Governmental financial reporting

1. Governmental financial reporting Government Reporting Entity and Comprehensive Annual Financial Report

2. FINANCIAL REPORTING OF GOVERNMENTAL ENTITIES (GASB No. 14) • The financial statements of a governmental entity are presented for the reporting entity: • The primary government • Component units • Other organizations that have a significant relationship with the primary government

3. primary government unit A primary government is defined in GASB Statement No. 14 as: 1. A state government or a general purpose local government (municipality or county); 2. A special purpose government which meets all of the following criteria: a. It has a separately elected governing body; b. The government functions as a separate legal entity

4. primary government unit c. It is fiscally independent of other state and local governments--It must have substantive authority to do all three of the following: i. Determine its own budget without another government's having the authority to approve and modify that budget; ii. Levy taxes or set rates or charges without approval by another government; and iii. Issue bonded debt without approval by another government.

5. component unit A component unit is a legally separate organization for which the elected officials of a primary government are financially accountable.

6. component unit Financial Accountability A primary government is financially accountable if: 1. The primary government appoints a voting majority of the organization's governing body; and 2. The primary government: • Is able to impose its will on that organization--The existence of any ONE of the following conditions clearly indicates the ability to impose its will: i. Ability to remove appointed board members; ii. Ability to modify or approve the budget; iii. Ability to modify or approve rate or fee charges; iv. Ability to veto, overrule, or modify board's decisions; v. Ability to appoint, hire, reassign, or dismiss management; or

7. component unit • There is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government--A financial benefit or burden relationship exists if any ONE of these conditions exist. The primary government: i. Is legally entitled to or can access the organizations resources; ii. Is legally obligated or has assumed the obligation to finance deficits or provide financial support to the organization; or iii. Is obligated in some manner for the debt of the organization.

8. component unit • Financial information of a component unit can be reported by: • Discrete presentation (i.e., in a separate column), or by • Blended presentation (combined in the same columns with financial information of the primary government) • Notes to financial statements should describe the reporting entity

9. other organizations For which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

10. Comprehensive Annual Financial Report (CAFR) • Introductory section • Financial section • Statistical section

11. Minimum Requirements for External Financial Reporting:The GASB’s View • Management’s Discussion & Analysis • Basic Financial Statements • Government-wide financial statements • Fund financial statements • Notes to the financial statements • Required supplementary information other than MD&A

12. CAFR - Introductory Section • Title page • Contents page • Letter of transmittal • Other (as desired by management)

13. CAFR - Financial Section (GASBS 34) • Auditor’s report • MD&A • Basic Financial Statements • Fund-based financial statements • Government-wide financial statements • Required Supplementary Information RSI (Other than MD&A) • Combining and individual fund statements and schedules

14. Management’s Discussion and Analysis (MD&A) • Brief discussion of financial statements • Condensed government-wide financial information • Analysis of position & results of operations • Analysis of individual funds • Budget analysis • Significant capital assets and LTL events • Description of currently known facts

15. Basic Financial Statements • Government-wide Financial Statements • Statement of Net Assets • Statement of Activities • Fund Financial Statements • Notes to the Financial Statements

16. Fund Financial Statements • Balance Sheet • Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds with reconciliation • Statement of Net Assets - Proprietary Funds • Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds • Statement of Cash Flows - Proprietary Funds • Statement of Fiduciary Net Assets • Statement of Changes in Fiduciary Net Assets

17. The Government Reporting Model

18. CAFR - Statistical Section Presents tables and charts showing social and economic data, financial trends and the fiscal capacity of the government in detail needed by readers who are more than casually interested in the activities of the governmental unit.

19. Governmental Funds — Required Financial Statements • Balance sheet—governmental funds • Statement of revenues, expenditures, and changes in fund balances—governmental funds • Reconciliation of total changes in fund balances of governmental funds to total changes in net assets of governmental activities at the government-wide level

20. Proprietary Funds Required Financial Statements Similar to those of for-profit entities • Statement of net assets • Statement of revenues, expenses, and changes in net assets • Statement of cash flows