Research Review is a place for me to bring you academic research that I think might be of interest or relevant to you all. It is not necessarily the Cliff notes of the paper, but it will present some key findings or insights from the paper.
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I know we typically only talk taxes and finances here on Death & Taxes, but I wanted to take the opportunity and let you all know about a dynamic and engaging leadership development opportunity through the School of Government. The Local Government Leadership Credit Fellows program focuses on personal and organizational leadership skills and aims to develop the next generation of local government leaders.
In our last chapter, You Are Doing WHAT to the Governmental Funds?? – Part 1, The Near-Term Approach, we explored one of the three new measurement focus and basis of accounting (MFBA) options being considered for the governmental funds. These approaches are presented in the Governmental Accounting Standards Board’s recent Invitation to Comment (ITC), Financial Reporting Model Improvements – Governmental Funds. And you thought it was a scary chapter!?? The suspense continues with the second MFBA proposal – the short-term (or working capital) approach. One spoiler alert (but it is for your own good) – each approach goes further away from the current resource measurement focus and modified accrual basis of accounting currently used by the governmental funds. (Just wait until you read Part 3….)
Try this online exercise. Go to Chapter 105 of the North Carolina General Statutes. Here’s a link. Once there, most browsers will allow a search feature. A common way to search in many software applications is to press the <Ctrl> key +F. Now search all of Chapter 105 for “tax administrator”. It doesn’t exist. But there are lots of tax administrators in North Carolina, right? Now search all of Chapter 105 for “tax supervisor”. The tax supervisor is referenced 9 times in the Machinery Act. And if you read the context of those references, there are a few important roles involved there. How many counties have a tax supervisor to fulfill these roles?
In my previous post, Invitation to Comment – or Invitation to Disaster?? The Long Slog to a New Financial Reporting Model Begins!, I provided a fascinating overview of the Governmental Accounting Standards Board’s (GASB) new financial reporting model project. As was noted, the actual Invitation to Comment (ITC), Financial Reporting Model Improvements – Governmental Funds is a first step in the long due process of developing a new GAAP standard. As is the case here, an ITC usually provides an opportunity for the GASB to solicit feedback on various proposal considerations. A significant aspect of the reporting model project is the reconsideration of the unique measurement focus used in the governmental funds (current financial resources). The ITC details three new measurement focus approaches to consider – the near-term approach, the short-term approach, and the long-term approach. This post, focusing on the near-term approach, is the first in a series that will provide (hopefully) a clearer insight into the plotting that is occurring in Norwalk.
Congratulations to our Tar Heels! Why is this on Death & Taxes you ask? Well…
There has been a great deal of interest in the distribution of local sales tax revenue in North Carolina in the past few years. I will admit that as a scholar of local sales tax policy and effects, it has been an interesting time to be in the state (and made me much more popular!). Not surprisingly, I have been having a lot of conversations with people across the state about SB 126, so I thought I would put some of my thoughts down on proverbial paper.
In the 1990s there was a wave of euphoria about cost accounting and particularly Activity Based Costing (ABC). One book in particular stands out in my mind as particularly euphoric: Common Cents: The ABC Performance Breakthrough by Stephen Turney. While it had a clever title, few people remember this book now, but many people remember ABC. Many finance and budget managers do not recall ABC with fondness. In fact, when government budget and finance managers are asked about the use of ABC in their organizations now, most will say that they are not using it. However, when asked if they are doing some form of cost accounting, the measure is much higher. In this post, I explore why budget and finance managers are willing to say that they are doing cost accounting and not ABC. I further explore (and mix) the metaphor of common sense/cents about cost accounting by thinking of its uses as two sides of the same coin.
Well, it was inevitable. While we all are still reeling from the fun that has been GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments that was issued in June 1999, another chapter in the never-ending saga has begun. Yes, the Governmental Accounting Standards Board (GASB) recently added a new financial reporting model project to their official agenda. Now, the good news is that this type of project takes time – lots of time. The project that culminated in GASB Statement No. 34 was a 15-year process. The first implementers of GASB Statement No. 34 did so 15 years ago. So, one would hope that this is the beginning of another 15 year adventure and, at the end, most of us will be retired. Well, no such luck this time. While we do have time to possibly retire, the potential release of a new reporting model standard is currently slated for November 2021, with implementation certainly several years after that. However, we are not looking at a 15-year process.
Yup, you guessed it, today’s blog post is on revenue forecasting! My current blog series is about some of the non-legal finance issues that are out there and revenue forecasting, while required by law, is a really important one! There are many people that are involved with revenue forecasting in local governments. While many outside of government may just assume that there is some accountant or budget wonk sitting in a back room who is somehow magically able (or has some very scientific formula) to predict how much money is going to be coming in next year, we know better.
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