June 6, 2011 • News from the Profession

AGA Today is Brought to You by AGA Corporate Partner Clifton Gunderson
Clifton Gunderson's offices in Washington, D.C., Baltimore, MD, and Arlington, VA, are seeking experienced professionals to join our public sector practice. Ideal candidates will have 3 yrs of Public Accounting or equivalent audit experience along with a BA/BS in Accounting/IT/IS, CPA, CGFM, CISA and/or CISSP. Duties will include audits of Federal entities, State & Local audits (GASB), A-133 audits, and compliance auditing. To apply please e-mail Michael.Armstrong@cliftoncpa.com

Federal News

Taxpayer-ID Theft Climbs Despite IRS Crackdown
Taxpayer identity theft is growing even as the Internal Revenue Service has taken a series of steps to prevent it, according to a Government Accountability Office report.The IRS identified 248,357 instances of such theft in 2010, compared with 169,087 in 2009 and 51,702 in 2008, according to the GAO. Identity thieves cash in on stolen names and Social Security numbers by filing fraudulent tax returns or by using such data to obtain a job. The GAO report didnft estimate how much money was stolen through these methods. Fraud using a tax return typically occurs when a thief obtains a taxpayerfs name and Social Security number and files a return claiming a refund early in the tax season, before a legitimate filer has a chance to send in a return. -Andrew Zajac, Bloomberg. Read more.

Obama's Re-Election Bid Shadowed by Unemployment, Shaky Economy
The prospect of a falling economy underscores the fact that President Obama faces an historic challenge as he seeks re-election next year. As The New York Times points out, no president since Franklin Roosevelt has won re-election with an unemployment rate higher than 7.2 percent on Election Day -- and it is very likely that number will be higher when Obama faces the voters on Nov. 6, 2012. With the unemployment rate already at 9%, poor data on private employment and manufacturing released Wednesday drove down the stock market down more than 2 percent. "The artificially engineered U.S. recovery is already starting to falter," said Michael Pento, an economist at Euro Pacific Capital. -David Jackson, USA TODAY. Read more.

Federal CFO, CEAR Award Recipient, Featured on KFED
James E. Dyer, CFO of the Nuclear Regulatory Commission (NRC), spoke to WFED Radio's Tom Temin after the agency received AGA's Certificate of Excellence in Accountability Reporting for the10th time. AGA honored 18 federal agencies at a black tie ceremony in Washington, D.C. May 25, and Dyer shared the NRC's experience with its Performance and Accountability Report on the air. Dyer said, "It really integrates the financial performance of the agency as well as our programmatic performance -- did we accomplish our mission?" Hear the interview.

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State and Local News

Improved Tax Collections Can't Keep Pace With States' Fiscal Needs, Survey Finds
Half the states plan to cut spending on higher education, and nearly a third plan cuts to elementary and high schools. Public assistance and transportation face cuts. Eighteen states have proposed slashing aid to struggling cities and local governments. Some states will raise taxes or fees. Others plan to lay off workers, or cut their salaries or benefits. Although state tax collections are picking up after several brutal years, a new survey by the National Governors Association and the National Association of State Budget Officers found that states still expect to collect less tax revenue and spend less money in the coming fiscal year than they did before the Great Recession began. At the same time the cost of Medicaid, the biggest single portion of state spending, has been rising, driven up by higher enrollment as many people have lost their jobs and their health insurance. Improving tax collections do not appear to be enough to make up for the end of the federal stimulus money, which had helped states stay afloat.-Michael Cooper, The New York Times. Read more.

Orange County Republicans Hope Costa Mesa Can Lead Statewide Battle to Cut Pensions
At a recent talk to a roomful of "tea party" supporters, Orange County Republican Party chairman Scott Baugh excitedly described how the next big GOP movement could be taking root in their own backyard. In Costa Mesa, CA, the City Council has proposed cutting its work force in half and outsourcing many of those jobs to private contractors. The radical cutbacks are being led by new councilman and longtime GOP activist Jim Righeimer, who says the layoffs are necessary to deal with rising government pension costs for employees. But Baugh and other Republicans see Costa Mesa as the beginning of something bigger. They hope other cities around California that are dealing with rising pension costs will take the same action. -Catherine Saillant, Los Angeles Times. Read more.

Private Sector News

12 Major Corporations Pay Less Than Zero in Taxes
A dozen multinational corporations paid an effective tax rate of negative 1.5 percent on billions of dollars in profits while reaping billions in taxpayer subsidies. A new study by the advocacy group Citizens for Tax Justice identified the 12 companies as American Electric Power, Boeing, Dupont, Exxon Mobil, FedEx, General Electric, Honeywell International, IBM, United Technologies, Verizon Communications, Wells Fargo and Yahoo. Together they reported $171 billion in profits over the 2008 to 2010 period, while getting $62.4 billion in tax subsidies. The release is part of a larger report that the group plans to release later this summer. CTJ noted that President Obama has indicated that he wants to reduce or eliminate corporate tax subsidies, but use the increased revenue to lower the statutory corporate tax rate. Lobbyists for big business, however, have rejected the so-called grevenue neutral approachh and called for changes that would reduce corporate tax payments by trillions of dollars over the upcoming decade. -Michael Cohn, Accounting Today. Read more.

Accounting Standards News

New GASB Pension Podcast Available
The Governmental Accounting Standards Board (GASB) has posted the third installment in its series of podcasts on pension accounting and financial reporting. In the brief audio presentation relating to the measurement of a government's total pension liability, GASB Project Manager Scott Reeser addresses attributing projected benefit payments to periods. GASB podcasts may be heard at www.gasb.org.

Technical Release Issued on Estimating Historical Costs of PP&E
Wendy Payne, CGFM, CPA, Executive Director of the Federal Accounting Standards Advisory Board (FASAB) and Chair of the Accounting and Auditing Policy Committee (AAPC), announced the issuance of Statement of Federal Financial Accounting Technical Release (TR) 13 Implementation Guide for Estimating the Historical Cost of General Property, Plant & Equipment.

The implementation guidance in TR 13 was developed to address the historical cost estimating of general property, plant, and equipment (G-PP&E) as it applies to Statement of Federal Financial Accounting Standards (SFFAS) 6, 23, and 35. The guide provides support and direction relative to the types of estimating methodologies and the documentation that could be used to support the valuation estimates of G-PP&E. This guidance provides a foundation for preparers to exercise judgment in formulating those estimates.

The examples outlined in this guide illustrate the use of various estimating methodologies to derive the historical cost of G-PP&E in accordance with SFFAS 35. SFFAS 35 clarifies that federal entities should report their G-PP&E based on historical cost information in accordance with the asset recognition and measurement provisions of SFFAS 6, as amended. However, reasonable estimates of historical cost may be used to value G-PP&E.

Upcoming Audio Conferences

June 8-Improving Controls Can Improve Program Performance,

June 22-Moving Beyond the Numbers; Turning Performance Measures Into Dollars

2011 Audio Conference Schedule

June 22 Audio Conference on Performance Measurement Offered for $175
AGA has added a new, discounted audio conference on performance measurement to its schedule. Worth 2 CPE hours per participant, the audio conference is scheduled for 2–3:50 p.m. EDT, June 22. Speakers at Moving Beyond the Numbers–Turning Performance Measures Into Dollars are Sheri Chaney Jones, president, Measurement Resources Company, Roland P. Hornbostel, deputy director, Policy and Programs, Department of Aging, State of Ohio, and Bev Seffrin, Ph.D., deputy director, Performance Evaluation, Franklin County Domestic and Juvenile Court, Columbus, OH. This audio conference is offered at a discounted cost of $175 per site, with unlimited attendance, if you register on or before June 17. Learn more.

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