A Review of DOT Compliance with GASB 34 Requirements (2004) / Chapter Skim
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GASB was sufficiently persuaded by these arguments to offer an optional method of compliance. Its June 1999 action authorized both the depreciation approach and a modified approach that relied on asset management analysis and systems as acceptable methods of valuing infrastructure assets.
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– First, the government manages the eligible infrastructure assets using an asset management system that has the characteristics set below: ■ Provides an up-to-date inventory of eligible infrastructure assets; ■ Performs condition assessments of the eligible infrastructure assets and summarizes the results using a measurable scale; and ■ Estimates each year the annual amount to maintain and preserve the eligible infrastructure assets at the condition level established and disclosed by the government. – Second, the government documents that the eligible infrastructure assets are being preserved approximately at (or above)
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Additions or improvements to eligible infrastructure assets should be capitalized. GASB 34 called for the prospective reporting aspect of the new standards to become effective in fiscal years ending after June 15, 2002, for governments with total annual revenues of $100 million or more.
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• A similar interplay of considerations was at work in the selection of targeted condition levels by the modified approach states. Some departments were inclined to establish relatively low condition targets that they were sure to achieve, thus generating a positive report for their financial statements.
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deficient Delaware Pavements Overall Pavement Condition (OPC) 0-5 scale based on pavement distress 9.8% in poor condition ≤15% in poor condition Bridges Bridge Condition Rating (BCR)
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Deficient nor Funct Obs Texas Pavements Maintenance Assessment Program 1-5 scale based on pavement, traffic operations and roadside with 1=20%, 2=40%, 3=60%, 4=80% and 5=100% Interstate 82% Other 79% Interstate ≥80% Other ≥75% Utah Pavements Ride Index 1-5 scale based on vehicle response to roughness with adjustment for pavement type 70% with ≥2.75 rating; 8% with ≤1.84 rating 50% with ≥2.75 rating; ≤15% with ≤1.84 rating Bridges Structures Inventory System 1-100 scale based on condition of major elements 70% with ≥80 rating; 3% with ≤49 rating 50% with ≥80 rating; ≤15% with ≤49 rating Washington Pavements Pavement Condition Index Pavement section assigned lowest value among Pavement Structural Condition, IRI and rutting 91% with ≥40 rating 90% with ≥40 rating Bridges Bridge Inventory System Good, Fair or Poor based on NBI structural appraisal 97% with Good or Fair rating 95% with Good or Fair rating Wisconsin Pavements International Roughness Index (IRI) 0-5 index based on vehicle response to roughness (lower=smoother)
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• Determination of condition targets -- for modified approach states, the calculation of meaningful condition targets was a key step in the process and various methods were employed. Different condition targets were adopted for the two principal asset classes, roads and bridges.
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The GASB 34 guidelines use a functional approach to these categories -- maintenance costs achieve the original design life; preservation costs extend that design life, but do not increase capacity or service; and capital costs increase capacity or service. However, the traditional DOT definitions relate more to type of construction -- a full reconstruction project is viewed as capital, whether or not lanes are added; a resurfacing project is viewed as preservation, whether or not there are ancillary safety benefits.
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The following topics are recommended for additional research: • Methods for Condition Assessments -- a consistent condition assessment methodology has not yet been developed. • Linking Condition Targets to Required Expenditures -- virtually all modified approach states experienced difficulty in estimating the expenditure level necessary to achieve targeted conditions.
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Each of these research topics is discussed in greater detail in Appendix G which is available as part of NCHRP Web Document 63. The research team suggests that recommendations be developed for each of the topics, to be presented at a second state DOT conference on GASB 34 implementation.
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