ``would lay out more clearly the true costs and
benefits of changes to various taxes and outlay programs and facilitate
the development of a broad budget strategy . . . In doing so, these
accounts should help shift the national dialogue and consensus toward a
more realistic view of the limits of our national resources.'';
Whereas, in 2009, the American Institute of Certified Public Accountants, in a
letter to the Federal Accounting Standards Advisory Board, stated that
``we continue to believe that the social insurance programs . . . are
currently executed and publicized as exchange programs and that there
should be expense and liability recognition.'' (on the accrual basis);
Whereas the 2012 financial statements for the United States Government refer to
the accounting system used by the Department of the Treasury in
preparing annual reports as a ``modified-cash'' basis, not an accrual
basis;
Whereas, on June 25, 2012, the Governmental Accounting Standards Board, an
organization created to establish and improve standards of State and
local governmental accounting and financial reporting, voted to approve
statement No. 68, ``Accounting and Financial Reporting for Pensions'',
improving the way State and local governments report their pension
liabilities and expenses, and resulting in a more faithful
representation of the full impact of these obligations by reporting net
pension liabilities on the balance sheet (providing citizens and other
users of these financial reports with a clearer picture of the size and
nature of these financial pension obligations);
Whereas the adoption of Governmentwide accrual accounting for budgeting and
financial reporting would not infringe on the explicit constitutional
power of Congress and its respective committees to appropriate and
collect--through taxation, fees, and borrowing--Federal funds determined
on a cash-flow basis, necessary for the collection, disbursement, and
management of the United States cash resources; and
Whereas the continuing use of the cash basis of accounting for the compilation
of the annual budget substantially understates Federal expenses and
annual budget deficits, and the use of modified cash-hybrid accrual
accounting for the preparation of the United States Consolidated Annual
Financial Statements does not present fairly, nor accurately, the
financial condition and results of operation of the consolidated
departments and agencies of the United States: Now, therefore, be it
Resolved, That the House of Representatives--
(1) agrees to consider legislation to implement accrual
basis generally accepted accounting principles for United
States Government budgeting, financial reporting, and
performance measures;
(2) acknowledges that the use of accrual basis accounting
for United States Government budgeting, financial reporting,
and performance measures would provide a more accurate measure
of the United States Government's finances and their impact on
the Nation's economy;
(3) requests the Comptroller General of the United States
to prescribe the manner in which accrual based generally
accepted accounting principles can be applied to United States
Government budgeting, financial reporting, and performance
measures in the fiscal year following the passage of
legislation to implement the reforms outlined in this
resolution; and
(4) recognizes the use of accrual accounting standards in
the Federal Government can assist in management improvement for
the agencies and departments of the Federal Government--
publicizing true costs, minimizing government waste, and
controlling inefficient spending, especially on long-term
Government contracts.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Oversight and Government Reform.
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