GFOA, the GASB, and performance measurement. (Letter to the Editor).(Government Finance Officers Association, Governmental Accounting Standards Board)

Recently, the president of GFOA, Timothy Grewe, wrote an editorial in Government Finance Review and co-authored, with the executive director of GFOA, a letter to the Governmental Accounting Standards Board. Both outline objections to the GASB's service efforts and accomplishments project. GFOA believes that GASB has stepped outside the boundaries of financial reporting and accounting, and that it intends to set performance standards that will greatly affect state and local government. Mr. Grewe and GFOA also argue that SEA reporting is incompatible with effective performance measurement. We find that we both agree and disagree with their conclusions.

In January 2000, the Multnomah County (Oregon) Auditor's Office completed a feasibility study on service efforts and accomplishments reporting for the county. The purpose in conducting such a study was twofold. As auditors we saw value in this type of reporting for accountability to citizens. However, like GFOA, we had concerns about the potential of mandated performance measures. We wanted to determine whether services such as those found in our county would lend themselves to such a report and to determine the cost of developing and producing the report. We felt that by participating in experimental SEA reporting we could legitimately add to the dialogue about how and whether to set standards. We found that there is a place for this type of reporting in local government, but that it has a significant cost impact if done with rigor.

We disagree with the GFOA leadership on a number of points. First, the assertion that performance measurement must be integrated into the budget process bespeaks a very narrow scope of focus. A budget is a management planning document. Included in the budget can be historical information (performance measures) to improve the quality of planning and decision making. These measures are necessarily specific in nature.

Although the budget is a public document, it is not a report to the citizens. If accountability is the primary goal of public reporting, then such reports must be accessible and meaningful to the public. This requires a more general notion of performance reporting, perhaps one that does not delve into the managerial detail necessary to effectively run a program, but rather reports on outcomes and other measures that are important to citizens. These may take a look across programs and departments to get at broad, community-level outcomes.

We also disagree that the GASB is overstepping its boundaries by entering into the performance measurement movement. We believe the GASB is absolutely correct in asserting that accounting and accountability need to extend beyond the reporting of financial data in a document accessible and understandable to few. Financial reports do not further the cause of accountability. Governments must find ways to engage citizens in learning about and understanding their governments. General SEA reporting is one way to accomplish this.

We agree with GFOA's assertions that government services vary widely by jurisdiction. Much of the variability is caused by the unique public policy decisions of elected officials. If the purpose of SEA reporting is accountability, the measures must accurately reflect the jurisdiction's policy decisions and ...