Post on 17-Jan-2015
description
FGFOA SCHOOL OF GOVERNMENTAL FINANCE
What are your financial statements telling you?
Jason E. Brown, CGFO
OMB Director, Indian River County
What are your financial statements telling you?
• Annual financial reportsCAFRFinancial reporting modelExamples
• Monthly reportsInternalExternalExamples
What are your financial statements telling you?
• Financial Reporting Model• GASB Statement No. 34• Key Components
Management’s Discussion & Analysis MD&A
Government-wide financial statementsIndividual fund statements
(governmental, proprietary, fiduciary)Required supplementary information
Governmental Financial Reporting Model (Minimum
Requirements)
Government-wide
Financial Statements
Fund financial statements
Govt’l. Funds
Proprietary Funds
Fiduciary Funds
Notes to Financial Statements
MD&A
Other Required Supplementary Info.
RSI
Audited Basic
Financial Statements
RSI
Comprehensive Annual Financial Report (CAFR)
CA
FR
Introductory Section Introductory Section
Basic F
inancial Statem
ents &
RS
I
Financial Section
MD&A
Government-wide Statements
(Major) Fund Financial Statements
Notes to Financial Statements
RSI other than MD&A
Info. on nonmajor funds & other supplementary info.
not required
Statistical Section Statistical Section
Introductory Section
• Required section for CAFR
• Provides background information and context for users of reportListing of principal officialsOrganizational chartLetter of transmittal
• Profile of government• Budget
– Economic condition (focus on future; local economy, long-term planning, major initiatives)
Introductory Section - Examples
• Add examples…..
Introductory Section - Examples
• Add examples…..
Management’s Discussion & Analysis (MD&A)
• Provides narrative introduction and overview• Analysis of key data presented in financial
statementsSignificant changes in revenues & expensesAmendments to budgetAnalysis of overall financial position (net assets)Fund balance changesConditions known as of close of audit field work
that could impact financial positionNot audited
MD&A - Examples
MD&A - Examples
Government-Wide Financial Statements
• Statement of Net AssetsReports assets and liabilities“Balance Sheet”
• Statement of ActivitiesReports changes in net assets“Income” or Operating Statement
• Consolidation of fund information
• Measurement focus and basis of accounting
Statement of Net Assets
• Reports assets and liabilities
• Includes current assets and non-current assets
• Presented in order of liquidity
• Includes capital assets (infrastructure, such as roads, drainage systems, utility systems, etc.)
• Assets – Liabilities = Net Assets
Statement of Net Assets
Statement of Net Assets
Statement of Net Assets
Statement of Net Assets
• Assets – Liabilities = Net Assets
• Net Assets classified in three categories:
• Net assets invested in capital assets, net of related debt
• Restricted net assets
• Unrestricted net assets
Net Asset Categories
• Restricted Net Assets
• Restrictions imposed on government by outside entities
• Other governments
• Grantors
• Creditors
• Self-imposed restrictions are not included (except Constitutional restrictions)
Restricted Net Assets
• Various Categories
Restricted for:
Capital projects $29,157,343
Debt service/bond covenants $3,375,447
Road projects $86,454,268
Other special revenues$34,918,682
Economic incentives $8,000,000
Long term advances to other funds $1,213,345
Total Restricted Net Assets $163,119,085
Unrestricted Net Assets
Total net assets
Less: Invested in capital, net of debt
Less: Restricted net assets
Equals Unrestricted net assets
Unrestricted Net Assets
Total net assets $663,741,836
Less: invested in capital ($445,541,175)
Less: restricted net assets ($163,119,085)
Unrestricted net assets $55,081,576
Current Assets & Liabilities
• Current Assets vs. Current Liabilities
• Private Sector analysis
• Current ratio = Current Assets ÷ Current Liabilities
= $247,792,905 ÷ $26,341,976 = 9.41
• Over 1.0 means positive “working capital”
• Shows ability to meet short-term obligations
•Higher ratio typically points to better short-term financial health (XOM = 1.47, GM @ 12/08 = 0.56)
Current Assets & Liabilities
• Analysis conducted for Governmental Funds Only
• Florida City A (pop. ~160,000)
Current Assets $499,893,146
Current Liabilities $229,382,597
Current Ratio = 2.18• Florida City B (pop. ~4,000)
Current Assets $1,967,760
Current Liabilities $330,008
Current ratio = 5.96
Statement of Activities
• Operating Statement
• Uses net cost format to highlight how functional expenses are funded
• Measurement focus on economic resources (rather than financial)
• Focus on expense rather than expenditure
• Depreciation expense for governmental assets included
Statement of Activities
• Expenses presented before revenues• Governmental and business-type activities
reported separately • Direct expenses in first column• Indirect expenses• Program revenues in next column(s)• Net (Expense) Revenue and changes in
net assets on right• General revenues follow total net expense