GASB proposes to redefine its role in performance measurement: the GASB issued an exposure draft in April that proposes to clarify the board's vision of its current and future roles in regard to service efforts and accomplishments reporting.

• Author: Gauthier, Stephen J.
• Position: The Accounting Angle - Governmental Accounting Standards Board

Perhaps no single initiative of the Governmental Accounting Standards Board (GASB) has generated more sustained controversy than the board's ongoing project on performance measurement, which the GASB prefers to describe as service efforts and accomplishments (SEA) reporting. In April 2008, the GASB issued an exposure draft (ED) that proposes to clarify the board's vision of its current and future role in regard to SEA reporting.

BACKGROUND

The GASB has issued several non-authoritative concepts statements to provide itself with a principled basis for setting its technical agenda and deliberating specific issues. The first of these documents, GASB Concepts Statement No. 1, Objectives of Financial Reporting (1987), set general-purpose external financial reporting (GPEFR) as the proper boundary for the GASB's research and standard-setting activities. The second, GASB Concepts Statement No. 2, Service Efforts and Accomplishments Reporting (1994), placed SEA squarely within the scope of GPEFR, and thus within the proper purview of the GASB's attention.

The major state and local government public interest groups, including the Government Finance Officers Association (GFOA), took strong exception to the GASB's involvement with performance measurement reporting. In particular, they voiced concern at the prospect of the GASB using its position as the authoritative accounting and financial reporting standard-setting body for state and local governments to mandate performance measurement reporting, an outcome clearly suggested in GASB Concepts Statement No. 2:

Several respondents suggested that SEA measurement and external reporting should be done only on a voluntary basis and that the GASB should not make SEA reporting part of GPEFR requirements ... The Board believes that unless SEA reporting is required, necessary information about the results of government services needed to assist financial report users in assessing the performance of governmental entities will be unavailable to most of those users. (paragraph 93) This concern was bolstered by the discussion of "Possible Approaches to Establishing SEA Reporting Standards" in that same document:

The establishment of SEA reporting requirements might take many different approaches. For example:

1. Reporting standards could require SEA reporting for major agencies, departments, programs, and services of a governmental entity without specifying the particular SEA measures that should be reported. In...