GASB 44—The Statistical Section

The Bottom Line Some new schedules added, other schedules are expanded, some schedules eliminated Total number of schedules presented will generally grow by 2 or 3 Status of statistical section has not changed –S–Still a required part of a CAFR, but CAFR remains optional New standards apply to any statistical section presented with the basic financial statements, even if not in a CAFR

Effective Date &Transition Provisions Effective for periods beginning after June 15, 2005 Retroactive reporting encouraged, but not required Retroactive reporting of new government- wide information back to year of Statement 34 implementation encouraged, but not required Revision of prior information changed by the Statement is encouraged, but not required –Should at least identify change

Reasons for the New Standards Prior standards in place for nearly 25 years NCGA 1 provided no detail Standards were geared toward general purpose local governments Standards did not include Statement 34 Merged with separate project on Economic Condition Reporting

Five Categories of Statistical Section Information Financial trends Revenue capacity Debt capacity Demographic and economic Operating

Financial Trends Objectives: to assist users in understanding and assessing how a government’s financial position has changed over time

Financial Trends Four types of information: –Net assets (new) –Changes in net assets (new) –Fund balances (previously optional, now required)—for general fund and all other governmental funds in the aggregate –Changes in fund balances (combined and expanded)—for all governmental funds, not just general fund

Revenue Capacity Objectives: to assist users in understanding and assessing the factors affecting a government’s ability to generate its own-source revenues

Revenue Capacity Four types of information: –Revenue base –Direct and overlapping rates –Principal payers (comparison year added) –Levies and collections (standardized) —if a government presents information about a property tax

Objectives: to assist users in understanding and assessing a government’s debt burden and its ability to issue additional debt Debt Capacity

Five types of information: –Ratios of total outstanding debt (new) –Ratios of general debt outstanding (all debt backed by general revenue) –Overlapping debt –Debt limits (trends added for key information) –Pledged-revenue coverage (all debt backed by pledged revenue)

Objectives: (1) to assist users in understanding the socioeconomic environment within which a government operates and (2) to provide information that facilitates comparisons of financial statement information over time and among governments Demographic and Economic

Two types of information: –Demographic and economic indicators –Principal employers (now required and adds comparison year)

Objectives: to provide contextual information about a government’s operations and resources to assist readers in using financial statement information to understand and assess a government’s economic condition Operating

Information from miscellaneous statistics schedule, but organized and expanded Three types of information: –Government employees –Operating indicators—demand or level of service –Capital asset indicators—volume, usage or nature

Eliminated Schedules Debt service ratios –Valuable information included in schedule of changes in fund balances Special assessment collections –Report as part of pledged-revenue coverage Property value, construction and bank deposits Surety bonds, insurance in force, salaries of officials

Additional Information You can provide additional information in the statistical section if it meets the objectives of one of the five categories of information

Sources, Assumptions and Methodologies If it doesn’t come from another part of the financial report (statements, notes, RSI), then source it Explain any assumptions you make or methodologies you employ to produce information

Narrative Explanations Schedules are more understandable and useful when accompanied by explanations Use professional judgment to determine if narrative explanations are needed Generally four types: –Objectives of information and schedules –Unfamiliar concepts –Relations among schedules and with other parts of CAFR –Atypical trends and anomalous data

Implementation Guidance Q&A guide planned for late 2005 Will include illustrations of complete statistical sections for: –Local government –County government –State government –School district –Airport –College/university –Utility