Every year when the auditor comes in, the conversation about infrastructure assets is the same. What's the condition of your roads? What's the estimated cost to bring them up to standard? Do you have documentation to support those numbers?

For most small towns, the answer is some version of "we have a spreadsheet" or "we have what the previous director left us." GASB 34 changed the requirements for how municipalities report infrastructure assets on their financial statements — and while most towns are technically in compliance, many are doing it in ways that create audit risk and don't actually help them make better decisions.

What GASB 34 Actually Requires

The Governmental Accounting Standards Board Statement 34 requires municipalities to report the value of their infrastructure assets — roads, bridges, sidewalks, and other public works assets — on their government-wide financial statements. There are two ways to comply:

The first is the standard depreciation method, where you record the cost of the asset and depreciate it over its useful life. The second — which many municipalities prefer — is the modified approach, where instead of depreciating the asset, you commit to maintaining it at or above a defined condition level and report on whether you're meeting that commitment.

What Your Auditor Needs

Under either approach, your auditor needs to see that you have a systematic way of tracking and reporting infrastructure asset conditions. That means a methodology that's documented, applied consistently, and updated regularly. Specifically they're looking for:

A complete inventory of your network — every road segment with its length and basic characteristics. Condition ratings applied using a consistent methodology — whether simplified Good/Fair/Poor/Failed or formal ASTM PCI scoring. An estimate of the cost to bring the network up to your target condition level. And a record showing how conditions have changed over time.

Why Consistent Methodology Matters

The word your auditor cares most about is consistent. It's not about whether your ratings are perfect — it's about whether you're doing them the same way every time, so the numbers can be compared year over year. A simplified four-level rating system applied consistently every year is far more defensible than a formal PCI study done once five years ago and never repeated.

Making It Easier

The good news is that meeting GASB 34 requirements doesn't require an expensive engineering study or a complex system. What it requires is documentation — a record showing that you have a methodology, you're applying it, and you're tracking the results over time.

When your roads are in a system that timestamps every inspection, records who did it and when, and maintains the full history of condition ratings, your auditor has everything they need. The conversation gets a lot shorter.