Bureau of Accounts Gerard D. Perry Director of Accounts Anthony Rassias Deputy Director of Accounts (BOA)

Training Objectives To better understand the responsibilities of the Bureau of Accounts To learn the basics of setting a tax rate To better understand free cash and the purpose of the Schedule A

Five Major Functions  Approve tax rates Approve tax rates  Certify free cash  Review Schedule A  Oversee debt issues  Review and approve independent CPA audits

Field Staff BOA field staff are responsible for assisting municipal financial officers with state regulations and requirements,approval of tax rates, and certification of free cash Each community is assigned a BOA field representative They also provide instruction in sound municipalmunicipal accounting practices

Tax Rate Approval The tax rate, when applied to the assessed value of the taxpayer’s real and personal property, provides the single largest source of local revenue (for most communities) Tax Rate= Tax Levy ___________ Assessed Value X1,000 However, communities are limited by the constraints of Proposition 2 1/2 in the amount they can levy in property taxesProposition 2 1/2 `

Tax Rate Approval BOA annually reviews all tax rate recapitulation (“recap”) submissions and approves the tax rate provided that the community-- has a balanced budget is under the levy limit and

Tax Rate Approval Communities that issue semi-annual tax bills must submit their tax recap to BOA by September 1 Quarterly communities must submit the recap by December 1

Single v. Split Tax Rates Single tax rate-everyone in the community pays the same rate on their assessed property Split tax rate-different tax rates apply depending on whether the property is classified as residential or commercial, industrial or personal Tax Rate Approval Example:$15/$1,000 Example: $15/$1,000$23/$1,000

Review Click here for answer Communities are limited by the constraints of ? in the amount they can levy in property taxes. Proposition 2 1/2 Click here for answer True or False? In communities that have a split tax rate, everyone pays the same rate on their assessed property. False

Free Cash Certification Free cashFree cash is the amount of unrestricted funds available from operations that can be used as a funding source for appropriation after certification by the Director of Accounts Free cash is generated when actual revenue collections exceed the estimates used for budgeting and when actual expenditures and encumbrances are less than appropriations

Free Cash Certification The basic free cash formula is:  undesignated fund balance  less accounts receivable, deficits not authorized by law  plus deferred revenue  equals free cash

Free Cash Certification The Director of Accounts certifies free cash based on the community’s balance sheet for the fiscal year ended June 30 The balance sheet consists of assets, liabilities and fund balances It is prepared by the town accountant or city auditor with a target date for submission of September 15

Review Process Deficits created by overdrawn accounts (excluding legal deficits) and illegal appropriations are then subtracted Cash and receivables must be reconciled Requires a combined balance sheet as of June 30 for all funds Free Cash Certification

Free cash certification requires the reconciliation of ? and ?. The target date for submission of the balance sheet is ? Review Click here for answer cash and receivables September 15

Audit Reviews BOA field representatives review the independent CPA audit reports and accompanying management letters for their communities The audits are used to tie to other BOA submissions made by the community to ensure consistent and factual recording of data

Audit Reviews BOA reviews management letters to assess whether further assistance may be required by the community to resolve a potential or existing problem

Schedule A Schedule A is a statement of revenues, expenditures and other financing sources, uses, changes in fund balances and certain balance sheet account information prepared annually by the accountant or auditor at the end of the year

Schedule A The BOA seeks to reconcile any year to year material variances in cash, fund balance, or other accounts reported on Schedule A BOA also reconciles year end cash and fund balance amounts from the Schedule A to the balance sheet amounts

The Schedule A is prepared ? by the accountant or auditor. BOA reviews ? to determine whether further assistance is needed to help a community resolve potential or existing problems. Review Click here for answer annually management letters

Debt Section BOA’s debt section works with municipal treasurers and financial advisors on borrowing issues including State House notes, short term debtState House notes and bonds MENU