PASBO 48th Annual Conference

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PASBO 48th Annual Conference
GASB Statement No. 34 Crosswalk Follow the
Yellow Brick Road

• Linda S. Himeback, CPA
• Herbein Company, Inc.
• Jaclin B. Horrocks, CPA, PRSBO
• Owen J. Roberts School District

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Effective Dates

• Periods beginning after
• June 15, 2001 for governments with revenues of
  100 million or more (Phase 1)
• June 15, 2002 for governments with revenues of
  10 million or more but less than 100 million
  (Phase II)
• June 15, 2003 for governments with revenues of
  less than 10 million (Phase III)
• Early application is encouraged

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Financial Statement Format

• Managements Discussion and Analysis
• Government-Wide Financial Statements
• Fund Financial Statements
• Notes to the Financial Statements
• Required Supplementary Information
• (Other than MDA)

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OWEN J. ROBERTS SCHOOL DISTRICTBALANCE
SHEETGOVERNMENTAL FUNDSAS OF JUNE 30, 2002
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OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCESGOVERNMENTAL FUNDSFOR THE YEAR ENDED
JUNE 30, 2002
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OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF NET
ASSETSAS OF JUNE 30, 2002
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OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF
ACTIVITIESFOR THE YEAR ENDED JUNE 30, 2002
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OWEN J. ROBERTS SCHOOL DISTRICTRECONCILIATION OF
THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETSAS OF JUNE 30, 2002
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OWEN J. ROBERTS SCHOOL DISTRICTRECONCILIATION OF
THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCE TO THE
STATEMENT OF ACTIVITIESFOR THE YEAR ENDED JUNE
30, 2002
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• Audit Issues
• Classification of funds
• New definition of traditional funds
• Implications of placement of funds in reporting
• Impact on reconciliation between major funds and
  government wide presentation
• Materiality
• Current practice by fund type
• Possible approaches
• Government wide total
• Categories
• Individual columns

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• Audit Issues
• Capital assets
• Historical costs
• Interest and ancillary costs
• Donated capital assets
• Difference between
• Capital assets
• Infrastructure
• Historical treasurers

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• Audit Issues
• Infrastructure
• Population identified
• Estimated historical cost versus actual
  historical cost
• If transitioning infrastructure, identify those
  assets related and those not
• Which assets reported under modified approach
• Use of specialists

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• Audit Issues
• Increased use of estimates
• Receivables
• Compensated absences
• Claims and judgments
• Allocation of internal service fund assets
• Depreciation
• Allocation of indirect costs

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• Audit Issues
• Required supplementary information
• Responsibility
• Managements discussion and analysis
• Modified infrastructure approach
• SAS No. 52 requirements
• Essential part of financial reporting
• Applied limited audit procedures
• Report deficiencies and omissions

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• Audit Issues
• Required supplementary information
• Auditor Procedures
• Inquiries as to preparation methods
• Compare information with audited financials
• Consider appropriate management representations
• Consider other procedures based on type of
  information

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• Management Discussion and Analysis
• Should be objective and easily readable analysis
  of a governments financial activities
• Based on currently known facts, decisions or
  conditions
• Short-term and long term analysis
• Compares current year results with those of the
  prior year, with emphasis on the current year
• Discusses positive and negative aspects of the
  comparision
• Use of charts, graphs and tables is encouraged
• Focus is primary government
• Discussion is CONFINED to specific topics
  required by GASB 34, however, additional details
  about required topics can be provided
• Should not be boilerplate

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• Required Topics
• Discussion of the Basis Financial Statements
• Should explain purpose of the Fund Financial
  Statements (FFS) and the Government Wide
  Financial Statements (GWFS)
• Should include how FFS and GWFS relate to each
  other and the significant differences in the
  information they provide
• Should help reader understand why measurements
  and results reports in FFS either reinforce
  information in GWFS or provide additional
  information

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• Comparison of Current Year to Prior Year
• From GWFS
• At minimum, information needed to support
  analysis of financial position and results of
  operations
• Total assets, distinguished between capital and
  other
• Total liabilities, distinguished between
  long-term and other
• Total net assets
• Invested in capital assets, net of related debt
• Restricted amounts
• Unrestricted amounts

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• Program revenues by major source
• General revenues by major source
• Total revenues
• Program expenses, at a minimum by function
• Total Expenses
• Excess (deficiency) before contributions to term
  and permanent endowments or permanent fund
  principal, special and extraordinary items, and
  transfers
• Contributions
• Special and extraordinary items
• Transfers
• Change in net assets
• Ending net assets

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• Analysis of Financial Position and Results of
  Operations
• Should address government and business-type
  activities
• Should include reasons for changes, not just
  amounts of percentages
• Should address economic factors, such as changes
  in tax or employment bases, that affected
  operating results
• Should use items from comparison of CY to PY
• Should be information that is CURRENTLY known

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• Analysis of Individual Funds
• Reasons for Changes in fund balances or net
  assets
• Financial major revenue adjustments and program
  expenditure adjustment
• Non-financial board/district philosophy of
  legislative changes
• Reconciliation between fund balance and net
  assets
• Limitations on availability of resources for use

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• Analysis of General Fund Budget/Actual
• Between original budget and final budget amounts
• Between final budget and actual results
• Reasons presented here for the information
  included on budgetary comparison schedules in RSI
  or basic financials
• Practice/requirement to amend the original budget
  should be disclosed
• Clear and understandable to reader

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• Description of Capital Asset and Long Term Debt
  Activity
• Commitments made for capital expenditures
• Changes in credit rating
• Debt limitations
• Should summarize footnotes and give additoinal
  information that explains difference between
  years

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• Discussion of modified approach for
  infrastructure assets, if applicable
• Discussion of significant effect of currently
  known facts, decision or conditions
• Statement that comparative analysis will be
  provided in future years, if comparative analysis
  is not included in the year of implementation
• Analysis needed for objective and easily readable
  presentation
• Reference to separately issued component unit
  financial statements, if applicable