Due Process: The Public Hearing

(Adapted from an article in the May 2005 issue of The GASB Report)


As part of its due process efforts, the GASB seeks feedback from its constituents and other interested individuals in many ways throughout the various stages of a project. In addition to collecting and analyzing comment letters submitted in response to proposed standards, the Board also seeks feedback from its constituents by conducting public hearings and forums.

A public hearing is an opportunity for interested individuals to present their views to the Board and to participate in an exchange of views with Board members. The idea of presenting one’s views on a project to the Board members and staff and then answering questions might appear to be quite intimidating; however, the Board makes every attempt to encourage participation in this important process. For example, rather than meeting at the Board’s office in Norwalk, Connecticut, public hearings are often held in conjunction with conferences around the country to give more people an opportunity to testify. Participants also are invited to join the Board and staff at lunch so that one-on-one conversations can continue. In addition, the Board has been experimenting with changes in the public hearing format to encourage a broader range of constituent involvement.

On what does the Board base its decision to hold a public hearing?

The issues discussed at a public hearing generally are based upon a discussion document (a Discussion Memorandum, an Invitation to Comment, or a Preliminary Views document) or an Exposure Draft of a proposed Statement or Interpretation, although the Board may hold hearings in relation to any other study, report, or other matter. Hearings are held at the discretion of the Board and are used to obtain additional feedback on issues that are intended to be addressed through the issuance of a Statement of standards or concepts.

The Board determines the number of public hearings to be held for a project based upon the complexity of the issues involved and the level of controversy surrounding the proposals. Hearings are announced at least thirty days prior to the date of the event. The Board also will distribute a notice of public hearing through an announcement in The GASB Report or other GASB publications, if time allows. Any individual or organization may request to be heard at a public hearing, and every attempt is made to schedule all those who submit their request prior to the deadline noted in the meeting announcement. Those who wish to participate are also asked to submit written comments to the Board prior to the meeting. These comments, as well as the public hearing testimony, become part of the public record.

How is a public hearing structured?

The format of the hearing may vary depending upon the information needs of the Board. Regardless of format, each public hearing is conducted by one or more members of the Board or its technical staff. For example, six Board members plan to attend the public hearing on pollution remediation obligations. At the hearing, testifiers are given time to elaborate on their written comments. Depending on the format, generally the testifiers’ presentations run from five to ten minutes. Presentations usually are followed by an opportunity to exchange ideas with the Board through a question-and-answer session on the issues addressed by each speaker. The question-and-answer session is the primary reason that a public hearing or forum is held. It allows Board members and staff the opportunity to gain a better understanding of the participants’ views.

In recent years the Board has utilized alternative formats to include a wider range of participants and obtain more input. As part of the public commentary on the proposed standards that eventually became Statement No. 38, Certain Financial Statement Note Disclosures, the Board devoted the afternoon of a public hearing to panel discussions. The panels included a representative from the preparer community, a representative from the audit community, and two representatives from the financial statement user community. This forum concept not only allows the Board and staff the opportunity to ask questions, it also allows for interaction between panelists. During the public comment period on the proposed other postemployment benefits standards, the Board conducted a roundtable discussion in conjunction with the annual conference of the National Federation of Municipal Analysts. More than two dozen attendees asked questions about the proposals and answered questions from the Board members and staff.