The Institute for Truth in Accounting is an unaffiliated, nonprofit organization created by Sheila Weinberg, a Certified Public Accountant, in 2002. Its goal is to ensure that public and private organizations provide truthful financial information useful to a wide variety of users. The Institute is dedicated to the development of standards and awareness that timely, informative and reliable information is the basis for knowledgeable economic and political decisions.
The Institute is particularly interested in governmental accounting, at all levels. As the world's largest fiscal organization, the U.S. government must be the leader in providing complete and understandable financial information. State and local governments' accounting standards no longer adequately report the scope and scale of obligations assumed by these jurisdictions.
For the past decade, Weinberg has analyzed the Federal government's financial statements and projections. During the late '90's, she was astonished to find that the government was recording trust fund surpluses as both revenues and debt. Her accounting expertise compelled her to question how the national debt could be increasing while the politicians were reporting a government surplus.
As Weinberg dug deeper, she discovered other problems based on accounting issues. During the 2000 Presidential campaign, for example, candidates focused on how they would spend the projected surpluses. At the same time the Congressional Budget Office had projected a large general fund deficit. Surpluses resulted from including trust fund borrowings as income. The annual costs of government public retirement programs were completely omitted from the projections.
Weinberg recognized that this paradox meant Americans were—and are--making major public policy decisions based upon incomplete—and even misleading--financial information produced by the Federal government. To examine the problem, The Institute compiled the booklet "What Are the True Numbers?" The report concluded that the total projected surplus/deficit cannot be calculated, because whole categories of costs are simply not published.
The need to determine the government's true numbers is clear. This need spread to the private sector during the summer of 2002. Corporate accounting scandals at Enron and WorldCom erupted. Weinberg recognized corporate reporting inadequacies that had parallels with the Federal government's accounting practices. Read "Accounting Practices in America", also compiled by the Institute, for more information.
Weinberg's conclusion was to question the quality of financial information generally, but especially that issued by governments. The concern about the credibility of the Federal government's financial statements arise, because they are prepared using standards created by a board that is appointed by government officials. On the state and local level, accounting standards have not kept up with the expanding missions these governments have assumed
These trends convinced Weinberg that a more systematic and organized approach to accounting issues was required. To address the problem, she created The Institute for Truth in Accounting to educate the public about accounting issues, standards and truths for both the public and private sector.