Governmental Financial Reporting The Reporting Entity

1
Governmental Financial ReportingThe Reporting
Entity

• Chapter 5 Part 4
• Government-wide Statements, RSI Notes

2
Review of the Financial Reporting Model Fund
Financial Statements

• Chapter 5 Part 2 3

3
The Financial Reporting Model

• Financial reporting model defines contents of
  external financial reports
• June 1999 GASB No. 34
• Current reporting model based on
• Accountability
• Fiscal
• Complied with revenue expenditure decisions of
  public
• Operational
• How efficiently business-type activities met
  operating objectives
• Information useful for decision making

4
The Financial Reporting Model

• Minimum reporting requirements for external
  general purpose FS
• Managements Discussion Analysis (MDA)
• Classified as Required Supplementary Information
• Basic Financial Statements (BFS)
• Covered by audit opinion
• Required Supplementary Information (RSI)
• Other than MDA

5
Basic Financial Statements

• Government-wide financial statements
• Statement of Net Assets
• Statement of Activities
• Fund financial statements
• Notes to the financial statements

6
Comprehensive Annual Financial Report (CAFR)

• Goes beyond GASB requirements for general purpose
  external reporting
• Include non-GAAP information GAAP based
  information

7
Fund Level Financial Statements

• Short-term focus - financial accountability
• Reported based on type of fund
• Governmental funds - modified accrual
• Proprietary funds - essentially same as
  for-profit entities
• Information on fund level financial statements
  must be reconciled to information reported in GWS

8
Fund Level Financial Statements

• Present all categories of funds
• Governmental
• Proprietary
• Fiduciary

9
Fund Level Financial Statements

• Presented for major funds nonmajor funds in the
  aggregate
• Page 131
• Two governmental fund financial statements
• Three proprietary fund financial statements
• Two fiduciary fund financial statements

10
Major Funds

• General
• Always general fund
• May designate additional funds as major
• ISF never major fund
• A two step process
• 10 test
• Item for fund type
• 5 test
• Same item for all fund types

11
Government-wide StatementsRequired Supplementary
InformationFootnotes

• Chapter 5 Part 4

12
Government-wide Statements

• Statement of net assets page 150
• Columnar approach
• Net assets
• Invested in capital assets net of related debt
• Restricted
• Legal
• Contractual/external
• Unrestricted

13
Government-wide Statements

• Statement of activities page 152
• Expenses by function
• Allocation of direct expenses required
• Includes depreciation
• Interest on LTD MAY be allocated
• Revenues by category dictated by revenue source
• General
• Taxes even if restricted to specific program
• Income from government itself
• Program
• Charges for services
• Not from citizens may be general if not program
  restricted
• Program-specific operating capital grants

14
Government-wide Statements

• Statement of activities page 152
• Revenues by category
• General
• Program
• Charges for services
• Program-specific operating capital grants
• Source of revenue dictates category

15
Required Supplementary Information

• MDA
• Budgetary information page 154
• Option to include as part of BFS
• Minimum reporting
• Original final budget
• Actual on budgetary basis
• Funds
• General fund
• Major special revenue funds with legally adopted
  budget
• Modified approach to infrastructure
• Assessed condition
• Cost to maintain at adopted condition levels

16
Footnotes to Required Financial Statements

• Summary of significant accounting policies
• Cash cash equivalents
• Investments
• Policies (capitalization, operations, etc.)
• Capital assets (balances changes therein)
• Long term debt (balances changes therein)
• Interfund transactions balances
• Pensions OPEB
• Subsequent events

17
Required Exercises Chapter 5

• Problems pages 180 181
• 5-4 5-8 5-11
• 5-5 5-9
• NOTE These ARE part of your required assignment
  for this chapter. Please have them ready to hand
  in at the beginning of the designated class.