Download pptx - LGC UPDATE

LGC UPDATE2012 NCGFOA Summer Conference

Sharon Edmundson7/16/2012

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AGENDA

• Announcements / Reminders

• Auditing and Reporting Issues

• Coming Attractions

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• Introductions & Welcome

• Staff Changes:

o Tabitha Mbaka left at the end of March 2012

o Her position has not yet been filled

o Alexia Forte is leaving at end of July 2012

o In Debt Management - Ken Durham will be retiring this October

ANNOUNCEMENTS / REMINDERS

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• New State Treasurer’s website is up and running o Please note that old bookmarks will not work

• 2011 Audit Process was big hit and will continue for 2012 – changes on your side will be minimal:o Will still use commercial portalo Data input sheets will be downloaded from Treasurer’s

website rather than from portalo Changes to an audit will NOT be accepted piecemeal –

Entire audit must be resubmitted rather than inserting individual pages

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• Invoice processing for 2012 will be the same as last year

• Notice of approvals to units and auditors will be received via email

• Memo with updated 2012 instructions for processing audits is coming in August

• Illustrated statements for 2012 will be posted to web very soon (Charter schools and Boards of Ed currently available)

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Best way to stay informed is through listserv:LGC_News

May want multiple people on your staff registered in case you are out of the office.

Please give Sharon, Rita, or Amy a business card or send us an email if you wish to be registered.


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• New fiscal year:• Units with debt applications going before the LGC starting

in November 2012 will need to have 2012 audit completed and final statements submitted to SLGFD by October 15

• Please begin conversations with your auditor and the Debt Management Section if you anticipate seeking debt approval in the November to January timeframe

o The opinion, financial statements, notes and supplemental schedules are required – compliance audits can be delayed

Mark your calendar and notify your auditor & Tim Romocki if issuing debt in October, November or December of 2012


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• Unit letter responses

o Address each concern raised in the letter

o Include specific action taken to address each concern

o Back up actions with summary data if possible

o Our letter and your response go to the LGC with any debt applications for approval

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ANNOUNCEMENTS – AFIR REDESIGN

• In the final stages of new AFIR design

• Field tested by both municipalities & counties

• Fiscal Year Data for 2012 will be collected using the new AFIR process

• Specific instructions will go out in August 2012 regarding the new process

• Will be training materials available to guide you through the new form

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ANNOUNCEMENTS – AFIR PROCESS

• US Census supported website

• Download Excel Worksheet to your PC

• When completed, upload Excel file to the same US Census website

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ANNOUNCEMENTS – AFIR FORM

• Designed to tie to your:o “Revenue, Expenditure and Change in Fund Balance

Statement” ando “Revenue, Expense and Change in Net Asset

Statement”

• Units enter data and balance into the form at either the Fund level or Fund Type level, so it will be easier to keep funds in balance with the financial statements.

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ANNOUNCEMENTS – AFIR FORM (continued)

• There are fewer revenue and expenditure categories, so there will be more items in “other”.

• Many of the Revenue items that are accessible on the Department of Revenue’s website are no longer broken out in a separate line item on the AFIR.

• Cities and counties now use the same form.

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ANNOUNCEMENTS – AFIR FORM (continued)

• This year will be two versions – one each for municipalities and counties with only difference being that each is crosswalked to the “old” AFIR – field testers found this helpful in learning the new form.

• AFIR no longer has the previous year’s data on it, but does have beginning balances for the White Goods and School Capital Outlay sections

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AUDITING AND REPORTING ISSUES

• Cost Allocations vs. Transfers

o Cost allocations should be treated as reimbursements to reduce the cost of operations. It is not revenue – it is a contra account.

o Transfers are a gift of financial resources or equipment; they will be treated as revenue/OFS to the receiving fund.

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• Treatment of PILOTs – Payments in Lieu of Taxes

o Payments to compensate the general government for public services rendered, based on tax rate

o Should be classified as transfers – nonreciprocal interfund activity – in the enterprise operating statement. Please classify as “Transfer – Payment in lieu” in both funds.


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• Budgets should be presented at FYE as they stood at June 30 regardless of any subsequent budget amendments.o Those subsequent amendments may improve

the legal standing of the Board and the finance officer for purposes of compliance to GS 159-25 and 159-28

o Financial statements should be presented as of June 30

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• GASB 54 Issueso RSS is reported on both government-wide and

governmental funds statements in equityo The cash component of RSS must be restricted on

both statements; Powell bill cash must be restricted on government-wide statements

o On governmental funds statement – no fund but GF can have positive unassigned fund balance

o Failure to include fund balance policy statement and discussion of treatment of encumbrances

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• GASB 54 Issues – continued

o Capital Reserves caused problems in 2011

o If they are being reclassified as capital projects, be sure to title as such

o If they are consolidated into the General Fund, be sure to show a reconciliation in the front and a budget in the supplementary schedules

oCapital reserve is a statutory title with strict requirements about budgeting and the budgeting and use of funds

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• E 911 Fundso Problematic for last several years because of

differences between the audited fund and the PSAP Revenue and Expenditure report that is filed with the 911 Board

o Continue to work with 911 staff to find a workable solution

o In 2011, we published in IFS an example of a detailed fund schedule that would allow 911 staff to reconcile audited fund to PSAP report

o Feedback from units was mostly negative

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• E 911 Fundso For 2012 units can use the detailed example OR go

back to a more summarized format similar to other funds in the unit

o Units are asked to complete a reconciliation between the audit and the report filed with 911 Board if audit does not agree with PSAP Revenue and Expenditure Report

o Why? Fiscal Research and Legislators look at audits and data from 911 Board and see the differences

o Handout of fund statements and sample reconciliation

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• E 911 Fundso 62A.46.(b1) (Effective July 1, 2011) Carryforward. – A PSAP

may carry forward distributions for eligible expenditures for capital outlay, capital improvements, or equipment replacement. Amounts carried forward to the next fiscal year from distributions made by the 911 Board may not be used to lower the distributions in subsection (a) of this section unless the amount is greater than twenty percent (20%) of the average yearly amount distributed to the PSAP in the prior two years. The 911 Board may allow a PSAP to carry forward a greater amount without changing the PSAP's distribution.

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• E 911 Fundo There is no pre-purchase approval required for purchases

made with wireless 911 money; staff is available to assist if you have questions and they encourage you to call if there are questions about a purchase.

o Can transfer wireless 911 funds out of ETS Fund but will need to explaino Typical example is transferring to a capital project fund

where some of the purchases are being funded with 911 funds.

o Any wire line funds that remain in your ETS Fund MUST be transferred out and can be used for any purpose.

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• Calculation of Tax Collection Percentageo Worked with the SOG and the Tax Collectors’

Association to ensure that collection percentage calculation is standardized and in compliance with the General Statutes

o Units can use other methods of calculating the percentage for internal uses such as performance measures

o Method to be used for financial statement presentation and for budgeting purposes is as shown in 2012 Illustrative Financial Statements

o See handouts

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• Included in collection percentage calculation:o Current year taxes received

• Not included in collection percentage calculation:o Interesto Late listing/discovery penaltieso Service feeso Advertising costso Any other costs of collection

• Included in the current year levy:o Unit-wide taxes only, no special districts includedo Discoveries made through December 31 of the fiscal year

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DEPOSIT AND INVESTMENT ISSUES

• LGC-203 is a semiannual requirement (June 30 and December 31)

• LGC-203 for June 30, 2012 – due to be filed by July 25, 2012o Late letters will not go out until third week of August

• Form has been revised – DO NOT USE ANY EXCEL WORKBOOK EARLIER THAN THE REV. 12-11 VERSION – preferably you will use the Rev. 6-12 version. o This workbook has the dropdown lists for unit name and

bank name. (If you cannot find your name or bank, please call the office.)

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• INV-91 is an annual requirement for the June filing.o INV-91 for June 30, 2012 – due to be submitted to your

depository with a copy filed with our office BY AUGUST 24, 2012 for each bank.oMost efficient and effective to send along with your

LGC203 forms and documentation

o Allows DST staff to match local government deposit accounts to information provided by their depositories.

o This is necessary to ensure that local government funds are sufficiently collateralized.

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• Be cautious with investments offered with rates of return significantly higher than what appears to be available in the markets.

• Remember – Safety, Liquidity, then Yield

• Avoid any investment you do not understand.

• Questions? Call our office at 919-807-2381.

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COMING ATTRACTIONS

• Memo on tax collection percentage calculation• Reporting Issues memo• Retirement rate and other disclosure data memo• Remaining Illustrative Financial Statements

o Schools and Charters on the websiteo Dogwood completeo Carolina County in final stageso Housing Authority being updated now

• Detailed instructions on new AFIR• Detailed instructions on retrieving data input sheets for 2012 audits

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Questions?

Thank you!Together , we can build and maintain a fiscally strong and prosperous North Carolina.

www.NCTreasurer.com [email protected]