2016 Financial Reporting Workshop - Chief Financial Officer of Florida · PDF file2016...
Transcript of 2016 Financial Reporting Workshop - Chief Financial Officer of Florida · PDF file2016...
2016 Financial Reporting Workshop
Presented By: Florida Department of Financial ServicesDivision of Accounting & AuditingBureau of Financial Reporting
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Agenda for Today
Introduction CAFR Overview Statistics Inter and Intrafund Compliance Checklist Items Depreciation Governmental Accounting Standard Boards (GASB) Updates Conclusion
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Statewide Financial Reporting Section (SFRS) Team
Danta White, CPAFinancial Administrator
Pam BarksdaleProfessional Accountant Specialist
Nicole DavisProfessional Accountant Specialist
David JamesSenior Management Analyst II
Chunping Lin, CPAGovernment Analyst II
Sherif NessimGovernment Analyst II
Leonor SkoglundGovernment Analyst II
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CAFR Overview
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Authorization and Reference
Required by Section 216.102 (3), F.S.
Due by February 28 annually
Prepared in accordance with generally accepted accounting principles (GAAP)
Governmental Accounting Standards Board (GASB)
Audited by the Florida Auditor General
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CAFR Contents
Reporting entity includes state agencies and component units
Basic Financial Statements
Notes to the Financial Statements
Other Required Supplementary Information (RSI)
Statistical Section
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Information Sources
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Financial StatementsNotes to the Financial Statements
Departmental FLAIR records at closing
Forms
Certain audits or agency reports (Ex: Lottery and Florida Turnpike)
Certain audits or agency reports (Ex: Lottery and Florida Turnpike)
Adjustments – agency, CFO, audit
2016 CAFR Preparation Process
May June NovMarch
PLANNINGREVIEW & COMPILATION
AUDIT
AGENCY ADJUSTMENTS
FebAug Sept Oct Dec JanJan
CFO & AUDIT ADJUSTMENTS
AGENCY CLOSING PUBLISH CAFR
April July
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Forms/Databases
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Multiple Forms used to prepare information that makes up the CAFR
Key Formso Form 3 Inter/Intrafundo Form 30 Cash Flowso Changes In Assets/Liabilitieso Agency Fund Change Statemento Compensated Absenceso P Formso Many More
Forms are available on our website or will be provided.
Forms/Databases
Working Trial Balance Databaseo Tool to use as guidance before and after closingo Available July 1st, 2016
Form 3 Completeness Databaseo Tool to validate your Form 3 data is in balance with your Trial Balanceo Available mid-July 2016
Form 30 Databaseo Used to complete your Cash Flows Formso Available mid-July 2016
Instructions available for all three databases
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Forms/Databases
Working Trial Balance (WTB) Databaseo The WTB is a tool that provides trial balance information to the agencies
and Compliance Checklist status reports for specific Checklist items.o Tool to use before and after closingo Most GL-related Compliance Checklist Items have at least one report in
WTB.o “Forms Due” Report is an analytical tool to help assess forms that are
due to SFRS.o Available July 1st, 2016o Feedback on the tests in WTB or any suggestions for new tests are
always welcome!
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Working Trial Balance (WTB)
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Forms/Databases
Form 3 Completeness Databaseo Tool used to validate that your Form 3 data is in balance
with your Trial Balanceo Form 3 captures all Interfund and Intrafund transactionso All transfers, advances and due to/from transactions must
always be in balance with your Trial Balanceo Available mid-July 2016o Instructions provided with database
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Form 3 Completeness
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Forms/Databases
Form 30 Databaseso Used to complete your Cash Flows Formso Required for each enterprise fund (GF 50) and Internal
Service Fund (GF 60)o Available mid-July 2016o Instructions provided with database
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Form 30 (Cash Flows)
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STATISTICS
Adjustments Processed
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A=Auditor GeneralB=AgencyC=Statewide Financial Reporting
Inter & Intrafund
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INTERfund is journal transfer transactions between agencies(Due to/from, Transfers in/out and Advances to/from).
INTRAfund is journal transfer transactions within agencies(Due to/from, Transfers in/out and Advances to/from)
Debits must always equal credits
Interfund
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2014 Total
number of rows
Total rows of data not balanced
% of Balanced Data
1st Submission 4512 622 86%2nd Submission 4490 239 95%3rd Submission 4433 37 99%
2015 Total
number of rows
Total rows of data not balanced
% of Balanced Data
1st Submission 4195 1047 75%2nd Submission 4343 417 90%3rd Submission 4494 154 97%4th Submission 4385 89 98%
Interfund
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Intrafund
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2014 Total number
of rows Total rows of data not balanced
% of Balanced Data
1st Submission 1599 116 93%2nd Submission 1604 32 98%
2015 Total number
of rows Total rows of data not balanced
% of Balanced Data
1st Submission 1666 121 93%2nd Submission 1603 64 96%
Intrafund
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Inter & Intrafund
Agency/AST True-up
o There was some confusion regarding the recording of certified forwards (CF) for amounts due to other agencies.
o Agencies will receive an invoice from AST for the sole purpose of providing a recommended amount to record as certified forwards.
o Also, agencies will be instructed to create a “Due To” (GL 353).
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STATE OF FLORIDAAST - Agency for State Technology Data Center Invoice
2585 Shumard Oak BlvdTALLAHASSEE, FLORIDA 32399
Invoice Number ‐ CFJune2016
Invoice Date ‐ June 6, 2016
Data Center Services InvoiceInvoice displays AST's recommendation for AHCA's Certified Forward in the 210001 - State Data Center Agency for State Technology Data ProcessingServices Budget Category
Agency Name: Agency for Health Care Administration
Certified Forward Estimate for FY 16 $253,021.00
For the purpose of setting up your Agencies GL Code 35300 Payable to the AST
$253,021.00
Payment:Journal Transfer Payment should be made to:
72‐60‐2‐792018‐72980500‐00‐004801‐00Benefitting Object Code 048000
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Compliance Checklist
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Compliance Checklist
An instrument used to validate the accuracy of information reported within the CAFR
A tool to provide feedback to the agencies on how they are doing in regards to specific items.
Also used as a guideline for agencies as they prepare their information throughout the process
Twenty five (25) checklist items ranging from verifying proper data is being used to submitting items by a certain due date
2015 Compliance Checklist Evaluations will be available at the end of the workshop
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Checklist # Checklist Item Compliance 2015 Compliance 2014Year to Year Change
1 Funds in Balance 100% 94% 6%2 Intrafund Activity (within Agency) 79% 71% 8%3 Interfund Activity (with Other Agencies) 64% 58% 6%4 Cash Balances 97% 100% ‐3%5 Treasury Investment Balances 96% 96% 0%6 Beg Fund Balance/Net Assets 97% 97% 0%7 General Revenue 100% 100% 0%8 Capital Assets Depreciation 100% 100% 0%9 Fund Balance Classification 94% 100% ‐6%10 Net Investments in Capital Assets 96% 95% 1%11 Compensated Absences 83% 100% ‐17%12 Capital Asset Accounts 91% 94% ‐3%13 Long‐term Debt Accounts 100% 90% 10%14 Analytical Procedures 94% 92% 3%15 Other Guidance 100% 100% 0%16 Fund Questionnaires for New Funds 100% 100% 0%17 SWFS Forms 94% 94% 0%18 Component Unit Financial Statements 100% 100% 0%19 SEFA 97% 97% 0%20 Fraud Certification 100% 97% 3%21 Final Budgeted Revenues 100% 100% 0%22 GASB Implementation Schedule Notification 100% 100% 0%23 Elimination of Revolving Funds 100% 100% 0%24 Interfund Loans 100% 100% 0%25 Compliance with Chapter 280, FL Statutes (QPD) 100% 89% 11%
Compliance Checklist
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Checklist Item No. 11 – Compensated Absences
Compensated absences are absences for which employees will be paid, such as vacation and sick leave.
Validate that you’re utilizing the data from People First as assistance in calculating your compensated absences. This data is usually made available in July.
Ensure that the amounts reported within GLs 386 (Compensated Absences – Current) and 486 (Compensated Absences – Non-Current) on your forms (Form 49) agree to the amounts in your trial balances before submission to our office.
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Compliance Checklist
Checklist Item No. 9 – Fund Balance Reporting
Validates that your fund balance classifications are reported properly.
Refer to CFO Memorandum No. 3 (2013-2014) Fund Balance Reporting
New Report within WTB regarding Nonspendables – LT Receivables and Advances
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Compliance Checklist
Compliance Checklist
Fund Balance Reporting – Nonspendables (Long Term Receivables and Advances)
o This new report is being created in reference to CFO Memo No. 03 (2013-2014) – Fund Balance Reporting
o This report displays any funds that have an amount reported within GL 562 – Nonspendables – LT Receivables and Advances.
o If any funds are a SWGF 20 (Special Revenue Fund), you are required to reclassify the amount to committed (GL 549) or restricted (GL 571-575).
o Instances where you have a GL 562 reported within a fund that does not contain a SWGF 20, we recommend that you consider reclassifying the GL 562 to Committed or Restricted.
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Statewide Financial StatementsCompliance Checklist # 9 ‐ Fund Balance ReportingNonspendables ‐ Long Term Receivables and Advances
OLO 990000Department of Sporting Events
Fund: SWGF: Fund Title:
990000‐10‐1‐123456 10 General Revenue Fund
Long Term Receivables and Advances
In this fund, consider reclassifying GL 562 ‐ Nonspendable ‐ LT Receivables and Advances to Committed or Restricted. If the SWGF is a 20, you must reclassify your GL 562 amount to Committed (GL 549) or Restricted (GL 571‐575)
GL 562:‐12,013,651.15
Fund:
990000‐20‐2‐987654
SWGF: Fund Title:
20 Baseball Trust Fund
Long Term Receivables and Advances
No amount is recorded within your GL 562 for this fund, no adjustments are necessary.
GL 562:0.00
Fund:
990000‐20‐2‐234567
SWGF: Fund Title:
20 Football Trust Fund
Long Term Receivables and Advances
In this fund, consider reclassifying GL 562 ‐ Nonspendable ‐ LT Receivables and Advances to Committed or Restricted. If the SWGF is a 20, you must reclassify your GL 562 amount to Committed (GL 549) or Restricted (GL 571‐575)
GL 562:‐12,328,500.63
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DEPRECIATION
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Checklist Item No. 8 – Depreciation
Update to language on SWFS Guidance documento Validate that your Property Custodian has run depreciation for
ALL depreciable capital assets before closing.o Refer to the Florida Department of Financial Services FLAIR
Procedures Manual, Chapters 517-519 on the website
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Depreciation
Scenario A building construction project was not completely
added to the Property Master (PM) Fileo $10,000,000 was recorded to PM fileo $20,000,000 was not moved from GL 72200o $30,000,000 should be recorded to PM file
Assumptions: o Construction of the building completed and
amortization began as of 7/1/2010o Straight-line depreciation o Useful life of 50 years (600 months)
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Steps to Correct
1. Add $20,000,000 to the PM file to reflect correct asset cost – Entries will affect PM file and Fund
2. Reclassify expenditure to a prior period adjustment – Entries will only affect Fund
.
TR GL Debit Credit
16 27200 20,000,000
16 72200 20,000,000
TR GL Debit Credit
10 72200 20,000,000
10 54200 20,000,000
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Steps to Correct
3. Manually calculate accumulated depreciation for the period 7/1/2010 to 6/30/2015 and record adjustment to correct accumulated depreciation amount as of 6/30/2015 – Entries will affect PM file and Fund
4. Reclassify depreciation expenditure to a prior period adjustment – Entries will only affect Fund
TR GL Debit Credit
10 72500 2,000,000
10 54200 2,000,000
TR GL Debit Credit
16 27300 2,000,000
16 72500 2,000,000
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Steps to Correct 5. Results of Steps 1 through 4 in the PM file and the
Fund (as of 6/30/2015)o Building Costs = $30,000,000o Accumulated Depreciation = $3,000,000o Depreciable Building Value = $27,000,000
6. Run a simulated depreciation as of 6/30/2016 (current year) in FLAIR (no effect on PM File or Fund)
7. Run the depreciation as of 6/30/2016 in FLAIR –Entries will affect PM file and the Fund
TR GL Debit Credit
03 72500 600,000
03 27300 600,000
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Governmental Accounting Standards Board (GASB) Statements
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GASB Statements Effective Dates
Fiscal Year 2015-16 Fiscal Year 2016-17 Fiscal Year 2017-18
Statement No. 72 – Fair Value
Statement No. 73 –Pensions
Statement No. 75 – OPEB Employers
Statement No. 73 –Amendments to Pension
Statement No. 74 – OPEB Plans
Statement No. 81 –Irrevocable Split-InterestAgreements
Statement No. 76 – GAAP Hierarchy
Statement No. 77 – Tax Abatement Disclosure
Statement No. 82 –Amendments to Pension
Statement No. 79 –External Investment Pools
Statement No. 78 -Pensions
Statement No. 79 –External Investment Pools
Statement No. 80 –Component Units
Statement No. 82 –Amendments to Pension 41
GASB StatementsFiscal Year 2015-16 Implementation
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GASB Statement No. 72
Defines fair value Defines an investment and generally requires investments to
be measured at fair value Provides guidance for determining a fair value measurement
and applying fair value to certain investments Changes the measurement guidance for donated capital
assets, donated works of art, historical treasures and similar assets, and capital assets received in a service concession agreement
Requires disclosures to be made about fair value measurements, the level of fair value hierarchy, and valuation techniques
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GASB Statement No. 72
Definition of fair value – the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement dateo An exit priceo Not adjusted for transaction costs
Other characteristics of fair valueo Market-basedo Based on a government’s principal or most
advantageous marketo Considers unit of account
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GASB Statement No. 72
Definition of investment – a security or other asset that:o A government holds primarily for the purpose of
income or profit, ANDo Has a present service capacity based solely on its
ability to generate cash or to be sold to generate cash
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GASB Statement No. 72
Assets that meet the definition of an investment generally should be measured at fair value. Examples:o Alternative investmentso Equity securitieso Commingled investment pools that are not government
sponsoredo Invested securities lending collateralo Intangible assetso Land and land rightso Real estateo Natural resource assets
If they meet the definition of an
investment
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GASB Statement No. 72
The determination of whether an asset is an investment or another type of asset is made at acquisitiono Once determined, the classification should be retained
for financial reporting purposes, even if the government’s usage of the asset changes over time.
o Initial Implementation Exception: The classification should be based on the facts and circumstances at initial implementation of Statement 72, rather than on those in existence at the time the asset was initially acquired.
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GASB Statement No. 72
Scenario
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A housing finance agency holds mortgage loan receivables made as part of a governmental program to encourage home ownership. The present service capacity of the loans is to provide a service that allows residents to purchase a home
Investments or Not Investments
Not Investment - The present service capacity is not based solely on the loans’ ability to generate cash.
A state owns land and timber resources in an undeveloped part of the state. The state acquires the resources in order to preserve the land; however, the state occasionally enters into contracts for a company to cut and sell the timber, for which the state receives a fee.
Not Investment - The land and timber resources were not acquired primarily for the purpose of income and profit.
GASB Statement No. 72Scenario
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A state owns royalty interests in certain oil and gas properties. It holds these interests in order to generate income for providing funding to schools within the state. It does not own the tangible land associated with the oil and gas rights. There is no governmental program or service associated with the ownership of the interests.
Investments or Not Investments
Investment - Because the primary purpose of holding the royalty interests is for the purpose of income, and the present service capacity is based solely on the ability to generate cash, these assets would meet the definition of an investment.
The state owns a five-story office building. Three floors are occupied by state agencies, and two floors are leased to a retail merchant for the sole purpose of rental income.
Not Investment - The present service capacity of the building is not based solely on its ability to generate cash.
GASB Statement No. 72
Definition of acquisition value – The price that would be paid to acquire an asset with equivalent service potential in an orderly market transaction at the acquisition date, or the amount at which a liability could be liquidated with the counterparty at the acquisition dateo Market-based entry priceo Replacement cost or the settlement amount
measurement attribute
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GASB Statement No. 72
Acquisition value (entry price) replaces fair value for the following:o Donated capital assetso Donated works of art, historical treasures, and
similar assetso Capital assets received in a service concession
arrangement
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GASB Statement No. 72
SFRS Implementationo Survey will be sent to agencies to determine if there
are capital assets or other assets that may meet the new GASB 72 definition of an investment
o A CFO Memorandum will be released in regards to Statewide Financial Statements Capital Asset Guidance and Rules For Tangible Personal Property
o Creating new forms for Investments Measured at Fair Value
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GASB Statement No. 73, 76, and 79 Statement 73: Pensions
o FYE 6/30/16: Amendments to Statement 67 and 68o FYE 6/30/16: Assets accumulated for purposes of providing pensions
through defined benefit plans that are not administered through trust (pensions not within the scope of GASB 68)
o FYE 6/30/17: Accounting and financial reporting for pensions that are not within the scope of Statement 68
Statement 76: The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments
o Simplifies the hierarchy and explains how to identify the relevant literature within the hierarchy
Statement 79: Certain External Investment Pools and Pool Participants
o Revises the accounting and financial reporting standards for 2a7-like investment pools as a result of amendments by the Securities and Exchange Commission (SEC) to the Investment Company Act of 1940, Rule 2a7
o Two year implementation (FYE 6/30/16 and 6/30/17) We will be working with applicable agencies (DMS, Treasury, and
SBA) to ensure proper implementation. 53
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GASB StatementsFiscal Years 2016-17 and 2017-18
Implementation
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GASB Statement No. 74 and 75Effective 2016-17 and 2017-18
GASB Statement 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans (OPEB Plans)
o Establishes financial reporting standards for state and local governmental OPEB plans.
o Effective FYE 6/30/17 GASB Statement 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions (OPEB)o Establishes standards of accounting and financial reporting for
OPEB provided to employees of state and local governmental employers through OPEB plans administered through trust
o Effective FYE 6/30/18 Statement 74 (plans) and 75 (employers) makes OPEB
accounting and financial reporting consistent with the pension standards in Statements 67 (plans) and 68 (employers).
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GASB Statement No. 74 and 75Effective 2016-17 and 2017-18
SFRS will be working with DMS to ensure the state meets GASB requirements
There will continue to be an OPEB liability allocation to agencies as employers recorded in State Fund 7 (SF7).
We will provide agencies with updates, as necessary, in regards to implementation
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GASB Statement No. 77 Effective 2016-17
Tax Abatement Disclosureso Establishes financial reporting disclosure standards
for tax abatement agreements entered into by state and local governments
o Disclosures required by this statement include tax abatements resulting from both: Agreements that are entered into by the reporting
government, AND Agreements entered into by other governments and that
reduce the reporting government’s tax revenues.
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GASB Statement No. 77 Effective 2016-17
Definition of tax abatement: A reduction in tax revenues that results from an agreementbetween one or more governments and an individual or entity in which:o One or more governments promise to forgo tax
revenues to which they are otherwise entitled; ANDo The individual or entity promises to take a specific
action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments
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GASB Statement No. 77Effective 2016-17
Required DisclosuresBrief Descriptive Information Government’s Own
AbatementsOther Government’s Abatements
Name of program √
Purpose of program √
Name of government √
Tax being abated √ √
Authority to abate taxes √
Eligibility criteria √
Abatement mechanism √
Recapture provisions √
Types of recipient commitments √60
GASB Statement No. 77Effective 2016-17
Required Disclosures
Other Disclosures Government’s OwnAbatements
Other Government’s Abatements
Dollar amount of taxes abated √ √
Amounts received or receivable from other governments associated with abated taxes
√ √
Other commitments by the government
√
Quantitative threshold for individual disclosure
√ √
Information omitted due to legal prohibitions
√ √
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GASB Statement No. 77 Effective 2016-17
SFRS Planned Steps for Implementation:o Work with DEO and other applicable agencies, if
any, to ensure the state meets GASB requirements
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GASB Statement No. 80 Effective 2016-17
Blending Requirements for Certain Component Units – an amendment of GASB Statement No. 14o Establishes an additional blending requirement for the
financial statement presentation of component unitso Applies to component units that are organized as not-
for-profit corporations in which the primary government is the sole corporate member as identified in the CU’s articles of incorporation or bylaws.
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GASB Statement No. 80Effective 2016-17
SFRS Planned Steps for Implementation:o Survey agencies to determine discretely presented
component units that may need to be blended.o Update SFRS Component Unit Determination Form
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Conclusion
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KEYS To Successful Pre/Post Closing
Close in balance (Checklist Item #1) Start confirming INTER fund balances with other agencies
early. Ensure you record depreciation in FLAIR prior to agency
closing Review agency post-closing adjustments prior to submission
to SFRSo Adjustments in balance (debits = credits)o Adjustment does not create atypical balanceso Adjustment based on current trial balance amounts
Utilize WTB Database daily Contact SFRS if you have any questions or concerns
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Agency Closing Reports and Year-end Reports
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Available in RDSo Year-end Report available in
March 2017o Closing Report available in
August 2017
FLAIR Report Distribution System (RDS) End User Training
http://www.myfloridacfo.com/Division/AA/Training/default.htm
References
Working Trial Balance Database & SWFS Guidance -http://www.myfloridacfo.com/Division/AA/StateAgencies/default.htm
Forms - http://www.myfloridacfo.com/Division/AA/Forms/default.htm
Florida Department of Financial Services FLAIR Procedures Manual, Chapters 517-519 (Depreciation) located at: http://www.myfloridacfo.com/Division/AA/Manuals/default.htm
Memorandums - http://www.myfloridacfo.com/Division/AA/Memos/default.htm
FLAIR Report Distribution System (RDS) -End User Training http://www.myfloridacfo.com/Division/AA/Training/default.htm
GASB Standards -http://www.gasb.org/jsp/GASB/Page/GASBLandingPage&cid=1176160042327
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How to Contact UsDanta White, CPAFinancial Administrator(850) 413-5687
Pam BarksdaleProfessional Accountant Specialist(850) 413-5803
Nicole DavisProfessional Accountant Specialist(850) 413-5459
David JamesSenior Management Analyst II(850) 413-5666
Chunping Lin, CPAGovernment Analyst II(850) 413-5385
Sherif NessimGovernment Analyst II(850) 413-5565
Leonor SkoglundGovernment Analyst II(850) 413-5603
Group E-mails:[email protected]
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Questions
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