Section: Around the Nation

On February 21, several state government associations joined NASACT in sending a letter to the Financial Accounting Foundation to express strong concern over governance issues that led to the FAF's recent selection of a private sector individual to be the next chairman of the Governmental Accounting Standards Board.

The FAF’s decision regarding the new GASB chair is historic, unprecedented and of great concern to state and local governments for several reasons, most notably:
  1. The diversity and composition of the GASB was unilaterally and fundamentally changed. In July 2007, the Board of Trustees established a Special Committee on Governance Review to reexamine the overall structure, effectiveness, and efficiency of the governance processes of the FAF, FASB, and GASB. After a period of due process where feedback was received from 59 respondents, the FAF concluded in its 2008 report that the size and composition of the GASB should not change. However, in 2020, with no due process and no consultation with state or local governments, the FAF decided to fundamentally change the GASB’s composition.
  2. For the first time in GASB’s 36-year history, the chair will not be a representative of state or local government.  
  3. The government trustees on the FAF were outvoted by the non-government trustees on an appointment to the GASB. It is telling that the FAF trustees with the best understanding of state and local government were unanimously opposed to the unilateral action; yet, their private-sector colleagues were willing to disregard their experience-based judgment. With only three of 18 trustees representing government, it is now clear that oversight of the GASB is controlled solely by the non-government trustees. 
The state groups have requested a meeting with the FAF to discuss these concerns.

In addition to NASACT, the following groups signed on to the letter:
  • National Conference of State Legislatures (NCSL)
  • The Council of State Governments (CSG)
  • National Association of Counties (NACo)
  • National League of Cities (NLC)
  • The United States Conference of Mayors (USCM)
  • International City/County Management Associations (ICMA)
  • National Association of State Treasurers (NAST)
  • Government Finance Officers Association (GFOA)