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Cities Find Unexpected Benefits From GASB 34 Compliance

Two local governments—Salt Lake City, Utah, and Greene County, Missouri—have discovered that using GIS-enabled solutions from CartęGraph, an Esri business partner, to meet Governmental Accounting Standards Board Statement 34 (GASB 34) reporting requirements has enhanced efficiency and saved money.

GASB 34, issued in 1999, affects how state and local governments categorize capital fund accounts and capital asset values. Although GASB is a private, nonprofit organization that lacks regulatory or enforcement powers, failure to implement reporting required by GASB 34 can have serious consequences for local governments.

GASB is part of the Financial Accounting Foundation, which establishes the Generally Accepted Accounting Principles (GAAP). Adherence to GAAP standards, which is de rigueur in the private sector and often mandated by state constitutions, is also required so that a government can obtain a clean audit. Failure to comply with GASB 34 can result in an "unclean" or qualified audit.

A qualified audit can limit a government's ability to raise money for capital improvements through bonds by either prohibiting their issuance or requiring a higher interest on those bonds. State funding, for which a government might otherwise qualify, may be withheld because of an unclean audit. All state and local governments must be in compliance with GASB 34 by June 2003.

Under GASB 34, capital assets related to infrastructure networks, such as roads, bridges, and lighting systems, must be inventoried and valued. With capital assets inventoried and valued, the next step is tracking and reporting capital values and expense information in financial statements using either the Depreciation or Modified methods. Either reporting method requires a dynamic, up-to-date inventory of all eligible assets.

Even without GASB 34, Salt Lake City, a growing city with a population of 190,000, realized that its Public Works Department couldn't handle the workload using a paper and spreadsheet approach. The city chose CartęGraph's PAVEMENTview Plus and MAPdirector for ArcView. This ready-made solution had unforeseen benefits. "We originally attempted to create our own programs to track assets, but our in-house development of management programs was slow," said Robert Sorcic, Salt Lake City's street asset manager. "After implementing PAVEMENTview Plus, we probably saved almost two years of development, which translates to almost a $150,000 savings!"

Implementing GASB 34 has caused some local governments to reexamine infrastructure management as a whole. Greene County, Missouri, was in the midst of building a GIS system when it began determining what was needed for GASB 34 compliance. "After finding out exactly what GASB 34 was and what it would require of our organization, we came to the conclusion that we needed asset management software that would help us meet GASB 34 requirements, while integrating the management of our maintenance, planning, and financial operations," said Bill Bohnenkamp, administrative services manager for the Greene County Highway Department.

The county chose CartęGraph software, which tracks and maintains asset records and links back to the county's GIS. Not only has this strategy led to quick implementation of and compliance with GASB 34 but, using GIS with the CartęGraph software, the county is now developing a work management program.

GASB 34 and GIS will have a dramatic effect on the way government does financial reporting, most notably in the budget process, asset/maintenance management, work orders, customer service, capital improvement, and rehabilitation planning areas. GASB 34 compliance provides the latest example of how GIS aids governments in streamlining business practices while adhering to complex political and regulatory requirements.

For more information, contact

Keri L. Samson
CartęGraph Systems, Inc.
Tel.: 563-556-8120, ext. 6210

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