DiNapoli: Financial Expertise Available to Help Local Officials
Comply with New Accounting Standards
OSC Releases FAQS on Meeting New GASB-45 Requirements
State-sponsored actuarial services and guidance on how to meet new accounting requirements are now available to local governments, State Comptroller Thomas P. DiNapoli announced today. DiNapoli’s office issued answers to frequently asked questions to help local governments comply with the new accounting rules. He also recommended that localities take advantage of state contracts with several companies to provide actuarial services to local governments to help them calculate the costs of retiree health and health-related benefits. The contracts, negotiated by the Office of General Services (OGS), can save local officials the trouble of finding these important and highly technical services on their own.
“The new accounting requirements will ultimately help aid local governments in their long-term financial planning,” DiNapoli said. “But right now, the changes are causing some pain. We want to alleviate some of that hurt. The State has contracted with several actuarial firms that local governments can hire. Local officials should use our guidance and these services to comply with the new rules. This won’t be easy, but no one has to go it alone.”
The Great GASB
Under the new standards, local governments must include in their annual financial statements the cost of projected health and health-related liabilities that they are obligated to pay retirees.
The Government Accounting Standards Board (GASB) changed standards for local governments that prepare financial statements in compliance with Generally Accepted Accounting Principles. In 2004, GASB released Statement 45 (GASB-45), which established rules for calculating post-employment health and health-related benefits, otherwise known as other post-employment benefits (OPEB). They include medical, dental, vision, prescription medicine, hearing benefits, and some disability, long-term care and life insurance benefits. In the past, public agencies reported the cost of retiree heath care and other non-pension benefits on a pay-as-you-go basis.
Governments with revenues from $10 million to $100 million must comply starting with the fiscal year beginning after December 15, 2007. Governments with revenues less than $10 million must comply starting with the fiscal year beginning after December 15, 2008.
Actuarial Valuation Services Available
Several audit services contractors offer actuarial services. Local governments can access a list of service providers on the OGS website at: http://www.ogs.state.ny.us/purchase/snt/awardnotes/7903700939can.HTM.
In addition, the Government Finance Officers Association developed an “RFP Checklist for OPEB Actuarial Valuation” that could be helpful to local governments. DiNapoli also suggests that school districts contact their local Board of Cooperative Educational Services to inquire about possible actuarial services. Counties should contact the New York State Association of Counties.
For additional information concerning GASB-45 and OPEB:
GASB-45 FAQs: http://www.osc.state.ny.us/localgov/pubs/opeb45faqs.htm
Other Post-employment Benefits: A Plain-Language Summary of GASB Statements No. 43 and No. 45: http://gasb.org/project_pages/opeb_summary.pdf
OSC Bulletin: Other Post-employment Benefits (OPEB): http://www.osc.state.ny.us/localgov/pubs/releases/opeb.pdf
New York State Government Finance Officers Association: RFP Checklist for OPEB Actuarial Valuation: http://www.gfoa.org/committees/corba/