•HRES 545 IH 
should be able to comprehend them, to investigate 
abuses, and consequently to control them.’’; 
Whereas, in 1949, the findings of the first Hoover Commis-
sion were endorsed by President Harry Truman, and the 
Commission’s recommendations were issued to Congress 
in nineteen separate reports, resulting in the passage of 
the Budget and Accounting Procedures Act of 1950, giv-
ing the General Accounting Office the authority to make 
it a requirement that agency accounting systems be 
maintained on the accrual basis in order to secure Comp-
troller General approval; 
Whereas, in 1955, the findings of the second Hoover Com-
mission Report were endorsed by President Eisenhower 
and reported to the United States Congress which passed 
Public Law 84–863, in 1956, establishing the following: 
‘‘As soon as practicable . . . the head of each executive 
agency shall, in accordance with the principles and stand-
ards prescribed by the Comptroller General, cause the ac-
counts of such agency to be maintained on an accrual 
basis to show the resources, liabilities, and costs of oper-
ations of such agency with a view to facilitating the prep-
aration of cost-based budgets . . .’’; 
Whereas, in 1967, President Lyndon Johnson’s Commission 
on Budget Concepts, a temporary ‘‘blue ribbon’’ commis-
sion headed by the Secretary of the Treasury David Ken-
nedy, recommended that the accrual basis of measuring 
receipts and expenditures be substituted for the cash 
basis at ‘‘as early a date as feasible.’’; 
Whereas, in 1969, President Richard Nixon reaffirmed the 
conclusions of President Johnson’s Commission on Budg-
et Concepts to make the conversion for the Federal Gov-
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•HRES 545 IH 
ernment from the cash basis to the accrual basis of ac-
counting; 
Whereas, in 1976, before the Committee to Investigate a Bal-
anced Federal Budget of the Democratic Research Orga-
nization on Implementing Accrual Accounting Within the 
Federal Government, Comptroller General Elmer Staats 
stated the following: ‘‘In summary, accrual accounting in 
the Federal Government has been a legal requirement 
since 1956. Since accrual accounting is fundamental to 
sound financial management it has always been a basic 
tenet of our principles and standards. I believe that cur-
rent economic conditions and the extensive government 
use of deficit financing have accentuated the need for the 
Federal Government to provide better overall financial re-
ports that show clearly for the benefit of the Congress 
and the public the major aspects of its financial position 
and operations.’’; 
Whereas, in 1984, the United States Treasury prepared its 
own prototype version of the United States Government’s 
annual consolidated financial statements with a ‘‘rec-
onciliation schedule of accrual operation results to the 
cash basis budget as of September 30, 1983 and 1982,’’ 
but deviated from accrual accounting by removing, from 
the financial statements, the actuarially computed long- 
term liability for Social Security and Medicare; 
Whereas, in October 1990, a ‘‘Memorandum of Under-
standing on Federal Government Accounting Standards 
among the General Accounting Office, the Department of 
the Treasury, and the Office of Management and Budg-
et’’ established the current Federal Accounting Standards 
Advisory Board to determine ‘‘accounting standards’’ 
that are appropriate for the United States Government’s 
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•HRES 545 IH 
annual financial statements, as requested of the Director 
of the Office of Management and Budget in the Chief Fi-
nancial Officers Act of 1990; 
Whereas, in November 1990, President George H.W. Bush 
signed the Chief Financial Officers Act of 1990, estab-
lishing a Chief Financial Officer for the United States, 
within the Office of Management and Budget, for each 
major United States department and agency, and requir-
ing the annual financial statements of the United States 
Government to be publicized annually; 
Whereas, in October 1992, the National Executive Committee 
of the Association of Government Accountants adopted 
the recommendations of the organization’s Truth in 
Budgeting and Accounting Blue Ribbon Task Force, call-
ing for, among other things, ‘‘the use of an accrual basis 
of accounting, including realistic treatment of all unre-
corded and contingent liabilities’’; 
Whereas, in 2003, Federal Reserve Chairman Alan Green-
span, in testimony before Congress, stated that the use 
of accrual-basis accounting for the Federal Government 
‘‘would lay out more clearly the true costs and benefits 
of changes to various taxes and outlay programs and fa-
cilitate the development of a broad budget strategy . . . 
In doing so, these accounts should help shift the national 
dialogue and consensus toward a more realistic view of 
the limits of our national resources.’’; 
Whereas, in 2009, the American Institute of Certified Public 
Accountants, in a letter to the Federal Accounting Stand-
ards Advisory Board, stated that ‘‘we continue to believe 
that the social insurance programs . . . are currently ex-
ecuted and publicized as exchange programs and that 
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•HRES 545 IH 
there should be expense and liability recognition.’’ (on the 
accrual basis); 
Whereas the 2012 financial statements for the United States 
Government refer to the accounting system used by the 
Department of the Treasury in preparing annual reports 
as a ‘‘modified-cash’’ basis, not an accrual basis; 
Whereas, on June 25, 2012, the Governmental Accounting 
Standards Board, an organization created to establish 
and improve standards of State and local governmental 
accounting and financial reporting, voted to approve 
statement No. 68, ‘‘Accounting and Financial Reporting 
for Pensions’’, improving the way State and local govern-
ments report their pension liabilities and expenses, and 
resulting in a more faithful representation of the full im-
pact of these obligations by reporting net pension liabil-
ities on the balance sheet (providing citizens and other 
users of these financial reports with a clearer picture of 
the size and nature of these financial pension obliga-
tions); 
Whereas the adoption of Governmentwide accrual accounting 
for budgeting and financial reporting would not infringe 
on the explicit constitutional power of Congress and its 
respective committees to appropriate and collect— 
through taxation, fees, and borrowing—Federal funds de-
termined on a cash-flow basis, necessary for the collec-
tion, disbursement, and management of the United 
States cash resources; and 
Whereas the continuing use of the cash basis of accounting 
for the compilation of the annual budget substantially 
understates Federal expenses and annual budget deficits, 
and the use of modified cash-hybrid accrual accounting 
for the preparation of the United States Consolidated 
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•HRES 545 IH 
Annual Financial Statements does not present fairly, nor 
accurately, the financial condition and results of oper-
ation of the consolidated departments and agencies of the 
United States: Now, therefore, be it 
Resolved, That the House of Representatives— 
(1) agrees to consider legislation to implement 
accrual basis generally accepted accounting prin-
ciples for United States Government budgeting, fi-
nancial reporting, and performance measures; 
(2) acknowledges that the use of accrual basis 
accounting for United States Government budgeting, 
financial reporting, and performance measures would 
provide a more accurate measure of the United 
States Government’s finances and their impact on 
the Nation’s economy; 
(3) requests the Comptroller General of the 
United States to prescribe the manner in which ac-
crual based generally accepted accounting principles 
can be applied to United States Government budg-
eting, financial reporting, and performance measures 
in the fiscal year following the passage of legislation 
to implement the reforms outlined in this resolution; 
and 
(4) recognizes the use of accrual accounting 
standards in the Federal Government can assist in 
management improvement for the agencies and de-
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•HRES 545 IH 
partments of the Federal Government—publicizing 
true costs, minimizing government waste, and con-
trolling inefficient spending, especially on long-term 
Government contracts. 
Æ 
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