The Constitution of the United States of America lists the powers and limitations on the Congress in Article I. One sentence in that Article reads:
No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law, and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.
The founders added this provision below others vesting tax and spending authority in the Congress. It is called the Statement and Account Clause. It was originally proposed by George Mason of Virginia, who was concerned about safeguarding government accountability.
The Constitution was adopted over 200 years ago. So why are some people arguing today that federal government accounting is so bad it is unconstitutional, in light of this provision?
Last year, the Fordham University Corporate Law Center hosted a conference titled “Representation Without Accountability?” It featured (among others) David Walker, former comptroller general of the United States, and Joseph Marren, President and CEO of KStone Partners. Marren has been arguing that the federal government’s accounting is so misleading that it violates the Statement and Account Clause. Earlier this year, he released this paper laying out his argument.
At the 2012 Fordham conference, Walker stressed the costs of delay for pursuing legal avenues. He advocated rapid policy changes along with better judicial oversight, given the pressing magnitude of the problem. “If someone wants to bring a Supreme Court case, feel free to bring a case," Walker said. "But by the time it'll be considered, it may be too late."
Sheila Weinberg (CEO and Founder of Truth in Accounting) has been advocating accounting policy changes like these over the last decade. For example, see this “Who We Are” discussion at our website.
Marren remains active, too. Two weeks ago, he gave a presentation at a Federal Accounting Standards Advisory Board (FASAB) hearing in Washington. We will report on his presentation when a full transcript of his remarks becomes available. And we are looking forward to further developments in this critical policy area.
Bean counters matter – for trillions of dollars.