county financial statements – the county official’s role dave geertsen, kenosha county david...

County Financial Statements – The County Official’s Role

Dave Geertsen, Kenosha CountyDavid Maccoux, Schenck SCDawn Gunderson Schiel, Ehlers

Wisconsin Counties AssociationSeptember 22, 2015

2 ● s chencks c .com

County Finance Director’ Perspective

• What role do County officials play with the financial statements?

• What is an audit, and was is not an audit?

• What is audit failure?

3 ● s chencks c .com

Importance of Financial Statements

• Financial accounting and financial reporting

• Demonstrate stewardship to taxpayers and creditors

• Accountability of County officials– Remain financially solvent– Lack of business-like exchange of resources, with taxes levied on

taxpayers without necessarily receiving services– Compliance with laws and regulations

4 ● s chencks c .com

Independent Auditors’ Report

• Responsib

5 ● s chencks c .com

Government-wide Financial Statements

6 ● s chencks c .com

Statement of Net Position

• Illustrates what County owns and how much does it owe.

• Assess County’s present financial status and future outlook.

• Based on historical cost principles.

• Net position components

7 ● s chencks c .com

Statement of Net Position – Capital Assets

• Additions typically represent the purchase or addition to assets owned by the County.

• Deletions represent the sale or disposal of assets or, in the case of construction in progress, the classification to asset categories.

• Importance – Are you reinvesting in your assets?

8 ● s chencks c .com

Statement of Net Position – Long-term Obligations

• What does changes in your long-term obligations represent?– Bonds and notes payable– Employee obligations

9 ● s chencks c .com

Statement of Activities

• Identify cost to provide services to citizens.

• Difference between general and program revenues.

• What are the causes in your changes in financial position.

10 ● s chencks c .com

Fund Financial Statements

11 ● s chencks c .com

Balance Sheet – Governmental Funds

• More detailed look at your finances, concentrating on short-term view of basic services provided.

• Major fund activities reported

• Fund balance components and what is important.

12 ● s chencks c .com

Statement of Revenues, Expenditures and Changes in Fund Balances

• Focus of statement is cash and other financial resources received within or shortly after the year while expenditures represent services and goods received and due to employees and creditors.

• Focus on net change in fund balance, and primary reasons.

13 ● s chencks c .com

Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual

• How did your County’s budget change during the year?

• How does your actual results compare to the approved budget?

• Understanding your levels of budgetary control.

14 ● s chencks c .com

Proprietary Funds

• Measurement basis consistent with government-wide financial statements.

• Enterprise and internal service funds.

15 ● s chencks c .com

Proprietary Funds

• Analysis of operating revenues and expenses.

• Non-operating activities

16 ● s chencks c .com

Proprietary Funds

• Key financial statement to identify sources and uses of cash compared to operations.

• Identify future cash needs and ability of operations to meet obligations.

17 ● s chencks c .com

Notes to Financial Statements

• Notes in complimenting financial statements of County.

• Provide additional detail, including key accounting policies

18 ● s chencks c .com

Required Supplemental Information

• Management’s Discussion and Analysis (MD&A)– Introduction and overview of your financial statements– Increased comprehension by readers of your financial

statements– Management’s ability to highlight important issues

• Budgetary comparisons• Other Post-employment Benefits (OPEB)• Pension Information (WRS disclosures - FY 2015)

19 ● s chencks c .com

Other Information

• Supplemental Information– Combining statements of non-major funds– Individual fund financial statements

• Statistical Section (CAFR)– Historical trend data– Demographics and other data

20 ● s chencks c .com

Thank You

David Maccoux, CPAShareholder920-455-4114david.maccoux@schencksc.com

Measurement of Financial Viability Beyond the Basic Financial Statements

September 22, 2015

Measuring Financial Validity

• Finances– Liquidity– Budgetary Performance – Budgetary Flexibility

• Economy• Management• Debt/Pension• Institutional Framework

22

Finances

• Historical Trends in General Fund Revenues and Expenditures

• Trends in Fund Balance (General Fund and Total Governmental)

23

Historical Trends in General Fund Revenues and Expenditures

24

Trends in Fund Balance (General Fund and Total Governmental)

25

Historical Trends in General Fund Revenues and Expenditures

26

Trend in Fund Balance

27

Fund Balance as a % of Revenues

28

Finances

• Changes in Cash Balance over 5 years

• Liquidity (What makes up fund Balance)

• Budgetary Performance (General Fund and Total Governmental Funds)

• Budgetary Flexibility

29

Economy

• Equalized Value – Total Value of taxable property in the governmental unit’s boundaries. Size of tax base is a reflection on its ability to pay. Composition of tax base (Diverse)

• Trends in Equalized value and Assessed Values• Average Annual Growth in tax base – Economic health• Per Capita Equalized Value• Top 10 Tax Payers

30

Diversification of Tax Base

31

Equalized Tax Base Trends

32

Economy

• Largest employers• Building permits• Housing units• Trends in Employment and Unemployment Data • Census Population data• Average income and age statistics• Adjusted Gross Income per tax return• Adjusted Gross Income as Percentage of State Average

33

Management (Recommended Practices)

• Establish Policies– Fund Balance Policy– Debt Policy– Budget Policy– Investment Policy

• Monitor Policies and Live within them• Long Range Planning• Periodic Reporting to Elected Officials

34

Policy Monitoring

35

Policy Monitoring

36

37

Debt/Pension

• Direct Debt Burden

• Overall Debt Burden

• Payout over Ten Years

• Percentage of Expenditures for Debt Service

• Pension Liability

Institutional Framework

• Legal and Practical Environment in which you operate

• Predictability of Revenues & Expenses

• Statutory Limits

• Expenditure Restraints

• Levy Limits

38

Issuance of Debt and Credit Rating

• Analysis of Credit Quality

• Assist the investor in determining the risk of an investment

• Rating affects the price and interest rate that will be paid when debt is issued

39

40

Official Statement for Security Offering

• Purpose of the Official Statement (3 Basic functions)– 1. Provide a description of the securities offered and the

transaction– 2. Assists with marketing the security– 3. Discloses risks and other material information associated with

investment in the securities

• Its purpose is to tell potential investors what they need to know in order to decide whether or not to buy the securities

262-796-6166

dgunderson@ehlers-inc.com

Dawn Gunderson Schiel

Senior Municipal Advisor

41