Friday, January 29, 2010

Governor Reacts to DOT Board Accounting Changes

This story seems to be getting more complicated all the time. An auditor I talked to yesterday said that the change in accounting practices--from accrual to cash and back to accrual--should not be the main issue here as the two practices are really just different ways of looking at a budget and spending plan, and are commonly used interchangeably to give a more holistic view of an organization's financial well being.
Yes! That means I was wrong, I think?
But this clearly shows that the parties in Atlanta are circling the wagons and getting ready for a showdown.
From the Governor's Office:

Statement of Governor Sonny Perdue Regarding DOT Board Action on Accounting Methods
Thursday, January 28, 2010 Contact: Office of Communications 404-651-7774

ATLANTA – Governor Sonny Perdue issued the following statement today regarding actions by the DOT Board in defying the State Auditor and voting to change the department’s accounting methods:

“Today’s action by the DOT Board exhibits a clear defiance of state law and a frightening lack of concern for our state’s financial systems.

The state’s finance team, along with SRTA, identified an opportunity to refinance outstanding bonds for road projects and save DOT a total of $22 million in debt service, including $16 million in FY 2011. Given the uncertainty that has now been unnecessarily created by the Board, we cannot proceed with the refinancing at this time.

The Board is refusing to heed the sound advice of the State Auditor and the department’s own legal and financial staff. Previous Attorney General opinions also make it very clear that the department must follow the same accounting procedures as the rest of state government.

While I am incredibly frustrated that we are forced to pass up a substantial savings opportunity, I am more concerned that this Board continues to act irresponsibly and show such little regard for the state’s conservative fiscal management policies.”


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