[CAFR-Contacts-News] GASB 54 - reminder!

[ROSS Kathryn * SCD SARS]

Hello CAFR Accountants,

 

Now that we have completed the CAFR, SARS is refocusing its attention on
GASB 54 and the fund balance reporting requirements that are effective
for FY 2011.

 

In late May and again in mid-September 2010, SARS emailed agencies the
d23 fund tracking sheet to use to list the GASB 54 fund balance category
for each of your agency's governmental d23 funds (special revenue,
capital projects, debt service and permanent funds).  As we receive the
completed forms, we are checking to ensure that all governmental funds
have been assigned a GASB 54 code and that the assigned codes look
reasonable. We plan to upload this data into R*STARS once the review
process is completed.

 

Based on the tracking sheets submitted to date, we realize there are
some areas that need additional clarification: 

 

1.       GASB 54 Code R1. The GASB 54 category R1 represents resources
that are restricted by federal grants, federal laws, or federal
regulations. It should not be used for resources that are restricted by
laws or regulations of the State of Oregon or other entities.

 

2.       Active versus inactive governmental funds. If your agency has
d23 funds that are still in Active status, but are not being used, the
fund should either be: (a) inactivated or (b) assigned a GASB 54
category. The GASB 54 code will soon be an SFMS system requirement for
all active governmental funds.

 

3.       Nonspendable fund balance. While nonspendable is one of the
GASB 54 fund balance categories, it cannot be assigned to the entire
fund balance of an individual d23 fund. The nonspendable category will
be designated as the result of the transaction codes used to record
certain nonspendable resources (inventory, prepaids, etc).  The d23 fund
in which a nonspendable balance is reported must be assigned one of the
standard GASB 54 categories listed on the d23 fund tracking sheet, using
the same process to determine that category as is used for all other
governmental funds.

 

4.       Reference column - required information. For fund balances that
are restricted by the Constitution or enabling legislation, as well as
committed fund balance, the applicable constitutional or statutory
reference must be entered in the Reference column on the tracking sheet.
This information will then be uploaded into a special description field
on the d23 fund profile. The description field is limited to 40
characters (including any spaces). On the d23 fund tracking sheet,
please limit the information in the Reference column to 40 characters.
However, you may want to add more information on the copy that you keep
for your files.

 

5.       Constitutional restrictions. Please note, for resources
restricted by the Constitution, the reference information must be the
applicable article, section and subsection of the Oregon Constitution.
Lottery funds, including lottery bond debt service funds, should be
considered restricted by the Constitution, Article XV, Section 4,
subsection (4)(d).

 

6.       Budget bills. Budget bills should not be the basis for
determining the GASB 54 category that is assigned to an individual d23
fund. The exception we noted earlier that warrants repeating involves a
d23 fund that accounts for resources for which the only constraint on
spending of resources is contained in the agency's budget bill. In this
situation, if you cannot find:

 

a.       Legislation that both authorizes the collection of a revenue
and places constraints on its use (restricted fund balance), or 

 

b.       One piece of legislation that authorizes collection of the
revenue and another that places constraints on its use (committed fund
balance), and 

 

c.       The only constraint on how to spend the resources is found in
the agency budget bill, 

 

d.       There is no basis to categorize the fund balance as either
restricted or committed. 

 

e.       Instead, classify the fund balance as assigned (GASB 54 code
A1). It is the state's intent to spend the money for a certain purpose,
but there is no legislation (other than the budget bill) limiting it to
that purpose. The resources may easily be diverted to another purpose,
should it be desirable or necessary. 

 

Effective immediately, the GASB 54 fund balance category and reference
information will be required to process all new governmental d23 fund
requests. The D23 fund request form will be modified shortly to provide
a place to supply that information.

 

We initially asked agencies to submit the completed GASB 54 tracking
sheet to their SARS analyst by January 4 (yesterday); that deadline has
been extended to Friday, January 7th. Please let your SARS analyst know
if you have questions on the GASB 54 categories or will not be able to
meet this deadline. 

 

We are attaching the training documents (the guide to identifying the
appropriate fund balance category and the special revenue fund guide)
again for your reference, as well as the d23 fund tracking sheet. 
 
Thanks,
Kathy
 
Kathryn Ross
Statewide Accounting & Reporting Manager
Oregon State Controller's Division
155 Cottage Street NE, U-50
Salem, OR 97301
Phone:  (503) 373-7277, ext 253
Fax:  (503) 378-3514
http://oregon.gov/DAS/SCD/SARS
 
Data Classification: Level 1 - Published
 
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