Your July 12 editorial that the GASB's governance model is flawed and in need of reform provides valid and timely input for the Financial Accounting Foundation, which oversees both the Governmental Accounting Standards Board and the Financial Accounting Standards Board. On an ongoing basis, the FAF's trustees are always reviewing ways that the due process of both the GASB and the FASB can be improved.
As correctly noted in your editorial, a GASB process improvement is forthcoming in terms of comment letters being made available on the website, instead of on an “upon request” basis. Also, without a doubt, the GASB's funding issues mentioned in your editorial have been an ongoing challenge for FAF's trustees, who have worked diligently to resolve this very complex issue. The trustees have been and continue to be committed to ensuring that the GASB has adequate funding to meet its needs.
On the issue of GASB board member appointments, the FAF board of trustees appoints members to the GASB following a thorough, nationwide search process. GASB members have diverse backgrounds, including individuals with state and local governmental financial reporting backgrounds as well as those representing the interests of investors and other users of financial reporting information. Potential and perceived conflicts of interest are continuously monitored and evaluated by the FAF.
With respect to the GASB's preliminary proposal to revise public pension accounting standards, we welcome the input of our constituents, and your editorial gives us another opportunity to remind constituents to express their opinions during the public comment period, which ends Sept. 17. Obtaining such feedback is an important part of the rigorous due process followed by both the GASB and the FASB, and it's the FAF's duty to ensure a robust due process for all project proposals.
The integrity of our financial reporting system must be protected, preserved and continuously evaluated. What happens at the GASB — or the FASB — affects all of us, whether we're individual investors, taxpayers or companies seeking capital or auditors or regulators or members of Congress.
John J. Brennan
Financial Accounting Foundation