This presentation was made by Scott Showalter, FASAB, United States, at the 19th OECD Senior Financial Management and Reporting Officials Symposium held at the OECD Conference Centre, Paris, on 4-5 March 2019
Countries' updates - Scott Showalter, FASAB, United States
Do You Know Your
D. SCOTT SHOWALTER, CPA, CGFM
CHAIRMAN, US FEDERAL ACCOUNTING
STANDARDS ADVISORY BOARD
19TH ANNUAL OECD PUBLIC SECTOR
Views expressed are those of the speaker.
What are risks
Why do they matter?
options for reporting?
What Are Risks Assumed?
Earlier definition - Risk assumed is ..the
risk inherent in the insurance or guarantee
coverage in force. (SFFAS 5, par. 105)
Limited to insurance and guarantees.
Information provided about “expected
losses” in the future but those losses
were not recognized.
Transparency – Considering how uncertainty
might affect outcomes is important to
understanding financial position and
Completeness – Need to aggregate
information that helps users weigh risks
assumed by the central government as a
Why It Matters
Operating Performance – cost of government actions and
how costs are financed may be affected by risks and may
Risk may be assumed without immediately affecting the
budget. Risk may accumulate over time.
Stewardship – how future budgetary resources will be
Risk should be considered in assessing whether future
budgetary resources are likely to be sufficient to sustain public
Does it Help Meet Reporting Objectives?
Insurance programs are categorized based upon the type of revenue
received as defined by Statement of Federal Financial Accounting
Standards 7, Accounting for Revenue and Other Financing Sources
and Concepts for Reconciling Budgetary and Financial Accounting
This Statement identifies three categories:
1) exchange transaction insurance
programs other than life insurance,
2) nonexchange transaction insurance
3) life insurance programs.
Assessing risk information gaps
Using the IMF’s Fiscal Transparency Code: Pillar III -Risk
Analysis and Management, risk analysis and disclosure
principles as a general framework.
Holding roundtables with users of information to identify
information they use.
Assessing whether the needed information is (and should be)
included in federal financial reports.
Coordinating with the US federal government’s
efforts to adopt Enterprise Risk Management (ERM)
Definition (what risks should be
considered – explicit and/or implicit,
risks all should be aware of or risks
unique to the government)
Overload of information
Not likely to result in a specific measure of risk
Changed project name to “risk reporting”
Develop principles for reporting financial and non-
Forward looking information
Events vs. effect on financial position and operations
Develop principles to reveal measurement
D. Scott Showalter, CPA, CGFM