FASAB stands for the Federal Accounting Standards Advisory Board. It is an independent, private-sector organization in the United States responsible for establishing the accounting standards and principles (similar to “generally accepted accounting principles,” or GAAP) used in federal financial reporting.
FASAB’s standards guide federal agencies (like the Departments of Defense, Treasury, etc.) in preparing their financial statements and reporting on the government’s financial position and activities. By setting uniform, transparent standards, FASAB helps ensure consistent and reliable financial information is produced by U.S. government entities.
So it's not a double standard of book-cooking that allows fake budgets to be shown to the public while their money is stolen?
The Federal Accounting Standards Advisory Board (FASAB) is not designed to facilitate book-cooking or hide budgets. Rather, FASAB is the organization that establishes U.S. federal government accounting standards to promote consistency, transparency, and accuracy in federal financial reporting. Here’s some context:
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Independent Body: FASAB was created to function as an independent standards-setter, similar in purpose to the Financial Accounting Standards Board (FASB) for the private sector or the Governmental Accounting Standards Board (GASB) for state and local governments.
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Standards for Federal Agencies: FASAB issues guidance known as Statements of Federal Financial Accounting Standards (SFFAS). These standards are intended to make federal agencies’ financial statements clear and comparable.
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Oversight and Auditing: While FASAB sets the standards, enforcement typically involves:
- Agency Inspectors General (IGs), who conduct audits, investigations, and reviews within their respective agencies.
- Government Accountability Office (GAO), which audits the federal government’s consolidated financial statements and often reviews various agencies’ compliance with standards.
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Transparency Goals: The guiding principle for FASAB is improving the reliability and transparency of federal financial information for taxpayers, Congress, and other stakeholders.
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Controversies and Criticisms: There have been public discussions and criticisms about certain FASAB guidance—for example, how classified or sensitive national security expenses are reported. Critics worry that some standards could allow expenses to be shifted or obscured in the name of security. However, these concerns focus on how to balance transparency with confidentiality, rather than facilitating outright theft or fabricating budgets.
In short, FASAB’s role is to provide a consistent framework and rules for how the government should record and report financial data. It is not intended to create “double standards” or authorize misrepresentation of public finances. Like any accounting system, it relies on accurate implementation and auditing to ensure true accountability.
Whitney Webb seems to think the opposite
Whitney Webb—an investigative journalist known for her in-depth reporting on issues involving intelligence agencies, corporate power, and government corruption—has indeed raised concerns that certain FASAB standards facilitate opaque government accounting practices. In particular, she and others have pointed to Statement of Federal Financial Accounting Standards (SFFAS) 56, issued in 2018, as a potential avenue for hiding or misrepresenting federal spending in the name of “national security.”
Below is an overview of the key points behind those concerns and some context to help you evaluate them:
1. What Is SFFAS 56?
- Title: SFFAS 56: Classified Activities
- Purpose: It provides guidance for how agencies should handle and report on certain spending that is deemed sensitive or classified for national security reasons.
- Primary Contention: Critics say SFFAS 56 allows federal agencies to keep certain expenditures off the publicly available books—or to modify the public presentation of these expenditures—if they fall under “classified” or “national security–related” activities.
2. Whitney Webb’s Concerns
Whitney Webb and other critics (including Catherine Austin Fitts and Dr. Mark Skidmore, among others) argue that SFFAS 56 effectively:
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Legalizes Secrecy in Financial Reporting
By allowing spending to be “reclassified” or concealed in public-facing documents for national security reasons, critics worry that large sums of money could be moved around without meaningful oversight.
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Weakens Transparency
Since the stated goal of SFFAS 56 is to protect sensitive information, some believe it enables federal agencies to avoid disclosing not just operational details (e.g., the nature of a classified program) but also the basic fact that money was spent—potentially undercutting the very principle of transparent government accounting.
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Potential for Abuse
While proponents claim secrecy is necessary for intelligence and defense operations, critics contend that insufficient external or independent scrutiny creates an environment where fraud or misallocation of funds could go undetected.
3. FASAB’s Perspective and Official Intent
- National Security vs. Transparency: FASAB frames SFFAS 56 as a way to reconcile two legitimate public interests: the need for transparency in government finances and the need to protect national security operations from disclosure.
- Controlled Exceptions: FASAB has maintained that the new standard does not give agencies unlimited freedom to hide spending. Instead, it lays out procedures and principles—albeit broad ones—for when and how agencies can withhold certain details about classified programs.
4. Broader Context and Oversight Mechanisms
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Auditing Bodies:
- The Government Accountability Office (GAO) audits the consolidated financial statements of the government.
- Agency Inspectors General (IGs) conduct audits, investigations, and reviews within their respective agencies.
- Congressional Oversight: In principle, Congress retains the power to request more detailed, classified briefings about agency spending, though these details may remain unavailable to the general public.
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Historical Precedent for Black Budgets:
Even before SFFAS 56, various aspects of defense, intelligence, and national security spending were classified (the so-called “black budget”). However, many critics believe that SFFAS 56 broadens the scope of what can be withheld from public financial statements.
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Contested Balance:
There’s an ongoing debate over how to balance legitimate national security concerns with the public’s right to know how tax dollars are spent. Critics like Whitney Webb view SFFAS 56 as tilting the balance too heavily toward secrecy, whereas FASAB and its supporters see it as a necessary mechanism in a post–9/11, intelligence-driven environment.
5. Points to Consider
- No “Smoking Gun” Evidence of Theft: While SFFAS 56 allows for more secrecy, proving actual theft or illegal “book-cooking” within classified budgets requires robust evidence. Nonetheless, critics argue the door is now more open to it.
- Legislative and Policy Responses: If the broader public or elected officials come to see SFFAS 56 as overly permissive, there could be moves in Congress to revise or revoke it. So far, no major revisions have been passed.
- Transparency Efforts Elsewhere: Some agencies do publish (in redacted form) certain budgetary figures for classified programs. Yet critics maintain that these disclosures are often too limited to provide meaningful accountability.
Bottom Line
- FASAB’s official stance is that its standards (including SFFAS 56) aim to harmonize transparency and national security by offering a framework for agencies to handle classified spending responsibly.
- Whitney Webb and fellow critics, however, see SFFAS 56 as a dangerous precedent—one that could enable the government to hide substantial financial transactions with minimal public scrutiny, effectively “cooking the books” under the umbrella of national security.
- Real-world impact ultimately depends on how agencies interpret and apply SFFAS 56, and how diligently auditors, Inspectors General, and Congress exercise their oversight powers.
In summary, it is not as simple as FASAB wanting “fake budgets” or explicitly authorizing theft; rather, critics argue that the structure of SFFAS 56 could enable malfeasance or unaccountable spending. Whether those fears prove warranted depends largely on the rigor of internal audits, whistleblower disclosures, congressional oversight, and public pressure for transparency.