Governmental Financial Reporting The Reporting Entity

1
Governmental Financial ReportingThe Reporting
Entity

• Chapter 5 Part 2

2
The Financial Reporting Model

• 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

3
The Financial Reporting Model

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

4
Managements Discussion Analysis

• What MDA IS
• Managements responsibility
• Discussion of basic financial statements
• Condensed financial information
• Analysis of SIGNIFICANT changes
• Financial position results of operations
• Individual fund balances transactions
• Capital assets LTD

5
Managements Discussion Analysis

• What MDA IS
• Budget analysis of significant variances
• Modified approach
• Expectations
• Currently known facts circumstances
• Impact on future

6
Managements Discussion Analysis

• What MDA IS NOT
• Focused on single year
• GWS comparative data permitted
• MDA comparative data required
• Condensed financial information
• Place to put just about anything
• Boilerplate discussion technical jargon

7
Basic Financial Statements

• Government-wide financial statements
• Fund financial statements
• Notes to the financial statements

8
Basic Financial Statements

• Government-wide financial statements
• Statement of Net Assets page 150
• Statement of Activities page 152
• Fund financial statements
• Governmental page 133 135
• Proprietary page 142, 144, 145
• Notes to the financial statements

9
Comprehensive Annual Financial Report (CAFR)

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

10
CAFR Introductory Section

• Table of contents
• Letter of transmittal
• Other material deemed appropriate by management

11
CAFR Financial Section

• Auditors report
• Required by GAAP
• MDA
• Basic Financial Statements (BFS)
• Required Supplementary Information (RSI) other
  than MDA
• Budgetary comparison schedule
• Combining individual fund financial statements
• Primary government component units

12
CAFR Statistical Section

• Required by GAAP if prepared
• Financial trends information
• Revenue capacity information
• Debt capacity information
• Demographic and economic information
• Operating information

13
GFOA CAFR Award Program

• Established Certificate of Achievement for
  Excellence in Financial Reporting Program in 1945
• Encourage assist governments to go beyond
  minimum GAAP requirements
• Spirit of transparency full disclosure

14
GFOA CAFR Award Program

• Reports submitted are reviewed by
• Selected members of GFOA professional staff
• GFOA Special Review Committee (SRC)
• Individuals with expertise in public-sector
  financial reporting
• Includes FS preparers, independent auditors,
  academics, other finance professionals

15
Class Exercises Part 2

• Chapter Exercise 5-5 page 178
• NOTE These are not part of your required
  assignment for this chapter. They simply
  represent things we will discuss in class for
  this part of Chapter 5.