To require each agency to prepare and make public quarterly and annual consolidated financial statements using the fair-value accrual accounting method, to require the Congressional Budget Office to use current-year spending as the baseline for estimating future mandatory and discretionary changes, and for other purposes.

Summary: Truth in Government Accounting Act of 2011 - Requires the head of each federal agency to prepare for a fiscal year and submit to the Comptroller General (GAO) three quarterly and one annual consolidated financial statement based on the fair-value accrual accounting method. Requires such statement to include all future certain liabilities and all contingent liabilities that can be reasonably estimated, all liabilities that may require future taxes for present liabilities, and other expenditures and liabilities. Requires the Comptroller General to publish all such statements on a website accessible by the public that allows a user to search agency accounts and activities by each office, bureau, and activity of an agency.

Requires the Comptroller General to audit the consolidated financial statements prepared by each federal agency for each fiscal year.

Requires the President's annual budget to include a summary of how the use of accrual accounting procedures would affect the estimated expenditures, appropriations, and receipts of the government in the fiscal year in which the budget is submitted.

Requires the Director of the Office of Management and Budget (OMB) to prepare all of the budgets submitted to the President according to both accrual accounting procedures and the cash basis accounting method.

Amends the Balanced Budget and Emergency Deficit Control Act of 1985 to require the Congressional Budget Office (CBO) to use current-year spending as the baseline for estimating future mandatory and discretionary changes in spending.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Truth in Government Accounting Act 
of 2011''.

SEC. 2. FINANCIAL STATEMENTS.

    (a) In General.--With respect to a fiscal year, the head of each 
agency shall prepare and submit to the Comptroller General a quarterly 
consolidated financial statement for each of the first three quarters 
of such fiscal year and an annual consolidated financial statement for 
such fiscal year as a whole for such agency based on the fair-value 
accrual accounting method. Such statement shall include for such 
agency--
            (1) all future certain liabilities, including all 
        contingent liabilities that can be reasonably estimated;
            (2) all liabilities that may require future taxes for 
        present liabilities; and
            (3) other expenditures and liabilities.
    (b) Submission Deadlines.--
            (1) Quarterly financial statements.--Each quarterly 
        financial statement required by subsection (a) shall be 
        submitted not later than 90 days after the end of the fiscal 
        quarter.
            (2) Annual financial statements.--Each annual financial 
        statement required by subsection (a) shall be submitted not 
        later than 180 days after the end of the fiscal year.
    (c) Generally Accepted Accounting Principles and Footnote 
Disclosures.--Each statement described under subsection (a) shall be 
prepared in accordance with generally accepted accounting principles 
applied on a consistent basis and include footnote disclosures.
    (d) Web Site.--Not later than 10 days after the submission of any 
financial statements to the Comptroller General under subsection (a), 
the Comptroller General shall publish all such statements on a single, 
searchable, downloadable, up-to-date Web site accessible by the public, 
that allows a user to search accounts and associated activities by an 
agency and by each office, bureau, and activity of an agency.
    (e) Agency Defined.--In this section, the term ``agency'' has the 
meaning given that term in section 101 of title 31, United States Code.
    (f) Auditing of Financial Statements.--Subchapter II of chapter 7 
of title 31, United States Code, is amended by adding at the end the 
following new section:
``Sec. 721. Audit of agency consolidated financial statements
    ``(a) In General.--Each year, the Comptroller General shall, in 
accordance with generally accepted auditing standards, audit the 
consolidated financial statements prepared by each agency for each 
fiscal year under section 2(a) of the Truth in Government Accounting 
Act of 2011.
    ``(b) Records and Property.--To carry out this section, the head of 
each agency shall provide the Comptroller General with all records and 
property of or used by each such agency in the preparation of the 
consolidated financial statements under section 2(a) of the Truth in 
Government Accounting Act of 2011 that the Comptroller General 
determines to be statistically meaningful. The Comptroller General 
shall give the head of each agency a current list of officers and 
employees to whom, with proper identification, records and property may 
be made available, and who may make notes or copies necessary to carry 
out the audit. The head of each agency shall provide the Comptroller 
General with suitable facilities to carry out the audit.''.

SEC. 3. PREPARATION OF THE BUDGET.

    (a) The President.--Section 1105(a) of title 31, United States 
Code, is amended--
            (1) by redesignating the second paragraph (37) as paragraph 
        (39); and
            (2) by adding at the end the following new paragraph:
            ``(40) A summary of how the use of accrual accounting 
        procedures would affect the estimated expenditures, 
        appropriations, and receipts of the Government in the fiscal 
        year for which the budget is submitted.''.
    (b) Office of Management and Budget.--The Director of the Office of 
Management and Budget shall prepare all of the budgets submitted to the 
President according to both accrual accounting procedures and the cash 
basis accounting method.

SEC. 4. ZERO-BASELINE BUDGETING.

    (a) Changes in the Baseline.--(1) Section 257(c) of the Balanced 
Budget and Emergency Deficit Control Act of 1985 is amended--
            (A) in the second sentence of paragraph (1), by striking 
        everything that follows ``current year,'' and inserting 
        ``excluding resources designated as an emergency requirement 
        and any resources provided in supplemental appropriation 
        laws.'';
            (B) by striking paragraphs (2), (3), (4), and (5);
            (C) by redesignating paragraph (6) as paragraph (2); and
            (D) by inserting after paragraph (2) the following new 
        paragraph:
            ``(3) No adjustment for inflation.--No adjustment shall be 
        made for inflation or for any other factor.''.
    (2) Section 257(b) of the Balanced Budget and Emergency Deficit 
Control Act of 1985 is amended by adding at the end the following new 
paragraph:
            ``(4) No adjustment for inflation.--No adjustment shall be 
        made for inflation or for any other factor for any direct 
        spending program.''.
    (b) Extension.--The second sentence of section 275(b) of the 
Balanced Budget and Emergency Deficit Control Act of 1985 is amended by 
inserting ``other than subsections (a) through (d) of section 257'' 
after ``title''.

SEC. 5. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect on 
October 1, 2012.