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SEA Reporting Project – Suggested Guidelines

Suggested Guidelines for Voluntary Reporting

The primary purpose of a government is to help maintain and improve the well-being of its citizens by providing services. A government’s efficiency and effectiveness in providing those services is an important part of its performance. In order to report vital aspects of governmental performance to citizens, elected officials, and other interested parties (collectively referred to as “users”), information is needed about (1) the acquisition and use of financial and nonfinancial resources and (2) the service efforts and accomplishments (SEA) of the government. SEA reporting provides more information about a government’s performance than can be provided by traditional financial statements.

The results of the Governmental Accounting Standards Board’s (GASB) extensive research and monitoring indicate that it is appropriate at this time for the GASB to consider setting forth conceptually based suggested guidelines for voluntary reporting of SEA performance information. However, it is beyond the scope of the GASB to establish the goals and objectives of state and local government services, specific nonfinancial measures or indicators of service performance, or standards of, or benchmarks for, service performance.

The proposed suggested guidelines for voluntary SEA reporting are composed of the essential components of an effective SEA report, qualitative characteristics representing the attributes SEA performance information needs to possess, and a discussion of how to effectively communicate SEA performance information. The four essential components are purpose and scope, major goals and objectives, key measures of SEA performance, and discussion and analysis of results and challenges. The six qualitative characteristics, as set forth in Concepts Statement No. 1, Objectives of Financial Reporting, are relevance, understandability, comparability, timeliness, consistency, and reliability.

The proposed suggested guidelines for voluntary SEA reporting were developed after considering the 16 suggested criteria presented in the GASB staff’s Special Report, Reporting Performance: Suggested Criteria for Effective Communication, which was issued in 2003. The GASB also considered the results of experimentation efforts by governments with those suggested criteria and oral and written feedback received on a Request for Response, Suggested Guidelines for Voluntary Reporting of SEA Performance Information, issued in July 2008 and the Proposed Suggested Guidelines for Voluntary Reporting, SEA Performance Information, issued in June 2009, as well as the various approaches used by state and local governments in the United States and other countries in reporting SEA performance information.

The Expected Benefits of the Proposed Suggested Guidelines for Voluntary Reporting

The Suggested Guidelines for Voluntary Reporting were developed to provide state and local governments with guidance on how to effectively communicate SEA performance information to users. These suggested guidelines provide a common framework for the effective external communication of SEA performance information that will:

  • Assist users in assessing governmental accountability and making economic, social, and political decisions
  • Assist governments in demonstrating their accountability and stewardship over public resources.

Traditional financial statements provide financial performance information about a government’s fiscal and operational accountability. However, those statements do not provide all of the information necessary to determine the degree to which the government was successful in helping to maintain or improve the well-being of its citizens by providing services. SEA reporting that follows the suggested guidelines would assist governments in providing this information.

The Association of Government Accountants (AGA) has established a program to help state and local governments strengthen their SEA reports and recognize, through a Certificate of Excellence program, the truly outstanding reports. SEA reports will be reviewed and evaluated on how well the government or other organization informs the public about its SEA performance, consistent with the suggested criteria issued by the GASB. Reviewers will then provide recommendations for improving report content and structure and award a Certificate of Excellence in Performance Reporting to a select group of reporters.

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