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
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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
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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”
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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
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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
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Thank You
Division of Local Government and
School Accountability
[email protected]
14