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Presented By: Florida Department of Financial ServicesDivision of Accounting & AuditingBureau of Financial Reporting

2017 Financial Reporting Workshop

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Introduction CAFR Overview Statistics Compliance Checklist Items Form Reminders and Updates Governmental Accounting Standard Boards (GASB) Updates Component Units Keys to Success

Agenda for Today

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Danta White, CPAFinancial Administrator

Pam BarksdaleProfessional Accountant Specialist

Alphonso BrownSenior Management Analyst Supervisor

Stephanie HortonProfessional Accountant Specialist

David JamesSenior Management Analyst II

Chunping Lin, CPAGovernment Analyst II

Sherif NessimGovernment Analyst II

Leonor SkoglundGovernment Analyst II

Statewide Financial Reporting Section (SFRS) Team

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CAFR Overview

http://www.myfloridacfo.com/Division/AA/Reports/default.htm

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Thorough and detailed presentation of the state’s financial condition

Required by Section 216.102 (3), F.S.

Due by February 28 annually

Prepared in accordance with generally accepted accounting principles (GAAP)

Governmental Accounting Standards Board (GASB)

Audited by the Florida Auditor Generalw.myfloridacfo.com/Division/AA/Reports/default.ht

CAFR Overview

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Introductory Section

Financial Sectiono Auditor’s Reporto Management Discussion & Analysis (MD&A)o Financial Statementso Notes to the Financial Statementso Other Required Supplementary Information (RSI)

Statistical Section

CAFR Contents

CAFRIntroduction•CFO•EDR

MD&A•EDR

Audit Report•Auditor General

Financial Statements•Agencies•Component Units

Notes•Forms•SBA•DMS•DFS

Other RSI•EDR•DMS•DOT

Statistical Section•Various Agencies

Information Sources

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2017 CAFR Preparation Process

May June NovMarch

PLANNING REVIEW & COMPILATION

AUDIT

AGENCY ADJUSTMENTS

FebAug Sept Oct Dec JanJan

CFO & AUDIT ADJUSTMENTS

AGENCY CLOSING PUBLISH CAFR

April July

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Three Primary Databases:o Working Trial Balance Databaseo Form 3 Completeness Databaseo Form 30 Database

Instructions included when databases downloaded from Accounting & Auditing website

Databases

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Working Trial Balance (WTB) Databaseo Tool to assist agencies before and after closingo Available July 5, 2017o Various Compliance Checklist Reports to help in CAFR preparationo Additional Reports, such as: Adjustment Report Various Forms Due Reports Trial Balance Report

Feedback on the tests in WTB or any suggestions for new tests are always welcome!

WTB Database

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WTB Database

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WTB – Adjustment Report

Run after submission of post-closing adjustments

Review for accuracy

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Two types of forms due reports:o Forms Due Reports – Based on GL codes used in the trial balance. o Form Updates Due by Adjustments Posted Report – Based on post-closing

adjustments processed to certain GL codes.o Separate reports for State Agencies and Discretely Presented CUs.

WTB Database

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WTB – Forms Due Report Form names Form for each fund

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WTB – Forms Due Report

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WTB – Form Updates Due by Adjustments

Posted Report Forms due resulting from

post-closing adjustment

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WTB – Trial Balance Report

Most up-to-date trial balance

Review before creating adjustments

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Form 3 Completeness Databaseo Validates that your Form 3 data is in balance with your Trial Balanceo Form 3 captures all Interfund and Intrafund transactionso All transfers, advances and due to/from transactions must always be in

balance with your Trial Balanceo Available mid-July 2017

Databases

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Form 3 Completeness

Identify and correct differences

Communicate changes with agencies

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0

200

400

600

800

1000

1200

2012 2013 2014 2015 2016

2653

22 18 26

747

594 594531

576

973 992942

11121048

A Adj. B. Adj. C. Adj.

A = Auditor GeneralB = AgencyC = Statewide Financial Reporting

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INTER fund is journal transfer transactions betweenagencieso (Due to/from, Transfers in/out and Advances to/from)

INTRA fund is journal transfer transactions withinagencieso (Due to/from, Transfers in/out and Advances to/from)

These must balance to -0- (Debits=Credits)

INTER & INTRA Fund

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2015

Total number of rows

Total rows of data not balanced

% of Balanced

Data

1st Submission 4195 1047 75%

2nd Submission 4343 417 90%

3rd Submission 4494 154 97%

4th Submission 4385 89 98%

2016

Total number of rows

Total rows of data not balanced

% of Balanced

Data

1st Submission 4194 1035 75%

2nd Submission 4296 408 91%

3rd Submission 3931 247 94%

You can be in balance in trial balance, but still be out of balance on the F1 F2 Agreement Report.

Both must be in balance.

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70%

75%

80%

85%

90%

95%

100%

1st Submission

2nd Submission

3rd Submission

4th Submission

75%

90%

97%98%

75%

91%

94%

0%

2015

2016

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INTRAFund

2016

Total number of rows

Total rows of data not balanced

% of Balanced Data

1st Submission 1569 251 84%

2nd Submission

1629 144 91%

2015

Total number of

rows

Total rows of data not balanced

% of Balanced

Data

1st Submission

1666 121 93%

2nd Submission

1603 64 96%

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75%

80%

85%

90%

95%

100%

93%

96%

84%

91%

Percentage of Balanced data comPared to total data results

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Compliance Checklist Items

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Used to guide agencies in preparing information for CAFR preparationo Twenty -five (25) essential tasks with specific due dateso Agencies scored on accuracy of information and timeliness

2016 Compliance Checklist Evaluations will be available at the end of the workshop

Compliance Checklist

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Compliance ChecklistChecklist # Checklist Item 2016 2015 Year to Year Change

1 Funds in Balance 94% 100% -6%2 Intrafund Activity within Agency 60% 79% -19%3 Interfund Activity with Other Agencies 57% 64% -7%4 Cash Balances 94% 97% -3%5 Treasury Investment Balances 100% 96% 4%6 Beg Fund Balance/Net Assets 94% 97% -3%7 General Revenue 100% 100% 0%8 Capital Assets Depreciation 100% 100% 0%9 Fund Balance Classification 100% 94% 6%

10 Net Investments in Capital Assets 97% 96% 1%11 Compensated Absences 66% 83% -17%12 Capital Asset Accounts 91% 91% 0%13 Long-term Debt Accounts 88% 100% -13%14 Analytical Procedures 94% 94% 0%15 Other Guidance 100% 100% 0%16 Fund Questionnaires for New Funds 100% 100% 0%17 SWFS Forms 83% 94% -12%18 Component Unit Financial Statements 76% 100% -24%19 SEFA 94% 97% -3%20 Fraud Certification 100% 100% 0%21 Final Budgeted Revenues 94% 100% -6%22 GASB Implementation Schedule Notification 94% 100% -6%23 Elimination of Revolving Funds 100% 100% 0%24 Interfund Loans 100% 100% 0%25 Compliance with Chapter 280, FL Statutes 92% 100% -8% 29

Compliance Reminders:o Checklist Item #2/#3 INTRA/INTER Fund Fund 1/Fund 2 Agreement Report and the trial balance are in balance

o Checklist Item #11 Compensated Absences Complete Form 49 first, then do adjustments to trial balance

o Submit forms by due dates and reconciled with trial balance amounts

Compliance Checklist

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BREAK

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Forms Multiple Forms used to prepare information that makes up the CAFR

Key Forms:o Form 3 Inter/Intrafundo Form 30 Cash Flowso Changes In Assets/Liabilitieso Agency Fund Change Statemento Compensated Absenceso P Formso Adjustment Form

Forms are available on the DFS Accounting & Auditing website or will be provided

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Form 30 Databases is used to complete your Cash Flows Forms

Form Reminders

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Form RemindersAdjustment Form (DFS-A1-1835)

o Used to submit adjustments after agency closingo Form features: Fund number linked to SWGF and SWF fields Form(s) update notices Adjustment balance check

P Forms and CUR Formso P Form required for every agency ando CUR Forms required for applicable discretely presented component

unitso If form is not applicable, select the “N/A” box (sign and date, if

applicable) and submit the form.

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Adjustment Form990000502000051

GASB Statement No. 72 Requires:o Measure Investments at Fair Value (with exceptions)o Disclose Fair Value measurements, level of fair value hierarchy, and

valuation techniquesFYE 2016:

o Created Form 19 and CU 9, specifically for fair value disclosuresFYE 2017:

o Merged Form 18 and 19, as well as, Form CU 2 and CU 9o Eliminated Form 19 and CU 9

Updated Form 18 and CU 2

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Investment measured at fair value (A1-A7): Discloses investments by their fair value levels. o Level 1: Unadjusted quoted prices in active markets for identical assets

or liabilities.o Level 2: Inputs either directly or indirectly observable for an asset or

liability (including quoted prices for similar assets). o Level 3: Significant unobservable inputs for assets or liabilityo If using inputs from more than one level, then measurement is based on

the lowest level input.Description of Valuation Method: For each investment type, by fair

value level, provide a brief description of the valuation technique(s) used to determine fair value.

New Features in Form 18 and CU2

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Form18

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Total Fair Value 6/30 automatically calculated

Form 18

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Net Asset Value (NAV) Pending Sale Exception Investments (A-8):o NAV should not be applied if, as of the measurement date, it is

probable the investment will be sold at an amount other than NAVo Measured using fair value levelso Section B required to be completed

New Features in Form 18 and CU2

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Investments measured at Net Asset Value (NAV) (B1-B12):o NAV per share – The amount of net assets attributable to each share of

capital stock outstanding at the close of the period.o Permitted if investment does not have a readily determinable fair valueo Must also complete Section B

New Features in Form 18 and CU2

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Section B – Investments Measured at NAV:o Additional disclosures for investments measured at NAV Unfunded Commitments Redemption Frequency (If Currently Eligible) Redemption Notice Period Description of NAV investments and significant investment strategies

New Features in Form 18 and CU2

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New Features in Form 18 and CU2

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Investments reported as Receivables/liabilities:o Investment sold short (A-9) o Other investments reported as Receivables/liabilities (A-10)o Excluded from “Total Other Investments” sum

Other investments not measured at Fair Value (A-11):o GASB 72 fair value measurement exceptions

Money Market Funds, Repurchase Agreements, Certain life insurance contracts, etc.

o Recorded at Reported Amount

New Features in Form 18 and CU2

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Form 18

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Section A, Fair Value Measurements Levels: Required to be completed for all Discretely Presented Component UnitsSection B-G: Only required to be completed for Major Discretely

Presented Component Unitso NAV additional disclosures and investment risk disclosureso Annual re-determination of Major Component Unitso 3 Major Discretely Presented CU: Citizens Property Insurance Corporation Florida Housing Finance Corporation University of Florida

Form CU2

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Form CU2

Sections B-G only for Major Discretely Presented CU

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Instructions for Form 18

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Used as an interactive tool to assist in the proper determination of Potential Component Units and re-determination of current Component Units.

Revised as a result of GASB Statement No. 80, Blending Requirements for Certain Component Units – an amendment of GASB Statement No. 14

Reporting Entity Determination Form

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Reporting Entity Determination Form

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Addition To Reporting Entity Determination Form

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Fiscal Year 2016-17 Fiscal Year 2017-18 Fiscal Year 2018-19

Statement No. 73 –Pensions

Statement No. 75 – OPEB Employers

Statement No. 83, Certain Asset RetirementObligations

Statement No. 74 – Other Post Employment Benefits (OPEB) Plans

Statement No. 81 –Irrevocable Split-InterestAgreements

Statement No. 77 – Tax Abatement Disclosure

Statement No. 82 –Amendments to Pension

Statement No. 78 -PensionsStatement No. 79 –External Investment PoolsStatement No. 80 –Component UnitsStatement No. 82 –Amendments to Pension

GASB Statements Effective Dates

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Tax Abatement Disclosureso Establishes financial reporting disclosure standards for tax abatement

agreements entered into by state and local governmentso Disclosures required by this statement include tax abatements resulting

from both: Agreements that are entered into by the State, AND Agreements entered into by other governments, including component units,

and that reduce the State’s tax revenues

GASB Statement No. 77 Effective 2016-17

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Definition of tax abatement: A reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which:o One or more governments promise to forgo tax revenues to which they are

otherwise entitled; ANDo The individual or entity promises to take a specific action after the

agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments

GASB Statement No. 77 Effective 2016-17

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Required Disclosures

GASB Statement No. 77 Effective 2016-17

Brief Descriptive Information Government’s OwnAbatements

Other Government’s Abatements

Name of program √

Purpose of program √

Name of government √

Tax being abated √ √

Authority to abate taxes √

Eligibility criteria √

Abatement mechanism √

Recapture provisions √

Types of recipient commitments √

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Required Disclosures

GASB Statement No. 77Effective 2016-17

Other Disclosures Government’s OwnAbatements

Other Government’s Abatements

Dollar amount of taxes abated √ √

Amounts received or receivable from other governments associated with abated taxes

√ √

Other commitments by the government

√

Quantitative threshold for individual disclosure

√ √

Information omitted due to legal prohibitions

√ √

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SFRS Planned Steps for Implementation:o Working with DEO to identify tax abatements required to be disclosedo SFRS requested agencies to identify tax abatements, if any, administered

by their agencyo SFRS will be working with all applicable agencies to ensure all disclosure

requirements are met

GASB Statement No. 77 Effective 2016-17

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Blending Requirements for Certain Component Units – an amendment of GASB Statement No. 14o Establishes an additional blending requirement for the financial statement

presentation of component unitso Applies to component units that are organized as not-for-profit

corporations in which the primary government is the sole corporate member as identified in the CU’s articles of incorporation or bylaws

GASB Statement No. 80 Effective 2016-17

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SFRS Planned Steps for Implementation:o Revised DFS Reporting Entity Determination Form (Form DFS-A1-1833)o Requested agencies to submit revised DFS Reporting Entity Determination

Forms for all component units.o SFRS will be updating Component Unit List as necessary

GASB Statement No. 80Effective 2016-17

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What’s on the Horizon

Topic Description Status

Leases Establishes a single approach to accounting for lease transactions.

Final Pronouncement estimated in Q2 2017

Financial Reporting Model Governmental funds recognitionapproaches (Near-term, short-term, and long-term)

Cash flow statements

Public Hearings and User Forums

Revenue and Expense Recognition

Comprehensive recognition model for non-exchange, exchange, and exchange-like transactions.

Initial deliberations

GASB Major Projects

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Component Units

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Component Units DefinedAgency ResponsibilitiesIdentifying Component UnitsFund 80 and 90Component Unit Reporting and Disclosures

Overview

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Definition: Legally separate organizations for which the elected officials of the primary government are financially accountable.

Classified as: o Blended component units: in substance, part of the primary government.o Discretely Presented component units: all other component units that are

not reported as blended.

What are Component Units?

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Agencies should be monitoring bills annually and informing SFRS of any changes and/or creation of new component units.o Agency familiarity of bills impacting the agency

Establish Fund 80 and 90, as necessary

Reconcile all financial statements to your forms and trial balances before submissiono Current year beginning equity agrees with prior year ending equityo Forms and applicable trial balance general ledger (GL) amounts agree

Agency Responsibilities

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Search of passed legislative billso Potential new component unit established, or o Statutory language changes affecting reporting status of a current

component unit (e.g. abolishment of a component unit)

Contact agency to submit Reporting Entity Determination Form for their potential component unit

SFRS reviews completed form and makes final determination

Identifying Component Units

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All blended governmental component units should establish a fund 80 and 90:

o Fund 80: General Fixed Asset Fundo Fund 90: General Long-Term Debt Fund

Request to establish fund with DFS Accounts Control and submit fund questionnaire to SFRS

Requirement does not apply to:o Blended Proprietary or Fiduciary funds, ando Discretely Presented Component Units

Blended CUs: Governmental Funds

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Major/Non-Major Component Unit determinationo Determines which component units will be presented individually (separate

column in the CAFR), as well as, in selected note disclosures All component units reported in FLAIR included in analysis Major CU threshold: 10% or greater of all component unit assets, liabilities, revenues,

or expenses

Not all CUs financial statement data is included in the CAFRo All CU’s not currently reported in FLAIR (financials not reported in FLAIR)o Annual materiality determination performed of aggregate CU amounts

excluded from the CAFR Less than 1% of total aggregate CU assets, liabilities, revenues, or expenses

Component Unit Reporting and Disclosures

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Keys to Success

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Close in balance (Checklist Item #1)Confirm INTER fund balances with other agencies early.Record depreciation in FLAIR prior to agency closingDevelop a checklist of year-end tasks and entries.Review agency post-closing adjustments prior to submission to SFRS

o Adjustments in balance (debits = credits)o Adjustment does not create atypical balanceso Adjustment based on current trial balance amountso Use adjustment form on DFS website

KEYS To Successful Pre/Post Closing

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Compare current year and prior years entries.Utilize WTB Database dailyUse the current forms on the DFS websiteContact SFRS if you have any questions or concerns

KEYS To Successful Pre/Post Closing

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Working Trial Balance, Form 3, and Form 30 Databases & SWFS Guidance -http://www.myfloridacfo.com/Division/AA/StateAgencies/default.htm

Forms - http://www.myfloridacfo.com/Division/AA/Forms/default.htm

Florida Department of Financial Services FLAIR Procedures Manual, Chapters 517-519 (Depreciation) located at: http://www.myfloridacfo.com/Division/AA/Manuals/default.htm

Memorandums - http://www.myfloridacfo.com/Division/AA/Memos/default.htm

FLAIR Report Distribution System (RDS) -End User Training http://www.myfloridacfo.com/Division/AA/Training/default.htm

GASB Standards - http://www.gasb.org/jsp/GASB/Page/GASBLandingPage&cid=1176160042327

References

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Danta White, CPAFinancial Administrator(850) 413-5687

Pam BarksdaleProfessional Accountant Specialist(850) 413-5803

Alphonso BrownSenior Management Analyst Supervisor(850) 413-5672

Stephanie HortonProfessional Accountant Specialist(850) 413-5458

David JamesSenior Management Analyst II(850) 413-5666

Chunping Lin, CPAGovernment Analyst II(850) 413-5385

Sherif NessimGovernment Analyst II(850) 413-5565

Leonor SkoglundGovernment Analyst II(850) 413-5603

Group E-mails:sfrs@myfloridacfo.com

How to Contact Us

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Questions