Presented by C. Michelle Blackstock, CPA/CITP

Partner, Grau & Associates

State Audit RequirementPursuant to Section 218.39(1), Florida Statutes :All counties, school districts, charter school or technical center.

All municipalities or special districts based on revenues or expenditures

Single Audit Requirement

If the local government expends $500,000 or more in either Federal Awards or State Financial Assistance programs

Know the Rules

What is the Purpose of an Audit?

Obtain reasonable assurance that the financial statements are free of material misstatements.

Includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements.

Planning

Gain an understanding of the internal controls

Preliminary analyticsFraud inquiryMaterialityDevelop a plan

Fieldwork

Auditors execute the audit plan and perform substantive procedures

CompletionWrap up open items from the fieldworkFinal discussions on any significant

deficiencies, material weaknesses, compliance issues or other findings

Review all potential audit adjustments Complete the financial statements and audit

reportsIssue report and complete all filings

Nonspendable Fund Balance

Amounts that cannot be spent because:1.Not in a spendable form or2.Legally or contractually required to be

maintained intact

Restricted Fund BalanceAmounts restricted for specific purposes where

the use of the resources are:1.Externally imposed by others or2.Imposed by law through constitutional

provisions or enabling legislation

Committed Fund Balance

Amounts to be used for a specific purpose pursuant to formal action of the highest level of decision making authority of the government unless removed or changed by the same type of action (i.e.: resolution or ordinance).

Assigned Fund Balance

Amounts that are constrained by the intent to be used for specific purpose but are neither restricted or committed.

Intent should be by the governing body itself or a body or official delegated with the authority to assign the amounts.

Unassigned Fund Balance

Fund balance that has not been assigned to other funds and not restricted.

The general fund should be the only fund with a positive unassigned fund balance.

Governmental FundsGeneral fund is the operating fund. Special revenue funds are used

for specific revenues legally restricted for expenditures for specified purposes.

Debt service funds are used for the accumulation of resources and the payment of long-term debt.

Governmental FundsCapital projects funds are used to

account for financial resources to be used for the acquisition/construction of major capital facilities.

Permanent funds are used to report legally restricted resources.

Proprietary FundsEnterprise funds may be used for

activities where a fee is charged to external users for goods or services.

Internal service funds are used to report activities that provide goods or services to other funds or governments on a cost-reimbursement basis.

Fiduciary Funds

Pension trust funds are used to report resources that are required to be held in trust for employee benefit plans.

Investment trust funds are used to report external investment pools or specific investments held for others.

Fiduciary Funds

Private-purpose trust funds are used to report trust arrangements that benefit individuals, private organizations, or other governments.

Agency funds are used for situations where the government’s role is custodial and do not involve a formal trust agreement.

Component Units

Blended Component Units

Discretely Presented Component Units

Government Wide Statements

Statement of Net Assets Statement of Activities

Fund Level Statements

Balance SheetReconciliation of Balance Sheet –

Governmental Funds to the Statement of Net Assets

Fund Level StatementsStatement of Revenues, Expenditures, and

Changes in Fund BalancesReconciliation of Statement of Revenues,

Expenditures, and Changes in Fund Balances Governmental Funds to the Statement of Activities

Required Supplementary Information (RSI)

Management Discussion and Analysis (MD&A)

Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (if not included as a Statement)

Infrastructure condition and maintenance date if using the modified approach

Required Supplementary Information (RSI)

Pension and OPEB trend data (Schedule of Funding Progress and Schedule of Employer Contributions)

Revenue and claims development trend data – public-entity risk pools

Other Information Notes to the Financial StatementsIntroductory Section (only if CAFR

prepared)Combining Statements (non major funds

and individual internal service and fiduciary funds)

Statistical Section (only if CAFR prepared)

Hands On Examples

Independent Auditor Reports

Independent Auditor’s Report - OpinionInternal Control over Financial Reporting and

Compliance and Other MattersManagement Letter

Auditor General Reporting

If the audit findings in the preceding financial audit report are uncorrected, the auditor must identify those same findings that were included in the second preceding fiscal year financial audit report. Any such findings must be clearly referenced to the corresponding findings included in each of the two preceding financial audit reports.

Single AuditReport on compliance requirements on each

major program and internal control over that compliance

Schedule of expenditures of federal or state awards

Notes to the scheduleSchedule of Findings and Questioned Costs

Annual Financial Report (AFR) If you are required to provide for an

audit then submit the annual financial report (AFR) and a copy of the audit to the Department of Financial Services: 45 days after the completion of the

audit no later than 9 months after the fiscal

year end of the local governmental entity.

Annual Financial Report (AFR)

Official website must provide a link to the Department’s website to view the entity’s AFR that was submitted. If there is no official website, then the county government’s website must provide the link for the local government.

The Florida Department of Financial Services also needs a copy of the financial

statements for certification of the AFR submission. You can submit the financial

statements electronically as a PDF attachment to localgov@myfloridacfo.com

Auditor General Filing

Currently one electronic copy and one paper copy are required to be submitted.

Specific requirements for the electronic filing apply and can be found on the Auditor General’s website:

www.myflorida.com/audgen

Other Filing Requirements

Federal Single Audit at harvestor.census.gov/sac

MSRB EMMAMunicipal Police & Firefighters Pension

annual reportCAFR submission to GFOA

State of Financial EmergencyLocal governments that meet one or more of

the following conditions:1.Failure to pay short-term loans or make long-

term debt payments when due as a result of lack of funds.

2.Failure to pay uncontested claims within 90 days due to a lack of funds.

State of Financial Emergency

3. Failure to timely transfer payroll related obligations due to a lack of funds.

4. Failure to pay wages, salaries or retirement benefits due to a lack of funds.

State of Financial Emergency

No longer a condition: Fund balance deficit in total or portion not

classified as restricted, committed, or nonspendable, or a total or unrestricted net assets deficit and for which sufficient resources are not available to cover the deficit.

Financial Condition Assessment

Local governments are required to notify the Governor and the Legislative Auditing Committee when one or more of the conditions have occurred or will occur if action is not taken to assist the entity.

Independent auditors are required to notify the local government of deteriorating financial conditions that may cause a financial emergency.

Vocabulary TestAuditFederal Single Audit/SEFAState Single AuditAnnual Financial Report (“AFR”)Comprehensive Annual Financial Report

(“CAFR”)Financial Condition Assessment (“FCA”)

Mandatory Reading ListGFOA’s Governmental Accounting, Auditing,

and Financial Reporting (the “Blue Book”)Rules of the Auditor General Chapter 10.550

Local Governmental Entity Audits

Contact information:mblackstock@graucpa.c

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