Concept Statement No. 2 of the Governmental Accounting Standards Board (GASB)
On concepts related to Service Efforts and Accomplishments Reporting
Summary:
GASB sets the standards for local and government not-for-profit organizations. Six concept statements outline the scope, purpose, and decision-making process for elected officials, investors, and creditors alike.
The purpose of Concept Statement No.2 is to provide conceptual guidance regarding the reporting of service efforts and accomplishments (SEA) performance data information. This is one of a series of six Concepts Statements used as a framework for evaluating existing practices and establishing future state and local reporting guidance for governmental entities as needs arise.
SEA reporting’s objective is to provide an essential aspect of governmental performance metrics necessary for assessing accountability and making informed decisions.
Concept No. 2 focuses more on the external financial reporting requirement specifications such as qualitative data content and timing of the performance metrics to be viewed by stakeholders outside of an organization. This also bridges the gap between the financial reporting objectives of GASB Concepts Statement No. 1, Objectives of Financial Reporting, and future pronouncements or other communications that guide the reporting of SEA performance information. Non-governmental entities are not in scope.
These agencies can be very diverse; therefore, the appointed officials need to collaborate with individual organizations to understand the specific way of operation and nuances such as management personnel, legislative staff, and other interested professional associations to get a good understanding of the individual needs and/or justification for publishing or not publishing certain data metrics. General-purpose external financial reporting (GPEFR) focuses on providing information to meet the needs of external users. It also helps define governmental agencies’ accountability for financial data reporting metrics such as taxes and identifying monopolies of goods or services.
SEA reporting is an important part of GPEFR as this is an input data to the bigger picture. This data is used in the facilitation of decision making around the public administration system and budgetary cycle. It is also used to measure performance and provide a baseline for where optimal results can be targeted. Ideally, any corporation should establish and communicate clear, relevant goals, and objectives to set measurable targets for accomplishment. A governmental entity needs to have these best practices to set standards for tracking and measuring through the development of report indicators that display progress in achieving defined goals and objectives while highlighting improvement opportunities.
References:
Copley, P. (2018). Essentials of Accounting for Governmental and Not-For-Profit Organizations (13th ed.). McGraw Hill.
GASB, Financial Accounting Standards Board. (n.d.). Retrieved from https://www.gasb.org/jsp/GASB/Pronouncement_C/GASBSummaryPage&cid=1176156708257 (Links to an external site.)