When the Government Accounting Standards Board issued Statement 34 (more familiarly known as GASB 34) in 1999, it constituted the group's first major change in reporting requirements since 1935. Municipalities all over the country must comply with its demands, and implementers are finding the process to be quite a challenge.
GASB 34 requires that state and local governments provide full accrual and new capital asset accounting, in an effort to make their annual reports easier for legislators, oversight bodies, and citizens to understand. Previously, the agencies had to report only on current assets and liabilities; now, they must account for capital assets and long-term liabilities, including infrastructure such as roads and bridges, reaching back to 1980 and beyond. When GASB 34 was first announced seven years ago, the agency released an implementation schedule designed to ease some of the headache:
Agencies were given up to four years after the deadlines to issue a retroactive statement of their infrastructure assets; for agencies with revenues less than $10 million, the retroactive reporting is optional. According to an exclusive survey of PUBLIC WORKS readers, agencies across the country have a ways to go. While many respondents indicated that they are compliant in a number of areas, more are not compliant in any (see the chart below).
It appears that the agencies that tackled GASB 34 compliance earlier in the game are the best off today. In 2001, Toni McClure was hired as deputy director of the department of public works in Bloomington, Ind., to help the city sort out the city's GASB 34 tangle. “The city actually started looking into compliance with the GASB 34 infrastructure reporting requirements in the late 1990s, when it became clear that the Board was going to implement something,” she said.
The city started with infrastructure, due to the huge task of placing a value on all of the infrastructure and calculating prior depreciation. As a result of the city's efforts, McClure said, the city is now fully compliant.
One of the challenges in compliance is funding the massive undertaking. Sheri Landeck, principal analyst for city engineering in Colorado Springs, Colo., said GASB 34 compliance was initiated when her department created a model to estimate the value of the city's infrastructure. “As our inventory and tools develop, we hope to have much better information,” she said. “However, developing such information will require a large investment to collect the data, and purchase the hardware and software to manage it.”