Proper Filing of the Annual Update Document: Common
Proper Filing of the Annual Update Document: Common Issues and How to Avoid Them Presented by Lila Ang, Ang CFE, CFE Senior Examiner and Alisa Serdyuk, Senior Examiner Division of Local Government and School Accountability Office of the State Comptroller Thomas P. DiNapoli State & Local Government Accountability Local Government & School Accountability Andrew A. SanFilippo Gabriel F. Deyo Executive Deputy Comptroller Deputy Comptroller Welcome From State Comptroller Thomas P. DiNapoli Welcome Yvonne Martinez Chief of Policy, Research and Training, Division of Local Government and School Accountability 1 Training Objectives Spotlight on your financial data Filing Process – Electronic Filing Software (EFS) AUD review i Financial Edits – Typical Issues Supplemental schedules Fiscal Reporting Duties General Municipal Law §30: Annual Report to State Comptroller, a.k.a. Annual Update Document (AUD) Purpose of Accounting Accounting is a standard, systematic method of communicating financial information that is: Relevant Complete Accurate 2 Financial Data Users Local Officials / Governing Boards Management & Planning Accountabilityy Taxpayers Transparency Financial Data Users (cont’d) Legislature, State and Federal Agencies Program Monitoring Resource Allocation Academics, researchers Investors, rating agencies How do you file the AUD? OSC provides electronic filing software (EFS) Filing information is e-mailed to the CFO by g Unit ((DMU)) Data Management Municipal Code and PIN Instructions on the website Contact DMU at 866-321-8503 Option 4 3 Financial Reporting Financial Data Section Supplemental Schedules Notes to Financial Statements Certified Public Accountant (CPA) or Federal Single Audit Report (if applicable) AUD – Financial Statements Governmental Funds Balance sheet Assets and deferred outflows of resources Liabilities, deferred inflows and fund balance Results of Operations Revenues and other sources Expenditures and other uses Analysis of Changes in Fund Balance Budget Summary OSC Review: Goals and Focus Goals: Proper accounting Accuracy C Consistency i Verify, resolve and correct as necessary Automated error checks – “financial edits” Critical vs. non-critical edits 4 Typical AUD Issues Critical Edit – Balance Sheet Balance Sheet not in balance Assets + Deferred Outflows = Liabilities + Deferred Inflows + Fund Balance Critical Edits will prevent you from submitting the AUD Typical AUD Issues (cont’d) Critical Edit – Changes in Fund Balance Changes in Fund Balance at Year End = Total Fund Balance on Balance Sheet Fund Balance on Balance Sheet = code 8029 Prior Year’s Fund Balance + Revenues – Expenditures = Fund Balance at Year End (Code 8029) Critical Edits will prevent you from submitting the AUD Typical AUD Issues (cont’d) Non-critical financial edits e.g., due to / due from, interfund transfers, bank reconciliation vs. cash in the funds Debt reporting edits and issues (payments, refunding, new issues, etc.) Prior period adjustments 5 Typical AUD Issues (cont’d) Financial Edits Transfers In = Transfers Out D T Due To Oth Other Funds F d (Liability (Li bilit Account A t 630) = Due From Other Funds (Asset Account 391) Transfer codes: Revenue (5031) and Expenditures (9901.9 or 9905.9) Loans between funds must balance Cash in Bank reconciliation statement = Cash in the funds (generally account codes 200, 210, 223, 230 and 231) Debt Edits Several edit checks Statement of Indebtedness vs. Fund activity Outside resources are available to verify some debt reporting Environmental Facilities Corporation (EFC) Disbursement Logs Electronic Municipal Market Access (EMMA) site offers official statements Bond Reporting How should a Bond be reported? Liability in the Long-Term Debt Fund (W628) Proceeds and related expenditures in the Capital Projects (H) Principal (9710.6, 9720.6) and interest payments (9710.7, 9720.7) in related operating fund, or in the Debt Service Fund (V) 6 Common Debt Edits (Bonds) Bond edit checks: Bond liabilities on Balance Sheet (628) = Bonds outstanding end of year on Statement of Indebtedness (SOI) Total Bond principal expenditures in the funds (9710.6) = Bonds redeemed on SOI Total Bond Revenue (5710, 5720) = Bonds issued on SOI Bond in Governmental Fund Bond issued for $1,000,000. No proceeds spent H200 Cash H5710 Bond Revenue W129 General Long-Term Liabilities W628 Bond Liabilities 1,000,000 1,000,000 1 000 000 1,000,000 1,000,000 Proceeds used to purchase a building H1620.2 Buildings, Equip. and Cap. Outlay H200 1,000,000 Cash 1,000,000 Bond in Governmental Fund (cont’d) $50,000 Bond principal and $25,000 interest paid in General Fund A9710.6 Bond Principal 50,000 A9710 7 A9710.7 Bond Interest 25 000 25,000 A200 Cash 75,000 Long-Term Debt Fund (W) W628 Bond Liabilities W129 General Long-Term Liabilities 50,000 50,000 7 Bond Anticipation Notes (BANs) How should a BAN be reported? Liability in Capital Projects (H) fund unless maturity is greater than one year Proceeds and related p purchases in the (H) fund Principal and interest payments expensed in related operating funds Code H5731 – BANs Redeemed from Appropriations Common Debt Edits (BANs) BAN edit checks: BAN liabilities on Balance Sheet (626) = BANs outstanding at year-end on Statement of Indebtedness (SOI) Total BAN principal (9730.6) in funds = BAN principal payments on SOI Total BAN principal (9730.6) = BANs Redeemed from Appropriations (H5731) BANs (cont’d) New short-term BAN issued for $100,000 H200 Cash H626 BAN Liability 100,000 100,000 Proceeds used to purchase $100,000 truck for Highway Department H5110.2 H200 Maintenance of Streets, Equip. and Cap. Outlay Cash 100,000 100,000 8 BANs (cont’d) $25,000 principal and $2,000 interest paid out of Highway Fund (DA). Liability originally recorded in H Fund DA9730.6 BAN Principal DA9730 7 BAN IInterest DA9730.7 t t DA200 Cash 25,000 2 000 2,000 27,000 Reporting in H Fund H626 H5731 BAN Liabilities BANs Redeemed From Appropriations 25,000 25,000 BAN (short-term) paid with Bond Proceeds $75,000 BAN is redeemed with proceeds from new bond issuance. (Liability in H Fund) H626 BAN Liabilities H5710 Bond Revenue W129 General Long-Term Liabilities W628 Bond Liabilities 75,000 75,000 75,000 75,000 AUD: Bond revenue and bond liability will be reported; BAN liability will go to zero; Reported cash will not change SOI: Indicate that BAN was “paid with bond proceeds” BAN (long-term) paid with Bond Proceeds $75,000 BAN is redeemed with proceeds from new bond issuance. (Liability in W Fund) W129 General Long-Term Liabilities W628 Bond Liabilities W626 BAN Liabilities W129 General Long-Term Liabilities 75,000 75 000 75,000 75,000 75,000 SOI: BAN will be reported as “paid with bond proceeds” 9 Common BAN Edit $100,000 BAN liability is reduced by $25,000 using unspent proceeds (Liability in H Fund) H626 BAN Liabilities H200 Cash 25,000 25,000 AUD: Report a reduction in cash and BAN liability on balance sheet in H Fund Edit Discrepancy: 9730.6 (BAN principal payments) will not equal BAN principal payments on SOI Disclose the reason in the Comments field Common BAN Renewal Issue BAN for $90,000 is renewed for $80,000 SOI: Update highlighted fields for the original BAN to report the BAN renewal Enterprise Fund Full Accrual Accounting Bond/BAN liability reported on balance sheet If proceeds were used to purchase an asset, report as a balance sheet transaction. Fund balance is not affected Acquired asset is expensed using depreciation method over the useful life Certain edits will not be in balance 10 BAN Issue in Enterprise Fund $100,000 BAN issued in Enterprise Utility Fund EE220 Cash From Obligations EE626 BAN Liabilities 100,000 100,000 P Proceeds d are used d to acquire i equipment i EE104 Machinery and Equipment EE220 Cash From Obligations 100,000 100,000 BAN liability is recognized on the balance sheet Purchase of equipment is a balance sheet transaction BAN Issue in Enterprise Fund (cont’d) $25,000 principal and $5,000 interest paid on BAN in Enterprise Fund EE626 BAN Liabilities EE9730 7 BAN Interest EE9730.7 EE220 25,000 5 000 5,000 Cash From Obligations 30,000 Edit Discrepancy: 9730.6 BAN principal payments in the funds will not equal BAN principal payments on SOI Disclose the reason in the Comments field Advanced Bond Refunding Report in the Debt Service (V) Fund Codes 9991.4 (Repayments to Escrow Agent Advanced Refunding Bonds) and 5791 (Advanced Refunding Bonds) Edit Discrepancy: Bond principal payments on SOI will not equal those listed in the funds Disclose the reason in the Comments field 11 EFC Disbursements (Long-Term) Long-term disbursements are treated as Bonds on AUD Total amount is recognized as a Bond in the year of issuance Portion which is not drawn down is reported as Cash with Fiscal Agent (code H223) Refinancing of a long-term EFC Bond should be reported in the Debt Service Fund (V) EFC Disbursements (Short-Term) Short-term disbursements are treated as BANs on the AUD Disbursements for each fiscal year are treated as separate BAN issuances on the Statement of Indebtedness Net available cash (the amount that has not yet been drawn) is not reported on the AUD Accounting release online AUD – Financial Statements (cont’d) Supplemental Schedules Statement of Indebtedness Bank Reconciliation Schedule of Time Deposits and Investments Local Government Questionnaire Schedule of Employee and Retiree Benefits Schedule of Other Post Employment Benefits Schedule of Energy Costs and Consumption 12 Tips for AUD Filing Understand what's in your report – accurate data File on time Be aware of communication from OSC Call us with questions before you file Attend our training events Important Contacts OSC Division of Local Government and School Accountability Data Management Unit Help Line: 866-321-8503 or 518-408-4934,, Option p 4 Local Official Training Unit: [email protected] OSC Regional Offices: www.osc.state.ny.us/localgov/contact.htm#regional Resources Accounting and Reporting Manual (ARM) Accounting Releases OSC Website www.osc.state.ny.us/localgov OSC Governmental Accounting Schools Schedule http://www.osc.state.ny.us/localgov/training/index.htm OSC Online Contact Update Database https://nysosc11.osc.state.ny.us/product/contacts.nsf OSC Required Reporting/Forms www.osc.state.ny.us/localgov/finreporting/index.htm OSC Electronic Filing Site https://nysosc11.osc.state.ny.us/product/efsdex.nsf 13 Thank You Division of Local Government and School Accountability [email protected] 14
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