Whenever we review the financial statements of the various political sub-divisions there is one item that we conclude is a product of what we refer to as “murky” bookkeeping.
One definition of “murky”– “not fully explained or understood, especially with concealed dishonesty or immorality”
To be clear, the political sub-divisions are merely following the guidelines of the Governmental Accounting Standards Board policy number 68. (GASB 68). There is nothing nefarious being done on their part.
From the Lake County’s 2017 audit report presented by the State of Ohio Auditor, we find this explanation:
“Under the standards required by GASB No. 68, the net pension liability equals the County’s proportionate share of each plan’s collective:
1. Present value of estimated future pension benefits attributable to active and inactive employees’ past service.
2. Minus plan assets available to pay these benefits.”
“In Ohio, there is no legal means to enforce the unfunded liability of the pension system as against the public employer.”
“State law operates to mitigate/lessen the moral obligation of the public employer to the employee, because all parties enter the employment exchange with notice as to the law.”
“In the event that contributions, investment returns and other changes are insufficient to keep up with required pension payments, state statute does not assign/identify the responsible party for the unfunded portion.” [emphasis added]
[LFC Comment: Now this is really disconcerting to us. Even to the accountants this makes absolutely no sense. Anyone want to guess who is ultimately responsible to pay for the government workers’ unfunded pension liability?……you get an “A” if you said the “unsuspecting taxpayers”]
We have contacted the GASB main office via email, we will report to you what we find out about this “murky bookkeeping”.
One problem with being a bookkeeper…..half your life you are “out of balance”….for the liberal readers out there….that is known as a “joke”.