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B-201796 1 (1981-02-27)

handle is hein.gao/gaobabjyy0001 and id is 1 raw text is: •~ , // COMPTROLLER GENERAL OF THE UNITED TES WASHINGTON OZC. 205.48 B-201796 February 27, 1981 The Honorable Donald T. Regan Secretary of the Treasury Dear Mr. Secretary: I am writing this letter to bring you up to date with re- spect to the General Accounting Office's involvement in Treasury's project to issueLaccrual-basis consolidated financial statements on teb operations of thv Federal Government7 Surprising as it may seem, until this project was started, Tto accrual-basis finan- cial information on the Federal Government as a whole was available. We think the project provides vital information to the Congress, the Executive Branch, and others and have been strongly supportive of the project since its inception. This effort began in early 1976 when William Simon estab- lished an External Advisory Committee, chaired by Harvey Kapnick of Arthur Andersen and Company. I served as a member, along with a number of prominent business executives, educators, and accountants. To date, four prototype reports have been issued-- the most recent being fiscal year 1978. The External Advisory Committee has been discontinued, but the work on a series of Federal consolidated financial statements has continued. Beginning in 1977, I agreed to serve as chairman of what is known as the Interagency Advisory Committee to see whether we could find solutions to a number of problems ident- ified by the External Advisory Committee. I established seven task groups, made up of representatives from the various Federal agencies, to study and find solutions to the problems identified by the External Committee. The task groups have completed their work and have submitted their recommendations to Treasury. I am confident that these recommendations will bring more respons- ible accounting to Government. I believe Treasury will find the methods recommended by the task groups for accruing Federal income taxes and Federal employee pension plans liabilities very helpful. With additional study, I believe the task group recommendations can be implemented in the consolidated statements with regard to recognizing allowances for losses on accounts and-loans receivables, accruing loss contingen- cies on insurance in force and loan guarantees, and valuing assets to show the effects of inflation and other changing prices. 7g.J°