The recently passed National Defense Authorization Act includes provisions that will have a future impact on some townships. Townships that have existing bonds or plan to issue future bonds should be aware that the act will require new formats for federal reporting, which will require the purchase of new or reconfigured software.
Financial regulators are required to develop common standards that promote the organization, readability, and availability of financial data using uniform reporting categories, including the need to “tag” financial information using a machine-readable format. Federal agencies must develop and implement regulations for the new rule within four years, although this process has historically taken five to 10 years. Current cost estimates for compliance are based upon each impacted municipality purchasing new software to comply or reconfiguring existing software, which reports quote at $100,000 each. PSATS suggests impacted townships work with their financial consultants and bond counsel to determine the most cost-effective means to comply once the proposed regulations are available for review.