The Great GASB
If you’ve never thought about entering governmental accounting, you should! You never know where your days will lead.
September 30, 2022
By Amanda L. Phelps
Dancing red lights filled the air and we were off. My stomach felt nauseous and my ears were ringing. I was surrounded by IVs, oxygen tanks and bandages. I had no idea where we were going and could not see the road. We arrived at the destination, a beautiful home in coastal Virginia. I stepped out of the ambulance, instantly feeling better. An elderly man ushered us inside the home. We loaded the fragile patient, her face twisted in pain, into the ambulance and I could see the decimals and dollars of equipment at work. The bandages were dollar bills and the oxygen tubes became rolls of quarters. This was my moment, the moment I finally saw the financial statements come to life.
The scene that unfolded will stay with me the rest of my life.
When I started working as an accountant with the City of Virginia Beach, I never imagined I would get to ride along with Fire and Rescue. That’s the thing about being a governmental accountant — you never know where the day is going to take you. Bridging the knowledge gap between accounting and operations is the key to successful governmental accounting.
What makes governmental accounting unique?
The goals of governmental accounting are very different than the public or private sectors. State and local governments use standards set by the Governmental Accounting Standards Board (GASB). The GASB is the law of the land in governmental accounting. As an independent private-sector organization, GASB issues governmental accounting standards.
Fund accounting is unique to governmental accounting. There are three major types of funds: governmental, proprietary and fiduciary, which are set up as individual self-balancing accounts. Another unique aspect is the annual production of the comprehensive annual financial report (CAFR). The CAFR will keep you busy for months on end, giving you the opportunity to work with the entire territory to produce the document. Not only will you work with external auditors, but most likely your work will end up online for all to see. Citizens eagerly await the publication each year, ready to provide their own audit. Get ready for Freedom of Information Act (FOIA) request!
When you aren’t working on the CAFR, you can stay busy producing monthly interim financial reports. Additionally, governments don’t pay taxes, so you won’t have to worry about that type of tax accounting. Don’t think you’re finally getting away from the dread of taxes, though, because they are a main revenue source for many governments. Accounting is done on a budgetary basis and variances outside the budget will require analysis. The great GASB will be your guidance on accounting for all revenues, expenditures and whatever other transactions you encounter.
Accounting
Revenues for local governments are often derived from real estate taxes, personal property taxes, sales and meal and entertainment taxes. A huge part of governmental accounting may consist of grant accounting as well. Localities often receive funding from both federal and state governments for specified grants. They are awarded by external entities to carry out a public purpose. Accurately accounting for these grants is key, and requires working across many departments to properly account for all the grants a locality may have. You will also have to comply with many federal and state agencies, such as the Federal Emergency Management Administration, the Department of Motor Vehicles, the federal System for Award Management and more. It is safe to say that if you are working in government, you will be working heavily with accounting compliance. When it comes to grants, you must comply with the Uniform Guidance (2 CFR 200) and are subject to a single audit. A career in government may bring about other unique transactions such as municipal bond sales.
Operations
It’s important to not only know and understand GASB, but to understand the operations of the entity as well. Being on the ground floor on a ride-along allowed me to understand operations first hand. It gave me confidence in communicating with departments, and when it came time to report numbers, I felt much more confident since I had actually visited the departments and understood their operations. Seeing the fixed assets with your own eyes will help you account for and report those items. Additionally, understanding operations will help you design, implement and maintain internal controls, which are essential to help provide reasonable assurance in meeting objectives. When operations run smoothly, accounting processes run much easier.
Benefits
Government jobs offer many benefits. People often assume the salary is lower, but the important factor to look at is take-home pay. Health insurance coverage, retirement, vacation and sick leave are all crucial factors. Many times, government employees receive discounts at local recreational centers and other services that are provided or subsidized by the local government. Advancement opportunities are available as well, dependent on the size of the entity. Every city, state and federal government requires accountants, therefore there are jobs across the nation.
A career in government provides a work-life balance that allows me to split my focus between my family and career equally. There are even many different niche jobs within governmental accounting — audit, reporting, investments. The work is very rewarding since you are always working for the good of the people. I like knowing the work I do makes a difference. Even during hurricanes or other states of emergency, you may end up helping at an emergency shelter. Being able to see some of the services a city provides first hand makes my work more rewarding. I know the work I do promotes public safety and provides services to the citizens.
What are you waiting for?
Governmental accountants are stewards of taxpayers’ dollars. Government resources must be used wisely and fall under many different types of audits — including that of the inquisitive citizens. As a government accountant, you must use your first-hand knowledge of operations to provide adequate accounting. How an accountant interprets and applies GASB affects fund balances. These applications are important because they affect the budget and the distribution of federal and state funds. Agovernmental accountant must use best practices to bring about the most reliable and relevant financial information. There are many benefits to this type of accounting and it’s definitely worth pursuing. There is never a dull moment and you will never know where the day will take you!
Amanda L. Phelps, CPA, is an accountant for the City of Virginia Beach, where she focuses on annual and interim financial reporting. She is a member of the VSCPA’s Young professional Advisory Committee.