To establish the Federal Accounting Standards Advisory Board.

Summary: Establishes a Federal Accounting Standards Advisory Board which shall work under the general oversight of the Comptroller General, the Secretary of the Treasury, and the Director of the Office of Management and Budget to consider and recommend accounting concepts and standards for the Government that provide a frame of reference for resolving accounting issues.

SECTION 1. FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD.

    (a) Findings.--Congress finds the following:
            (1) There is a need for objective and neutral Federal 
        Government accounting standards. To be objective and neutral, 
        standards must ensure that the resulting information is a 
        faithful representation of the effects of Federal Government 
        activities. Objective and neutral mean free from bias, without 
        placing any particular interest above the interest of 
        individuals who rely on the information in financial reports of 
        the Federal Government.
            (2) Accounting standards are essential to the efficient 
        functioning of the Federal Government and the economy, as 
        decisions about the allocation of resources rely heavily on 
        credible, concise, and understandable financial information. 
        Financial information about the operations and financial 
        position of the Federal Government is used by citizens, 
        Congress, executives, and program managers.
            (3) The Joint Financial Management Improvement Program, 
        established by the General Accounting Office, the Department of 
        Treasury, and Office of Management and Budget, conducts a 
        continuous program for improving accounting and financial 
        reporting in the Federal Government.
            (4) The Comptroller General, the Secretary of the Treasury, 
        and the Director of the Office of Management and Budget have 
        established an advisory board in accordance with the Federal 
        Advisory Committee Act (5 U.S.C. App.), to consider and 
        recommend accounting concepts and standards for the Federal 
        Government.
    (b) Purpose.--The purpose of this Act is to affirm the Memorandum 
of Understanding Among the General Accounting Office, the Department of 
the Treasury, and the Office of Management and Budget on Federal 
Government Accounting Standards and a Federal Accounting Standards 
Advisory Board dated January 11, 2002, effective June 30, 2002.
    (c) Establishment of Board.--There is hereby established the 
Federal Accounting Standards Advisory Board (hereinafter in this Act 
referred to as the ``Board''). The Board shall work under the general 
oversight of the Comptroller General, the Secretary of the Treasury, 
and the Director of the Office of Management and Budget (hereinafter in 
this Act referred to as the ``Principals'').
    (d) Meetings; Procedures.--The Board shall--
            (1) meet as necessary and at the request of one of the 
        Principals; and
            (2) establish detailed working procedures for the Board.
    (e) Composition.--(1) The Board shall be comprised of nine members 
as follows:
            (A) One member who is a representative of the General 
        Accounting Office appointed by the Comptroller General.
            (B) One member who is a representative of the Office of 
        Management and Budget appointed by the Director of the Office 
        of Management and Budget.
            (C) One member who is a representative of the Department of 
        the Treasury appointed by the Secretary of the Treasury.
            (D) Six members appointed jointly by the Comptroller 
        General, the Director, and the Secretary, who are--
                    (i) representatives of the financial community, the 
                accounting and auditing community, and the academic 
                community; and
                    (ii) not representatives of the Federal Government.
    (2) In selecting members under paragraph (1)(D), the Principals 
shall--
            (A) seek nominations from a wide variety of sources;
            (B) consider, among other criteria, an individual's--
                    (i) broad professional background; and
                    (ii) expertise in Federal Government accounting, 
                financial reporting, and financial management; and
            (C) consider the recommendations of a panel convened by the 
        chairperson selected under subsection (c).
    (f) Terms.--(1) The members appointed under subparagraphs (A) 
through (C) of subsection (e)(1) shall serve at the discretion of the 
appointing agency head. Members appointed under subsection (e)(1)(D) 
shall be appointed for an initial term of not more than five years, and 
may be reappointed for one additional term of not more than five years.
    (g) Chairperson.--The Principals shall select a chairperson of the 
Board from among members appointed under subsection (e)(1)(D).
    (h) Consideration of Accounting Concepts and Standards.--(1) The 
Board shall consider accounting concepts and standards for the Federal 
Government that provide a frame of reference for resolving accounting 
issues. In considering accounting concepts and standards, consideration 
shall be given to the budgetary information needs of executive agencies 
and the needs of users of Federal financial information.
    (2) The Board shall not set or propose budget concepts, standards, 
or principles.
    (i) Process Required.--The Board shall take the following steps in 
carrying out the process for considering accounting standards:
            (1) Identification of accounting issues and agenda 
        decisions.
            (2) Preliminary deliberations.
            (3) Preparation of issues papers or discussion memorandums.
            (4) Release of documents to the public, holding public 
        hearings, and consideration of comments.
            (5) Further deliberations, preparation of exposure draft, 
        and consideration of comments.
            (6) General consensus of at least a majority of the Board 
        members and submission of recommendations to the Principals.
    (j) Adoption of Recommendations.--Recommendations of the Board on 
proposed accounting concepts or standards shall be made to the 
Principals for review. If, within 90 days after submission, any of the 
Principals objects to the proposed concept or standard, the concept or 
standard shall be returned to the Board for further consideration. If, 
within 90 days after submission, none of the Principals objects to the 
proposed concept or standard, the concept or standard become final and 
shall be published in the Federal Register. Standards set and 
promulgated following the Board's rules of procedure shall have 
substantial authoritative support, and accounting standards contrary to 
such promulgation shall not.
    (k) Proposed Interpretations and Technical Releases.--A proposed 
Interpretation or Technical Release shall be submitted to the members 
of the Board representing the three Principals for review. If, within 
45 days after submission, any one of such members objects to the 
proposed Interpretation or Technical Release, the proposed 
Interpretation or Technical Release shall be returned to the Board for 
further consideration. If, within 45 days after submission, none of 
such members objects to the proposed Interpretation or Technical 
Release, the proposed Interpretation or Technical Release shall become 
final. Final Interpretations and Technical Releases shall be published 
in the Federal Register.
    (l) Staff.--A core group of qualified technical staff shall support 
the Board in carrying out its duties and functions. The staff shall 
spend its time working on Board matters and, from time to time, may be 
augmented with staff assigned from executive departments or agencies or 
other organizations.
    (m) Task Forces.--The Board may appoint task forces as necessary 
to--
            (1) advise the Board on accounting matters;
            (2) provide expert views; and
            (3) recommend solutions to issues or problems in the 
        accounting standard-setting process.
    (n) Transition Provisions.--The terms of members of the Board 
serving on the date of the enactment of this Act from the Congressional 
Budget Office, international organizations, defense agencies, and 
civilian and other Federal agencies shall expire on June 30, 2002. The 
terms of any non-Federal members serving on the Board on the date of 
the enactment of this Act shall be extended until June 30, 2004, and 
such members shall be eligible to serve an additional term of up to 
five years to the extent that the total service of the member on the 
Board does not exceed 10 years.
    (o) Construction.--Nothing in this Act shall be construed as 
diminishing the authorities, separately or jointly, of the Principals 
to establish and adopt accounting standards for the Federal Government.
    (p) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this Act.