Disclosure is an issuer responsibility.

• Author: Green, Jeffrey S.

The title of this editorial is not controversial, it is a statement of fact. Despite the,efforts of some of cloud the issue, disclosure is an issuer responsibility. And always has been.

Issuers and the buyers and sellers of their debt come together in one place - the municipal bond market - every day to raise capital for projects that are essential to each community and to the nation as a whole. As participants in these transactions, finance officers have a special responsibility to the marketplace - the responsibility to disclose important information about their government and its securities, both at the time the debt is sold and while it is outstanding.

Fortunately, municipal issuers are not subject to the same complicated financial disclosure requirements that are imposed by the federal securities laws on corporations and enforced by the Securities and Exchange Commission (SEC). They rely on a self-regulatory system for which the GFOA Disclosure Guidelines for State and Local Government Securities is a central component. For almost two decades the GFOA Guidelines have provided the basic substantive recommendations as to the content of disclosure documents

In recent years, other issuer groups and professional organizations have developed additional guidance which also is helpful to issuers in fulfilling their responsibilities. The level of cooperation and coordination in improving municipal disclosure has never been greater, and it is growing with each new effort.

Why all the activity surrounding disclosure? It is fair to say that issuers and the buyers and sellers of their debt are not completely happy with the current voluntary system. But perhaps more importantly, Congress and the SEC have indicated that they are not happy. Highly publicized municipal defaults have caught the attention of federal lawmakers. And, the SEC has been under increasing pressures from Representative John Dingell, chairman of the House Committee on Energy and Commerce, to ensure that investors in municipal securities are adequately protected.

In addition to all of the advances over the past several years related to disclosure, there have been significant achievements in financial reporting by state and local governments. Consider the growth of the GFOA Certificate of Achievement for Excellence in Financial Reporting Program: 889 submissions in 1985 and 1,665 in 1990. Nevertheless, the issuer community is getting a bum rap because of the faults and defaults of...