Mr. CONAWAY. Mr. Speaker, I rise today to highlight an important oversight in the implementation of the sequester that this CR does not address: the inclusion of several private, non-profit organizations in the scope of the sequester.
We all recognize the importance of eliminating our country's growing deficit and debt. While the sequester is in no way the best solution to this problem, we cannot afford to ignore our nation's debt crisis. Meaningful spending cuts are absolutely required in order to get our fiscal house in order.
As a CPA, I am concerned about two organizations in particular, the Public Company Accounting Oversight Board and the Financial Accounting Standards Board. These two organizations were designed from their inception to be independent of the federal budget process.
High-quality accounting and independent audit oversight is critical to providing transparent, consistent, comparable, relevant, and reliable financial information to investors. Because of the complexity and the competing stakeholder interests associated with accounting standards, Congress has repeatedly determined that the establishment and enforcement of these standards should be managed by independent, private-sector organizations.
In order to insulate the PCAOB and FASB from coercion and to protect their independence, Congress authorized these organizations to collect fees as dedicated sources of funding in the Sarbanes-Oxley Act. These fees are not federal dollars; they never touch the Treasury or any other governmental entity, and are not subject to appropriation. In fact, Section 109(c)(1) of Sarbanes-Oxley specifically says: ``accounting support fees and other receipts of the [PCAOB] and [FASB] shall not be considered public monies of the United States.''
Importantly, neither the PCAOB nor FASB has any budget authority, or the ability to obligate and expend funds on behalf of the Federal government. Section 109(i) of Sarbanes-Oxley clarifies their independence further by stating: ``Nothing in this section shall be construed to render either the [PCAOB], [FASB], or both, subject to procedures in Congress to authorize or appropriate public funds, or to prevent such organization from utilizing additional sources of revenue for its activities .....''
Despite this clear Congressional intent to keep the PCAOB and FASB independent of the Federal budget process, OMB included them both in the President's Budget, making them subject to sequestration under the BCA. Yet, because their revenues are not federal monies, sequestering their funds would have no impact on the Federal budget and would not reduce the deficit one dollar.
Sequestration of the PCAOB and FASB's accounting support fees would jeopardize the independence of the accounting standards-setting and auditing process, and provide the Federal government with unintended and unprecedented control over these institutions. That type of control is precisely what Congress sought to avoid when it made the PCAOB and FASB independent of the Federal budget process in Sarbanes-Oxley.
Absent correction, I fear that FASB's sister organization, the Government Accounting Standards Board--GASB--will also be subject to sequester. Like the PCAOB and FASB, GASB had its independence firmly established with its own authorization to collect fees and its complete separation from the federal budget written into Dodd-Frank.
In order to implement Congressional intent and maintain the independence of the accounting and auditing community, we must exempt these private, non-profit organizations from the President's Budget and clarify that these and other similarly situated entities are not subject to current or future sequestration under the BCA.
I would like to insert into the RECORD a bipartisan letter signed by nine members of the Congressional Caucus on CPAs and Accountants. While the letter is focused on FASB and GASB, it is equally applicable to the PCAOB and shows the bipartisan concern that protecting the independence of these organizations has.