FROM THE OFFICE OF PUBLIC AFFAIRS

On January 11, 2002, the Secretary of the Treasury, the Director of the Office of Management and Budget, and the Comptroller General of the United States announced a restructuring of the Federal Accounting Standards Advisory Board (FASAB) to increase the number of public members on the Board from three to six, decrease the number of federal government members from six to three, and provide for terms of up to ten years. The FASAB promulgates generally accepted accounting principles (GAAP) for federal reporting entities.

Regarding the changes, Comptroller General David M. Walker, who currently chairs the Joint Financial Management Improvement Program (JFMIP), stated:

Since its creation in 1990, the Board has made tremendous progress. We believe, now more than ever, we must continue this progress in establishing sound financial accounting and reporting. The changes are designed to enhance the independence of the Board and increase public involvement in setting standards for federal financial accounting and reporting. These changes will be effective June 30, 2002.

The Board's current public members David Mosso, formerly vice-chairman of the Financial Accounting Standards Board; John Farrell, retired partner from KPMG LLP; and James Patton, professor with University of Pittsburgh's Katz School of Business will continue and will be joined by three new members.

Secretary of the Treasury Paul H. O'Neill indicated that:

We believe that the restructuring further evidences our commitment to high quality standards developed with robust public participation. We anticipate recruiting additional experienced knowledgeable members to join our present high caliber public members and to continue the thoughtful deliberations of the Board.

Mitchell E. Daniels, Jr., the Director of the Office of Management and Budget, in commenting on the reduction of federal membership said:

This Administration is determined to improve the management of the federal government. We want to move departments and agencies to the higher levels of effectiveness and efficiency commonly seen in the private sector. It is only logical that the standard setters themselves in an area like accounting bring a private sector perspective and expertise to their work.

ABOUT FASAB

The mission of the FASAB is to promulgate federal accounting standards after considering the financial and budgetary information needs of citizens, congressional oversight groups, executive agencies, and the needs of other users of federal financial information.

Accounting and financial reporting standards are essential for public accountability and for an efficient and effective functioning of our democratic system of government. Thus, federal accounting standards and financial reporting play a major role in fulfilling the government's duty to be publicly accountable and can be used to assess (1) the government's accountability and its efficiency and effectiveness, and (2) the economic, political, and social consequences of the allocation and various uses of federal resources.

For more information on FASAB, please visit our website: www.fasab.gov