THE SENATE                           S.C.R. NO.            193
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                    SENATE  CONCURRENT
                        RESOLUTION

  REQUESTING THE DEPARTMENT OF ACCOUNTING AND GENERAL SERVICES TO
    REPORT TO THE LEGISLATURE THE STATUS OF ITS EFFORTS TO
    CONVERT TO THE NEW GOVERNMENTAL ACCOUNTING STANDARDS
    REQUIRED BY THE GOVERNMENT ACCOUNTING STANDARDS BOARD.


 1        WHEREAS, the downturn in Hawaii's economy has forced the
 2   state government to examine its programs and search for ways to
 3   cut costs; and
 4   
 5        WHEREAS, this search has highlighted the fact that
 6   government services are budgeted and accounted for in ways that
 7   do not reflect their actual costs or their long-term fiscal
 8   impact; and
 9   
10        WHEREAS, because state budget makers fragment many program
11   costs among different administrative divisions and different
12   funding mechanisms, taxpayers do not have a clear picture of
13   the total cost of programs; and
14   
15        WHEREAS, as the state budget is currently executed, the
16   Department of Accounting and General Services does not account
17   for program costs but rather accounts for annual cash revenues
18   and expenditures into and out of the state's general and
19   special funds; and
20   
21        WHEREAS, because cash accounting does not reflect the
22   depreciated value of state assets or the long term effects of
23   state obligations such as payment of debt service and legal
24   settlements, a false picture is presented by the Comptroller's
25   balance sheets; and
26   
27        WHEREAS, most businesses and some governmental agencies
28   use accrual accounting to clearly show the fiscal implications
29   of their activities on future years; and 

 
 
 
 
Page 2                                                     
                                  S.C.R. NO.            193
                                                        
                                                        

 
 1        WHEREAS, governmental accounting standards are set by the
 2   Government Accounting Standards Board (GASB)to assure that all
 3   governments, state and local, conform to generally accepted
 4   accounting principles; and
 5   
 6        WHEREAS, the GASB has recognized the problems with cash
 7   accounting and is now requiring all governmental entities to
 8   adopt new standards that require them to:
 9   
10             Prepare government-wide financial statements listing
11             assets and liabilities and using accrual accounting
12             of all government activities; 
13   
14             Include, for the first time, information about the
15             government's public infrastructure assets, such as
16             bridges, roads and buildings, and to either
17             depreciate them or include maintenance costs; 
18   
19             Provide both actual and original budget comparisons
20             so users can know where changes were made and also
21             assess the government's ability to estimate and
22             manage its resources; 
23   
24             Require financial managers to share their insights in
25             a required management analysis of the government's
26             financial performance;
27   
28             Continue, for the sake of comparison to past years,
29             to report revenues and expenditures of all their
30             major funds; and
31   
32        WHEREAS, Hawaii is required to have these new procedures
33   in place for fiscal year 2001; now, therefore,
34   
35        BE IT RESOLVED by the Senate of the Twentieth Legislature
36   of the State of Hawaii, Regular Session of 2000, the House of
37   Representatives concurring, that the Department of Accounting
38   and General Services report to the Legislature no later than
39   twenty days before the convening of the Regular Session of 2001
40   on the status of its preparation to meet the new government
41   accounting standards; and                                      

 
 
 
 
 
 
Page 3                                                     
                                  S.C.R. NO.            193
                                                        
                                                        

 
 1         BE IT FURTHER RESOLVED that certified copies of this
 2   Concurrent Resolution be transmitted to the Comptroller of the
 3   State of Hawaii.
 4 
 5 
 6                         
 7                          OFFERED BY:_____________________________
 8