RSSMalloy – The Accountability/GAAP Candidate Takes a Giant Step Backward
Jun 01
Malloy, State Budget, State Legislature GAAP, Malloy, State Legislature 5 Comments
(Cross-posted from Pelto’s Point at the New Haven Advocate)
As CT Mirror reporter Keith Phaneuf reveals in a story today, the massive budget implementation bill that passed the House of Representatives last night not only upended Connecticut’s public financing system and undermined Connecticut’s community colleges but hidden inside the 350-page bill was language allowing Governor Malloy to push off his campaign promises on converting Connecticut to Generally Accepted Account Principles.
Day after day, week after week Candidate Dan Malloy and his choice for Lt. Governor, Nancy Wyman made the conversion to GAAP a lynch-pin in their effort to prove to voters that they would bring an end to politics as usual in Hartford. GAAP was not only important in and of itself but a symbol of how Malloy/Wyman were going to bring honesty to Connecticut’s budget process.
But now in the driver’s seat, the Malloy Administration added language to the massive budget implementation bill that delays most of the changes necessary to implement GAAP for two years – and perhaps most amazingly – delays even beginning to pay off the $1.5 billion “GAAP conversion
cost” until FY 2014.
As Phaneuf explains;
“unlike the modified cash basis currently used, under GAAP expenses must be promptly assigned to the year in which they were incurred. Similarly, revenues are counted in most situations in the year in which they were received.”
“In the context of the state budget, that ends an array of accounting gimmicks that have pushed current expenses into future years and similarly used revenues received in one year to balance the books of the prior year.”
But Malloy and his Administration failed to follow through on their most fundamental promise and now he has asked and received legislative authorization to postpone shifting to GAAP.
Last night’s approved bill also includes a provision that actually moves Connecticut in exactly the opposite direction of fiscal accountability. Language was added that ends the “current requirement that agencies pay all expenses incurred in a fiscal year within 30 days of that year’s end.”
In short this change will mean agencies will be allowed to book expenses that have no direct association to the fiscal year in which the money was authorized.
The State Comptroller must close the state books within a month of the end of the Fiscal Year but this legislation actually allows the Malloy Administration even greater flexibility to authorize payments in one fiscal year for expenses in another. The very problem that helped create Connecticut’s fiscal disaster in the first place.
What on earth happened to the “Accountability Candidate”?
And after all that has happened and all the rhetoric, why isn’t the Legislative Branch drawing a line in the sand when it comes to the use of these fiscal gimmicks.
For more on this story, read Keith Phaneuf’s articles on a regular basis and especially this one. http://ctmirror.org/story/12759/gaap-conversion-doesnt-kick-until-2013-under-house-bill
