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65 Cards in this Set
- Front
- Back
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What is the CAFR
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Comprehensive Annual Financial Report
Used by state and local governments to provide detailed information (more than MD&A). It is not required, but done for public record. |
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What are the major parts of the CAFR
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1) Introductory: title page, content page, letter of transmittal, etc.
2) Financial: Auditor's report; MD&A; Basic Financial State.; RSI and other supplementary info. 3) Statistical: tables and charts showing demographics, economic data, financial trends, fiscal capacity, and operating information. |
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Fiscal Accountability
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Assess whether the government has raised and spent financial resources in accordance with budget plans and in compliance with pertinent laws and regulations. Focus on the short-term flow of current financial resources. Conservator that cares for assets.
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Operating Accountability
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Government-wide financial statements used to assess whether the government has used its resources effectively and efficiently in meeting operating objectives.
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Management Discussion & Analysis (MD & A)
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Part of RSI, includes discussion about the purpose of the basic financial statements and the government's current financial position and results of financial activities compared w/ those of the prior year.
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Two Basic types of Financial Statements
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Fund Financial Statements and Government-wide Financial Statements
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Fund Financial Statements
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Inteneded to assist in assessing whether the government has raised and spent financial resources in accordance with budget plans and in compliance with pertinent laws and regulations. Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance. Do NOT report LT Assets and LT Liabilties on Balance Sheet
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Government-wide Financial Statements
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Intended to provide an aggregated overview of a government's net assets and changes in net assets. Report on the government as a whole and assist in assessing operational accountability. Statement of Net Assets (report on LT Assets and Liabilities) and Statement of Activities.
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Interperiod Equity
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Significant part of accountability. Assess whether current-year revenues are sufficient to pay for services provided that year and whether future taxpayers will be required to assume burdens for Services previously provided. ie, The burden of paying for current services should not be shifted to subsequent periods.
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RSI
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Required Supplementary Information. Example: the MD&A, easily readable form.
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GASB
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Governmental Accounting Standards Board. Distinguishes governmental entities from non-profit and businesses, stressing that governments exist in an environment in which the power ultimately rests in the hands of the people.
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Budgeting Approval Process
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Once legislature approves a budget, it is a legal document. Governments can only spend what is authorized.
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General Purpose Governments
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Provide many categories of services to their residents, such as police, fire, roads and bridges, and health and welfare.
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Special Purpose Governements
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Provide only a single function or a limited number of functions, such as education, drainage and flood control, water and soil conservation.
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Proprietary Funds
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Business-type governments.
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Fiduciary Funds
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Certain fiduciary activies of governments.
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Two basic Financial Statements of Government-wide
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Statement of Net Assets and Statement of activies
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Two Basic Financial Statements of Funds
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Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance
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Major Fund
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GASB 34 Size Requirements: Fund having total assets, liabilities, revenues or expenditures/expenses equaling 10% of the total governmental or enterprise fund amount for the same element and at least 5% of the combined governmental and enterprise fund total amount for the same element.
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General Fund
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The aggregate of nonmajor governmental and enterprise funds is reported in a single column. Always considered a Major Fund.
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Accrual Basis
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Used on the Government-wide Financial Statements, similar to for-profit businesses.
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Modified Accrual Basis
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Used for Fund Reporting. Recognizing as revenues only those inflows that are measurable and available to pay current-period obligations and recognizing as expenditures only obligations that will be paid from currently available financial resources.
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Revenue vs. Other Financing Sources
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Revenue may be taxes, license permits and fees. Other financing sources may be proceeds from a Bond Issue
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Budgetary Accounts vs. Operating Accounts
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Budgetary accts. have normal balances that are opposite of the operating accounts. Budgetary are temporary accounts set up to establish budgetary control. Operating accts. are accounts set up to track revenue and expenses.
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What is TAN
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Tax Anticipation Note: Loan paid for “in anticipation” of receiving proceeds from long term bond issue
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Business Type Activities
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Intended to be self-supporting by charging users for the services they receive. Public utilities, transportation systems, toll roads, toll bridges, hospitals, liquor stores, golf courses and swimming pools.
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Proprietary Funds
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Present financial information for Internal Service Funds and Enterprise Funds. They are self-supporting and function like a for-profit business. Enterprise provides goods or services to the public for a fee. Internal Service Funds serve departments of the same government.
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Expenditure
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the amount of financial resources used to acquire an asset (the cost).
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Expense
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How much of the cost has expired on an expenditure in producing services of the period.
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What 3 general ledger budgetary control accounts are needed in the General Fund?
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Estimated Revenues, Appropriations and Encumbrances.
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Appropriation
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An authorization from a specific fund to a specific agency to make expenditures or incur obligations for a specified purpose and period of time.
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Encumbrance
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Contingent liabilities in the form of purchase orders, contracts, or salary commitments that are chargable to an appropriation and for which a part of the appropriation is reserved. They cease to be encumbrances when paid or when the actual liability is recorded.
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3 categories of Funds
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Governmental, Proprietary, and Fudiciary
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Governmental Funds
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Five types: general, special revenue, debt service, capital projects and permanent. Every government has at least the General Fund.
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Special Revenue Funds
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A fund that is created when tax or grant revenues or private gifts are legally restricted for particular operating purposes.
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Fund Balances
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The difference between assets and liabilities reported in a governmental fund that is available for appropriation.
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Fund Equity
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The excess of fund assets and resources over fund liabilities. A portion of the equity of governmental fund may be reserved or designated; the remainder is referred to as fund balance.
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Permanent Funds
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Used to account for permanent endowments created when a donor stipulates that the principal amount of a contribution must be invested and preserved, but earnings can be used for some public purpose.
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Budgetary Accounts
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Those funds, which reflect budgetary operations and condition, such as estimated revenues, appropriations, and encumbrances, as distinguished from proprietary accounts
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Estimated Other Financing Sources
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Budgeted interfund transfers and debt proceeds may be recorded in this account (Same as Uses).
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Estimated Other Financing Uses
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Budgeted interfund transfers and debt proceeds may be recorded in this account (same as Sources).
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Estimated Revenues
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1 of the budgetary control general ledger accounts.
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Other Financing Sources
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Transfers Into a fund and debt issue proceeds received by a fund are examples of inflows.
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Other Financing Uses
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Transfers of financial resources from one fund to another fund, have the same effect on fund balance expenditures.
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Indirect expenses
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Expenses that are not directly linked to an identifiable function or program.
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Program Revenues
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Are reported in the functions/programs section of the statement of activities, where they reduce the net expense of each function or program to produce a net revenue.
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GASB Statement No. Objectives of Financial Reporting
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Accountability is the cornerstone of all government financial reporting.
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US Bureau of the Census states that a Government
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is an organized entity which has sufficient discretion in the mgmt. of its own affairs to distinguish it as sep. from the administrative structure of any other governmental unit.
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Uses Current Resources
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Fund Financial Statements. Cash or near cash resources.
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Uses Economic Resources
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Government-wide Financial Statements. Both long-term and short-term economic resources.
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Current Financial Resources
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Cash or near cash items (such as A/R) that will be converted into cash during the current FY or that will be available soon enough after the end of the period to pay for current-period liabilities (typically w/i 60 days).
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Current Financial Resources
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Cash or near cash items (such as A/R) that will be converted into cash during the current FY or that will be available soon enough after the end of the period to pay for current-period liabilities (typically w/i 60 days).
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Special Revenue Fund
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One of the major Governmental Funds. Tax or grant revenues or private gifts are legally restricted for a particular operating purposes, such as library or maint. of roads.
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Debt Service Funds
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Bond obligations outstanding and certain other types of LT general liabilities may be required by law or bond covenants to create a sep. fund acct.
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Special Revenue Fund
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One of the major Governmental Funds. Tax or grant revenues or private gifts are legally restricted for a particular operating purposes, such as library or maint. of roads.
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Debt Service Funds
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Bond obligations outstanding and certain other types of LT general liabilities may be required by law or bond covenants to create a sep. fund acct.
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Capital Project Funds
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To account for tax or grant revenues or bond proceeds to earmarked for major construction of bldgs., roads or bridges or parks
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Capital Project Funds
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To account for tax or grant revenues or bond proceeds earmarked for major construction of bldgs., roads or bridges or parks
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Permanent Fund
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Used to account for permanent endowments created when a donor stipulates that the principal amount of a contribution must be invested or preserved, but the investment earnings can be used for a public purpose.
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Permanent Fund
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Used to account for permanent endowments created when a donor stipulates that the principal amount of a contribution must be invested or preserved, but the investment earnings can be used for a public purpose.
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Private-Purpose Trust Fund
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Permanent fund specified to benefit private individuals, organizations or other governments, instead of a program of the government or its citizenry.
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Fund Equity
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The difference between current assets and current liabilities. (Fund Financial Statements use current resource method).
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Classification by Function
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Group related activities that are aimed at accomplishing a major service or regulatory responsibility. Ex: General Govt, Public Safety, Highways and Streets, Health and Welfare, Culture and Recreation.
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Classification by Programs
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Group activities, operations or organizational units that are directed to the attainment of specific purposes or objectives. Ex: Police, fire, Bldg. Safety and Public Works Depts.; City Attorney, City Clerk, Personnel Dept. and Parks and Rec.
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Major Revenue Source Classes Commonly Used
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Taxes, Special Assessments, Licenses and Permits, Intergovernmental Revenues, Charges for Services, Fines and Forfeits, and Misc. Revenues
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