Author: Mary Pat Campbell

Criticizing Government Accounting

Mary Pat Campbell
Criticizing Government Accounting

Excerpt:

Although for more than half of my 53-year career in auditing, I managed to avoid any involvement with government GAAP. Yet I found myself interested in two articles about it in the April CPA Journal: “Is Government GAAP Necessary?” by Sheila Weinberg, and “The Future of Government Accounting Standards” by Joel Black. What appealed to me about both articles is that they were critical of the archaic, shortsighted, and conceptually groundless second set of “basic” financial statements prepared on the hybrid “modified accrual basis” that have been required in addition to full accrual financial statements since 1999 by GASB 34. Both authors are to be complimented.

The Black article is a scholarly summary of the long history of government GAAP and an explanation of the rationale for several differences from commercial GAAP. Accordingly, I believe the article would make a useful training tool for young staff. Black’s criticism of modified accrual basis reporting and his implied support for probable future improvements to the current model that he characterizes as “not major” follow:

Author(s): Howard B. Levy, CPA, Sheila A. Weinberg. Founder & CEO, Truth in Accounting

Publication Date: 2 March 2021

Publication Site: CPA Journal

EU and Italy Block Export of AstraZeneca Covid-19 Vaccine to Australia

Mary Pat Campbell

Link: https://www.wsj.com/articles/eu-and-italy-block-export-of-astrazeneca-covid-19-vaccine-to-australia-11614875649?mod=djemwhatsnews

Excerpt:

Italy blocked the export of AstraZeneca PLC’s Covid-19 vaccine to Australia, in a move coordinated with European Union authorities, reflecting mounting frustration in Europe with slow deliveries of vaccines.

The move was prompted by the persisting shortage of vaccines in Italy and the EU, delays in the supply of vaccines by AstraZeneca and the fact that Australia is considered a “nonvulnerable country” to Covid-19 under EU regulations, Italy’s Ministry of Foreign Affairs said.

The decision affects 250,700 doses, a number the ministry said was high compared with what has been delivered so far by AstraZeneca. The doses were bottled at a factory near Rome that is part of the company’s supply chain. AstraZeneca has delivered around 1.5 million doses to Italy, according to the government.

Author(s): Giovanni Legorano,  Jenny Strasburg

Publication Date: 4 March 2021

Publication Site: Wall Street Journal

Cuomo Advisers Altered Report on Covid-19 Nursing-Home Deaths

Mary Pat Campbell

Link: https://www.wsj.com/articles/cuomo-advisers-altered-report-on-covid-19-nursing-home-deaths-11614910855?mod=djemwhatsnews

Excerpt:

New York Gov. Andrew Cuomo’s top advisers successfully pushed state health officials to strip a public report of data showing that more nursing-home residents had died of Covid-19 than the administration had acknowledged, according to people with knowledge of the report’s production.

The July report, which examined the factors that led to the spread of the virus in nursing homes, focused only on residents who died inside long-term-care facilities, leaving out those who had died in hospitals after becoming sick in nursing homes. As a result, the report said 6,432 nursing-home residents had died—a significant undercount of the death toll attributed to the state’s most vulnerable population, the people said. The initial version of the report said nearly 10,000 nursing-home residents had died in New York by July last year, one of the people said.

The changes Mr. Cuomo’s aides and health officials made to the nursing-home report, which haven’t been previously disclosed, reveal that the state possessed a fuller accounting of out-of-facility nursing-home deaths as early as the summer. The Health Department resisted calls by state and federal lawmakers, media outlets and others to release the data for another eight months.

Author(s): Joe Palazzolo, Jimmy Vielkind, Rebecca Davis O’Brien

Publication Date: 4 March 2021

Publication Site: Wall Street Journal

The hopeful news for Social Security buried in the $1.9 trillion bailout

Mary Pat Campbell

Link: https://www.msn.com/en-us/money/retirement/the-hopeful-news-for-social-security-buried-in-the-1-9-trillion-bailout/ar-BB1eht7e?ocid=BingNews

Excerpt:

Lawmakers have moved to include in the bill an unrelated $86 billion bailout for bankrupt union pension plans.

And once they’ve done that, it’s going to be even harder for them to argue that they shouldn’t bail out the stricken Social Security trust fund that is actually their responsibility. Social Security’s deficit: $16.8 trillion, or about $50,000 for every person in America.

On the other hand, if Congress tries to weasel out of fully funding Social Security in a few years’ time, this rescue of private sector union pensions is going to look like an outrage.

Author(s): Brett Arends

Publication Date: 6 March 2021

Publication Site: MSN Money

Preliminary Semiannual Estimates

Mary Pat Campbell
Preliminary Semiannual Estimates

Graphic:

Excerpt:

The National Safety Council (NSC) estimate of total motor-vehicle deaths for 2020 is 42,060, up 8% from 39,107 in 2019. The estimated annual population death rate is 12.8 deaths per 100,000 population, up from 11.9 in 2019. The estimated mileage death rate is 1.49 deaths per 100 million vehicle miles traveled, up 24% from 1.20 in 2019. Estimated vehicle miles traveled for 2020 indicate over a 13% decrease compared to 2019, from 3,260 billion to 2,830 billion.

A medically consulted injury is an injury serious enough that a medical professional was consulted. Based on the current medically consulted injury-to-death ratio of 114:1, and rounded to the nearest thousand, the estimated number of nonfatal medically consulted injuries resulting from crashes during in 2020 was 4,795,000.

The estimated cost of motor-vehicle deaths, injuries, and property damage in 2020 was $474.4 billion.

Publication Date: 4 March 2021

Publication Site: National Safety Council

Motor Vehicle Deaths in 2020 Estimated to be Highest in 13 Years, Despite Dramatic Drops in Miles Driven

Mary Pat Campbell

https://www.prnewswire.com/news-releases/motor-vehicle-deaths-in-2020-estimated-to-be-highest-in-13-years-despite-dramatic-drops-in-miles-driven-301240410.html

Excerpt:

For the first time since 2007, preliminary data from the National Safety Council show that as many as 42,060 people are estimated to have died in motor vehicle crashes in 2020. That marks an 8% increase over 2019 in a year where people drove significantly less frequently because of the pandemic. The preliminary estimated rate of death on the roads last year spiked 24% over the previous 12-month period, despite miles driven dropping 13%. The increase in the rate of death is the highest estimated year-over-year jump that NSC has calculated since 1924 – 96 years. It underscores the nation’s persistent failure to prioritize safety on the roads, which became emptier but far more deadly.  

Author(s): National Safety Council

Publication Date: 4 March 2021

Publication Site: PR Newswire

National Security Risks of Late-Stage Capitalism

Mary Pat Campbell
National Security Risks of Late-Stage Capitalism

Excerpt:

There are two problems to solve. The first is information asymmetry: buyers can’t adequately judge the security of software products or company practices. The second is a perverse incentive structure: the market encourages companies to make decisions in their private interest, even if that imperils the broader interests of society. Together these two problems result in companies that save money by taking on greater risk and then pass off that risk to the rest of us, as individuals and as a nation.

The only way to force companies to provide safety and security features for customers and users is with government intervention. Companies need to pay the true costs of their insecurities, through a combination of laws, regulations, and legal liability. Governments routinely legislate safety — pollution standards, automobile seat belts, lead-free gasoline, food service regulations. We need to do the same with cybersecurity: the federal government should set minimum security standards for software and software development.

Author(s): Bruce Schneier

Publication Date: 1 March 2021

Publication Site: Schneier on Security

MOODY’S REPORT: ILLINOIS PENSION DEBT REACHES RECORD-HIGH $317 BILLION

Mary Pat Campbell

Link: https://www.illinoispolicy.org/moodys-report-illinois-pension-debt-reaches-record-high-317-billion/

Graphic:

Excerpt:

Because the state systemically underestimates its pension debt, it also underestimates the taxpayer contributions necessary to keep the debt from growing each year. During the past decade, officially-reported growth in pension debt outpaced the state’s initial projections by $24 billion. Growth in annual taxpayer contributions exceeded state estimates by about 15% per year on average, causing taxpayers to contribute $7.6 billion more than projected during the decade. Still, that extra money has not slowed a mushrooming pension debt. The state’s regular upward revisions demonstrate Moody’s method, which is more in line with private sector standards, is more accurate.

Because employee contributions to the pension funds and benefits paid out are both fixed by state law, taxpayers must make up for any shortfall caused when investment returns miss rosy targets. For example, the largest of Illinois’ five state pension systems, the Teachers’ Retirement System, reported a 0.52% return on investment in fiscal year 2020, which included the first four months of the COVID-19 pandemic. That was far short of the TRS’s 7% return target and helped grow the debt.

Author(s): Adam Schuster

Publication Date: 5 March 2021

Publication Site: Illinois Policy Institute

Dow to freeze U.S. pension plans, contribute $1 billion and hike DC match

Mary Pat Campbell

Link: https://www.pionline.com/retirement-plans/dow-freeze-us-pension-plans-contribute-1-billion-and-hike-dc-match

Excerpt:

Dow Inc., Midland, Mich., will freeze the benefit accruals of its U.S. pension plans at the end of 2023, increase its matching contribution in its defined contribution plans and will contribute $1 billion to the pension plans before the end of the first quarter.

The chemical company announced its plans in an 8-K filing with the SEC on Thursday.

First, Dow will freeze benefit accruals for participants in qualified and non-qualified pension plans, including the Dow Employees’ Pension Plan, the Union Carbide Employees’ Pension Plan and the Dow Chemical Co. Executives’ Supplemental Retirement Plan-Supplemental Benefit, effective Dec. 31, 2023.

Author(s): Rob Kozlowski

Publication Date: 4 March 2021

Publication Site: Pensions & Investments

Guilty of bribery and extortion, ex-public employees still collect public pensions

Mary Pat Campbell

Link: https://www.wxyz.com/news/local-news/investigations/after-admitting-to-bribery-and-extortion-ex-public-employees-still-collect-public-pensions

Excerpt:

In 2017, a law was passed that attempted to make forfeiture of a crooked public employee’s pension mandatory, or at least easier to pursue. But a 7 Action News investigation reveals it has seldom been used, and Michigan’s Attorney General was not even familiar with it.

Former Detroit Police officers James Robertson, Jamil Martin and Anthony Careathers were charged by prosecutors when it was revealed that each was extorting collision shop owners on the job.

Author(s): Ross Jones

Publication Date: 4 March 2021

Publication Site: WXYZ

Why Cuomo Cooked the Books on Nursing-Home Deaths

Mary Pat Campbell

Link: https://www.nationalreview.com/2021/03/why-cuomo-cooked-the-books-on-nursing-home-deaths/

Excerpt:

What DeRosa told lawmakers had them aghast. Not only had Cuomo misled them; he had, in DeRosa’s telling, done it in order to keep relevant information hidden from U.S. investigators. If the latter were true, Cuomo administration officials could well be guilty of federal-obstruction and false-statements crimes. In other words, so shameful was their actual reason for covering up nursing-home deaths — namely, to make a wayward governor look like a fantasy hero — that Cuomo administration officials figured it was better to be seen as potentially felonious than to admit their crude political motivation.

As the New York Times reported on Thursday night, in the spring of 2020, DeRosa and other members of Cuomo’s inner circle, who have no public-health background, studiously purged the nursing-home death data from a report compiled by state health officials. The Justice Department was not eyeing them at the time. That happened months later, in August, when the feds began seeking information about the treatment of, and record-keeping about, COVID-stricken nursing-home residents by New York and three other states.

So what was going on at the time of the purge? Well — whaddya know! — it turns out that was just when Cuomo was quietly securing the state ethics approvals that would permit him to earn outside income from a book he’d decided to write. The book would inform the world about his unparalleled mastery of the COVID crisis — which, oddly enough, he contemplated as a work of nonfiction.

Author(s): Andrew McCarthy

Publication Date: 6 March 2021

Publication Site: National Review