Jason Brown
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Transcript of Jason Brown
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