Highlights
Walk-in Registrations Accepted for NLC
AGA's Third Annual National Leadership Conference starts today and runs through tomorrow at the Ronald Reagan Building in Washington, D.C. With 14 CPE hours and an outstanding technical program—this year's program is not to be missed. Check out the conference program.
Fraud Audio Conference Set
Earn 2 CPE hours by participating in an audio conference titled, “Key Reasons Why the Breakdown of Internal Controls Contribute to Fraud,” set for 2 to 3:50 p.m. EST March 2. Receive a discounted rate for your site by registering before Feb. 25.
AGA Advertising Opportunities!
Advertise in AGA's electronic newsletters—TOPICS and AGA Today! Get maximum exposure and build your brand. Click here for all the information you need to run your ad! Or you can contact AGA's Director of Communications,
Marie Force
PDC 2005 Registration Now Open
Join us in sunny Orlando for the government financial management education event of the year! AGA invites you to attend its 54th Annual Professional Development Conference & Exposition, to be held July 10 – 13, 2005, in Orlando, FL. PDC 2005 promises to be an excellent learning and networking opportunity for government financial managers and accountability professionals. Education sessions will provide technical training, useful information on emerging trends, tools to help you become more effective and lessons from the best in the business. In addition to an outstanding technical program, we have arranged a number of social events to ensure an exceptional conference experience. You can register online or print the registration form to register by fax or mail. Advance registration discounts apply to all forms received before June 10, 2005. Click here to register.
Computer-Based Auditing Tools & Techniques—A Special Supplement to the Summer 2005 Journal
Auditors everywhere rely on a variety of computer-based tools and techniques to get their jobs done. The supplement will be bagged and mailed along with the Summer 2005 Annual Technology issue of the Journal of Government Financial Management. Click here for more information.
Studying for CGFM Examinations?
Be sure to order one of the study guides available for CGFM Exams 2 and 3 to help you prepare. Click here to learn more.
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February 7, 2005 • News from the Profession
Comptroller General: Fix Federal Fiscal Mess Now
Painting a bleak picture, the head of the Government Accountability Office said that if the federal government does not get serious about the looming fiscal crisis soon, important functions at the state and local government level will get hit. ”Passengers on the Titanic had a great time and smooth ride until the ship hit the iceberg,” Comptroller General David Walker told the audience at Governing’s Outlook in the States 2005 conference in Washington, D.C. Wednesday. Now is the time to focus on the priority of fiscal discipline, Walker said, adding that if the government remains on its present "unsustainable" and "unacceptable" course, by 2040 it will have to cut federal spending by more than half or raise taxes to more than 2 1/2 times today’s level to balance the budget. Calling the fiscal crisis “a value problem,” Walker listed three must-do’s to get back on a prudent fiscal track: top-to-bottom review of discretionary and mandatory spending; revisiting tax policy and enforcement programs; and entitlement reform. To turn things around, Walker suggested looking to the states. “In dealing with fiscal balances, there is no model better than the states. They have made hard choices since they are bound by state constitutions, sensitivity to bond ratings and because they can’t print their own money.” —Elizabeth Daigneau, Governing.com. Click here to read the entire article.
Grading the States 2005: The Year of Living Dangerously
The Government Performance Project has completed a massive study evaluating government management in all 50 states. To weather the poor economy, any states have cut back on their analytic capacity; allowed their roads, bridges and buildings to decay at an accelerating clip; resorted to financial tactics that only defer fiscal pain; slowed down or rejected positive initiatives in human resources and—in a few extreme cases—have so undernourished government that they risk malnutrition or worse. Despite problems, positive initiatives abound, the study shows. Virginians are proving once again that a commitment to excellent financial practices can survive the arrival of a new governor every four years. Georgia’s experiments in managing human resources are paying off big time. Utah keeps getting better and better at overseeing its infrastructure. Undergirding much of the good news lies the fact that technology is no longer an adjunct to government services but the vital spine along which they are built and function most effectively. These are some of the central conclusions of the study, which examined four areas of management: money, people, infrastructure and information. — Katherine Barrett and Richard Greene with Zach Patton and J. Michael Keeling, Government Performance Project. Click here to read the entire article.
Click here to learn more about the Government Performance Project.
Federal Workers to Receive Time off for Travel
New rules allow compensatory time off to federal workers who have to travel as part of their job. Union leaders and a bipartisan array of lawmakers backed the legislation. "The new rules will now allow federal employees to be credited with time off for uncompensated periods of official travel that occur during nonwork hours," said OPM Director Kay Coles James. "This is a benefit for federal employees [that is] not often available in the private sector, and these regulations implement legislation passed by Congress late last year.” The Federal Register provides precise definitions of what may be claimed as time off for travel. Employees must have travel "approved by an authorized agency official, or otherwise authorized under established agency procedures." Sen. George Voinovich, R-Ohio, who originally introduced the legislation, said the new authorities will provide innovative tools to improve hiring, retention and management in the federal government. — David McGlinchey, Government Executive. Click here to read the entire article.
Federal Accounting Corner—Linking Equity with Budgetary Account Balances
Account Structure
Proprietary accounts record the financial accounting impact of transactions, while budgetary accounts record their impact on legal authority. While these two might coincide, often they do not. One area where there is often agreement, though, is in unexpended appropriations, which is a budgetary concept that the SGL Board has included in the equity section of the proprietary accounts. —by Simcha Kuritzky, CGFM, CPA. Click here to read the entire article.
Virginia's Excess Tax Revenue Could Top $1B
Gov. Mark R. Warner said Virginia's superheated economy will generate $265 million more in tax revenue than he estimated when presenting his budget amendments last month, handing lawmakers a windfall as they debate tax cuts and funding for transportation and the environment. Warner had announced that tax collections for the two-year, $60 billion budget approved last year would exceed the forecast by more than $900 million. Estimates now show the excess could total close to $1.2 billion, in part because corporate taxes had increased 78 percent since the previous fiscal year. But Warner cautioned that huge spikes in corporate taxes and revenue from home refinancings are not likely to last, and he urged the Republican-controlled General Assembly to spend the windfall in ways that don't involve overly rosy assumptions about the future. "I'm not going to bet the future of the commonwealth on extraordinary growth on our most volatile revenue sources," Warner told the Washington Post. —Michael D. Shear, The Washington Post. Click here to read the entire article.
More Interest in Telework than Participation Suggests
Interest in telework continues to run high for federal employees, but just 51 percent of workers are eligible to work away from the office, according to a report from a Herndon, VA-based technology distributor. The report found that 36 percent of the federal work force has been given the option to work away from the office and 45 percent of workers say their managers view telework favorably. Nineteen percent telework, the report by CDW Government Inc. stated. Of the responding workers, 74 percent said improved commuting times were the reason they preferred telework; 60 percent said work flexibility. Thirteen percent said they would not telework if given the option. Some lawmakers tout telework as a means to reduce Washington metropolitan area traffic and decentralize the federal work force, which would make it more difficult for a terrorist attack to bring the government to a halt. The U.S. Departments of Commerce, State and Justice and the Small Business Administration have to make telecommuting available to all eligible employees by Feb. 8 or, according to language in the 2005 Consolidated Appropriations Act, $5 million will be withheld from their budgets. The language does not specify what makes an employee eligible for telework, however, leaving that up to the agencies. — Daniel Pulliam, Government Executive. Click here to read the entire article.
Financial Restatements Up 28 Percent in 2004
A report by Huron Consulting Group revealed that amended filings for financial restatements rose to a record 414 in 2004 from 323 the previous year, a 28 percent increase. "Financial restatements dramatically increased in 2004. After the leveling off in restatement filings observed in 2003, we had hoped that the upward trend in accounting errors might be over," said Joseph J. Floyd, managing director and national practice leader of Huron's Disputes and Investigations practice. "It seems that the scrutiny placed on company internal controls and other pressures surfaced a large number of reporting problems this past year." Huron's report, called the 2004 Annual Review of Financial Reporting Matters, analyzed the leading causes and trends in financial restatements filed in amended filings with the U.S. Securities and Exchange Commission (SEC) for the year ending December 31, 2004. The report tracks whether the error was initially reported in either quarterly or annual financial statements. In addition, the report summary breaks down financial restatements by accounting issue. —SmartPros. Click here to read the entire article.
States, Cities Seek Internet Tax Revenue
At a time when states are grappling with record shortfalls, many are taking a closer look at how they can tax Internet sales, which are siphoning revenue from state coffers, the Wall Street Journal reported. Cities are getting in on the act too with New York City notifying 2,000 residents last week that they owe back taxes on cigarettes they bought online. People are using the web to save on the nearly $7 per pack they would pay at a retail outlet. Technically these taxes are owed on purchases of music, books and other common items, but usually they are only due when the items are bought out of state and then transported or shipped items home. However, New York City has not indicated that it plans to expand its efforts to collect use taxes beyond tobacco, the Journal reported. State and local governments have pressured national web retailers to collect more taxes, and states such as California and New York now have "use tax" lines on personal income-tax forms, making it harder for consumers to claim ignorance, the Journal reported. —AccountingWEB. Click here to read the entire article.
Federal Work Force Survey Coming
The Merit Systems Protection Board (MSPB) soon will conduct the latest in its series of "Merit Principles" surveys, a polling of the federal work force that delves into issues including job satisfaction, productivity and experiences with illegal workplace practices such as discrimination and retaliation.The survey will go out to all major departments and agencies and for the first time will be delivered electronically. MSPB last conducted the survey in 2000, although it was three years until the results were fully compiled and reported on. The MSPB survey is designed to track specific merit system indicators over time and to evaluate how changes in personnel policies affect merit and fairness. For example, in the most recent survey, employees voiced concerns that downsizing had damaged their work units, and indicators of job satisfaction were down, when compared with prior studies. The agency says the survey "is particularly important right now considering the work force challenges facing the federal government. We recently saw the largest reorganization in 50 years with the establishment of the Department of Homeland Security.” —FedWeek. Click here to read the entire article.
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