Common Certificate of Achievement for Excellence in Financial Reporting Comments
Posted 3-18-2011 | By David Mol
Governmental Accounting Standards Board (GASB) Statement No. 44, Economic Condition Reporting: The Statistical Section, effective several years ago, continues to generate many Certificate comments.
The three most common comments we have seen for the December 31, 2009 CAFRs involve statistical tables. Below is a summary of the comments with recommended actions:
1. By far the most common comment relates to the Direct and Overlapping Property Tax Rates table. This table contains the entity's direct tax rates along with the overlapping rates to illustrate the overall burden on the government's taxpayers. Many entities present only the total direct tax rate for their government, whereas GASB 44 requires separate columns to display the major components of the total direct tax rate. This breakdown is not required of the overlapping rates.
2. Another frequent comment received is for the Property Tax Levies and Collections table. The comment questions why the table shows a percentage of levies collected exceeding 100%. This comment is easily resolved by including a "levy adjustments" column in the table to reflect additions and abatements to the original levy. The percentage of levy collected is then calculated using the net levy so a percent exceeding 100% will not be shown.
3. The calculation of "debt service as a percentage of noncapital expenditures" on the Changes in Fund Balances, Governmental Funds table historically generates a significant number of comments. A new comment this year centers on the amount to use for debt service when making this calculation. The comment states that only the principal and interest components of debt service expenditures should be included.
If you would like to further discuss Certificate comments, please contact David Mol, CPA, at dmol@hlbtr.com, or Peggy Moeller, CPA, at pmoeller@hlbtr.com.