99
LEARNING OBJECTIVES
1. Identify the BASIC FINANCIAL STATEMENTS.
2. Understand the format/content of GOVERNMENT-WIDEfinancial statements and FUND FINANCIAL STATEMENTS.
3. Understand the concept/content of REQUIRED SUPPLEMENTARYINFORMATION (RSI).
4. Identify a government’s MAJOR FUNDS.
5. Distinguish PROGRAM REVENUES from GENERAL REVENUES.
6. Understand required information components of MANAGEMENT’SDISCUSSION and ANALYSIS (MD&A).
7. Understand the types of notes to the financial statements required forgovernments.
NOT REQUIRED: Principle 13 suggests it “shouldbe prepared..”
SECTIONS OF THE CAFR:
1. Introductory Section.
2. Financial Section.
- Independent Auditor’s Report.- Management Discussion & Analysis (MD&A)
-BASIC FINANCIAL STATEMENTS (BFS)
- REQUIRED SUPPLMENTARY INFORMATION (RSI other than MDA).
-SUPPLMENTARY INFORMATION.
3. Statistical Section.
SECTIONS OF THE CAFR:
1. Introductory Section.
2. Financial Section.
- Independent Auditor’s Report.- Management Discussion & Analysis (MD&A)
-BASIC FINANCIAL STATEMENTS (BFS)
- REQUIRED SUPPLMENTARY INFORMATION (RSI other than MDA).
-SUPPLMENTARY INFORMATION.
3. Statistical Section.
SECTIONS OF THE CAFR:
1. Introductory Section.
2. Financial Section.
-BASIC FINANCIAL STATEMENTS (BFS)
- REQUIRED SUPPLMENTARY INFORMATION (RSI other than MDA).
-SUPPLMENTARY INFORMATION.
3. Statistical Section.
- Independent Auditor’s Report.- Management Discussion & Analysis (MD&A)
Management’s Discussion and Analysis (MD&A).
SECTIONS OF THE CAFR:
1. Introductory Section.
2. Financial Section.
- Independent Auditor’s Report.- Management Discussion & Analysis (MD&A)
-BASIC FINANCIAL STATEMENTS (BFS)
- REQUIRED SUPPLMENTARY INFORMATION (RSI other than MDA).
-SUPPLMENTARY INFORMATION.
3. Statistical Section.
GOVERNMENT-WIDE
-Statement of Net Assets (Balance Sheet)-Statement of Activities (Income Statement)
GOVERNMENT FUND FINANCIAL STATEMENTS
-Balance Sheet-Reconciliation of the B/S Governmental Funds to Statement of Net
Assets-Statement of Revenues, Expenditures and Changes in Fund Balance (Lunch)-Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds to Statement of Activities.
PROPRIETARY FUND FINANCIAL STATEMENTS
-Statement of Net Assets (Balance Sheet)-Statement of Revenues, Expenses and Changes in Fund Net Assets- Statement of Cash Flows
FIDUCIARY FUND FINANCIAL STATEMENTS
- Statement of Net Assets- Statement of Activities
COMPONENT UNIT FINANCIAL STATEMENTS
-Statement of Net Assets (Balance Sheet)-Statement of Activities (Income Statement)
NOTES TO FINANCIAL STATEMENTS
GOVERNMENT-WIDE
-Statement of Net Assets (Balance Sheet)-Statement of Activities (Income Statement)
GOVERNMENT FUND FINANCIAL STATEMENTS
-Balance Sheet-Reconciliation of the B/S Governmental Funds to Statement of Net
Assets-Statement of Revenues, Expenditures and Changes in Fund Balance (Lunch)-Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds to Statement of Activities.
PROPRIETARY FUND FINANCIAL STATEMENTS
-Statement of Net Assets (Balance Sheet)-Statement of Revenues, Expenses and Changes in Fund Net Assets- Statement of Cash Flows
FIDUCIARY FUND FINANCIAL STATEMENTS
- Statement of Net Assets- Statement of Activities
Primary government vs. Component Units
Iowa’s Component Units:
Financing the Capital Needs of Iowa's Private Colleges & Universities
Primary government isGOVERNMENTAL VS BUSINESS TYPE activities
FIDUCIARY FUNDS are NOT INCLUDED in Govt Wide
Net Assets are setup like Enterprise Funds:
Invested in Capital Assetsnet of relateddebt
+Restricted
+
Unrestricted
Governmental Activities column is the sum ofal the governmental funds (after adjusted frommodified accrual to full accrual).
Business-type activities column is the sum ofall enterprise funds. Internal service funds are blended with either governmental activities orbusiness-type depending upon who uses themmore. Very little adjustments since they all fullaccrual.
ELIMINATIONS!
INTERFUND PAYABLES AND RECEIVABLES BETWEENGOVERNMENTAL FUNDS HAVE BEEN ELIMINATED.
LIKEWISE, INTERFUND PAYABLES AND RECEIVABLESBETWEEN ENTERPRISE FUNDS HAVE BEEN ELIMINATED.
INTERFUND PAYABLES AND RECEIVABLES BETWEENGOVERNMENTAL FUNDS AND ENTERPRISE FUNDS STILL REMAIN.
internal balances
INTERNAL BALANCES IN ASSETS
Governmental Activitieshas a receivablecoming from Business-Type activities.
Costs of providing services are provided by FUNCTION.
Revenues are presented as PROGRAM REVENUESvs. GENERAL REVENUES
There are (3) kinds of PROGRAM REVENUE:
Expenses are listed first and are NEGATIVE.
Revenues are listed next and are POSITIVE.
The right side of the Statement Activities totals outProgram Revenues – Expenses for Governmental vsBusiness Type activities.
Then all revenues that aren’t program revenues arelisted as GENERAL REVENUES down on the lowerleft side.
They are totaled out on the right side of the statement.
GOVERNMENT-WIDE
-Statement of Net Assets (Balance Sheet)-Statement of Activities (Income Statement)
GOVERNMENT FUND FINANCIAL STATEMENTS
-Balance Sheet-Reconciliation of the B/S Governmental Funds to Statement of Net
Assets-Statement of Revenues, Expenditures and Changes in Fund Balance (Lunch)-Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds to Statement of Activities.
PROPRIETARY FUND FINANCIAL STATEMENTS
-Statement of Net Assets (Balance Sheet)-Statement of Revenues, Expenses and Changes in Fund Net Assets- Statement of Cash Flows
FIDUCIARY FUND FINANCIAL STATEMENTS
- Statement of Net Assets- Statement of Activities
All the governmental funds are presented by MAJORFUNDS which include:
1. GENERAL FUND (always only 1)
2. Any number of other major fundsor non-major funds.
Iowa has:* Special Revenue Funds* Capital Projects Funds* Permanent Funds
Column for EACH OTHERMAJOR FUND (Iowa doesn’thave any)
How to decide what is a major fund?
If you pass this test, then the fund MUST be shown asa major fund (not an option then).
Quantitative MAJOR FUND CRITERIA are:
a. Total assets, liabilities, revenues, or expenditures/ expenses (excluding extraordinary items) of that
individual gov fund (or Enterprise Fund) are atleast 10% of the corresponding total for all fundsof that category or type.
b. The same element that met the 10% criterion in(a) is at least 5% of the corresponding elementtotal for all governmental funds and enterprisefunds combined.
adds back the value of capitalassets – accumulated depreciation.
adds in the value of internal service fundassets because they need to be allocatedto governmental activities and businessactivities in the GOVT WIDE. Here they seem to be going all into GovernmentalActivities.
adds back the value of revenues that were not countedin fund accounting (because they weren’t available)but can be accrued for GOVT WIDE.
and other necessary adjustments are doneto turn these financials from modified tofull accrual.
This equals the total net assetsfor governmental activities inthe GOVT-WIDE balancesheet.
Presented in same format as lunch statement that we are used to.
Adds back the excess of capital outlay costs(which were treated as expenditures) as comparedto the depreciation expense which would be the netcharge on the lunch statement.
Adjusts for the difference between the gain amounton the sale of capital assets (which should be shown)and the total Other Financing Source that was claimedin fund accounting.
Removes the Other Financing Source that was createdwhen Capital Leases and other financing arrangementswere created and does not count such as revenue inGOVT WIDE.
And all other necessary adjustments to turnthis from modified accrual to full acrrual.
This matches the changes in net assetsfrom governmental activities on theGOVERNMENT-WIDE STATEMENT OFACTIVITIES.
GOVERNMENT-WIDE
-Statement of Net Assets (Balance Sheet)-Statement of Activities (Income Statement)
GOVERNMENT FUND FINANCIAL STATEMENTS
-Balance Sheet-Reconciliation of the B/S Governmental Funds to Statement of Net
Assets-Statement of Revenues, Expenditures and Changes in Fund Balance (Lunch)-Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds to Statement of Activities.
PROPRIETARY FUND FINANCIAL STATEMENTS
-Statement of Net Assets (Balance Sheet)-Statement of Revenues, Expenses and Changes in Fund Net Assets- Statement of Cash Flows
FIDUCIARY FUND FINANCIAL STATEMENTS
- Statement of Net Assets- Statement of Activities
Business type activities are broken down into* University funds* Unemployment benefits* Non-major enterprise funds
And thenInternal service.
1. MAJOR FUND reporting is used for Enterprisefunds but not for Internal Service Funds.
Total is the amount shown for BusinessType activities in GOVERNMENT WIDEbalance sheet
Appears in its familiar format
Total change is same as amount forBusiness-Type activities in GOVERNMENTWIDE.
same setup learned for cash flowswhen studying enterprise funds.
GOVERNMENT-WIDE
-Statement of Net Assets (Balance Sheet)-Statement of Activities (Income Statement)
GOVERNMENT FUND FINANCIAL STATEMENTS
-Balance Sheet-Reconciliation of the B/S Governmental Funds to Statement of Net
Assets-Statement of Revenues, Expenditures and Changes in Fund Balance (Lunch)-Reconciliation of Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds to Statement of Activities.
PROPRIETARY FUND FINANCIAL STATEMENTS
-Statement of Net Assets (Balance Sheet)-Statement of Revenues, Expenses and Changes in Fund Net Assets- Statement of Cash Flows
FIDUCIARY FUND FINANCIAL STATEMENTS
- Statement of Net Assets- Statement of Activities
No changesin Agency Fund
It doesn’t haveNet Assets
COMPONENT UNIT FINANCIAL STATEMENTS
-Statement of Net Assets (Balance Sheet)-Statement of Activities (Income Statement)
NOTES TO FINANCIAL STATEMENTS
$991,878,000$623,476,000 $88,831,000
The Net Assetbalances of thethree state universities
Change in NAof (3) state schools
$8,902,600 $8,686,500 $421,400
COMPONENT UNIT FINANCIAL STATEMENTS
-Statement of Net Assets (Balance Sheet)-Statement of Activities (Income Statement)
NOTES TO FINANCIAL STATEMENTS
-notes should be presented that areessential to fair presentation of theBasic Financial Statements.
Finally the BudgetaryComparison Statement!!!
CAFR alsoincludes a BudgetaryComparisonReconcilliation-Budget to GAAP
RSI FOOTNOTES
are presented next in the CAFR
CAFR also presents a combininglunch statement.
CAFR presentsa series ofCombiningStatements.
CAFR presentsa series ofCombiningStatements.
CAFR presentsa series ofCombiningStatements.
CAFR presentsa series ofCombiningStatements.
CAFR presentsa series ofCombiningStatements.
Other Pension, Private Purpose Trust Fund and Agency Fund combining statements are offered.
NET ASSET BY COMPONENTCHANGES IN NET ASSETS
FUND BALANCE OF GOVERNMENTAL FUNDS
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Tax revenue by source-
Govt’l funds
Individual income tax returns filed and tax rates
Retail sales by business classification
Ratios of outstanding debt bytype
Reve
nue
bon
d cove
rage
