GASB Financial Statements
What GASB Standard are governmental financial statements built on? Hint - You should hear this alot in Governmental Financial Statement trainings!
GASB 34
Why the $^#& do they call a Government Audit "Yellow Book"?
Back in the day (yes, BEFORE me Amy!), there was a physical "rule book" of standards and guidance for auditors and audit organizations containing the rules to audit governmental entities...the rule book was yellow!!
One side is to present operational accountability - has the entity met its operating objectives and can it continue to do so into future. Other side is to demonstrate fiscal accountability - to justify actions during current period were appropriate. Which side is for fiscal accountability?
Fund side - it is not "accrual", so there are no capitalized assets with depreciation, no debts - only payments for debt in CY and payments for fixed assets in CY, as example.
Are there any special CPE requirements to be a YB auditor?
Yup - Must have 24 hours every 2 years. If you are nonsupervisory and only work less than 40 hours a year on YB engagements, that can be waived.
This type of fund generally holds resources as a trustee or agent.
A fiduciary fund.
What are the two "sets" of financial statements under GASB 34 for Govenerment Entities commonly referred to as?
Government-wide and Fund financials.
Local School accountant says, "So we spent like $20,000 more on textbooks than we budgeted for - big deal!" Why is that a big deal??
School budgets are LEGAL Documents - spending more than allowed is a legal compliance issue!
What is the difference between the two sides of how equity is reported?
Gov't wide is as Net Position.
Fund side is as Fund Balance - you see "fund" way more, so that is a clue to help you know what side you're looking at!
How is the calculation of materiality different in a YB audit than a For-Profit (a typical For-Profit for us)?
For-profit typically has one reporting unit, so one materiality calc. In YB, all major funds and then Gov't wide have their own calcs. Could be SEVERAL!
This type of fund is primarily supported by taxes and grants.
Governmental fund
What "set" of Governmental Financial Statements would include Capital Assets, Long-term Debt, and Deferred Inflows / Outflows, among other items?
Government wide
Can you name 5 examples of government entities (types, not our specific clients)?
Schools, Universities, Townships, Cities, Water / Sewer Authorities, Transportation Authorities, Public Hospitals, MORE!
Which side excludes the reporting of Fiduciary funds? Or is this a trick and they both do!?
"Funds" - Fiduciary is not reported on gov't wide because the resources aren't available to fund the government's programs/activities.
For-Profit audit client maybe has 5 new accounts a year for us to group - same for governmental clients? Why/Why not?
Bal Sht accounts typically the same ... but revenue / expense accounts change every year...could be 100s or 1000s of accounts to group!
This type of fund is primarily supported by charges for services and fees.
Proprietary Fund
What is a piece of required supplemental info the generally follows the Auditor's report, but precedes the standard financial statements?
Managements Discussion & Analysis (MD&A)
Do all government / YB financials require a Statement of Cash Flows?
Nope!!! Not unless they have a Proprietary / Enterprise fund!
Fund side = receivable and deferred rev.
Gov't wide = receivable / revenue.
60 day rule is the 'general' rule here...but its more of a guideline than a rule. Discuss with AA (judgement call!)
What do gov't entities call a consumption of net assets by the entity that is applicable to a future reporting period?
A deferred outflow.
Inflow is an acquisition of net asset applicable to a future period.
This type of fund is typically set up when a large building is to be constructed.
Capital Projects
What type of governmental fund is "full accrual" - similar to for-profit financial statements we prepare?
Proprietary / Enterprise Fund
What is the main difference between an Enterprise Fund and an Internal Service Fund?
Enterprise's customers are external, while Internal's are internal (other funds) !
For most of our government entities, which side looks better, and why?
Most is Fund ... it has no liabilities so usually shows positive fund balance. Net position typically way negative due to pension/OPEB or debt !
What procedure(s) do we use in gov't audits to tie out the vast majority of revenues?
Taxes - tie to public info / tax rolls posted on third party sites.
State Aid - Tie to State reported info provided.
Grant Auditors Reports - Tie / Reconcile to third party grant income reported by third parties.
These type of fund is typically set up when a new bond is used to finance a project or refinance an old bond.
Debt Service