How’d you feel about Gov. Malloy’s appearance at the Essential Event?

Posted on May 24, 2011. Filed under: Uncategorized |

Well, another Essential Event is behind us!

Colin McEnroe and Laurence Cohen were very well-received in their panel discussion, “Connecticut at the Crossroads: A Dialogue About Direction” – insightful, realistic, and, at times, rather funny. Forensic rock star Dr. Henry Lee was, surprisingly, absolutely hysterical.

Gov. Dannel Malloy spoke for nearly an hour and addressed every question we threw at him. How do you think he did?

The media was there, so if you couldn’t make it, do catch up:

Applause for GAAP” (CT News Junkie)

Mind the GAAP: Malloy Meets the CPAs” (CT Mirror)

The headlines don’t lie – GAAP was a big topic of discussion in the question and answer portion of the program. Malloy has been saying since his campaign days that Connecticut needed to use GAAP for budgeting, and true to his word, that was the first executive order he signed. Judging from his opening remarks, this is an achievement he’s proud of.

Things got a beat heated, though, when the governor was pressed on why modified GAAP and not full accrual GAAP.

For more on the discussion, read the CT Mirror article – and don’t miss Governmental Issues Taskforce Chair and guest blogger Michael Kraten’s comment back to the author, which I’ll reprint here:

Good morning, Mr. Pazniokas:

Thank you for attending our annual meeting of the Connecticut Society of Certified Public Accountants yesterday. I personally appreciated your timely and well-balanced news coverage of our event.

As you noted at the end of your article, I was indeed stumped — in fact, a bit mystified — at the governor’s belief that full accrual accounting may not always be appropriate for entities like the UConn Health Center because it claims to be losing money while using it, even though the state pays for its depreciation expense. As we all know, many organizations do lose money, even though they might be receiving funds to pay for a portion of — though not all of — their expenses. In all honesty, I did not understand why the governor thought that the accounting loss might lead us to question the usefulness of full accrual accounting.

In fact, it occurred to me that the Governor’s UConn Health Center example actually represented an instance of a full accrual GAAP policy that is operating effectively. After all, if the state sees fit to incorporate this full depreciation accrual entry into its health center reimbursement formula, it must obviously be a useful entry. And thus I still wonder: why wouldn’t full accrual (as opposed to modified accrual) accounting entries prove to be equally useful in all areas of state governmental accounting?

I do regret that I did not take advantage of an opportunity to pursue this point further with the Governor. Or to let him know, for that matter, that I do — as you noted in your article — personally admire him for forcing the state to confront so many challenges in his first term of office.

Sincerely,
Michael Kraten

What’d you think of Malloy’s session (or, while we’re at it, the whole Essential Event)?

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