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AFMD-92-49R 1 (1992-02-28)

handle is hein.gao/gaobacjzc0001 and id is 1 raw text is: Iq~oGc ~Aao*Comptoller General of the United StAwe WaJomghz. D.Q0648 B-247667 February 28, 1992 The Honorable John Glenn Chairman 146069 The Honorable William V. Roth, Jr. Ranking Minority Member Committee on Governmental Affairs United States Senate At our February 6, 1992 testimony before your committee, the Chairman asked for our reaction to the Administration's proposed accrual budget treatment of deposit insurance and pension guarantees. This letter provides our views. In summary, we believe that the current, cash-based budget treatment of deposit insurance and pension guarantees does not disclose the true costs of those programs and that the concept of reporting accruals in the budget is sound and could result in improved disclosure of program costs. However, the accrual calculations of the Administration's current proposal go well beyond tested accrual accounting conventions and are suspect because of the uncertain assumptions and poor data that underlie the calculations. Therefore, we conclude that the Administration's current proposal is flawed and should be rejected by the Congress pending further study. In a June 1991 report on the subject of budgeting accruals, the director of the Office of Management and Budget (OMB) discussed similar data limitations and the need to further develop and test the complex accrual projections models, concluding that another two or three years of study would be required, after which, By then we should be able to see whether and how to bring these [accrual] estimates into the budget.' We fully agree with this earlier OMB assessment. 'Office of Management and Budget, Budgeting for Federal Deposit Insurance, June 1991, p. 5. GAO/AFMD-92-49R Accrual Budgeting / ou O