1. Common Reporting Deficfencies

2. Improving Financial Reporting – Transmittal Letter  Hit all the required elements Profile of the Government Profile of the Government The economy and outlook - Get visual! The economy and outlook - Get visual! Major initiatives - Infrastructure, Health Care, Environment, Technology Major initiatives - Infrastructure, Health Care, Environment, Technology Awards & acknowledgements Awards & acknowledgements

3. Charts and Graphs  Average or Median Home Price  Population per Capita Income  Funded LT Liabilities – OPEB or Pension  Trends for Significant Revenues  Look to the Statistical Section

4. Improving Financial Reporting – Transmittal Letter  Involve others outside of Finance…  Budget Office  Economic Development  Provide helpful references for readers Adopted Budget, Capital Planning, etc… Adopted Budget, Capital Planning, etc…  Who reviews the Transmittal Letter?  Dated after audit opinion  On your letterhead

5. The MD&A  Quantify changes but don’t forget the why?  Create an analytical tool to assist with MD&A  Challenges with large $ amount & % change Where to start, how to hone in? Where to start, how to hone in?  Don’t wait until the end

6. GCG61 The MD&A  Budget Analysis For The General Fund Should Be Comprehensive Should Address Variances Between Both The Original And Final Amended BudgetShould Address Variances Between Both The Original And Final Amended Budget Final Amended Budget And Actual ResultsFinal Amended Budget And Actual Results

7. GCG71 The MD&A  Data for comparative basic financial statements should be complete –Complete means that each year must comply with the authoritative standards and essentially stand alone as a set of basic financial statements. –Include condensed financial data and comparative analysis for each of the last 3 years

8. GCG81 The MD&A  Data for comparative basic financial statements should be complete  Merely presenting the numbers does not satisfy this requirement. A narrative analysis of changes between both sets of years is also mandatory. Current year vs. previous year Previous year vs. two years prior

9. GCG91 The MD&A  Includes a Discussion Of Capital Assets And Long-term Debt Activity  Reference To Notes Does Not Replace Discussion  The purpose of the discussion is to recap specific capital asset and long-term debt activity that occurred during the year.

10. MD & A – Capital Activity  Don’t leave this out. Readers want to know! What was purchased during the year? What was purchased during the year? What’s been disposed of during the year? What’s been disposed of during the year?  Plans for the future? Capital budget plan?

11. GCG111 Capital Asset Narrative Example  The major capital events during the current fiscal year were additions to infrastructure of $9.9 million, remodeling costs to the County’s federally qualified health center for $1.1 million and the Public Health Facility for $2.6 million, and $0.7 million in renovation costs for the new Public Works Customer Service Center. Additional information on the County’s capital assets can be found in Note III.C. in the Notes to Basic Financial Statements section of this report.

12. GCG121 Long-term Debt Narrative Example  Bonded debt decreased overall by $5.7 million primarily due to ongoing debt service payments for the 1998 Wastewater System and the Authority’s 2002 Certificates of Participation. Additional information on long-term liabilities can be found on pages 70-76 in the notes to basic financial statements.

13. GCG131 G-W Statement of Net Position  Net pension/OPEB obligation are netted with pension/OPEB assets  Net pension/OPEB obligation not presented as long-term –Should be noncurrent in classified approach –Should be reported as “due in more than one year” under the relative order of liquidity  Debt not net of related premiums and discounts –Should be netted to present debt carrying value

14. GCG141 G-W Statement of Net Position  Miscalculation Of Net Investment In Capital Assets –Unspent Proceeds Should be Excluded –Significant Retainage Should be Included –Significant Accounts and Contracts Payable Should be Included –Bond Issuance Costs Should be Excluded

15. GCG151 G-W Statement of Net Position  Miscalculation Of Net Investment In Capital Assets –Accrued Liabilities Should be Excluded –Intangible Assets Should be Included –Refunding Bonds Should be Included When Refunded Debt Was Capital- related

16. GCG161 Restricted Net Position  Reasons for reporting a part of net position as restricted should be presented in detail  By major category –Significant amounts of net assets should not be subdivided into generic categories such as other purposes or special purposes. –Restricted for use by special revenue funds is too generic.  Display on the face of the statement of net position  Disclosure in the notes is not a substitute for display (see Q&A 7.22.8)

17. GCG171 G-W Statement of Activities  Recipients Of Shared Taxes Generally Report Them As Tax General Revenues in Error (i.e., cities receiving SPLOST from counties) –Not A Tax From Viewpoint Of Recipient –Should Be Classified As Program Revenue (If Restricted To A Function) Otherwise It Is General Revenue

18. GCG181 G-W Statement of Activities  Includes Special Items That Are Not Significant –Significance Of The Special Item Is Judged Based On Where It Is Reported (Q&A 7.67.2) –Item Can Be Significant In The Fund Financial Statements But Not The Government-wide (And Vice Versa)

19. GCG191 G-W Statement of Activities  Capital Outlay Presented As A Governmental Activities Functional Category –Detail Of Expenses Should Be By Function Not Character Classification

20. GCG201 G-W Statement of Activities  Intergovernmental Expenses Should Not Be Presented As A Separate Function  Expenses Should Be By Function Except For Extraordinary And Special Items

21. GCG211 G-W Statement of Activities  Significant “Other” Program Revenues Reported  If Other Has Become Significant, Consider a Breakout for Additional Revenue Line Items

22. GCG221 Fund Financial Statements - General  Funds That Meet The Threshold Of A Major Fund Are Reported As Nonmajor –Calculation To Determine Major Funds Must Be Performed Each Year –Classification Can Change From One Fiscal Year To The Next Without Any Consistency Concern

23. GCG231 Fund Financial Statements - General  Funds That Meet The Threshold Of A Major Fund Are Reported As Nonmajor –Threshold Applies To The Final Numbers Reported In The Fund Financial Statements

24. GCG241 Governmental Funds  Inflows and outflows related to current and advance refundings should be separately presented on the operating statement –Debt issuance should be an other financing source –Use of the proceeds for the refunding should be reported appropriately based on the type of refunding : Current refunding = expenditureCurrent refunding = expenditure Advance refunding = other financing useAdvance refunding = other financing use

25. GCG251 Governmental Funds  Report liabilities that are not due and payable as of the end of the fiscal year  Compensated absences (determination made based on whether the employee separated from service on or before fiscal year end)  Claims and judgments

26. GCG261 Governmental Funds  Other financing sources/uses reported for items not identified in GAAP. Other financing sources are:  The issuance of long-term debt  Bond premiums  Material sales of capital assets (unless they qualify as a special item)  Proceeds from insurance recoveries  Interfund transfers in

27. GCG271 Governmental Funds  Other financing uses are:  Original issue discounts on the issuance of debt,  The application of the proceeds of the refunding bonds to refund the existing debt  Interfund transfers out,

28. GCG The New Fund Balance  Special revenue funds –Should not have significant expenditures for capital outlays –Must be supported by specific revenues that comprise a substantial amount of the inflows into the fund.  Substantial ≠ majority

29. GCG291 The New Fund Balance  Restricted, committed, assigned, and unassigned –Negative restricted or committed fund balance is inappropriate –Only the General Fund can have positive unassigned fund balance –Assignment of fund balance only appropriate if there is available unassigned fund balance to assign

30. GCG301 The Reconcilations Reconciliations to government- wide financial statements have inadequate detailReconciliations to government- wide financial statements have inadequate detail Detail should be provided for combined or net reconciling itemsDetail should be provided for combined or net reconciling items If not displayed the detail should be in the notes to the financial statementsIf not displayed the detail should be in the notes to the financial statements

31. GCG311 Proprietary Funds  Reasons for reporting a part of net position as restricted should be presented in detail –By major category Significant amounts of net position should not be subdivided into generic categories such as other purposes or special purposes.Significant amounts of net position should not be subdivided into generic categories such as other purposes or special purposes.

32. GCG321 Proprietary Funds  Capital Contributions Should Be Consistently Reported Between The Proprietary Fund And Government-wide Financial Statements –No Difference In Measurement Focus Between These Statements So The Amounts Should Be Identical –“Negative capital contributions” should not be reported

33. GCG331 Proprietary Funds  Miscellaneous Or Other Cash Flows Are Included In An Inappropriate Category (E.G., Noncapital Financing)  If The Definition Of Any Of The Four Categories Is Not Met The Cash Flow Is Reported In Operating Activities As The Residual Category

34. GCG341 Transfer of Capital Assets  Governmental activities to Business-type Activities –Capital contribution reported  Business-type activities to Governmental Activities –Nonoperating expense reported (no longer considered an interfund activity)

35. GCG351 Fiduciary Funds  Pension plans and OPEB plans should be reported in one pension and other postemployment benefit trust “column” in the basic financial statements  The principal subdivisions of investments should be reported as separate line-items

36. GCG361 Note Disclosures  Generic Description Of The Criteria Used To Include Component Units –Criteria Needs To Be Specific To The Component Unit Whether It’s Blended Or Discretely Presented

37. GCG371 Note Disclosures  Relevant Investment Policies For Various Applicable Risks Are Not Disclosed (Credit Risk, Concentration Risk, Interest Rate Risk, Foreign Currency Risk)  Needs To Be An Adopted Policy Not A Description Of Practice  If No Such Policy, Disclose That Fact

38. GCG381 Note Disclosures  Changes In Long-term Liabilities Netted –Increases And Decreases Should Be Separately Displayed

39. GCG391 Note Disclosures  Long-term liabilities note disclosure –It is recommended that the purpose of each debt issuance be disclosed

40. GCG401 Note Disclosures  Long-term liabilities note disclosure  It is required that the notes disclose which funds liquidate each long-term liability other than debt compensated absencecompensated absence claims and judgmentsclaims and judgments termination benefitstermination benefits pension and OPEB liabilitiespension and OPEB liabilities

41. GCG411 Note Disclosures  Disclosures For Future Revenues Pledged To Support Debt Should Include:  Specific Revenue Source And Approximate Amount  Secured Debt And Its Purpose  Period Of Commitment  Proportion Of Revenue Stream Pledges  Comparison Of Pledged Revenue To Debt Service

42. GCG421 RSI  Budgetary Comparisons Should Note Go Beyond The Allowed Scope –May Only Include General Fund And Major Special Revenue Fund Budgetary Comparisons In RSI –May Not Include Other Governmental Fund Types Or Nonmajor Special Revenue Funds In A CAFR These Are Other Supplementary InformationIn A CAFR These Are Other Supplementary Information

43. GCG431 RSI  Budgetary Disclosures Must be Presented In The Appropriate Location –If Budgetary Comparisons Are RSI The Disclosures Are Notes To The RSI –However, Any Significant Violation Of Finance-related Legal Provisions Must Always Be Included Within The Notes To The Financial Statements

44. GCG441 RSI  Funding Progress Incomplete When A Separate Single-employer Or Agent Multiple-employer Postemployment Benefit Plan Report Is Not Issued  Employer Reporting The Pension Trust Fund Must Include Six Years Of Funding Progress Information

45. GCG451 Other SI  Necessary Budgetary Comparisons Missing For Nonmajor Special Revenue Funds, Debt Service Funds, Capital Projects Funds, And Permanent Funds  Pre-GASSB 34 Rule Still Applies. CAFR Must Have A Comparison For Any:  Governmental Fund –Appropriated/Legally Adopted –Annual/Biennial Operating Budget

46. GCG461 Other SI  Inadequate Detail For The Budgetary Comparisons  Must Be At The Legal Level Of Budgetary Control For Comparisons Only Shown In OSI (Nonmajor Special Revenue Funds, Debt Service Funds, Capital Projects Funds, And Permanent Funds)

47. GCG471 Other SI  General Fund And Major Special Revenue Funds Need Schedules In OSI If Comparisons Mandated For Basic Financial Statements Do Not Have Detail At The Legal Level Of Control

48. GCG481 Other SI  Negative amounts are being presented for all components in combining statements –A negative asset should be reported as a liability –A negative liability should be reported as an asset –A negative revenue is only appropriate for investment losses –A negative expenditure should be reported as a revenue 

49. GCG491 Other SI  Statement of changes in assets and liabilities for agency funds  Changes must be presented for each asset and liability line-item  Showing changes for assets and liabilities in the aggregate does not present a complete statement as required

50. GCG501 Statistical Section –Miscalculation Of Debt Service As A Percentage Of Noncapital Expenditures For Governmental Funds Debt Service = Principal + InterestDebt Service = Principal + Interest Should Not Include Issuance CostsShould Not Include Issuance Costs Noncapital = Total Expenditures - Expenditures That Are Capitalized For Government-wide Financial StatementsNoncapital = Total Expenditures - Expenditures That Are Capitalized For Government-wide Financial Statements –Calculated For Conversion From Modified Accrual To Accrual Basis

51. GCG511 Statistical Section  Incomplete Information Presented For: –Largest Own-source Revenue (E.G., Property Tax Or Sales Tax) –Information For Second Own-source Revenue That Is Electively Presented No Need For Property Tax Collections Unless It Is Largest Own-source Revenue Or Information Is Electively PresentedNo Need For Property Tax Collections Unless It Is Largest Own-source Revenue Or Information Is Electively Presented  All Applicable Tables Must Be Included For Each Revenue Source That Is Presented

52. GCG521 Statistical Section When Applicable, Both Per Capita Debt Ratios Are Not PresentedWhen Applicable, Both Per Capita Debt Ratios Are Not Presented Total Outstanding DebtTotal Outstanding Debt All Types Of DebtAll Types Of Debt Both Governmental And Business-type ActivitiesBoth Governmental And Business-type Activities Total General Bonded DebtTotal General Bonded Debt

53. GCG531 Statistical Section  Overlapping deb t –Should not include business-type activities. –A subtotal should be presented for the portion of the debt that is overlapping –Include a footnote explaining what “overlapping” means

54. GCG541 Statistical Section  Narratives Missing: –Description Of The Five Objectives –Explanation Of Why 10 Years Of Data Was Not Included –Atypical Trends And Anomalous Data GASB Statement No. 44 Identifies Four Types Of Narrative Explanations That Should Be IncludedGASB Statement No. 44 Identifies Four Types Of Narrative Explanations That Should Be Included

55. GCG551 Articulation of Data  MD&A to basic financial statements  Operating statements to balance sheet  Fund financial statement reconciliations to government-wide financial statement  Statistical section to basic financial statements

56. We Are Finally Finished Any Questions pglick@mindspring.com