Malloy seeks to delay GAAP accounting update
Hartford — The tough realities of a budget crunch is forcing the Malloy administration to seek a delay in Connecticut’s much-touted conversion to a more transparent accounting method.
Gov. Dannel P. Malloy and the state legislature had planned to set aside $75 million this fiscal year and $50 million in 2012-13 to start adopting Generally Accepted Accounting Principles. Often called GAAP, these are the bookkeeping standards used by businesses and corporations and all Connecticut municipalities.
Converting the state to GAAP was a major campaign pledge for Malloy in his bid for governor.
Beginning in July 2013, the state was to make $100 million conversion payments for at least 15 years. But the first $75 million payment will now be put off for at least a year under the $20.5 billion budget adjustment plan that passed the House of Representatives at 2:30 a.m. Tuesday and awaited a vote in the senate Tuesday evening.
Gian-Carl Casa, spokesman for the Office of Policy and Management, pointed out that by law the Malloy administration only needed to make the first payment if there was a budget surplus.
As the once-projected surplus has become a deficit, state government is no longer on the hook for GAAP. The administration now plans to make that initial $75 million payment next year instead of this year and push the payment scheduled into the future by an additional year.
“We don’t expect to have a surplus this session, but the law does remain on the books,” Casa said Tuesday. “They expect to have a surplus next year and we’ll fund the GAAP conversion then. We’re fully committed to it.”
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