Financial AccountingFinancial Accounting& Reporting& Reporting

WHAT WE DOWHAT WE DOPresented byPresented by

Scott S. Smith &Scott S. Smith &Peter M. Rancatore, Jr.Peter M. Rancatore, Jr.

Lucas County Auditor’sLucas County Auditor’sOffice (Accounting)Office (Accounting)

Scott SmithChief Deputy Auditor

Peter RancatoreChief Accountant

Dave PolekStaff Accountant

Karla HayesAccounting Specialist

Lucas County Auditor = Lucas County Auditor = Anita LopezAnita Lopez

Anita’s CreedAnita’s Creed•Take the Burden off the TaxpayerTake the Burden off the Taxpayer

•  Government is Transparent Government is Transparent •The Citizen is the Boss --The Citizen is the Boss --Customer Service ReignsCustomer Service Reigns

Burden LesseningBurden Lessening

Assisting in Special ProjectsAssisting in Special Projects

• Tax EstimatorTax Estimator• Tax DistributorTax Distributor• Homestead Savings ProjectHomestead Savings Project• Implementing GL PeopleSoft - ERP Implementing GL PeopleSoft - ERP

Steering Committee MembersSteering Committee Members

Customer Service Customer Service OrientationOrientation

*Information source for*Information source for– Public officialsPublic officials– School TreasurersSchool Treasurers– Township AdministratorsTownship Administrators– Municipal OfficialsMunicipal Officials– Fiscal OfficersFiscal Officers– Other County Offices & AdministratorsOther County Offices & Administrators

*Issue 1099s for Vendors & Childcare Providers*Issue 1099s for Vendors & Childcare Providers*Initiate Wage Garnishments*Initiate Wage Garnishments*Replace Lost/uncashed checks*Replace Lost/uncashed checks*Place some funds into unclaimed funds (5 yr rule)*Place some funds into unclaimed funds (5 yr rule)*Calculate $$$ to provide the taxing jurisdictions*Calculate $$$ to provide the taxing jurisdictions*Accounting for Fixed Assets*Accounting for Fixed Assets

Transparency Transparency

- Tax Estimator, Tax Distributor - Tax Estimator, Tax Distributor Homestead Savings ProjectHomestead Savings Project

- Preparation and publication of - Preparation and publication of optional and statutory reportsoptional and statutory reports

Major ReportsMajor Reports

CAFR & PAFRCAFR & PAFR

What is the CAFR?What is the CAFR?

CAFR = Comprehensive Annual Financial ReportCAFR = Comprehensive Annual Financial Report

• Basic financial statementsBasic financial statements• Management’s discussions & analysisManagement’s discussions & analysis• Supplemental financial statementsSupplemental financial statements• Other financial and statistical information as Other financial and statistical information as

required by the GFOA.required by the GFOA.• Statements conforming to generally accepted Statements conforming to generally accepted

accounting principles (GAAP).accounting principles (GAAP).• ““Everything you ever wanted to know about the Everything you ever wanted to know about the

County,” Scott S. Smith.County,” Scott S. Smith.

Is preparing a CAFR Is preparing a CAFR required?required?

• Doing a financial section is required Doing a financial section is required by statute (pgs 13-78).by statute (pgs 13-78). – Preparing a CAFR is not (pgs 79-Preparing a CAFR is not (pgs 79-

214).214).

Examples of Governments Examples of Governments Preparing a 2005 CAFRPreparing a 2005 CAFR

√ Maumee Maumee √ Findlay Findlay √ Northwood Northwood √ OregonOregon √ ToledoToledo √ Napoleon Napoleon √ Rossford Rossford

Anthony Wayne SchoolsAnthony Wayne Schools Ohio Def. Comp ProgramOhio Def. Comp Program PERS, STRS, Ohio Police & PERS, STRS, Ohio Police &

Fire Pension FundFire Pension Fund Ohio State Auditor Ohio State Auditor Sylvania, Toledo SchoolsSylvania, Toledo Schools Toledo-Lucas County Toledo-Lucas County

Public Library Public Library

Examples of Governments Examples of Governments NotNot preparing a 2005 CAFR preparing a 2005 CAFR

Х SylvaniaSylvaniaХ Ottawa HillsOttawa HillsХ WatervilleWatervilleХ WhitehouseWhitehouseХ PerrysburgPerrysburgХ DefianceDefianceХ BGBG

Х Port ClintonPort ClintonХ GibsonburgGibsonburgХ WalbridgeWalbridgeХ ClydeClydeХ BryanBryanХ TiffinTiffin

Purpose of the CAFRPurpose of the CAFR

TransparencyTransparency *As the Audited Financial *As the Audited Financial

Statement of the County, the Statement of the County, the CAFR is an informational tool CAFR is an informational tool for for the public.the public.

Who Reads this?Who Reads this?• Bond Rating AgenciesBond Rating Agencies

-Moody’s (A1)-Moody’s (A1)-Fitch (AA-)-Fitch (AA-)-Standard & Poors (A+)-Standard & Poors (A+)

• Good Bond Ratings lower the County’s interest Good Bond Ratings lower the County’s interest that it pays on debt.that it pays on debt.

• Distribution = 400 + online availabilityDistribution = 400 + online availability

GFOA AwardGFOA Award

• An Award winning CAFR An Award winning CAFR provides an additional amount provides an additional amount of confidence in of confidence in the numbers presented.the numbers presented.

CAFRs undergo scrutiny, CAFRs undergo scrutiny, meeting stringent financial meeting stringent financial

reporting requirementsreporting requirements

A CAFR is Audited 3 Times!!!A CAFR is Audited 3 Times!!!

• Ernst & YoungErnst & Young• State of OhioState of Ohio• Government Finance Officers Government Finance Officers

Association (GFOA)Association (GFOA)

What Type of Information is What Type of Information is in the CAFR?in the CAFR?

• NumbersNumbers

• NarrativesNarratives

• StatisticsStatistics

The CAFR has The CAFR has 3 Sections3 Sections

Introductory Section (pgs 1-13)Introductory Section (pgs 1-13)

Financial Section (pgs 14-78)Financial Section (pgs 14-78)

Combining Financials & Statistical Combining Financials & Statistical Section (pgs 79-214)Section (pgs 79-214)

What Kind of Accounting is What Kind of Accounting is in the CAFR?in the CAFR?

Methods of AccountingMethods of Accounting

• Cash Cash - Recognize income when cash (or - Recognize income when cash (or check) is actually received;check) is actually received;

Recognize expenses when paid. Recognize expenses when paid. • AccrualAccrual - Transactions recorded when - Transactions recorded when

the order is made, the item is delivered, the order is made, the item is delivered, or the services occur, or the services occur, regardless of regardless of when money is actually received or when money is actually received or paidpaid. .

Cash/Accrual ExamplesCash/Accrual ExamplesExample 1: Your computer installation Example 1: Your computer installation

business finishes a job in November, and business finishes a job in November, and doesn't get paid until three months later doesn't get paid until three months later in January.in January.

When Income RecognizedWhen Income Recognized

Cash: Cash: JanuaryJanuaryAccrual: Accrual: NovemberNovember

Example 2Example 2

You purchase a new laser printer You purchase a new laser printer with a credit card in May and pay with a credit card in May and pay $1,000 for it in July, two months $1,000 for it in July, two months later. later.

When Expense RecognizedWhen Expense Recognized• Cash: Cash: JulyJuly• Accrual:Accrual: MayMay

Modified AccrualModified Accrual• Revenue is recognized when it becomes available and Revenue is recognized when it becomes available and

measurable. measurable. “Available” means that the government has collected the “Available” means that the government has collected the revenues in the current period or expects to collect them soon revenues in the current period or expects to collect them soon enough after the end of the period to use them to pay liabilities enough after the end of the period to use them to pay liabilities of the current period. of the current period.

• Expenditures are generally recognized when the related fund Expenditures are generally recognized when the related fund liability is incurred, if measurable.liability is incurred, if measurable.

Layman’s DefinitionLayman’s Definition: :

• Government fund accounting is cash accounting, except for the Government fund accounting is cash accounting, except for the first 2 months of the year when accruals are done.first 2 months of the year when accruals are done.

Modified Accrual ExampleModified Accrual ExampleExample: BMR physically receives a grant Example: BMR physically receives a grant

on February 15, 2007. The grant on February 15, 2007. The grant payment was for the calendar year payment was for the calendar year 2006.2006.

Lucas County will record this as income in Lucas County will record this as income in thethe

2006 CAFR.2006 CAFR.

County FundsCounty Funds

• Governmental FundsGovernmental Funds

• Proprietary & Internal Service FundsProprietary & Internal Service Funds

• Fiduciary FundsFiduciary Funds

What is the PAFR?What is the PAFR?

• Popular Annual Financial ReportPopular Annual Financial Report

• Translation – Accounting info for Translation – Accounting info for the commonerthe commoner

DistributionDistribution

Approximately 63,000 + onlineApproximately 63,000 + online

Anyone can receive a copy of the Anyone can receive a copy of the CAFR and or PAFR.CAFR and or PAFR.

What are the County’s What are the County’s Sources of Revenue?Sources of Revenue?

•Sales TaxSales Tax(.5 in 1970, .5 in 1982, .25 in 1993).(.5 in 1970, .5 in 1982, .25 in 1993).

•Property TaxProperty Tax•GrantsGrants•Charges for ServicesCharges for Services•LicensesLicenses• Investment IncomeInvestment Income

PAFR = Also can receive a PAFR = Also can receive a GFOA Award GFOA Award

CreativityCreativity PresentationPresentation UnderstandabilityUnderstandability Reader AppealReader Appeal

It looks cool, & it’s understandable.It looks cool, & it’s understandable.

This Concludes Part I!This Concludes Part I!Special thanks toSpecial thanks to

• The AudienceThe Audience• Shimeako ColeShimeako Cole• Karla HaysKarla Hays• Dave PolekDave Polek• Scott SmithScott Smith• Peter Rancatore, IV. (10yrs old)Peter Rancatore, IV. (10yrs old)• Mely ArribasMely Arribas

Part IIPart IITax Collection /Tax Collection /

Distribution CycleDistribution Cycle

Who Has Taxing Who Has Taxing Authority?Authority?

TownshipsTownshipsMunicipalitiesMunicipalitiesSchool DistrictsSchool DistrictsCounty CommissionersCounty CommissionersOthersOthers

TownshipsTownshipsHardingHardingJerusalemJerusalemMonclovaMonclovaProvidenceProvidenceRichfieldRichfieldSpencerSpencerSpringfieldSpringfield

SwantonSwantonSylvaniaSylvaniaWashingtonWashingtonWatervilleWaterville

MunicipalitiesMunicipalitiesBerkey VillageBerkey VillageHarbor View Harbor View VillageVillageHolland VillageHolland VillageMaumee CityMaumee CityOregon CityOregon CityOttawa Hills Ottawa Hills VillageVillage

Swanton VillageSwanton VillageSylvania CitySylvania CityToledo CityToledo CityWaterville VillageWaterville VillageWhite House White House VillageVillage

School DistrictsSchool Districts

ToledoToledoMaumeeMaumeeWashingtonWashingtonSylvaniaSylvaniaOttawa HillsOttawa HillsSpringfieldSpringfieldEvergreenEvergreen

OregonOregon Anthony WayneAnthony Wayne OtsegoOtsego Penta CountyPenta County Four CountyFour County SwantonSwanton

CommissionersCommissionersCounty General FundCounty General FundSenior ServicesSenior Services911 Telephone911 TelephoneZoo OperatingZoo OperatingZoo ImprovementZoo ImprovementCOSICOSICSBCSBMRDDMRDDMental Health and RecoveryMental Health and RecoveryPort AuthorityPort Authority

OthersOthersLibraryLibrarySylvania Joint Recreation DistrictSylvania Joint Recreation DistrictMetro ParksMetro ParksOlander Park SystemOlander Park SystemTARTATARTA

Tax Collection CycleTax Collection Cycle75 days before the election, the 75 days before the election, the

subdivision must file with the Broad subdivision must file with the Broad of Elections. The of Elections. The AuditorAuditor must must

certify the amount to be generated certify the amount to be generated by the levy before they can go to by the levy before they can go to

the Board of Elections.the Board of Elections.

Different PurposesDifferent PurposesOperationsOperationsBond RetirementBond RetirementCapital ImprovementsCapital ImprovementsFireFirePolicePoliceRecreationRecreationEmergency ServicesEmergency ServicesFireman & Police PensionFireman & Police PensionRoad & BridgeRoad & BridgeSenior ServicesSenior Services

Different TypesDifferent TypesRenewalRenewalRenewal with increaseRenewal with increaseRenewal with decreaseRenewal with decreaseReplacementReplacementReplacement with increaseReplacement with increaseReplacement with decreaseReplacement with decreaseAdditionalAdditionalEmergencyEmergency

After the ElectionAfter the Election

Successful levies and expiring levies are Successful levies and expiring levies are updated with the State Department of updated with the State Department of Tax Equalization.Tax Equalization.

DTE, using property value info, DTE, using property value info, calculates reduction factors.calculates reduction factors.

Reduction factors are entered into tax Reduction factors are entered into tax accounting system and create “tax accounting system and create “tax duplicate”.duplicate”.

At Budget Commission meeting, At Budget Commission meeting, Auditor delivers the tax duplicate Auditor delivers the tax duplicate to Treasurerto Treasurer

Treasurer prepares bills and Treasurer prepares bills and collects taxes. collects taxes.

Other SettlementsOther SettlementsMobile HomesMobile HomesMobile homes like real estateMobile homes like real estatePersonal property taxPersonal property taxRollback and HomesteadRollback and HomesteadEstate TaxEstate TaxCigarette license fee Cigarette license fee

Other Funds Passed Other Funds Passed Through the Auditor Through the Auditor Local government fundLocal government fundHB 66 Personal Property Phase out.HB 66 Personal Property Phase out.Public utility deregulationPublic utility deregulation$10,000 exemption$10,000 exemptionLibrary and Local Government Library and Local Government

Support Fund.Support Fund.

THE ENDTHE END

APPLAUSE!APPLAUSE!