Treatments Not Advised

 Human Resources and Benefits

Underfund Accrued Liabilities like Pensions. Government can use its resources to fund current obligations, rather than to fund future obligations.



  • This is a way of sticking tomorrow’s generations with today’s tab.
  • This can create negative repercussions on bond ratings, public perception, and employee relations as well as large liabilities in a closer future than expected.

Capital and Debt

Shift Operational Costs into Capital Budgets. Governments can inflate the budgets of capital projects to carry operating and maintenance costs for a time.



  • This distorts the true cost of capital investments and makes government vulnerable to unsustainable operating and maintenance costs when the capital financial runs out.
  • This is nominally not permitted under some state’s legislation that requires operating expenses to be paid from operating revenue. Persisting in this practice endangers the organization’s credibility and its ability to return to good practices in the future.

Management Practices

Use Accounting Manipulations. Accounting practices can be manipulated to disguise the true nature and magnitude of the problem. Examples include delaying deliveries, payrolls, and payments to the next fiscal year, estimation/forecast manipulation or distortion, or recognizing anticipated (or even worse, speculative) savings or revenues.



  • This only makes the problem worse by creating a culture of unaccountability and delaying recognition of the problem.
  • “Accuracy above Balance” is the fundamental rule of budgeting. If the budget is balanced but not accurate, it is not balanced!
  • Future credibility and ability to manage is greatly damaged by the fact that information is false or misleading or even by the perception of intentionally being misinformed.
  • Condoning the use of accounting manipulations is a possible first step towards deeper corruption and malfeasance.


Web AdministratorMembership information | Training information | Publication information | Login/Password Assistance

Government Finance Officers Association of the United States and Canada
203 N. LaSalle Street - Suite 2700 | Chicago, IL 60601-1210 | Phone: (312) 977-9700 - Fax: (312) 977-4806